UpDate - Vol. 16, No. 14
December 12, 1996
Credit-card convenience will replace purchase order paper

     Paperwork got you down? Wouldn't it be easier to pay for
items with a credit card like you do at home?
     That's precisely the solution that's on the way for members
of the University community who use requisitions and POWCs
(purchase order with checks) to make purchases under $5,000. It's
a major change that will bring departments greater convenience,
control and flexibility.
     Under a new contract just signed with CoreStates Bank of
Delaware, the University will be issuing Purchasing Cards (VISA
charge cards) to selected employees. These cards will give
cardholders the ability to charge purchases with a value of
$5,000 or less. CoreStates will pay the merchants from whom the
purchases are made, and the University will, in turn, pay
Corestates for those charges. CoreStates also will compile
historical data and furnish the University with detailed reports
to aid in the management of the Purchasing Card program.
     The new Purchasing Card program is anticipated to replace
the current POWC program by this time next year.
     A six-month pilot program involving five campus units
(Biology, Agricultural Sciences, Chemistry and Biochemistry,
Athletics and Facilities) will begin in January. As the pilot
progresses, other units will be included in the program.
Campuswide implementation of the program is scheduled for July 1,
1997.
     According to George Walueff, assistant director of
purchasing and leader of the implementation team for the
Purchasing Card program, "This program will provide a convenient
means with which to make purchases and at the same time reduce
the costs associated with initiating and paying for those
purchases."
     "Today, a typical purchase made by a University unit may
involve more than five separate steps and add as much as $35 to
the cost of that purchase," he said. "Purchases under $5,000
represent more than 80 percent of the University's purchase
transactions, but they account for less than 10 percent of the
purchase dollars spent. So, processing these transactions takes a
disproportionate amount of labor and materials compared to the
size of the expenditure."
     While the Purchasing Department will oversee the entire
Purchasing Card program, each academic and administrative
department will be responsible for managing each of its own
cardholder accounts, including determining who receives the card,
for what purposes it will be used and how much may be charged on
it.
     The cardholder will be authorized to use the card to buy any
merchandise or services required by his or her duties at the
University, with the exception of personal items, cash advances,
food and beverages, liquor, travel-related expenses,
entertainment, gasoline, financial services, motorized vehicles
or any other purchase prohibited by University policy or not
directly related to University business.
     The Purchasing Department originally began investigating the
use of a purchasing card when FAMIS was formed last fall. That
group's Buy/Pay Team recommended implementation of a purchasing
card program as one of the most effective ways to manage the
procurement process and to reduce per-purchase transactions
costs.
     After the competitive selection of a card provider this
summer, the implementation team's work has centered on finalizing
the agreement with CoreStates, documenting policies and
procedures, developing on-line account distribution and reporting
capabilities and testing.
     Other members of the Purchasing Card implementation team are
Gail Armstrong, publications; John Brennan, public relations;
Sandra Dean, biology; Scott Eatough, athletics; Jim Green,
management information services; Karl Hassler, internal audit;
Katie Hutton, agricultural sciences; Joann Rose, chemistry and
biochemistry; Barbara Sharkey, disbursements and Gail Tentor,
facilities.
     Additional information about the Purchasing Card will be
featured in UpDate over the coming months and also will be
available on the FAMIS web site.