The vast majority of business travelers (94 percent) surveyed
in February by Chrome River claimed to be honest about their travel expense
reimbursements. That's the good news. The bad news: The 6 percent who
admitted to defrauding employers each claimed on average $2,448 in false
expenses per year, according to Chrome River. The expense management provider
surveyed 1,072 frequent business travelers, defined as those having taken more
than three trips a year.
The most common way for travelers to defraud employers was to
pass off personal purchases as business travel expenses, a tactic used by 45
percent of rogue respondents. Overclaiming mileage and tip expense were the
next most frequent fraud methods, used by 35 percent and 29 percent of rogue
respondents, respectively. About 10 percent of offending respondents have submitted
receipts for canceled events, trips or returned items.
Criminal Profile
Who are these fraudsters? The most frequent offenders, 14
percent, were employees holding senior vice president or C-level positions
other than CEO, the report showed. About 73 percent of perpetrators were male,
and their average age was 46.
"Expense fraud also has a tendency to be committed by
those who an organization would typically trust the most," the report
noted.
A 2014 Association of Certified Fraud Examiners survey
had similar results, finding that 27 percent of expense-reimbursement-fraud cases
were committed by those in "executive/upper management" positions.
Blue-collar workers in the Chrome River survey represented
10 percent of those who reported committing expense fraud.
Fighting Fraud
Of travelers who admitted to submitting false expenses, 76
percent reported using manual expense processes, while 24 percent used
automated expense reporting systems. "It's just much easier to trick the
system with manual expense submission," a Chrome River spokesperson told BTN.
Though automated expense reporting processes can more easily
catch duplicate expense items, for example, which reduces incidents of fraud,
it's not foolproof. If
collusion
exists between the submitter and approver, then the approver won't act on the
red flags, the spokesperson explained. Also, companies that don't establish
business rules are susceptible to efforts to work around the system, he added.
"An expense automation platform tool can
cut the [fraud] instances down dramatically," according to the
spokesperson, "but quite a lot of this is providing approvers with the
tools they need to detect fraudulent claims, and there also needs to be some
kind of process put in place for audits, either [automated] … or manual."