Here are a couple of ideas on developing your audit process.
- You could use a statistical sample of expense reports and audit for compliance (signatures, supporting documentation, dollar limit compliance, vendor compliance, advance reservation compliance, business purpose documentation, settlement of advances timely..). The frequency with which your management team would like it audited (monthly, bi-monthly, quarterly...) will indicate for you the total population to sample. For instance, if you processed 100 T&E reports in January, then your population to sample from would be 100. Your statistical sample may require you to only pull 10 to 15 reports to analyze. If there is an exception, then you would pull additional reports until you are satisfied your team is in compliance.
- Others may audit all 100 reports but only focus on certain compliance indicators that management feels would identify any issues or fraud. For instance, you may look at authorizations, dollar limits, and matching the travel schedule to the expense report.
- Other audit considerations include:
- Make sure to require boarding passes attached to travel reports so that you can confirm the person made the trip.
- Review a list of expense reports where the amounts match exactly for a particular employee but were submitted on different dates, look for double dipping of expenses.
- Review receipts for travel to the same city but submitted on different dates. The double dipping that occurs here is where the employee makes a copy of hotel and meal receipts, submits them shortly after the trip and then re-submits them several months later under the guise that they have not been reimbursed and they forgot to submit them.
- Give attention to management and executive level expense reports where scrutiny needs to be done and not forgotten.
- Review budget vs actual expense accounts to see if they appear to be significantly over budget and find out why.
- Look for expenses submitted close to the dollar limit (e.g., $24.99 vs. $25 limit). Compare expenses between people who travel in similar geographic areas to see how equal their gas and hotel expenses are.