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Expense claim frauds

Author: Jason Weir

The politicians expense scandal in the UK made headlines again this month, with David Chaytor, a 61 year old former MP from northern England being sentenced to 18 months jail for his part in the expense claim scandal which erupted in the UK in 2009. The expense scandal involved hundreds of MPs and caused widespread public anger, with claims for items ranging from dog food to moat cleaning.

It is reported that Mr Chaytor claimed £22,650 for rent for houses owned by himself and by his mother, and also for IT services that he had received free of change.

There has also been similar concerns raised about expense claims made by New Zealand politicians in recent times.

It is easy to believe problems, like the expense claim scandal, are restricted to politicians, and simply helps to confirm stereotypes of politicians. However, in our experience expense claims are a fraud risk area for all organisations that reimburse staff for expenses (or provide corporate credit cards).

There are many expense claim schemes – some of the more common expense claim problems we see are:

  • Private expenditure – reimbursement is sought for private meals, accommodation and travel;
  • Double claims – legitimate business expenses are claimed twice (or more). Sometimes this is achieved by claiming the expense in month 1 using the invoice and the same expenditure claimed in month 2 using the EFTPOS receipt or a copy of the invoice;
  • Unsupported claims – claims for expenditure that are not supported by documentation;
  • Bogus claims – claims supported by fabricated invoices/receipts.

Problems with expense claims flourish in environments with poor policies that are not clear about what is appropriate expenditure. These problems can also occur if there is little or no effective review of expenditure (including claims by senior management). The good news is both of these areas are very easily improved.
Consider

  • Do your policies clearly define what expenditure is reimbursable?
  • Who reviews the expenditure?
  • Are they aware of the policy?
  • Are they sufficiently independent of the person claiming the expenditure?
  • Would they decline the expenditure if it breached policy?

For more information on expense claim fraud or any other concerns about potential misappropriations, contact Jason Weir.

Read the article –
First British MP jailed for expenses fraud

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