To Fight T&E Fraud and Waste, Focus on Repeat Offenders

When he’s on the road, Joe frequents gentlemen’s clubs on the company dime. Before she leaves on a business trip, Melissa boards her dog and later submits these as “hotel” expenses. Adam pads his mileage and out-of-pocket spending on expense reports. 

Ongoing policy violators are often the hardest to spot, but they can be a big problem if they go unnoticed. According to Oversight’s research, less than 5 percent of business travelers are high-risk repeat offenders. By focusing on the riskiest travelers, companies can make a substantial impact on their overall risk profile.

Some of the riskiest repeat offenders are well known, but many who cheat on expense reports know how to fly under the radar of their company’s policies. In each of these cases, there were no red flags – nothing to suggest anything was wrong. Joe goes to a gentleman’s club with a generic-sounding legal name and his receipts have a restaurant merchant category code (MCC). Melissa’s and Adam’s expenses also looked legitimate, lining up with the dates of their recent business trips and falling within policy guidelines.

Expense management systems’ audit rules simply aren’t equipped to pick up the subtle clues and detect complex patterns involved in high-risk transactions like these over time. Without an automated auditing and compliance solution to analyze and track all T&E and purchase card transactions over time, most businesses find it tough to spot repeat offenders like Joe, Melissa and Adam.

Fortunately, their employers used Oversight Insights On Demand™ to detect these “bad apples.” The job was made easier with help from the enhanced Repeat Offenders feature, providing one-click visibility to monitor and resolve these cases.   

Using Oversight, Joe’s company was able to uncover thousands of dollars in reimbursed T&E expenses that violated company policy. Melissa’s employer found that she had racked up $9,000 in reimbursements for first-class accommodations and meals for her dog and this investigation led to discovering procurement fraud she was involved in amounting to more than $100,000. Adam collected thousands more in reimbursed mileage and out-of-pocket expenses than he was due.

By leveraging Oversight, these companies were able to focus on detecting and mitigating high-risk cases like these. Our research has shown that, when employees know their expenses are being closely monitored and analyzed, they’re less likely to submit questionable or wasteful expenses in the first place. By addressing repeat offenders, many organizations have been able to improve policy compliance by as much as 70 percent.

Nathanael Lheureux is Vice President of Solution Consulting and Client Engagement Oversight Systems.