Guide to Handle Expense Fraud - A straightforward guide that covers what expense fraud is, what it costs to the companies, whether you should be ...
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Guide to Handle Expense Fraud A straightforward guide that covers what expense fraud is, what it costs to the companies, whether you should be concerned, and what you can do about it.
CONTENTS
1. Introduction 03 4. Preventing Expense Fraud 17
• Preparing your company
2. Expense fraud 05 • The importance of compliance
• What is expense fraud? • Organizational culture and policy
• Why do employees tamper expenses? • How to write and publish an expense policy?
• What impact does expense fraud • Expense policy tips
have on a company? • How automated expense management could help?
3. Dealing with Fraud 11 5. Conclusion 27
• Recognizing red flags • Expense Fraud Checklist
• What to do if you suspect fraud?
• Managing employees and fraud
1 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 2
INTRODUCTION
As the economy continues to falter, your organization, like many others, may find
itself more susceptible to fraud. While it is considered by some as simply ‘padding out
the expense report’, expense fraud is a crime that affects organizations large and small
with significant financial implications. It is estimated that Asia Pacific organizations
lose approximately 5% of their revenues to fraud, according to the Association of
Certified Fraud Examiners (ACFE) Report to the Nation on Occupational Fraud
and Abuse1.
Expense report fraud actually accounts for 15%2 of all reported occupational fraud
(other scams include corruption, financial reports, billing, accounting, etc.). And
all types of industries experience fraud, from banking and financial to technology,
manufacturing, government, non-profit, education and healthcare. In other words: it
can happen in any company.
Because of the potential consequences, failure to implement fraud safeguards could
jeopardize your business. Keeping your organization safe from fraud demands strong
policies and a culture of compliance and honesty. Whether you’re a multinational
corporation or a small business, you can fall victim to expense reimbursement fraud.
We have provided expense management solution to organizations around the
world. Over the years, we have learnt a lot about human nature, expenses and
the environment in which they are incurred and claimed. For most organizations
expense fraud isn’t something to worry about, but the reality is that it does take
place occasionally.
This e-book is designed to help you better understand expense fraud and the
possible implications on you and your organization. It also provides some practical
solutions to help prevent fraud. Whether it’s the red flags you should look for or tips
for communicating with employees, we hope this resource will help you and your
organization effectively plan for or deal with expense fraud.
3 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 4
EXPENSE What is expense fraud? 07
FRAUD
Why do employees tamper expenses? 08
What impact does expense
fraud have on a company? 08
5 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 6
ALL ABOUT EXPENSES FRAUD
What is expense fraud? “Below the Line”expenses may involve creating and claiming
fictitious bills or even reclaiming
“One in seven
In an effort to reduce the number
Piles of receipts and the process of manually of receipts that employees old bills. Since buying a receipt
filing expenses are sure to be an erroneous book or creating receipts online
task for any organization. Most of the time
have to keep track of, many
organizations have identified is such a simple task, employees frauds is now
these errors are harmless mistakes, but
discovered
a minimum expense threshold will often find creative ways to
occasionally there is a more malicious intent before a receipt is required for cover the expenses; often coding
by chance”
behind it. reimbursement. While reducing them to departments or line
paper, this threshold opens a items that are running below
Finance departments are well aware that
budget so the charges are not
human error is a common factor in expense window of opportunity for the – KPMG Survey 2011
simplest form of fraud; false detected as out of the ordinary.
reporting. In fact, it is often this awareness
that prompts them to prevent it by enforcing expense reports with charges of
Changing travel
expense policies, requiring receipts and less than the identified threshold.
A travel policy will often
auditing expense records for irregularities Overstating charges determine the class of travel resulting in a reimbursement
and missteps. appropriate for organizations. from their company as well.
