How KIPP San Antonio Got a Handle on Procurement
Charter school network CFO tells a still-unfolding story of the fits, starts, frustrations and triumphs that have accompanied implementation of the organization’s new purchasing policy
Bringing a coherent, transparent procurement policy to an organization that has long lacked one, then getting people to actually follow that policy, can be a painful process. Just ask Shawn McCormack, who as chief financial officer at KIPP San Antonio Public Schools (KIPP is short for the Knowledge Is Power Program, a national network of 209 schools), has spent the last several years doing exactly that with the six-school, 400-employee organization and its $11 million procurement budget.
For McCormack, who owns a Master’s degree in accounting and came to KIPP San Antonio from the financial services world in 2013, this “starting from scratch” has been at times frustrating, at times rewarding— and most of the time, highly challenging, as he explained during a recent conversation with BuyQ.
BuyQ: Tell us about some of the biggest changes you’ve sought to make to KIPP San Antonio’s procurement policies and practices, and the motivation for pursuing them…
Shawn McCormack: We really didn’t have any kind of procurement policy in place three years ago. We needed to build that policy, then implement it. One of the things that we wanted to do was simplify it, so we didn’t have all these different thresholds. So we decided to adopt the federal threshold for all of our purchasing. Now every purchase in our organization over $3,500 requires bidding, over $50,000 requires an RFP and over $150,000 requires board approval.
That was an ambitious approach. I don’t think I quite understood the impact of that kind of decision, because it is pretty daunting to try and bid out everything over $3,500. We don’t have a formal purchasing manager or procurement manager or department. We’re not large enough for that yet, so it’s been a struggle to balance the amount of work it takes to set something up, and where we are right now. Those thresholds have put a big burden on our staff, to be able to meet the compliance side of that work.
BuyQ: Trying to automate wherever possible, I would think, would be a good way to relieve that burden…
SM: We are looking now to move online for our hard purchasing, and this year we chose Concur as the platform we want to utilize. We chose Concur for a variety of reasons, mostly because it can do a lot more than some of the other systems that we looked at it. It can handle the AP side, the travel, credit card reconciliations and employee reimbursements.
One of the positives of being in the KIPP national network is, we share a ton with each other, so being able to see what other people use, how they use it, what are the advantages and disadvantages, it’s been really helpful in evaluating different options. Throughout the KIPP network, most people either use Concur or AnyBill as their AP platforms.
BuyQ: How has the Concur system worked for you to this point? How has the implementation and utilization gone?
SM: That’s the interesting thing. We chose this summer to use Concur, and started the process of negotiating which pieces of the platform to implement first, and we basically ended up slowing down the process after realizing that we needed to have our vendor account set up first, and our credit cards in the right place. So we want to work on some of the background policy work before we implement Concur, because we feel like we wouldn’t get the full value out of it until those things are in place.
We decided to hold off for one year on Concur, to better set up for success when we roll it out. Because if we don’t have that background stuff in place first, it’s going to be quite a bit of work for our staff to be able to utilize the system and learn it.
BuyQ: You mentioned travel spending. What are you doing to address that issue?
SM: KIPP is known for spending a lot on professional development for staff. It’s something they value highly. We send people all across the country for different national trainings. But we didn’t have any kind of travel policy in place. It was all done manually, where people were setting up their own travel, turning in the receipts or putting it on corporate cards. There was no structure to it, and there were a lot of expenses that I didn’t feel comfortable approving, but there wasn’t a mechanism to say, “This isn’t acceptable.”
The first thing we did is we developed a travel policy that outlined exactly what is acceptable, what is not, what we’ll cover. And we shifted to a reimbursement model, so we no longer allow corporate cards or company cards to be used to pay for travel.
We hired a travel agent to book all of our travel, to put some teeth behind the policy. And we provided a central credit card to book all pre-paid hotels, flights, shuttles, etc., so people weren’t putting huge amounts on their personal card and having to be reimbursed. We tried to centralize travel as much as possible by putting structure in place. And that’s been really successful. We did that about three years ago, and it took about six months of painful implementation. Now it’s running pretty well.
BuyQ: Day in day out, what’s the hardest part of your procurement responsibilities?
SM: Being the bad guy. We try to make the policy about using common sense, but staff are stretched in a million directions and they just want to make a decision, a move forward. If something is out of policy, then I am usually the person deciding on what to do next. Usually my answer is no, we can’t do that.
BuyQ: What about at the organizational level — what’s the biggest procurement challenge KIPP San Antonio faces currently?
SM: Answering the question, “Who should own procurement?” Is it a Finance’s or Operations’ responsibility? I have strong personal feelings about this topic. Procurement sits on the Finance team in most charter organizations I know. This makes most procurement systems feel too compliance oriented because Finance is not the purchaser, but is responsible for the reporting. Operations is really closest to the procurement work and would add greater value around which vendors best fit the organization’s needs and how to design the policy and processes to ease the burden of purchasing on our schools. But Operations staff are usually the ones being pulled in a million directions, so it is hard to add the large upfront work of setting up a procurement system on to their plate.
BuyQ: Based on your own experience and talking with colleagues around the industry, what do you see as the biggest challenge charter school procurement departments face today?
SP: One is that charter schools were put into place to breed innovation, breed flexibility and this idea that you’re not bogged down in office stuff. One of the struggles with procurement is that there’s not that flexibility. We absolutely have to be as accountable as every other public organization’s procurement department — in some cases more. That’s something that is really hard for some members of our staff to understand. Yes, we’re a charter school and we get a lot of flexibility and we have a lot of great ways that we can be innovative and do things. But there’s just stuff in procurement that involves bureaucracy.
BuyQ: If you had to offer a piece of advice to someone in a position like yours who’s new to charter school procurement, what would that advice be?
SM: Don’t try to recreate the wheel. There are a lot of people doing this work that are much farther along. So you can see ahead a few years, and know what you need to do by utilizing the people ahead of you doing the learning. And, consider utilizing a third-party purchasing organization like BuyQ that does all the work and has everything set up. You can purchase through them and not have to worry about all this additional work in order to move your work forward.
That doesn’t absolve you from having to know what needs to be done. You still need to know what is required of you from a compliance perspective, so make sure who you’re choosing to support your work is doing what they should.
