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Markell, Wagner, and Jones-Potter tackle check reform 14 July, 2009

Posted by David Anderson in Budget, State.
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DOVER – In a move that will reduce the number of checks the state cuts each year, reduce the number of state credit cards and deliver several hundred thousand dollars back from the state’s credit card vendor, Governor Jack Markell announced Friday reforms in the way the State of Delaware pays its vendors, reimburses state employees and tracks state credit card usage. State Treasurer Velda Jones-Potter, State Auditor R. Thomas Wagner, Acting Secretary of Finance Tom Cook and leaders from several state agencies joined Markell in the announcement.

“The state is serious about cutting its costs. Government needs to be as efficient and effective as possible to ensure that Delawareans get better value for their tax dollars,” Markell said. “These reforms are one of several important steps forward.”

The new reforms consist of the following:

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Reimbursements made to state employees will be paid by direct deposit. When fully implemented, this will eliminate up to 50,000 checks per year.
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The top 10 vendors that have been identified as receiving multiple checks per day from the State will be paid via credit card or electronic fund transfer when possible. This will reduce the production of up to 28,000 checks a year.
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Payments to the next 300 vendors will be transitioned in batches over the next year to either electronic fund transfers or the state credit card. If the vendor can only process checks, then state agencies will combine their expenditures and make single consolidated payments. This move will eliminate up to 36,000 checks.
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The implementation of new systems to reconcile and monitor credit card usage by state employees, reduce the number of cards in circulation and review internal controls and cardholder agreements at each agency.

“Initiatives like these can bring a substantial amount of money back to our state and make our government more responsive and responsible,” remarked State Treasurer Velda Jones-Potter. “Working across agencies and departments, we are helping to make this idea of greater fiscal responsibility a reality.”

Just as families and businesses around the world that use credit cards responsibly receive rewards like frequent flier miles from their card provider, the state benefits from a cash back program when we use our cards, noted Acting Secretary of Finance Tom Cook, who said the current reward program brings in nearly a million dollars each year to Delaware taxpayers. By moving the top 10 vendors to credit card payments instead of checks, as much $600,000 could be added to state coffers.

“It’s good to see state government focus on nuts-and-bolts issues like these. I’ve long said the state had to do more to maximize the amount of money it gets back from its credit card vendor, and this is a significant improvement in that policy.” Wagner said. “Real reductions in the number of checks cut to vendors is a real reduction in cost and that is more important than ever.”

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