The UK is in a cost of living crisis, and many employees will be experiencing financial difficulties in meeting food, energy and housing costs. The impact of this could be staff making bad decisions out of desperation, and making fraudulent expense and allowance claims.

This type of fraud occurs when employees submit claims for expenses and allowances which are either entirely false, or are inflated. Examples include:

  • claiming for travel and expenses that were never incurred
  • using inflated mileage totals when seeking reimbursement
  • collusion among employees who claim separately for travel or mileage reimbursement when they travelled together
  • seeking reimbursement for items that were never purchased
  • falsifying or manipulating receipts
  • charging for items used for personal reasons
Prevention and Detection

Organisations should ensure that they have robust authorisation and monitoring procedures in place including the following:

  • expenses and allowances policies and procedures should be communicated to staff
  • claims should be submitted promptly within a specified time
  • original documentation such as receipts should be maintained for a period of time for audit purposes
  • claims should be authorised by an appropriate officer who should conduct random checks to verify the claim details and checks for reasonableness
  • the organisation should maintain an up to date list of authorisers
  • budget holders should be provided with sufficient information to enable them to monitor expenses and allowances costs against budget

Suggested wording for an expense claim declaration is “I declare that the expenses I have claimed were incurred wholly, necessarily and exclusively in the execution of my duties as an employee. I confirm that I have personally incurred the expenditure and have not previously submitted any item on this claim”.

Consider the following for electronic expenses systems:
  • procedures covering the granting of appropriate access rights to users
  • a requirement for users to change their passwords on a regular basis
  • automatic user logout when the system has not been used for a specified amount of time
  • system login blocked after a specified number of failed attempts

(Source material: NHS CFA Payroll Fraud: Guidance for prevention, detection and investigation – March 2019, v1.0)

Organisations should review their current expense claim policy and procedures. TIAA Anti-Crime Specialists can provide advice and investigate any incidents of alleged fraud. To find out more Contact Us.