Inflating the amount on a receipt
Human errors, by their nature, are more is an easy way to claim a few For travelers who are allowed, Not submitting receipts
easily detectable than fraudulent expense extra dollars. by policy, to purchase premium
Strict business practice and
activity. The issue of fraud arises when the class flights, there is the ability
With receipts for cash items, statutory requirement in some
boundary is crossed between honest mistakes to downgrade at the counter or
particularly meals and taxis, countries say that relevant
and deliberate attempts to circumvent rules. directly through the airline and
often consisting of a handwritten records, like receipts, should be
Fraud is a type of criminal activity, defined as get reimbursed for the difference,
slip that is easy to alter or even provided to support any expenses
intentional deception to obtain an advantage, or use the difference to purchase
completed by the traveler; paid to employees. Unfortunately
avoid an obligation or cause loss to another a ticket for a companion.
overstating charges has become some employees intentionally
person or company. While expense fraud Some employees even claim lose receipts (often when one
an easy way to exploit the
is only a small sub-category of fraud, the for flights they haven’t actually actually never existed in the first
expense system. Overstating
potential cost to a business in both time and traveled on. Flexible flights or place) in an attempt to claim
charges by paying for a personal
money is significant. train tickets are booked and can additional expenses – particularly
guest on the company account
is also a common trick used in be cancelled in advance of the if their manager is generous, or
While expense fraud may take many shapes,
submitting fraudulent expenses. trip. This would therefore involve turns a blind eye.
there are five key forms that regularly appear
in organizations; below the line expenses, a refund by the travel provider,
Claiming fictitious bills or These, and other, more innovative
overstating charges, claiming fictitious bills however cunning travelers still
reclaiming bills fraud tactics, are commonly
or reclaiming bills, changing travel and not claim it as an expense that
occurring in many organizations.
submitting receipts. Creative accounting by employees went through their credit card,
7 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 8
Why do employees While motivations to commit fraud may be Abuse, the typical organization
personal, the consequences are impacting in Asia Pacific loses 5% of its
tamper expenses? organizations financially. By raising awareness of annual revenue to fraud. It is
how expense fraud could happen, organizations can likely that most of incidents are
Whether it is exaggerating claims, adding a couple
proactively take the first step to prevent it. small, however a couple of dollars
of dollars or adding non-business related items to
here or there soon adds up. The
a claim, tampering expenses is more common than
study found that the median loss
most would expect. What impact does expense caused by the Asia-Pacific cases
A global study by KPMG found that the fraud have on a company? of fraud was US$300,000. More
biggest driver in committing expense fraud is concerning is that Asia Pacific
There are two schools of thought about ‘tampering
usually the desire for personal gain3. Whether experienced significantly higher
expenses’. On one hand it is seen as relatively
it is supplementing a salary considered to be losses than the global median of
harmless, or even a kind of business perk. The
insufficient, changes in personal circumstances, US $160,0004.
justifications range from “it’s only a few dollars
financial worries or job dissatisfaction; the
and the business can afford it” to “everyone does
desire for personal gain can push normally The cost of tampering expenses
it”. Nevertheless, expense fraud is dishonest and
responsible individuals to do things they usually can have repercussions that go
sometimes even illegal. It is a touchy subject that
wouldn’t consider. far beyond the balance sheet.
can cause anger and distrust.
Fraud can affect company
Organizations are often left confused at the
Whether you see it as harmless tampering or morale and is considered a
individuals committing fraud. Whether it is expense
a serious breach of ethics, expense fraud can serious workplace crime by some
tampering or something involving much larger
unfortunately be a reality for individuals within both employees. According to Ernst
sums, the people involved in fraudulent activities
small and large organizations. & Young’s Fraud Investigation
are not always greedy or deceitful by nature. Most
& Disputes Services team:
fraudsters work within companies for several years
According to the Asia-Pacific Edition of the 2010 “employees consider tampering
without committing fraud.
Report to the Nations on Occupational Fraud & expenses as more serious than
stealing physical company
property (20%), drinking during
work (13%) and breaching
licensing arrangements (10%).”
