BidOhio: Using Technology to Earn More for Taxpayers

By Deters, Joseph T. | Government Finance Review, October 2000 | Go to article overview

BidOhio: Using Technology to Earn More for Taxpayers


Deters, Joseph T., Government Finance Review


Through the use of an Internet auction, the State of Ohio has been able to generate more investment income for the state and revolutionize the way that interim funds are invested.

On October 5, 1999, Ohio became the first state in the U.S. to conduct a competitive, Internet auction of interim Treasury funds. Using a new system named BidOhio, the state was able to auction interim state funds to Ohio financial institutions. Prior to BidOhio, bids were not competitive and were not auctioned, resulting in banks bidding the minimum rate because they were assured of receiving a portion of the available deposits.

What is BidOhio?

BidOhio is a competitive live auction of interim funds from the Ohio Treasury conducted on a secure Web site developed exclusively for the Ohio Treasurer of State's office. The "interim funds" that are auctioned are state dollars (tax receipts, fee payments, etc.) which have been received by the Treasurer's office, but are not yet needed to meet the immediate obligations of the state. As a result, these funds are available to the Treasurer for short-term investment, which allows the state to earn revenue until the funds are needed.

The Ohio Treasury's decision to create BidOhio stemmed from a top-to-bottom review of Treasury operations. The goals of that review were to look for opportunities to assist the Treasurer's office in its function as the state's largest "bank" and to introduce modern banking practices and the latest technology wherever possible.

BidOhio makes a number of improvements in the Treasury practice of making interim funds available to banks around the state. In the past, bids for interim funds were not accessible, not competitive, and not auctioned, resulting in banks bidding low rates and, thus, providing a lower rate of return for taxpayers. Previously, the methodology of submitting bids via fax, phone, or hand-delivery was inefficient and outdated. Fax machines could not handle the volume of bids, received bids were hard to confirm, and it was difficult for the office to execute a precise and fair closing to each bidding session. Moreover, the old process was impractical for some banks and contributed to an inequitable distribution of Treasury funds, which in turn deprived some communities around Ohio of an additional infusion of available capital for their local economies.

BidOhio is a far more competitive, efficient, and up-to-date bidding process. A key advantage of BidOhio is that it achieves equal footing among banks regardless of size or geographic location. Internet technology permits more banks to compete for interim Treasury funds, thereby reinvesting Ohio's money in more Ohio communities. Now, Treasury money is invested in counties all over Ohio, as opposed to large regional or national banks in the major metropolitan centers. With BidOhio, seven out of every 10 banks that submit a winning bid are from small or medium-sized counties. In the first auction, 10 of the 21 winning bids were from smaller banks for deposits ranging from $200,000 to $1 million.

The statewide distribution of investments achieved by BidOhio has continued from the first auction to the most recent. In the August 2000 auction, 17 different banks had winning bids, with money being invested in counties from nearly every corner of the state. A number of the winning banks were from rural areas. Only one of the winning bids was from one of the three largest Ohio cities--Columbus, Cleveland, and Cincinnati. Over the past ii auctions, a total of 56 banks from 41 counties in Ohio have participated in the auctions.

By using the Internet to conduct auctions, the Treasury also has greater flexibility when investing state funds. The Treasurer can amend the parameters of the auction prior to or during an auction, making it a valuable cash management tool because it can easily be adjusted according to the market.

BidOhio is a "paperless" process, which enhances the safety, accuracy, and efficiency of Treasury investment operations. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

BidOhio: Using Technology to Earn More for Taxpayers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.