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September 10, 2010



DiNapoli: State Could Save Millions With Increased P-Card Use



New York State could save as much as $49 million over a three-year period with increased use of the state procurement card by agencies, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“State agencies have been getting better at extracting savings and rebates through use of the P-Card,” DiNapoli said. “But $49 million is a lot of taxpayer money to leave on the table.  The state is facing uncertain revenues the rest of the fiscal year and beyond. Agencies need to do everything they can to maximize cost effectiveness. Every dime really does count.”

DiNapoli’s auditors, in a prior audit, found that state agencies could have saved at least $13.4 million in process costs and realized at least $2 million in rebate revenues annually if they had used the P-Card instead of traditional vouchers for small-dollar purchases.

In the audit of the Office of General Services (OGS) released today, auditors found that most state agencies have increased their P-Card use since the 2005-06 fiscal year, and more agencies are beginning to use the card and encourage its wider distribution and use. As a result, the number of small-dollar purchases that we estimate could have been made with the P-Card, but were not, fell 33 percent from 578,000 per year in the prior audit to 386,000.

Even though agencies have been making progress and the total number of small dollar vouchers has declined since 2005, the potential for savings has actually grown due to escalating costs and an increase in available rebates. DiNapoli’s auditors estimate the potential cost savings and rebate revenues that could be realized in the three years remaining on the state contract with the P-Card provider could total as much as $49 million.

From July 1, 2008 to June 30, 2009, state agencies processed almost 500,000 voucher payments totaling over $250 million for purchases valued up to $2,500. About 78 percent of the voucher-based purchases could have been put on the card. Had agencies made these purchases with the P-Card, the state could have saved about $14 million in processing costs and realized about $2.3 million in additional rebate revenues.

Auditors recommended OGS:

  • Investigate alternative approaches that could provide incentives for state agencies to increase their use of the P-Card;
  • Help agencies strengthen their efforts to make P-Card payments timely, and communicate the importance of doing so, emphasizing the rebates forfeited due to late payments; and
  • Work with agencies to promote use of the P-Card for eligible small-dollar transactions, via top-down communication and training, to increase the likelihood of realizing cost savings and rebate revenues.

OGS officials generally agreed with the audit’s recommendations and indicated they have already taken steps to increase the use of P-Cards at state agencies.  

A copy of the full audit, including the OGS’s response, can be found here: http://www.osc.state.ny.us/audits/allaudits/093010/09s56.pdf.

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