Buddy says: If you suspect that an employee has submitted an incorrect expenses claim, you should suspend payment and undertake a thorough investigation into this matter without delay.  A full investigation should be carried out to ensure that claims are not improperly withheld and to determine whether disciplinary action is necessary. 

Employer Information: Recent headlines have shown that employees are continuing to cash in on lax expenses controls.  To assist in the prevention of suspicious expense claims, it is advisable to have an expenses policy in place which details what documentation an employee is required to provide to support a claim for expenses.  The policy should also specify which expenses are reimbursable and whether an employee needs prior approval by management before incurring such expenditure. 

Clearly defined policies will ensure that employees who make claims will understand what claims are acceptable and those that are not.  By thoroughly checking expenses claims immediately upon receipt, you can ensure nothing unacceptable passes through and action can be taken without undue delay.

Although expenses claims often slip through the net, an employer is not prevented from taking action to recover monies paid out.  It is usually possible for an employer to deduct overpaid expenses from an employee’s pay, provided that that the deduction relates to the overpaid expenses.  It is important that this right is exercised in a reasonable manner to prevent any breach of the trust and confidence which exists between an employer and employee.  It is also advisable to obtain the employee’s written consent to the deduction or to include a specific clause in the employment contract allowing for such deductions.

If an employer discovers an employee is making fraudulent claims, it should take disciplinary action against the individual, in accordance with its disciplinary policy and the statutory minimum disciplinary procedures.