State Treasure squares off with Governor over paperless checks

Monday, April 1, 2013 - 6:39pm

A new plan to change the way the state pays businesses for services and contracts has sparked a big debate between the State Treasure and Governor Jindal’s office.

The issue all boils down to a proposed cost-cutting measure. Governor Jindal wants the state to utilize a program called ePayables from Bank of America, which would pay businesses with virtual rather than physical checks.

"After an in-depth analysis, we estimate that the state would save between $2.5 million and $3.6 million per year through implementing ePayables," Kristy Nichols, Commissioner of Administration, said. "The state currently issues thousands of checks each month to vendors, with a yearly average of more than 150,000 checks issued each year the last three years -- and the Division of Administration incurs the costs associated with printing and processing a check, conservatively estimated at $2.99/check. In an effort to reduce the costs of issuing checks, the state would offer vendors an additional way to receive electronic payment."

However, State Treasurer John Kennedy is not convinced the plan benefits tax payers doing business with the state. He claims that the program will actually force businesses to pay a fee to Bank of America to get the money they are owed.

"This is a gift, a huge gift to Bank of America, and the taxpayers don't get anything in return,” Kennedy said when addressing his concerns. “The people we do business with don't get anything in return. Why do we have to pay Bank of America? I don't charge a fee as state treasurer."

Kennedy also said that he’s so passionate about the issue he’s willing to take the Governor to court. He says he plans to meet with the Governor sometime next week to try and work out their differences.

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