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Mileage Fraud: Too Common But Easy To Address

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Keeping The Mobile Workforce In Motion How Common? Common Enough Expense fraud (and those who commit it) happens about 5-6% of the time and affects about the same proportion of business value. Over 5% of Chrome River survey respondents admitted they had committed expense fraud. In addition, an analysis conducted by expense analysis vendor Oversight Systems of 10 million expense transactions (representing $1 billion in total value) found that 5% of reimbursement value was out of policy. To help illustrate how common 5% really is, pick up a pair of regular, six-sided game dice. A roll of those two dice will add up to 2 or 12 about 5-6% of the time. Just as most employees are basically honest, the dice won't roll 2 or 12 all the time. But it's not exactly rare, either. Why It Happens In some cases, expenses are at odds with policy because of honest mistakes or emergency situations. In many others, the reporting process itself is at fault. That's because so many companies still rely on spreadsheets for crucial steps in their expense reporting process. According to a 2014 Ventana Research report, 35% of companies suffer from errors in mission-critical spreadsheets. In other cases, employees exploit the lack of controls and visibility for their own benefit. Put simply, they commit fraud, and there isn't a nicer way to say it. Many companies are simply unaware of the fraud because their processes are unable to check reports in an automated, efficient fashion. In one travel and expense (T&E) reporting vendor survey, 31% of corporate representatives said that T&E compliance was the responsibility of the employee submitting the report. In 20% of organizations, only high-value reports are reviewed for compliance, leaving the door open for recurring smaller-scale fraud. Mileage fraud is one of the most common forms of employee theft. A survey by Chrome River of 1,072 business travelers found that 35% of those who committed expense fraud did so by exaggerating the duration or cost of their business mileage. In fact, according to the employees admitting to this behavior, mileage fraud is more common than these popular tricks: • Rounding up tips and pocketing the difference (done by 29% of those who admitted to fraud) • Inflating the cost of an item beyond true cost or policy limits (28%) • Submitting expenses for canceled or returned purchases (10%)

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