TOPINKA: DIRECT DEPOSIT IMPROVES EFFICIENCY, SAVES DOLLARS
Comptroller highlights initiative in Springfield, Peoria & Moline
SPRINGFIELD – Illinois Comptroller Judy Baar Topinka is traveling the state to highlight her successful Direct Deposit legislation, which builds efficiency and saves more than $1 million annually in paper and postage costs alone by requiring that certain state payments be made electronically.
Initiated by Topinka and overwhelmingly passed by state Senate and House members, the Direct Deposit legislation also ends the inefficient practice of mailing low-dollar interest checks – sometimes literally for cents – from the state to its vendors.
“These are common sense changes that will make state government more efficient, and save taxpayer dollars,” Topinka said. “It is the kind of thing that should be going on in every office and agency throughout state government. We need to continue to find ways to streamline operations and identify savings wherever possible in order to regain our fiscal footing.”
Specifically, Direct Deposit legislation requires non-union employees, and all vendors and contractors that receive 30 more checks annually from the State to register for electronic payments, or be subject to a $2.50 per check fee for each hard copy. Over 14,500 vendors received 30 or more payments from the same state agency last year, totaling more than 2.5 million checks.
By moving those transactions to electronic payments, the state would save an estimated $1 million annually in paper and postage alone (2.5 million x .40).
The legislation further ends the inefficient and costly practice of mailing low-dollar interest checks to state vendors. Specifically, the legislation sets a minimum threshold of $5.00 for any interest checks sent by the state. Interest checks for greater dollar values will continue to be made, ensuring those most impacted by payment delays are appropriately compensated.
The State wrote 96,142 interest penalty checks under $5 between August 18, 2009 and December 31, 2010.
“Nothing says inefficiency like a five-cent check in the mail,” Topinka said. “It is absurd for the state to send checks that cost more to mail than their value, and with this legislation we have ended that practice.”
