Last week, an e-mail went out to all employees in the Illinois Department of Public Health to let them know that their corporate cards will no longer work after April 22nd because Bank of America is not renewing the contract and the State cannot find a replacement.
Like most major companies, the State issues corporate cards to employees to charge travel expenses and other charges related to their work. In the case of the State, this has to be done via your typical procurement processes. The below e-mail shows that Bank of America is fed up with the State and they have yet to find a willing sucker bidder willing to deal with the State’s payment cycle.
Here is a copy of the e-mail (emphasis mine):
Folks:
Not to send panic, but just a heads up to each of you as to what’s happening.
Bank of America is cancelling the contract with the State of Illinois effective April 22, 2011. They will not do another contract extension for the State of Illinos. So what does that mean? On April 23, 2011 at 12:01 a.m., the cards currently held by IDPH employees will no longer be valid. The State has been trying to finda new vendor, encourage BoA to give us a few more months, but as of this writing has been unsuccessful on all fronts. So what does this mean to our travelers? Most establishments will not direct bill especially conferences, (prior approval needed by travel office for this process) so persons required to travel will have to put charges on their personal charge cards or set aside personal funds on prepaid travel card, or pay cash out of pocket. For those who are non-GRF [General Revenue Fund] this should be not big deal, but to those traveling on GRF, this could have an impact.
One additional details are received. I will share that information with you so that you can share with our travelers.
Unti then . . . this is just a heads up!!!!
The state has for several years run budget deficits. As Illinois can’t print money and they’ve run out of cash, they have resorted to simply paying bills later and later. Some vendors have stopped doing business with the state, some vendors simply will not do business with the state or seek state business.
Bank of America is likely tired of having a customer owe millions and insist on paying on a Net-270 (on a good month). The fact that they can’t find other bidders shows that everyone knows the score here.
Now, if you were a state employee, would you be willing to use your personal credit cards or cash for state business? Not if you didn’t want a one-way ticket to bad credit town.
What isn’t clear is whether this effects just the Department of Public Health or the State as a whole (calls to government spokespersons have yet to be returned with answers to those questions since last week).
All of this despite a 67% income tax increase has still left the State of Illinois unable to pay its bills on time and a Governor who insists cutting spending is just plain wrong.
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