HR Software Reality Matters

Employees Cheating on Expense Claims - Indicative of a Much Larger Problem?

Employees Cheating on Expense Claims - Indicative of a Much Larger Problem

An increasing epidemic in the current financial climate, the issue of employees cheating on business expense claims is becoming a huge worry in the corporate world. A survey published by Personnel Today in late 2007 found that more than one third of employees admitted to cheating on business expense claims - with some even doubling the value of the original expense.

What Makes a Normally Moral Person Effectively Commit an Act of Fraud?

Firstly, the amount being added on to expense claims is typically fairly low. Most employees believe that adding a small monetary figure to expense claims will go unnoticed and also have very little impact on their employer’s bottom line. If it won’t make much of a difference, then why not tweak the figures in their favour?

Secondly, most employees simply don’t believe they’re being paid what they actually deserve. The art of fiddling business expenses is seen as an easy means of supplementing income and taking what’s ‘owed to them’.

Finally, times are hard and morale is low. The credit crunch is hitting employees hard - the price of products and services seem to be increasing at an exponential rate to salaries - and employees view cheating expenses as a quick way of reducing the burden on their bank balance. The person cheating on their expenses views the organisation as having the resources to cope with the small differences they apply - whereas the difference to them is far greater.

Examples of Expense Claim Cheating

What Kinds of Techniques are Employees using to Illegally Claim Expenses?

Consistently submitting false claims for values lower than those requiring documentary evidence (e.g. £15 on a lunch/meal).
Submitting claims over and above allowed entitlements by splitting individual expenses into multiple claims.
Submitting claims for personal items under the guise of corporate expenses.

How Does This Impact the Employer?

The effect of one employee liberally cheating on their expenses will often go unnoticed and have little effect on the employer - However, once others see that a colleague is ‘getting away with it’ it can foster an environment where multiple employees undertake the same techniques (as this would only be ‘fair’ on them). Once a culture of illegal claims becomes engrained throughout the organisation, before the employer knows it the expense bill has become hugely inflated and they have a cost on their hands that hasn’t been either anticipated or budgeted for.

Addressing the Issue

Simple steps can be taken to ensure the issue of expense fraud never rears its head. Modern-day technology, such as expense management systems, can force all employees to adhere to the same system of claims, with in-built limits, process and managerial/finance approval. Instances of false claims can be flagged up using pre-defined rule-sets. Employers can then enforce a zero-tolerance policy by addressing any examples of expense fiddling through standard expense management reporting.

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