9 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 10
DEALING WITH
FRAUD
Recognizing red flags 13
What to do if you suspect fraud? 13
Managing employees and fraud 15
11 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 12DEALING WITH FRAUD
Recognizing red flags When the owner looked back at previous expense
reports, she discovered that the employee had
Finding expense report fraud is likely to
be upsetting. Maintaining open lines of
Once an employee has been shown to commit
genuine fraud, it is important to take decisive
It may be an uneasy feeling that something been claiming this mileage reimbursement for two communication, keeping clear expense-policy action – not only to show that justice has been
isn’t quite right. Perhaps a business traveler is years, accumulating a small but convenient extra guidelines, and operating under the belief that done, but also to define acceptable behavior for
submitting a few more receipts than normal, sum each month. The owner gave the employee employees really are trying to do their best for the the rest of the company.
perhaps the amounts are a bit higher, or maybe two choices: either pay back the money or leave the company will reduce the stress.
they are submitting claims a little more frequently company. The employee returned the money and
than usual. apologized. However, the trust between them had
disappeared and the employee left a year later.
A KPMG analysis of global patterns of fraud calls
these feelings or situations red flags. “A red flag”, Once an instance of fraud has come to your
they say, “is an event or set of circumstances that attention, you might be asking yourself, “What
ought to alert an entity to the presence of risk.”5 should I do now?” Initially, you need to determine if
Many frauds are exposed by formal or informal it was simply an honest slip or an attempt to defraud
tip offs or whistleblowing. In fact, Association of the company. If you’re thinking: “I’m sure it was just
Certified Fraud Examiners (ACFE) found that the a mistake. This employee wouldn’t do this to the
most common fraud detection method in Asia- company.” then you’re probably right. But before you
Pacific was the ‘tip off’, accounting for 43% of all contact the employee to get a better understanding
fraud studied6. of the charge in question, do your research.
ACFE found that the cases of fraud generally Do you see other types of suspicious activity on
continued for an average of 12 months7 before they past expense reports? If not, then it’s probably
were formally detected. In most cases, those who exactly as you first thought – it’s an innocent error.
exposed the fraud either paid attention to red flags Call or email the employee and explain what you’ve
or uncovered fraud by accident. found. The expense could have been misclassified;
it could have been personal, or it could have been
Nevertheless, it’s very likely that many known a data-entry error. It’s always good to start by
instances have gone and continue to go unreported. giving people the benefit of the doubt, before you
Whatever the red flag, trust your instinct and unnecessarily risk upsetting the employee, or worse,
investigate further. causing a serious incident without proof.
What to do if you suspect fraud However, if you are certain that their behavior
does indeed violate a clearly defined expense policy,
Recently, we heard a story from a small business or if the reports or receipts appear to be altered or
owner who noticed that an employee was claiming manufactured, then consult your human resources
20 miles to travel a distance that the owner knew department. They will need documentation
was really a 4-mile journey from the office. and proof so they can address the issue with
the employee.
13 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 14Managing employees and fraud After you’ve weighed the significance of each of these
factors on your business, you’ll need to address the
No matter how great or small the offense is, one thing’s for sure: you issue with the employee in question. Before you do,
need to deal with it. Whether you work for a small business and act remember the following:
as your own human resources department, or you are part of a large
organization with access to experts who will support you in such • Prepare. Before you meet with the employee, determine the
matters, you have to figure out how to approach the employee in objective of your conversation. You may want to jot down notes
question and handle the situation. of things you want to discuss.
Whatever the • Set expectations. When the employee sits down, clearly explain
Before you make a decision on the appropriate action, you’ll need to motivation, people to him or her why you’re meeting. Use opening statements
weigh a handful of things. Here are a few factors to consider:
do occasionally like, “I’ve found some questionable expenses in your last five
• Severity. How much money in fraudulent claims was there? A few expense reports. I’d like to use today to better understand
submit dishonest the pattern.”
hundred dollars? Or thousands of dollars?
expense reports. • Listen. Give the employee a chance to share his/her side of the
• Duration. How long has the employee been filing fraudulent
expense reports? Is it a one-time occurrence? Or has it been story. Be direct. Reiterate your company’s values and tolerance
going on for months or maybe even years? level for instances of fraud.
