The breaking news that the Labour Member of Parliament for Rotherham, Denis MacShane, is facing a 12-month suspension from the House of Commons for submitting false invoices that were “plainly intended to deceive” highlights the constant diligence required of organisations to monitor and control their expenses and incoming invoices.
This was also the subject of a September survey that found nearly one-third of 1,000 UK employees who took taxis for work admitted that they routinely cheated on such expense claims. The people polled indicated that they added to the taxi bill or expensed fares that were not business related.
"Taxi Receipt" Photo. Ebay.co.uk 10 Jun. 2012. 06 Nov. 2012 <http://www.ebay.co.uk>.
Some taxi drivers leave the amount blank when asked for a receipt (usually in return for a more generous tip), giving the employee the opportunity to enter his or her own fraudulent fare. On www.ebay.co.uk, you can search for “taxi receipt” and be offered, for a few pence, a wide selection of different un-used books of receipts—in effect, a licence to print money?
In the UKMP expenses scandal of 2009, one particular Member of Parliament, Sir Alan Haselhurst, was reported to have claimed almost £12,000 for gardening services over a five-year period. This was achieved by submitting bills of £249 every month—£1 below the threshold of £250 which would have required an invoice as proof of expenditure.
So, how can organisations safeguard against such devious practices? First of all, a travel/expense policy must be in place to set out the rules and guidelines that staff should follow. These may include economy-class tickets, meal cost per person if employees are the only guests, or receipts accompanying the claim. There are expense management systems available today that ask claimants meaningful questions to let them know that their claims are being audited (from/to details on taxi claims, other passengers, etc.). Once people are aware that these policies are being electronically checked and enforced, they tend to be more honest due to the fear and embarrassment of being found out.
These systems can highlight to the approver or internal auditor items that are within permitted spending limits. Since the receipts are scanned and accompany the claim on its approval route, the proof of expenditure is always visible—it may even be enlarged for detailed inspection.
REMEMBER: People do what you inspect, not what you expect!
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