Thank You Cards for the Office: $15; New Purchase System: Priceless

Pablo Medina, Editor

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A paperless purchasing program is in the works for all departments at NEIU.

Michael Pierick, NEIU’s Vice President for Finance and Administration, will administer credit cards to all department financial managers to purchase fundamental materials and cover travel expenses. Although there is currently no projected date for the finalized system, the pilot program — a test to gauge the effectiveness of the new system — will be initiated in the next few weeks.

“It is just a MasterCard in this case used by staff for two primary purposes,” Pierick said. “The first is for purchasing low dollar items, we call those ‘commodities.’ The second is travel expense.”

The current method requires department staff to pay out of their own pocket and to circulate invoices from vendor to financial managers.

On this method Pierick said: “It’s not really fair for me or an employee to say to them ‘Look, if you want to buy something to do your job, you have to spend your personal money and then wait for a reimbursement.’”

Many national colleges, such as the University of Wisconsin-Madison and Penn State University, have used purchase card programs for the past two decades. Pierick was advised to develop a comparable system for NEIU by University President Sharon Hahs.

“She said, very specifically to me, ‘Michael, I’d like you to create a purchasing card program here at Northeastern,’” Pierick said. “It took about 15 months to work out the different policy changes, the practices that we had to change and to work out the relationship with JP Morgan Chase, the bank that we worked with to establish our purchasing card.”

The program will be available to 30 departments during the pilot training for the purchasing card usage. The project will expand according to the results of the data input and expenses of the departments. “We wanted to start with a limited number of users,” Pierick said. “We need to make sure that all of the data is transferring correctly and posting into our financial reports and so on.”

“Probably the biggest concern is that we’ve had a history of encumbering funds for every purchase,” he said. “It’s a question of financial responsibility.”

The purchase cards will employ a security chip to avoid credit fraud and abuse of finances as well as a set amount for users to spend during the pilot testing.

“We standardize a set amount, “Pierick said. “The pilot user limit is $1,500 during the transaction period. We can make exceptions to that.”

The purchases of the cards will be reviewed by financial directors through a SmartData system at Chase, which will be seen by the financial managers of the university departments.

SmartData system is commercial card management service that features services such as scheduling reports and exports and accounting allocation codes. Each card will have a unique code that provides proper tracking.

Another issue brought up in Pierick’s development of the card system was the uneven budgets of different departments, with some departments limited in the amount allocated for their purchases.

“Some of the smaller departments have a limited commodities budget,” Pierick said. “One of the arguments for establishing individual limits, instead of a broadly based limit, is if you give someone a limit of $1,500 and they only have $100 (for commodities)…they can go out and find a vendor who’ll send us an invoice for something more than $100.

“There are numerous ways to overspend their budget…we expect that people will not overspend their budget.”

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