While it is not cost-effective to review every employee expense report in detail, you should periodically delve into the details of a few expense reports, so that employees know you are looking. This should not be a casual review. Instead, use the following in-depth review techniques to ensure that all submitted claims are valid:
- See if a boarding pass is included as supporting detail for airfare. A receipt for a flight is not sufficient, since the employee could have booked a flight and then cancelled it.
- See if a final grade document or course certificate is included as supporting detail for a training class. A receipt for a training class payment is not sufficient, since the employee could have cancelled the class and obtained a refund.
- If an employee submits a receipt for a group, such as for a block of hotel rooms, multiple airfares, or a group dinner, then review the expense reports submitted by the other employees in the group to see if they have also submitted expenses for the same things.
- Look for multiple receipts from the same store that have a date and time stamp that are very close together. This could mean that an employee waits for other customers to buy items from the store, and then asks them for the receipt (I have seen this being done by an audit manager!).
If any expenses look questionable, obtain the employee’s credit card statements for the expense report period under review, as well as for the following month, to see if charged receipts actually appear on the statements, and if any refunds appear in the following month.