- Are your employees cheating on theircorporate travel expense reports? About 80% claim that they are generally honest with their travel expense reports but some admit to skimming a little of company funds for various reasons. Your employees represent your company on the road. And, their occasional unethical practices should be minimized, if not eliminated.
Filling One's Pockets
Take the case of James Woosley, a former intelligence chief of the Immigration and Customs Enforcement. Conniving with four others, he scammed the government of $600,000 by approving the submission of fake travel receipts from 2008 to 2010. Who would ever imagine that a trusted employee with a sensitive position would put his career in peril? Woosley faces a sentence of 18 to 27 months in prison and a potential fine.
If there can be a winner for the best travel scammer, this employee could be it. Mr. Traveler books himself a plane ticket for a business trip a month or weeks before his scheduled official travel with his personal funds to avail of a discount. A few days before his intended trip, he buys a refundable plane ticket with a higher price for the same flight. He later cancels the second ticket and uses the first ticket for his actual travel. It sometimes works the other way around. The first booking can be the more expensive one and the second the cheaper one, depending on airfare demand. Either way, Mr. Traveler chooses the higher priced ticket for his corporate travel expenses report.
Gaining from Lodging in Style and Having a Free Ride
Some employees include a lodging expense on their corporate travel expenses while staying at a relative's house for free. Checking in at a hotel is, of course, the best option. Hotel clerks can't refuse guests who ask for a few blank or doctored invoices, lest they lose clients.
Some brazen employees make money from their car rental expenses by showing their discount coupons only after the clerk has issued the receipt. They are then issued a new receipt but keep the higher priced receipt for their corporate travel expenses report. Others borrow a friend's car for free in exchange for a past favor.
Leather Goodies, Lingerie, Spa, Salon...
What about the employee who bought $3,000 worth of leather goodies from Gucci with his company credit card? Not to be outdone is the manager who charged lingerie, spa and salon expenses on his company credit card? Not only did auditors discover their scheme, the wives they were cheating caught them too.
Paper receipts can also be used as accessories for cheating. For instance, deliberately changing a 1 to a 7 on a receipt, reflecting the wrong totals of columns and rows, forging signatures, indicating an incorrect foreign exchange rate and many more all contribute to the padding of corporate tax expenses.
Mindful of a tough economy, Finance, Travel and IT Managers need an automated expense management and tougher internal, external and automated auditing solutions like Chrome River to stamp out wasteful spending.
Learn how better expense management policies can help reduce fraud in our whitepaper:
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