Money for nothing - the importance of monitoring expenses claims

Money for nothing - the importance of monitoring expenses claims

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Author: Antonia Blackwell

A recent survey by webexpenses has revealed that as many as one in four employees has made a false expenses claim from their employer. We look at how employers can manage their expenses procedures to limit such abuse from taking place.

Expenses policies

Most employers will have some form of expenses policy in place which sets out the procedure that an employer requires an employee to follow before it will reimburse expenses incurred in the course of an employee carrying out his or her job.

However, it is rare for such policies to require prior approval before expenses are incurred. It is usually left up to individual managers to enforce the policy meaning that inconsistencies and discrepancies can arise. Indeed, 70% of those surveyed by webexpenses said that their expense claims had never been queried or rejected by their employer.

According to the survey, one in five employees who admitted to making a false claim said they felt no guilt about their actions, with a quarter agreeing that the longer they stayed with an organisation, the more likely they were to 'bend the rules'.

Practical steps

So what can employers do to stem the tide of false expenses claims?

  • Make sure that there is a clearly drafted expenses policy in place which reflects the employer's practice and/or requirements in respect of all types of expenses that are likely to be incurred by a member of staff. In particular, the policy should detail whether there is any limit on the type or value of expenses that can be incurred and, if appropriate, should remind employees of the applicable budget limits (such as an annual travel budget).
  • The policy should also detail the process for obtaining approval for expenses incurred and whether prior approval is necessary such as for higher value expenses. Although this is likely to be more time consuming for managers, it is less likely that claims will be falsified where they have been justified and agreed in advance.
  • The policy should also deal with any non-standard arrangements, such as contribution towards utilities for homeworkers.
  • The evidence required to support expenses claims should be clearly set out and this may be different depending on the types of expenses which can be claimed. For example, if business calls on a mobile phone are to be reimbursed, then it is likely itemised telephone bills will need to be submitted.
  • Managers should be fully trained on what the expenses policy contains and what steps they are required to carry out to review expenses claims. It is advisable to have a step by step guide for managers to ensure consistency across the business in checking claims and applying the policy.
  • Ensure that employees are aware of the consequences of submitting false claims and make sure this is included in any disciplinary rules or examples of gross misconduct offences. Employers also need to ensure that where false claims are discovered, these are dealt with in a consistent manner.
  • Carry out regular random checks on expenses claims to ensure that the policy is being applied consistently by all managers and that it complies with the Bribery Act 2010, in particular, in terms of the evidence of how and why each expense was incurred.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the author

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Antonia Blackwell

Senior Associate

03700 86 4087

Antonia is an employment lawyer with over 14 years experience providing commercially focused advice to businesses and employment advice for individuals on all aspects of employment law, both contentious and non-contentious, including proactively managing employment tribunal claims and providing pragmatic employment law advice, as well as advising on discrimination & equal pay, redundancy & reorganisation, executive appointment & exits, union related matters and TUPE advice.

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