How to Confront an Employee About Falsifying Expense Reports

Falsifying expense reports is a serious issue that can damage workplace trust, create legal risks, and harm company finances. Whether it’s a pattern of incorrect reporting, fake receipts for expense reports, or outright falsification of receipts, employers need to act carefully but decisively. Here’s how to identify, address and prevent employee expense fraud. 

Recognizing False Reporting in Expense Claims 

False reporting may range from simple mistakes to deliberate fraud. This includes submitting a false report for meals not eaten, mileage not driven, or using fake expense report receipts. In some cases, it could even involve the false reporting of hours worked. 

While human error is understandable, repeated discrepancies may signal a more serious problem: expense report fraud. Understanding what false reporting is helps HR and finance teams distinguish between honest mistakes and deliberate manipulation. 

For a deeper dive into specific examples, check out Common Types of Expense Report Fraud (And How to Prevent Them). 

Ethical Dilemma: When Do You Speak Up? 

Imagine you discover a colleague has been submitting suspicious expenses—perhaps small amounts at first, but consistently. You’re not sure if it’s fraud or just carelessness. Do you report it? Would your decision change if the employee was going through a personal crisis or if you feared retaliation? 

These scenarios underscore the importance of clear, consistently enforced policies. Organizations should provide safe, anonymous channels for reporting concerns and educate employees on what constitutes expense fraud. This ensures fairness and accountability, regardless of individual circumstances. 

How to Confront an Employee About Expense Fraud 

If you discover or suspect falsification, follow a structured approach: 

1. Gather Evidence: Ensure you have clear documentation—like a false report, fake receipts, or incorrect reporting patterns. 

2. Consult HR or Legal: Get guidance to follow proper procedures and ensure fairness. 

3. Conduct a Confidential Meeting: Ask clarifying questions, avoid accusatory language, and allow the employee to respond. 

4. Take Appropriate Action: Depending on the severity, consequences may include warnings, required reimbursements, or being fired for an expense report violation. 

Preventing Expense Report Fraud 

• Use automated tools like ExpensePoint to flag suspicious claims. 

• Educate employees on what constitutes a false report. 

• Require receipts and enforce audit trails. 

• Create and communicate a clear expense policy, including disciplinary procedures for falsification. 

Workplace Integrity

Employee expense fraud affects more than just the bottom line—it impacts workplace integrity. By understanding how to confront an employee about expense fraud and setting clear expectations through policy, companies can protect both their culture and their finances. 

Learn more about common red flags and how to proactively stop fraud with ExpensePoint’s expert guide.