Expense Reimbursement Schemes in the Professional Services Industry

According to the 2018 ACFE Report to the Nations on Occupational Fraud and Abuse, the median loss from occupational fraud costs the professional services industry $258,000. The most common scheme surrounds expense reimbursements.

An expense reimbursement scheme occurs when an employee files a claim for reimbursement of fictitious and/or inflated business expenses, based on false documents. Employees can either mischaracterize expenses, overstate expense reports, seek reimbursement for fictitious expenses or submit multiple reimbursement requests. Fraud perpetrators accomplish this in a variety of ways:

  • Alter actual receipts
  • Overpurchase business expenses
  • Overstate another employee’s expenses
  • Produce fictitious receipts
  • Obtain blank receipts from vendors
  • Claim the expenses of others

What can you do to detect and prevent expense reimbursement schemes?

  • Review and analyze expense accounts by comparing current expenses to historical or budgeted expenses.
  • Perform a detailed review of employee expense reimbursements, which may include a review of employees’ schedules.
  • Require employees to submit detailed receipts or other supporting documentation and provide an explanation of expenses before payment is reimbursed.
  • Periodically review employee expense reimbursements.
  • Understand the travel and entertainment policy of the company.

If you have any questions regarding expense reimbursement schemes, feel free to contact us at contactSD@schneiderdowns.com

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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