• Performance. What’s the employee’s performance level– • State the facts. Do not share your opinions or accuse the
exceeding or not meeting expectations? Could the fraud be a employee of fraud. Rather, keep your conversation to the point
result of low morale? and fact-based only.
• Impact. If you fired the employee, how quickly can you replace • Action.Share with the employee next steps and how you plan to
him/her? How important is the employee’s role in your handle the instances of fraud. Again, be direct and to the point.
organization? Would not having that person in that role negatively • Document. After your conversation, document everything
impact the growth and success of your business? discussed. This will be necessary if you need to take legal action.
• Trust. Can you move past the fact that your employee submitted
Whether you decide to fire the employee, take legal action or simply
fraudulent expense reports? Will you be able to trust him/her to
have the employee reimburse the company, be assured what you’re
manage future projects?
doing is what’s best for your business.
The answers to some of these factors may have more significance
than others. For instance, in some organizations, the impact of losing
the employee may outweigh the severity of the offense. In others,
the loss of trust may trump everything else. Also, company culture,
communication of clear corporate policies and your own instinct on
what the right thing to do will be contributing factors on your decision.
15 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 16PREVENTING Preparing your company
The importance of compliance
19
20
EXPENSE Organizational culture and policy 21
FRAUD How to write and publish an expense policy?
Expense policy tips
22
24
How automated expense management could help? 25
17 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 18PREVENTING EXPENSE FRAUD
Preparing your company
Open transparent communication is the Entertainment (T&E) spend is out of
key to a successful expense policy. By policy11 which can significantly impact on
explaining why certain decisions around an organization’s bottom line.
expenses have been made and expressing
the benefits of policy compliance to the Driven by market uncertainties and
individual and the organization as a whole; declining economic growth, many
companies are struggling to maintain
“Organizations need to recognize that fraud does happen. With a employees will often be more responsive
margins. The Ernest and Young Global
and motivated to participate. This extends
robust compliance program and protocols for prevention, detection to reporting the “wins”. Employees love to Fraud Survey recognized that compliance
and response, they will be better able to deal with it and move on”. know that their efforts do make a difference is becoming a pivotal focus for
organizations. They suggest that bribery,
– Graham Murphy, KPMG and have contributed to something.
corruption and fraud remain widespread,
Fraud is preventable. Helping people
however a focus on company compliance
do the right thing through writing and
and enforcement regimes, such as the UK
A key factor to understanding fraud is to does not speculate on what stemmed that communicating your organizations policies
Bribery Act proposed anti-bribery/anti-
recognize that where opportunities exist, particular tide, but increased awareness, and guidelines will go a long way for your
corruption (ABAC) legislation in India12 will
perpetrators can act. An organization’s advancements in expense management company and your own peace of mind.
be key to the future.
ability to heighten the perception that technologies and reduced travel/stricter
fraud will be detected, will substantially travel policies during the economic The importance Unfortunately, fraud happens, however
lessen the likelihood of its occurrence. recession are likely factors. of compliance fraud, misuse or abuse should not
overwhelm you. Organizations can take
Perpetrators are less likely to commit fraud It’s a small percentage that is prone
if they believe they will be caught. Controls According to research carried out by action to prevent fraud before it happens.
to fraudulent expense reports, but the
could exist to detect fraud, but if no one is Aberdeen Group, 49%10 of companies The first step is to make sure your
ability to find those reports and those
aware of them, the fraud could still said the top pressure in their expense expense policy sets the right compliance
travelers is critical. Improved policies
take place. management program was improving guidelines, developing a corporate
and comprehensive travel and expense
expense policy compliance. Despite culture of compliance and ethical
The good news for travel and finance solutions can help.
this, approximately 22% of Travel & business conduct.
managers, however, is that expense fraud While all organizations hope that expense
is on the decline. In 2006, ACFE found that fraud is something they never have to
more than 20% of identified cases of fraud deal with, being prepared can help you
were related to expense reimbursement8, understand the risks and take steps to
compared to 15% in 20129. The report mitigate those risks.
