We don't know whether state Auditor Glen Gainer bent ethics rules by appearing in Visa ads touting "p-cards" -- but the most astounding part of last week's news reports is the claim that those cards save West Virginia taxpayers $145 million per year. That's amazing, and highly commendable, if true.
Purchasing cards are special credit cards issued to employees of an agency or business for use in buying items or services for the agency or business.
At first blush, it's hard to understand how the cards can save money. But when you realize the bureaucracy expenses involved in purchasing by a large organization, the explanation becomes clear. The National Association of Purchasing Card Professionals says:
"The transactional or process cost of using a traditional procure-to-pay process -- often involving a requisition, purchase order, invoice and check payment -- is the same regardless of the dollar amount of the purchase. In other words, the process cost of a $25 purchase is the same as a $10,000 purchase. Often, the process cost exceeds the value of the item being acquired (e.g., the cost to acquire a $25 wrench may exceed $100). Estimates of the process cost of the traditional process range from $50 to $200."
In contrast, using a p-card avoids the requisition-order-invoice-check rigmarole that consumes a lot of paperwork and employee time. "When the payment method is switched from the traditional process to a purchasing card process, efficiency savings range from 55 percent to 80 percent of the traditional process cost," the NAPCP says.
The auditor's office adopted p-cards in 1996, and they have spread slowly to many state, county and city agencies. Their use creates a clear record that can expose crooked bureaucrats, such as a state highways official who used a p-card to buy himself a $2,500 big-screen TV.
Frugality is desirable in government, as well as in private businesses and family households. State officials should be commended for saving taxpayers money.