![]() However, the Illinois response was incomplete. Illinois was one of the states that responded to both the collections and disbursements surveys. 3 Although 32 states responded to its collections survey, only 20 states responded to the disbursements survey. In November 2018, the Council of State Governments released its Cash-less State Governments study, depicting how states use electronic payments and debit/credit cards for disbursements and collections. ![]() 2 In response, several studies have focused on the adoption of new payment technologies by state governments. Purpose and methodologyĪlthough advancements in payment technologies have been improving efficiency, saving money and enhancing accountability, state governments have been slow to embrace these innovations. ![]() This study gives specific recommendations on the development of a best practice guide by considering the advantages and disadvantages of each payment method, as well as the role of government under each circumstance. That legislation should also empower the comptroller to empanel an interagency task force to develop guidance on what those best practices are and to update the guidance as payment technologies change. This report recommends the General Assembly pass legislation that would enable agencies, with approval of the comptroller, to use payment methods that make the most sense under the circumstances. But the disbursement side is more rigid with little guidance. On the collection side, there is great flexibility in what state agencies may accept as payments. These EBT cards make the most sense when the government acts as a direct welfare benefactor and wants to make sure the funds are spent consistent with program guidelines.įourth, the Illinois General Assembly has the constitutional duty to provide the comptroller, treasurer and state agencies with the statutory structure to handle payments. For example, Electronic Benefits Transfer cards are a special kind of a debit card that allows the government to control what may be purchased by the recipient. Not all situations are the same, and flexibility is needed. Third, the role government plays is an important consideration when evaluating payment methods. Debit cards cost the recipient less money to access the funds, are more secure than paper checks or cash, and cost state government less money to administer. When direct deposit is not an option, the state should prioritize use of debit cards. Direct deposits are not an option for the 7% of Illinois households that are unbanked. Second, payment methods should take into account the financial situation of the recipient. Currently, direct deposit is the most cost-effective method of payment with better security controls, and should be prioritized unless other considerations weigh more heavily. This report outlines a number of important factors to consider in improving Illinois’ payment methods, as well as recommended next steps.įirst, government should consider cost and security controls when choosing payment methods. The state lacks unified standards in evaluating and implementing best practices in payment methods for now and in the future as payment technologies change.Although the Illinois Constitution gives the General Assembly the responsibility to lay out the statutory structure to handle payments, there is little guidance on how agencies can use the most effective payment method for disbursements.By statute, a state vendor may receive up to 30 payments per year by paper check.Paper checks are the most expensive and least secure of the available payment options. Illinois state agencies paid out at least $1.3 billion via paper checks in 2018.There is significant room for improvement in Illinois’ current payment methods, and the state needs a process to keep up with changing payment technologies. Improve payment security to better control for vulnerabilities, such as forgery and fraud.Make payments safer and more accessible for the more than 1 in 5 Illinois households that are unbanked and underbanked.This report shows that by adopting best practices across all of these dimensions, Illinois state government can: In deciding on those payment methods, policymakers must consider a number of important factors, including security controls, cost effectiveness, accessibility, speed and allowance for choice. 1 These flows all depend on methods of payment. Each year, tens of billions of dollars flow through Illinois state government.
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