19 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 20Organizational culture and policy How to write and publish an expense policy
Employees generally want to do the right thing; they what the company considers an allowable expense
An organization’s culture is often easy to discern by about out of policy expenses before implementing
just need to be taught what is right and how to do as well as what’s not allowable, employees will have
looking at its dress code. And just as the dress code a pre-approval process.
it. Some people may be tempted to steal, but the a framework that encourages policy compliance.
is designed to fit your organization’s culture, your
An expense policy aims to provide guidance and majority of employees will do the right thing. This can be communicated through examples and
expense policy should also be developed with the
take the guesswork out of completing an expense scenarios, which are very effective and can be used
same attitude. Writing and communicating an organization’s
claim. During the introduction process, it is as an easy reference.
corporate expense policy is the simplest and most
Providing your employees with a well-written and essential to listen to employees, be flexible and
effective measure in preventing fraud. When writing Identifying who is responsible for writing and
clear expense policy makes it easy to understand encourage feedback. This will ensure the policy is
and compiling a corporate expense policy, there reviewing the expense policy depends on your
and helps prevent confusion, frustration, mistakes accepted effortlessly.
are two basic rules for assisting employees to meet organization and its requirements. The best policies
and best of all, fraud.
Expense policies are as individual as the companies policy compliance: are those that are written by a cross-functional
When creating your policy, think about the tone they control. As you’re creating your company’s team, often including HR, travel and finance; that all
of the policy as well as the actual rules. Some policy, doing your research and thinking about Make your policy realistic have a stake in the outcome. Included in this should
organizations will respond to lighter phrasing, your company culture will result in a much more In some cases, expenses fall out of corporate also be a frequent traveler, providing insight into the
such as “travel guidelines” as opposed to successful policy in the long run. policy for the simple reason that it is not logical realities of business travel.
“travel policies.” or practical for employees. This is commonly seen
By providing your employees with an easy to A corporate expense policy should be considered
with airline carriers. While carrier agreements may
Some organizations also benefit from phasing in understand, organized and well written corporate as a working document, one that requires revisions
be in place, allowing non-stops on non-contracted
new expense policies. This can often be easier than expense policy, you’ll be arming your company with and updates. If you notice that employees ask the
carriers as an alternative when the connection
trying to enforce tighter control on a workforce one of the best fraud prevention measures out same kinds of questions, take it as a good sign
just doesn’t make sense and the price differential
that has a casual culture and environment. A good there: information. that not only are employees trying to do what’s
is minimal can help employees to work within
example of this is warning and educating staff best for the company, but that it might also be
policy. By implementing a common sense policy,
a good time to update your policy to include the
organizations will face fewer roadblocks that
answer. Expense policies should be reviewed every
The secret to encouraging appropriate behavior when claiming employees may otherwise ignore.
two years, ensuring the validity and relevance to
expenses lies in finding the right balance between people, policy Write very clear and concise guidelines
the organization.
and compliance. Provide business travelers the information they
need to make the right decision. By communicating
21 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 22Expense policy tips
Whether you are just starting to compile an expense policy or have
an established policy in hand, here are some tips and suggestions to
either get you started or help you stay up-to-date:
• Divide up your policy into sections such as air travel, hotel
lodging, dining, entertainment expenses and car rental.
• Provide a section for your employees that clearly states what is
You could download not reimbursable.
our Expenses Policy • Let employees know what enforcement measures will be taken
Providing your employees with a well-written and template to use as a to ensure policy compliance.
clear expense policy make it easy to understand. starting point if you • Clarify your policy about pre-trip authorization.
It helps prevent confusion, frustration, mistakes, don’t already have your • Include a guideline around traveling with spouses or
and best of all, Fraud. own policy. significant others.
• Include a guideline for travelers choosing to stay over extra
days or over a weekend.
