Business Trips ... Fraudulent Pleasures

For many organizations, business trips have been a permanent headache and source of economic losses due to the lack of clear controls and policies regarding the type of expenses and the amounts authorized by the corporation.

We know well that organizational abuse encompasses actions that have the purpose of personal enrichment through the inappropriate use or theft of resources or assets of the organization by a person. In most cases, people who take such resources consider that their actions are ethical given that the company has paid for such resources or because they are considered as expenses.

The abuses are detected through well-classified and detailed financial statements. With these tools, the company can yield valuable information about the movement of cash. A typical example is the travel expenses.

Most companies only evaluate travel and representation expenses on the basis of common sense. However, since there is minimal control, more in depth techniques most be used to detect fraud. The duplication of invoices trip after trip, use of the copy and original of the documents, duplication of expenses, alteration of values, fictitious expenses, payments in cash and by credit card, among others are simple examples that a highly creative employee can use to take advantage of the resources of the organization through business trips that become pleasure trips.

However, this type of practice is even more dangerous with staff or high-level executives whose salaries and allowances are far from the expectations of any minimum wage. Although this behavior should be a surprise, this white collar fraud is frequent.Remember that the statistics regarding white collar fraud in organizations show a strong correlation between higher salary and greater losses due to fraud. 

Therefore, to avoid any anomalies, misunderstandings, errors, excuses, and unnecessary explanations related to business trips, companies must have clear policies as well the type of document or support to be reimbursed. Likewise, this policy must be made known from the beginning of the employment relationship and for all employees regardless of if they are scheduled for future trips.

Avoid loose ends in business trips, and do not allow the employee to have control over the most representative expenses such as lodging and air transportation. It is the obligation of the company to know the places where the employee or executive will be hosted and the transportation company where he / she travels. Preferably, a company should have a department or 3rd party that manages travel.

Rules and limits about family members or companions must be included in the travel policy. Similarly, the extra time that employees can take outside of work activities should be considered within travel policies because this time is not related to their services and therefore the status of employee insurance must be adjusted. Accidents and tragedies happen every day; therefore, the company must know the risk when an employee is representing the organization and when the same employee takes advantage of the trip for personal activities.

The documents for business trips should be standardized in the travel policy as well as the types of approval for reimbursement. The limit of the daily expenses of food and urban transport must be determined to avoid cost overruns. These policies should also extend to client interactions. Additionally, all client expenses must be in accordance with global and local regulations to avoid any possibility of corruption.

Between business and pleasure there is a thin line that abusers constantly manipulate to take advantage of both time and money. Hence, the policies for business trips and filing expenses must incorporate strong sanctions and zero tolerance for any act that denotes fraud. Such policies must be complied with and exemplified by all personnel of the organization without exception, since the perception of control must be stronger than the pleasure of committing fraud.

Editor: Christopher Bonk