8 Ways to Curb Travel & Entertainment Fraud

Author: Peter Goldmann - CFE
1. Maintain a travel reimbursement policy
The best tip to prevent your organization against fraud is to maintain a travel reimbursement policy or guideline. There should also be a detailed account on prohibiting activity and per diem in this policy and it should be regularly communicated to your employees.
2. Maintain original documentation
Request all employees, who are eligible for travel expense reimbursements to maintain or submit original documentation with the reports for a set period of time for audit purposes.
3. Formal review
Request your department manager, payroll and human resources start a formal review process of all the employees’ reports. Frequently inquire your employees on expenditures that look extraordinary or unusual. Expense reports could symbolize an important risk exposure for certain organizations. In majority of the cases, employees are assumed to be sincere and their reports go without examining.
4. Implement corporate cards
Executing the use of corporate charge cards will provide you with greater control. With the implementation of corporate cards, companies can question each card individually to ensure that payments are being made against them.
5. Receive credit activity reports
Credit activity reports must be acquired from the issuing company on a monthly basis, if you implement corporate charge cards. These reports could help determine the number of charges that are being cancelled or credited back to the accounts.
6. Annual Auditing
Perform annual auditing of a sample of employees’ expense reports to make sure they meet the company’s guidelines. Be sure that proper documentation is available to support the expenditures that were requested. In case a company card is used, validate that the balance is being paid promptly.
7. Punish Offenders
Take punitive action against employees, who are found to be violating or falsifying their expense reports. If the culprits are allowed to escape unpunished, others will follow the suit.
8. Be the Role Model
The general psychology of an employee is to follow the proceedings of their supervisors or management. That means is tone is set at the top, the guidelines for travel and expense should be common invariable of their designations.

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