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Prepaid cards eliminate manual processes and improve efficiencies

Success of Miami-Dade Public Housing Agency utility allowance payments solution prompts expansion

We've shifted our focus from transaction processing to more value-added activities, which should be the goal of every financial department.
— VCraig Clay, Chief Financial Officer, Miami-Dade Public Housing Agency

The challenge

The Miami-Dade Public Housing Agency is the eighth-largest public housing agency in the U.S. and operates a $263 million multifaceted program that provides affordable housing opportunities for more than 30,000 residents in Florida's Miami-Dade County. The Miami-Dade Public Housing Agency administers federal government subsidies that enable thousands of low- and moderate-income residents to secure decent, safe, affordable housing. The many programs that the award-winning agency manages include federally subsidized payments to help qualified tenants meet their utility expenses.

For this program, the agency issues more than 25,000 utility allowance payments annually, many of which are for very small sums or sent to unbanked beneficiaries. Historically, the agency made all of these payments by check, something that was accompanied by all of the inefficiencies and headaches associated with in-house check processes, according to Craig Clay, the agency's CFO. Small checks would often go uncashed, checks would be returned by the postal service or they would get lost or stolen, unleashing a chain of manual processes related to voiding checks and stopping payments or issuing replacements. Identifying uncashed checks among the $1.8 million that is distributed annually was itself a cumbersome process and so were reconciliations.

Clay knew there was a better way. He wanted to make the whole process more efficient and saw an opportunity to replace labor-intensive check-writing processes with a card-based electronic solution.

The solution

To achieve Clay's vision for a simpler, technology-driven payment process, the agency chose Citi from a slate of contenders to develop a prepaid card program that could eliminate for good the agency's utility allowance check-writing hassles.

An easy-to-implement Citi® Prepaid Card solution took less than 30 days to get up and running, notes Clay. In fact, the transition from check-writing to card issuance was so simple that Clay and his staff brought the solution online, with the assistance of Citi's implementation team, without having to involve any technology personnel.

"I give the expert knowledge and service of Citi's implementation team an 11 on a scale of 10," said Clay. Emphasizing Citi's know-how, he added, "I knew what I wanted and Citi was there to deliver it. They understood my needs and knew what I was talking about. Their experience really shows and they far exceeded my expectations."

Now, all utility allowance recipients receive their monthly payments on reloadable prepaid cards. They no longer have to make a trip to the bank, worry about a check getting stolen or lost, or pay a check-cashing fee to receive their funds.

On the agency side, everything it needs to do to manage accounts and payments can be performed electronically via a web portal. It creates cardholder accounts, manages card inventory and views reports using ClientZone™, a web-based program management tool for Citi Prepaid Cards. Instead of issuing thousands of checks each month, the agency sends one ACH payment file to Citi and payment amounts are loaded onto tenants' prepaid cards "virtually."

The result

From the outset, the housing agency's number one goal was to create efficiencies. In the end, it achieved much more.

Clay estimates that the Miami-Dade Public Housing Agency saved more than $130,000 in the first seven months of the program when he tallied costs associated with postage, check and envelope stock, printing and postage combined with various personnel- and overhead-related costs. That amount is nearly double his original estimate of $250,000 over the first two years.

For the conversion, recipients were required to pick up their cards in person, a step that also helped weed out some fraudulent activity in the program.

The reporting capabilities on ClientZone also make it easy to identify inactive card accounts and to sort card balances by dollar amounts. There's no need to wait for bank statements to get information about uncashed checks, for example. "We can respond faster and analyze better," Clay observes. "We've shifted our focus from transaction processing to more value-added activities, which should be the goal of every financial department."

The utility assistance prepaid card program has been such a big success that the agency also rolled out prepaid cards to residents in its assisted living program who receive government subsidy payments. The cards have helped ease the burden of elderly residents who rely on family members or friends to cash or deposit their monthly checks.

Clay also sees other opportunities for deploying prepaid cards. He soon plans to extend the program to landlords who receive rental payments on behalf of tenants from the agency. Nearly 50% of the landlords providing services through the Miami-Dade Public Housing Agency still receive their payments by check, rather than direct deposit. Clay sees converting those check payments to prepaid cards as a way to generating even greater efficiencies and cost savings for his agency.