Perhaps one of the most heartbreaking things a manager in a company can encounter is the news of theft from within. Sometimes, this is the more obvious type of theft where an employee is outright stealing items from an office or account. Other times, it is more subtle, with employees modifying expense reports in some way, so as to get reimbursements back from the company for money they did not actually spend while traveling and working on the company’s behalf.
Fortunately, it has become easier to proactively discourage people from exploiting expense reports by using newer forms of expense report software, like ExpensePoint. The software even makes it easier to actually catch fraudulent expense reports, since the digital nature of entering items, and credit card transactions makes less subtle attempts at exploitation stand out. But this is a double edged sword; it’s good to be able to detect fraud more easily, but then comes the question of what to do about it?
Assessing The Damage
One of the most important things to do when taking a disciplinary action on an employee is to not act impulsively. Reacting out of anger at a sense of betrayal, rather than concern for protecting the interests of the company are two different things. One of the first things you should do is gauge the actual extent of the fraud.
In some cases, the fraud will be in small amounts, inflated reports on gasoline purchases, meals, or taxi cab fare. In other cases, they may be much larger expenditures. Most of the time, the actual amounts involved will not be anything injurious to company finances, but of course, that’s beside the point. The intent is what is important.
You may find that some of your employees are actually just committing consistent errors. This may be in part to not having a clear understanding of the reimbursement policy of the company, or may be attributed to poor organisational or admin skills while on a business trip. These kinds of lost receipts and errors filled in with substitute receipts may, in fact, be honest mistakes.
On the other hand, when it is obvious counterfeit receipts are being submitted, or expenses are being deliberately misreported, or reported multiple times, this is conscious, malicious behavior. And it requires a different, but definite response.
Considering the effect on employee morale is important when exploring disciplinary options. Come down too harshly, such as terminating the employment of someone acting out of ignorance, and you risk alienating employees and losing their trust in the company.
However, if someone further up the management chain is found to be submitting false reports and merely gets a verbal warning and no other action, this can have a devastating effect on morale for employees. You must always take into account the severity of the action, the degree of damage, and the people involved. There is no one-size-fits all solution to the act disciplining a fraudulent employee and whatever action you take will set the tone and example for the rest of your employees.