Below is a hypothetical conversation that may take place in a company experiencing issues with expense fraud and misuse.
(Heather, a sales manager is on a coffee break in the company cafeteria with Janie her friend who works in marketing.)
Janie: Hi Heather, I'd ask how you're doing but I can see you look stressed. Are you okay?
Heather: Not really. I'm sure you heard about the big travel expense fraud that took place at the annual sales meeting in Las Vegas a few months ago. Since then the VP of Finance has required that all managers review all expense line items on every report before approving. To make things worse I have to assume responsibility for each report's accuracy. Talk about pressure to keep your job.
I've had to spend so much time checking hotel rates, looking at all the bills to see if my folks were padding their reports and figuring out why they used their personal card when they could have used the company card, that I’ve hardly had time to do my real job!
On top of that we're now required to analyze the last 12 months of each employee's reports to ensure there's no pattern of improper behavior. I've had to create a spreadsheet for each of my 10 salespeople. My work life has been a nightmare!
Janie: Wow...who would have thought that the glamorous life of travel to cool places, staying in great hotels and eating like a king, all on the company dime, would become such a hassle for the boss.
Heather: Life used to be simple. I assumed that my team was honest and that they followed the company's travel and expense policies. Before, I got an email that alerted me a report was submitted by one of my team, which was frequent since they all travel most weeks, and all I had to do was click approve.
But that all changed when a small number of now, ex-employees decided to game the system and were caught in a big time scandal. What's worse, the fraud scandal was leaked to the press which adds more pressure on me to be accurate with my reviews.
Janie: Well Heather what puzzles me is that our company has automated our travel booking and our expense report submission processes and yet the review process is still manual. Maybe one day they'll automate that as well.
(Bob, a friend of theirs from the travel department, who had recently sat down at the table says...)
Bob: Heather, I couldn't help but overhear you talk about the aggravation that you're having with the new requirement to manually review your employees expense reports. Our department has also been receiving a lot of negative feedback. The VP of sales told my boss that we should be doing the reviews, but we can't do that with the size of our team, and on top of their existing workload, the internal audit team isn’t much help.
I did hear something the other day about a demonstration that my boss saw of a software solution that reviews 100% of our expense reports. Other companies that use it leverage the technology as a detective control to monitor expense transactions and to identify non-compliant behaviors or trends in the form of errors, fraud, waste, or misuse.
He told us that the company claimed to leverage automation and increase the scope of analysis from traditionally a 20% random sample to an automated 100% review. He also said they claimed that their clients have reduced their cost of compliance by over 50% and reduced their policy violations by up to 70% in the first year.
I can't remember the company's name, but I sure wish we would start using it right away so that everybody can get back to their regular jobs and stop being an amateur expense report auditor.
For the first time in weeks, Heather had a smile on her face.