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| How to prevent travel and entertainment fraud? |
How to prevent employee fraud is a big issue
concerning today’s corporate world. T&E fraud also known as expense
reimbursement fraud is an internal fraud type perpetrated by insiders at
all levels who work for an organization.
There are two types
of Travel and Entertainment Fraud External Fraud committed by outsiders such as
vendors, customers and computer hackers for example: a vendor pricing
does not match regular fares, and Internal Frauds
perpetrated by insiders at all levels, who work for the organization for
example book a trip, don’t
take it but claim for it anyway is a common travel
reimbursement fraud. Here
are certain tips on how to prevent travel and entertainment fraud and
what are the anti-fraud controls that an organization must adopt.
The first and foremost step that an organization must
take is to commence a formal review process wherein a department manager or human
resource manager reviews employees’ reports. Always do an inquiry on expenses
that appears to be fraudulent. Waiting for a bigger issue to arise will be a more
tough and costly affair to resolve later. Make all money disbursements to
employees formal through payrolls or accounts payable.
Corporate
credit card abuse is comparatively
low. So, implementation of corporate charge cards would provide greater control
as it allows companies to query each card individually to ensure that every payment
is being made against them.
Collect credit activity reports from the issuing
company on a monthly basis, if using corporate charge cards as these reports are
helpful in determining the number of charges that are being cancelled or
credited back to each account. Comparing this activity with the actual expense
reports will serve to determine accuracy.
Conduct annual audit of a sample of employee expense
report to ensure they meet the company’s established guidelines. Ensure that appropriate
documentation exists to support the expenditures that were requested. If a
company card is used, confirm that the balance is being paid at the exact time.
Fraud-audit techniques must be implemented in case the occurrence of
fraud is on an alarming high.
Be consistent in treating the reimbursement
activities by making the employees pay the expenditures and seek reimbursement,
or by making the payment by the companies directly. Wavering between the two
could end up in duplicate reimbursement to occur.
Prosecute offenders, who are found to be forging
their expense reports. If they are saved from punitive actions, others will
follow their actions.