• Detail who is responsible for travel charges if the employee
cancels a reservation or is a “no show”.
• Clarify your policy about home offices. This details whether
an employee can be reimbursed for internet and/or
phone charges.
• Outline your company’s policy about consuming alcohol at
meals with clients. If alcohol is permitted, what is your policy
about paying for an alternative ride back home or to a hotel if
the employee can’t drive?
• Clarify whether credit card statements an acceptable form
of receipt.
• Be sure to fit the current mode of your company growth. Are
you in growth mode or cost-cutting mode? Are you a smaller
company or larger? How high in the management structure do
expenses need to be approved?
23 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 2474% of serious fraud cases involve the exploitation of weak
internal controls by fraudsters.” – KPMG survey, 2011
How automated expense management Guide travellers’ decisions Powerful data analytics
could help? To enhance control over employee spend, your Improve visibility into your organization by
corporate travel policy is built into the travel and comparing itinerary data, corporate card charges,
Once you have a policy in place, a powerful method to prevent
expense solution – you will control spending before cash expenses, invoices and supplier-contracted
you might want to consider fraud. Here are some of the
it even occurs. When your travelers are looking at rates. Concur Travel & Expense allows you to track
taking the next step towards ways Concur Travel & Expense
travel options in the system, they know what options where your employees are spending money, find
enabling fraud prevention: management solution helps
are in or out of policy. Because it lets you set the errors and potential instances of fraud, and ensure
implementing a robust travel and organizations combat errors
limits for travel, your employees are free to choose policy and regulatory compliance
expense solution. and fraud:
their own unique travel plans and preferences within
As an expert in travel and those limits. Audit
expense management, we talk Single platform
If small amounts are exaggerated or not accounted
to many companies and hear Using an integrated travel and Card integration for, it might not seem significant at the time, but
our share of stories about fraud. expense management solution
Overwhelmingly, the majority By automatically capturing transaction data it soon adds up. Concur allows you to audit your
on a single platform ensures
of employees are doing the directly from corporate credit cards, your travel expenses and analyze every piece of data. You can
that all travel and expense-
right thing when it comes to and expense solution is able to populate this verify line-item expenses against submitted receipts
related activity is captured –
submitting their expenses for information directly into expense reports. and ensure purchases are within company policy -
from pre-trip approval, to travel
reimbursement. However, in the Eliminating the need for manual data entry and proactively reducing waste, misuse and abuse.
booking through to expense
instances when expense fraud reporting. Because you can significantly reducing the opportunity for
does take place, it is reassuring reconcile travel booked with human error. Mobility
to know that there are tools that what was actually expensed,
Business travel doesn’t always go as smoothly as
can help. and have all the analytics in one Ensure compliance we hope. Flights get delayed or even cancelled,
place, you’ll know if anything
Automating your travel and Most sources of data generated during the normal causing an unexpected need to search for alternate
doesn’t match up.
expense management process is course of travel are automatically recorded and arrangements. With Concur’s mobile solution, your
reconciled to ensure accuracy and to flag any employees have immediate access to their travel
problems. Travel, hotel or car-rental expenses are itineraries and it’s easy and convenient to make
managed automatically, based on the policies and alternative, in-policy travel-booking decisions from
T&E expense management research by compliance controls you’ve chosen; this automation their smartphone. Furthermore, expenses can be
submitted and even approved through the Concur
Aberdeen Group (2012) found that expense means your system will be less exposed to the risks
of human error and fraud. app, ensuring the process is simple and seamless
automation decreases the cost of every for all employees involved.
expense report transaction by 55% or
more and increases T&E expense policy
compliance by 31%13.
25 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 26CONCLUSION In Conclusion
Expense Fraud Checklist
30
31
•
27 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 28In conclusion
Expense fraud could take place at any company
but it is the exception rather than the rule.
Nevertheless, expense fraud poses a significant
risk, especially when one considers the financial and
ethical implications.
