Tips and Tricks to cull Expense Reimbursement Frauds

Author: Peter Goldmann - CFE
1. T&E Fraud
An organization should suspect T&E fraud when employees are charging for items used for personal reasons (gas, groceries, hotels, etc.), billing for travel and expenses that never materialized.
2. Purchase-Card Fraud
If an employee uses purchasing or corporate credit cards as a license to steal goods without the consent of the employer then it is a Purchase card or P-Card Fraud. The practice of making unauthorized purchases for personal use, disguising personal purchases as business expenses such as gifts to clients or customers that are actually kept by the cardholder is a typical P-card fraud activity.
3. Accounts Payable and Billing Fraud
When an employee submits invoices having consecutive numbers despite being weeks or months apart, a vendor address matches that of an employee, invoices are missing on key details such as address, date, quantities ordered and so on, invoices appear to be prepared unprofessionally, then there are possibility of forgery.
4. Accounts Receivable Fraud
An establishment can suspect possible Red Flags of Accounts Receivable Fraud when regular customers call to ask why, or complain that they are receiving past due notices despite having paid all invoices on time or details of deposit receipts do not match credits applied to specific accounts.
5. Vendor Master File Fraud
A vendor master file fraud is possible when there is a sudden reactivation of an inactive vendor, new vendors showing up in the Vendor Master file whose names are similar to the existing vendors, vendor addresses in the VMF match addresses of employees.
6. Inventory Theft or Fraud
If there is an occurrence of unusual fluctuations in levels of inventory or supplies for specific projects, unexpected shortages of supplies or incomplete deliveries, unusual purchases/deliveries of project materials, sales that do not match shipping documents, then possibility of Inventory Theft or Fraud is to be suspected.
7. Payroll Fraud
The Red Flags of Payroll Fraud are: including ghost employees on the payroll, former employees still receiving pay checks, an employee declines direct deposit of paychecks, unusual patters in working hours.
8. Check Fraud
Check fraud is one of the biggest challenges for a business or financial institution. Red Flags of Check Fraud are: blank checks are missing, cancelled checks showing signs of erasure or other alteration, signatures are missing or appear forged, vendors or other payees complain about not receiving payments.
9. Confidential Information Theft
With the progression of technology it is increasingly easy for criminals to commit Confidential Information Theft. Watch out when an employee uses a USB (thump) drive for no relevant reason, unauthorized system access attempts are detected by the IT department, an employee requests a "special one-time" access to secure computer systems.
10. Abuse of Computer Systems
Computers and technological innovations are both boon and bane. It eases the workload yet again it eases theft. So the IT department of an organization has to be vigil when there is an unauthorized attempt at access to funds, downloading of prohibited Internet content, excessive use of email for personal business, removal of organization-owned laptops for personal use or theft of confidential data.

Please submit the form

what would you like to do?