Preventing expense reimbursement fraud: Four things businesses can do

October 4, 2016

According to a recently released state audit, the manager of an insurance program for North Carolina workers submitted fraudulent expense receipts for reimbursement, resulting in more than half a million dollars in misappropriated funds.  

The program, called NC Flex, allows state employees to set aside pre-tax money for expenses such as uninsured medical and daycare costs. The program manager has been accused of submitting false expense claims for travel, rent, electronic equipment and other costs that were not actually incurred. The manager has since been charged with obtaining property by false pretense and larceny by an employee, illustrating how an expense reimbursement program can be very costly when not properly managed.

A recent article in CGMA magazine notes that there are four things small and medium enterprises can do to prevent or detect fraud. Here is a quick excerpt of the items mentioned in the article:

  1. Travel and expenses policy – A formal written policy should be in place, and all employees should be trained on them. A section should be included on addressing noncompliance and the punitive measures to be taken in case of fraud.
  2. Meaningful approvals – While it’s essential to trust your employees, control measures must still be enforced. Those granting approvals should review expenses and be trained on what details they should check and why.
  3. Cost monitoring – In addition to monitoring submitted expenses, the finance team should also examine the average spend per month per employee or type of cost (hotel, meals, etc.) to spot anomalies. The article also suggested using an expense management software—such as Concur—to manage approval steps, store copies of supporting documentation and facilitate the analysis of monthly costs.
  4. Lead by example – To make it easier to enforce policies, employees and management alike should be bound by and follow the same rules.

CaseWare Analytics has worked with a range of companies to help them monitor and analyze their purchase card (P-Card), travel and entertainment (T&E), procure-to-pay (P2P) and other financial transactions. One of our latest case studies reviews how an energy company used CaseWare Monitor to monitor transactions from accounts payable and vendor management in real-time. Check out the case study to see the numbers and savings.

If you are a Concur user and would like to expand your data analytics capabilities, take a look at our Concur connector and what it can do for you!


About Anu Sood:

Anu Sood is the Director of Product and Corporate Marketing at CaseWare Analytics and is responsible for the company’s global marketing strategy. Prior to CaseWare Analytics, Anu worked in various roles in the high-tech industry and her accomplishments range from writing software for telephone switches to launching a new global satellite communication service. Anu has extensive experience in strategic marketing, corporate communications, demand generation, content marketing, product management, product marketing and technology development. 

Connect:    Anu Sood

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