By Daniel Hunter
While there may have been a lax approach in the past, many UK workers now regard expenses fraud as one of the more serious workplace misdemeanours, new research has shown.
Ernst & Young’s Fraud Investigation & Disputes Services team has released research showing employees consider the fiddling of expenses as more serious than stealing physical company property (20%), drinking during work (13%) and breaching of licensing arrangements (10%). Only using drugs at work (33%) was considered the more serious of these offences.
Despite recent high profile prosecutions the research of 1000 middle managers found the exposure to risk remains high, with only one in five expressing zero-tolerance of intentional overstatement.
It found that the remainder would be tolerant of some overstatement, with 7% of respondents willing to accept false claims in excess of £100.
Alarmingly, 25% would not do anything about “significant” over-claims if they believed it would not be detected.
“A lax approach to expenses claims used to be seen in many sectors as quite acceptable — even using it as a means to top up pay," John Smart (Head of Ernst & Young’s Fraud Investigation & Disputes Services team) said.
"Recent cases have shown that in a number of instances people at all levels have been able to get away with illegally funnelling large sums of money to themselves through lack of basic checks.
“However, with the economic downturn and fraud seriously damaging the bottom line, concern over this crime has been raised. High-profile cases should make people more nervous about being caught, and help to act as a deterrent, but our research indicates there remains a significant tolerance of abuse. This highlights the need for clearer policies, a strong tone from the top, and zero tolerance when wrongdoing is found.”
Expenses abuse could lead to Bribery Act exposure for businesses
Unusual or lavish claims for expense reimbursements can also point to other types of fraud, including bribery. Despite the UK Bribery Act being in force for the past year and much comment about its impact on corporate hospitality, the research found that 36% of middle managers would overspend on their expenses budget if it improved the chances of winning business.
This is despite the fact that ‘lavish’ hospitality has been a repeated message of the Serious Fraud Office (SFO) in its explanations of how corporate hospitality can be a bribery mechanism.
“There is a need for companies to have compliance processes and shine brighter light into their affairs," John Smart continued.
"If they are not spotting warning signs early this can lead to enormous damage later on. Experience shows that so-called minor frauds escalate to exposure for a company or organisation on a far larger scale.”
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