Q. (cont.) Some companies may only check claims that exceed a certain amount. In such cases, are there any detective controls in place to ensure that there are no frauds or misuse of company funds?
A. Controls are dependent on the software you are using. About the only adjustment that is usually made is for what dollar amount you require a receipt. All items should be audited for validity, supplier, cost.
If it takes too much time to audit expense reports, my suggestion would be to purchase software that automates the process -- here, charges are downloaded from the credit card to prevent a common type of fraud, which is to alter receipts.
Manual validation procedures should include:
- The T&E policy being signed and re-signed whenever there are updates. It should say:
"I have read and agreed to the terms set out in the T&E Policies _______ ..."
- All expense reports should require a second signature, and those individuals are responsible for validity of expenses against T&E policy (with no special treatment for any employee).
- This policy must thoroughly describe what are acceptable expenses (supplier and rates) and state that violation could/does mean termination, for both the traveler and signing manager.
- Whatever your receipt policy is (i.e., $25 and over -- no receipt, no payment)
- For frequent travelers:
- Compare expense reports for double charges.
- Validate receipts over the stated policy amount and from preferred suppliers.
- IF your policy requires all receipts, consider only auditing over $25.00 (but don't tell anyone). The time it takes to check small dollar amounts costs more to validate than the charge itself.
- Make sure you receive original receipts and they don't look altered.
- Insist on charges going on a credit card.
- Do amounts compare to other travelers'?
- Look for unusual items or items that could be personal.
- A good place to look is at the Association of Fraud Examiners (http://www.acfe.com/).
If the trip is cancelled:
- Make sure the company gets any unused airline tickets