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Expense Fraud: Fact or Fiction

on August 18, 2016

recently read this article in Computer Weekly about making fictional expense claims a thing of the past, and I enjoyed it.

The article points out that a good expense management system reduces the likelihood of expense fraud by utilizing a handful of built in controls during the expense entry process: dollar thresholds for certain type of expenses and requiring itemizations for certain lodging or entertainment types of expenses, for example. Unfortunately, some companies think that when they implement an expense management system, that is all the controls they need. 

When distilled to its essence, an expense management system’s prime function is to make it simple and easy to get expenses entered and paid in a timely way (and at the least possible cost to the company.)  However, identifying complicated fraud scenarios is not an expense management systems’ area of expertise.

As the article points out, there are some types of fraud that are more difficult to detect when looking at a single expense at entry time, which is approving managers can’t easily detect these types of fraud either. The scenarios in this category include fraud, waste, or misuse scenarios like:

  • double dipping
  • pattern identification
  • schemes that work across different financial systems (AP, T&E, PCARD)


So, even if you are using an expense management system to enter, track, and pay your company’s expenses, it is a fact that there is undetected fraud, waste, and misuse in your T&E system. To pretend otherwise is just fictional wishful thinking. To get an idea of the scope of it, the article states that “… around 25% of employees admit to embellishing their expenses…” and the Association of Certified Fraud Examiners (ACFE) claims that in over 75% of the cases where an employee was involved in waste and abuse within T&E, they are likely to also be involved in other types of occupational fraud.

The article points out that some companies determine after crunching some numbers that hiring a team of employees to identify these types of fraud can cost more than the fraud itself, so maybe they should just turn a blind eye to it.

But there is an alternative.

Instead of doing it yourself, use an automated transaction monitoring solution like Oversight Insights On Demand™. It is easy to use, and very cost effective. And it can help you to identify the rogue actors at your company and bring them back into a state of compliance.

Make a culture of compliance at your company a fact instead of a fiction. You’ll be glad that you did.  Request a personal demo.

Julia Versaci

Julia Versaci is Director of Solutions Development at Oversight Systems.