You Have a Receipt for That?

Remember those Saturday morning SAT tests you took in high school and pending the outcome, hopefully you scored high enough to land a freshman slot in a well-respected institution of higher learning?

For those who recall those frenetic and regimented sessions, you’ll most likely remember the portion of the test that dealt with analogies: such as A is to B as C is to what?

Okay try this: Filling out an expense report is like a) root canal b) a hangnail C) a bee sting or d) all of the above.

After a quarter century of completing one form or another and meticulously collecting or scanning receipts, I’ll vote for d.

I bring up this often unpleasant administrative task, because a recent survey conducted by the Association of Certified Fraud Examiners found that a typical company will lose more than 5 percent in revenue to occupational fraud, and fraudulent expense reports played a not-so-minor role in that. According to the group the average loss to expense account fraud was $140,000 and in 20 percent of cases, the losses were over $1 million.

From personal experience, I worked at a company where one employee forged a credit card receipt in order to purchase a fur coat, while another compiled receipts from the same hotel where he was supposedly meeting clients. In reality he was meeting his administrative assistant and hint: it was not to take a memo or discuss quarterly earnings.

In full disclosure I did get into trouble with accounts payable on one occasion but that was because I hosted a dinner for 9 people, eight of whom were insufferably snobby wine connoisseurs and in addition, ordered that night’s special which was advertised as “market price” on the menu. Later I learned market price meant $120 per and the wine tab alone was $600.

In a panic, the senior sales associate and I agreed to split the tab which ran well into four figures, but an accounts payable audit revealed that we just happened to be at the same restaurant in Chicago at the same exact time.

Needless to say we both received a stern lecture on the prudence of moderate spending.

But back to the topic de jour.

The ACFE listed a number of red flags that often accompany phony expense reports.

To wit:

• Are expense reports being submitted without original receipts?
• Do the receipts appear to be altered?
• How do these expense reports and amounts compare with those submitted by peers in similar positions?
• How do receipts compare with receipts in prior years?
• Are there any items that appear unusual?
• Are expense reports submitted on a timely basis?

Actually I have had my eye on a pair of Oakley sport sunglasses for a while now and now that I make frequent trips to New England, I can argue they cut down on driving glare quite efficiently. Nah, I think that receipt would be returned to me with a rejection in bold red ink.