Since its inception in 2002, the state and county pCard (purchasing card) program has saved taxpayer dollars, increased buying power through rebates, improved efficiency through the reduction of paperwork, processing time and government employee hours, and has maintained stringent controls for protection and accountability.

‘The State Procurement Office (SPO) maintains the pCard program, develops policy, and provides training for the state.

The state and counties have received approximately $7.5 million in rebates through the pCard program since 2004, based on net purchasing volume. In 2014, our government saved about $69 per pCard transaction over the traditional —and tedious — purchase order. In fiscal year 2004, there were approximately 85,907 purchase orders in the state executive branch. A decade later, in fiscal year 2014, the number of purchase orders was reduced by 84 percent to approximately 12,970. Instead of processing thousands of individual invoices and cutting and mailing checks to vendors, one check is written to the financial institution.

Under the pCard program, the government receives goods and services in an expeditious manner and avoids late payment fees. Businesses also benefit from electronic payments made within three, rather than 30, days. This results in improved business cash flow, zero credit risk, and reduced costs through the elimination of invoices, accounts receivables, paper checks, postage and deposits.

The pCard program is equipped with various elements of protection and accountability, such as the imprinting of the authorized employee name and embedded photograph on the pCard, as well as MasterCard’s Zero Liability Protection Plan and First Hawaiian Bank’s zero-liability policy.

Verification and questionable transactions can be easily traced to a specific employee. Also, pCard administrators have access to all cardholders’ transactions and can look for unusual, unauthorized or fraudulent activity.

If there is any improper use, the cardholder may be held legally and personally responsible for that transaction.

In the event of the outright theft of a pCard, it is always very clear who is the responsible cardholder.

Every single pCard issued to a government employee is protected and embedded with statewide merchant category blocks, including food, restaurant, gasoline, hotel, cash withdrawals, entertainment and personal services. Only the chief procurement officer and the department/jurisdiction pCard administrator can approve a request to unblock a merchant category. The bank requires written documenta- tion and confirmation of any approved request before a code is unblocked. The mandatory blocks are supplemented with a very clear audit trail.

Other controls are available to all departments/jurisdictions. A cardholder may be limited to making a maximum number of transactions per day, week, month, or within a billing cycle. Dollar limits per transaction restricts how much can be spent at one time per transaction and/or within a specific period of time.

To further ensure the integrity of the pCard program, SPO requires that each department utilizing the pCard program designate a "pCard administrator" charged with pCard maintenance, administration and monitoring. To support these administrators, SPO has developed extensive policy manuals, on-demand training, continued policy guidance and on-call support.

SPO does not dictate departmental or jurisdictional policies and procedures, and does not interfere with their operation, management control or their resources. Departments and jurisdictions know best what controls and processes are appropriate to meet their needs within its available resources, and are responsible and accountable for every expenditure and pCard transaction.

In spite of constraints in resources in the SPO’s oversight of the program, the government pCard will continue to be the most financially viable and efficient method of payment for the state of Hawaii and its counties.