According to the Association of Certified Fraud Examiners
(ACFE) Report to the Nation on Occupational Fraud and Whilst technology plays an important part, the
Abuse, Asia Pacific organizations lose approximately 5% of impact of business culture is key.
their revenues to fraud every year14.
Improved policies and comprehensive travel and
expense solutions can help impede and prevent
many types of expense fraud, as well as protecting
the reputations of companies who can demonstrate
they are taking steps to prevent it.
29 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 30Expense Fraud Checklist
Keep an eye out Leverage the latest technology
Look out for red flags that could indicate fraud is taking place. Technology is revolutionizing the expense management process. Developments
have ensured the process is more user-friendly and efficient while simultaneously
eliminating the opportunities for employee expense fraud. In fact, systems exist
Prepare and share the policy that can:
Ensure you have a policy in place that is clear and comprehensive. If you do not • Incorporate company policy and automatically flag out-of-policy expenses.
yet have one, write one – download our helpful policy template to get
• Quickly generate detailed analysis reports, such as T&E spend tracking reports,
you started.
that help finance departments identify fraud.
• Share the policy – make it easy to find.
• Drive policy compliance, by capturing receipts via mobile applications and
• Consider creating a short, 1-page expense checklist to remind employees importing corporate card and travel itinerary data into the system automatically.
of the policy’s essentials.
• Make sure people understand any pre-authorization procedures
(if applicable).
Question expenses that don’t look right
• Don’t be afraid to challenge suspicious-looking claims.
• Encourage employee engagement and understanding about your policy,
as well as the reasons behind it, and how it can help. • Conduct regular expense reviews and sampling.
• Get buy in from management and stakeholders. • Maintain a consistent and public procedure to deal with “wrong-doers”.
• Don’t make assumptions that seniority/length of service will make people more or
Once you have a policy, check that it covers as many eventualities as is
less inclined to tamper expenses.
practical. You might want to review it to ensure it’s in line with corporate
culture – or even consider encouraging a more compliant culture by changing • You could also implement auditing services to analyze receipts and make sure
the policy itself. they’re legitimate.
• Check the checkers.
Have a plan, just in case
Expense fraud might never happen to you. But, then again, it might. Preparation Don’t keep it quiet
will help set your mind at rest: have plans in place so you know how to respond • Share the stories: praising people who have saved money provides positive
to instances of suspected or proven fraud (should it be necessary). reinforcement to encourage similar behavior in others.
• But don’t forget to share the horror stories as well – as a warning to let people
know what happens if they don’t follow the rules.
• Have a formal process to report suspected fraud.
31 | Guide to Handle Expense Fraud Guide to Handle Expense Fraud | 32References: 1. Asia Pacific Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2010 2. Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2012 3. http://www.kpmg.com/RO/en/IssuesAndInsights/ArticlesPublications/Special-interests/Documents/fraudster%20EN%20web.pdf 4. Asia Pacific Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2010 5. http://www.kpmg.com/RO/en/IssuesAndInsights/ArticlesPublications/Special-interests/Documents/fraudster%20EN%20web.pdf 6. Asia Pacific Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2010 7. Asia Pacific Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2010 8. Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2006 9. Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2012 10. Expense Management: for a New Decade, Aberdeen Group, 2011 11. State of T&E Expense Management, Aberdeen Group, 2010 12. Growing Beyond: a place for integrity12th Global Fraud Survey, Ernest and Young, 2012 13. Aberdeen Group, T&E Expense Management: The Best-in-Class Pillars of Next-Generation Expense Management, March 2012 14. Asia Pacific Report to the Nations on Occupational Fraud & Abuse, Association of Certified Fraud Examiners, 2010 About Concur Concur is a leading provider of integrated travel and expense management solutions. Concur’s adaptable cloud-based and mobile solutions help companies and their employees control costs and save time. Concur’s services are trusted by over 20,000 companies located in more than 100 countries worldwide. Concur is publicly traded on the NASDAQ stock exchange under the ticker CNQR. Learn more at www.concur.com.hk or www.concur.com.sg
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