How To Prevent Purchase Card Fraud

In order to combat Purchase card fraud or control purchases made with a Purchase Card or P-card, every organization must establish a fraud monitoring policy with regard to use of company P-cards and train all employees with newly issued P-cards and limit purchases to approved merchants. A Purchasing Card is one form of a Commercial Card that permits any organization to make use of the existing credit card infrastructure to create business-to-business (B2B) electronic payments for a variety of business expenses.

1. Tips to combat P-card fraud:
2. Make it clear to all employees that if they are found to have committed fraud, their card will be canceled and they will be subject to disciplinary action or may be prosecuted for criminal activity.
3. There are times when some of your employees might try to produce photocopied receipts of expense reports, in such cases, do not accept. Request employees to ask merchants for a detailed receipt if one is not provided, ask the cardholders to provide a detailed business purpose for each transaction.
4. Whenever you find any suspected split payments by an employee, request the cardholders to review and sign the monthly card statements —if those statements are sent to them rather than to your organization and also request them to produce itemized receipts for all purchases, even if the merchandise was subsequently returned to the vendor.
5. Under circumstances where you find sudden unusual drift in a particular employee's monthly P-Card purchases, the manager in charge of approving and signing employee P-card reimbursement claims or expense reports must carefully review all documentation, prior to signing it. It is also the duty of the managers to review any transactions identified by AP staff as unusual.
6. In order to curb unusual transactions by an employee, an organization must determine whether controls and procedures over purchase and payment for goods and services using purchase cards were adequate to ensure that vendor payments were made according to the policy. 
7. Always determine if all P-cards are issued in accordance with the Policy, verify if changes to existing cards are properly monitored and approved and all cards in circulation are accounted for and used by authorized employees.

Also refer http://bit.ly/Purchasecard-fraud-prevention