Advertisement - Click to support our sponsors.

City charges ahead on
purchasing cards

By Gordon Y.K. Pang
Star-Bulletin

Purchase orders may soon go the way of the abacus at Honolulu Hale and other agencies around the state.

Officials with the city Budget and Fiscal Services Department are reviewing proposals by several vendors that would give city employees purchasing cards, similar to credit cards.

"We're excited about this," Finance Director Roy Amemiya said. "This will greatly streamline our operations, enhance our control and allow us to pay our vendors on a more timely basis."

Currently, several hundred city employees have the authorization to issue roughly 40,000 purchase orders annually, three-fourths of them $5,000 or less.

"We would virtually eliminate the purchase order and also the paper and forms that go with them," said Charles Katsuyoshi, chief of the city Purchasing Division. "And what's going to happen obviously is if we make a purchase with a card, we're going to receive the goods right away and the vendor gets paid on a much more timely basis."

A purchasing card will give the buyer more leeway by eliminating the need for a supervisor's authorization as is usual with a purchase order, Katsuyoshi said.

But the card will also provide better control because it can be configured electronically to limit the types of product that can be purchased, amount of money available for specific items or vendors, and even the amount spent in a single day. Technology also allows easier and quicker detection of any misuse, Katsuyoshi said.

Proponents say going to purchasing cards will not cost money - but will put money back into city coffers. The credit card companies pass the cost onto vendors in the form of a discount fee, similar to regular credit cards. The city would receive a share of that discount fee, which varies based on the amount of a purchase.

Katsuyoshi expects most vendors who aren't already accepting credit cards to catch on because of the advantages.

Katsuyoshi is hoping to award a three-year contract by May and allow the first cards to be issued by July 1, the start of the fiscal year.

The three neighbor island counties, the Department of Education and the state Judiciary will also come under the contract, which is being negotiated by the city.

---

City & County of Honolulu