Algorithmic auditors are exposing employee expense fraud(bloomberg.com)
bloomberg.com
Algorithmic auditors are exposing employee expense fraud
https://www.bloomberg.com/news/articles/2018-11-14/ai-can-now-catch-lies-on-your-expense-report
175 comments
There was the old "raincoat expense report" urban legend back when I was in Big 4.
Consultant left raincoat on subway while traveling for business and ran replacement cost through on expense report. Admin rejected the expense.
Consultant submitted second expense report with exact same total without the raincoat expense line item and the cost just absorbed into the other untraceable per diem and incidental categories. "Find the raincoat now" as a comment.
Consultant left raincoat on subway while traveling for business and ran replacement cost through on expense report. Admin rejected the expense.
Consultant submitted second expense report with exact same total without the raincoat expense line item and the cost just absorbed into the other untraceable per diem and incidental categories. "Find the raincoat now" as a comment.
Similar experience at an employer where I was grateful to be travelling on their dime.
Took the bus and metro home from the airport - $3 claim rejected because I didn’t get a transfer as proof (which wasn’t needed to ride on this trip).
Yet if I drove, I could have claimed 50 cents a km or something, no proof required.
Took the bus and metro home from the airport - $3 claim rejected because I didn’t get a transfer as proof (which wasn’t needed to ride on this trip).
Yet if I drove, I could have claimed 50 cents a km or something, no proof required.
Interesting story. :)
I think businesses can he really hard on fraud without being hard on what constitutes a valid expense.
I think businesses can he really hard on fraud without being hard on what constitutes a valid expense.
I wonder how expensive that raincoat was that the person thought it needed to be its own line item on the expense. That's normally what the incidental expenses line is for, so this is just a story of someone who filled out his expense report incorrectly, got it rejected, and then filled it out correctly.
A good raincoat is pretty expensive. At least $200. So the guy submits an expense report with a $200 line item, gets rejected and splits the $200 into probably 7 or 8 incidentals which usually have a $25 limit, probably on different expense reports.
I'd take a double take at a $200 line item for an emergency raincoat to replace one that I lost on a trip. I'm not asking the guy to get a plastic poncho for his business meeting, but he doesn't need to get it at the Gucchi store.
Reminds me of a time I worked in a company that reimbursed us for coffee expenses on business travels. In their system, I had to itemize every receipt, so my expense report ended up being 50% made of morning espressos. The secretary handling expenses came back to me pretty annoyed and told me that next time, I should buy a pre-paid Starbucks card instead.
I've heard about "hide the hat" years ago––you lose your hat on a business trip and have to find some other way to expense it.
Wait, why should she lose her flexible medical benefits? Shouldn't recovery of the expense fraud be a separate legal process from taking of personal medical accounts?
Why do we connect medical benefits to employers?
Why do we connect medical benefits to employers?
Good question. It's a very strange method of motivation or coercion that we've all just kind of accepted into our lives, and we feel lucky to even have that.
Well all of us in the US, anyway. For some reason it doesn't work that way in most places on earth.
Medical job-lock is a real thing that happens, and most of us just discount the possibility completely until an unexpected problem crops up. AMHIK. Everyone be grateful for your health while you can, and plan for the future.
Well all of us in the US, anyway. For some reason it doesn't work that way in most places on earth.
Medical job-lock is a real thing that happens, and most of us just discount the possibility completely until an unexpected problem crops up. AMHIK. Everyone be grateful for your health while you can, and plan for the future.
>Wait, why should she lose her flexible medical benefits?
Because it was one of those "healthcare savings flex accounts" where the company puts in "virtual dollars" to pay for some types of health care. Unlike unused vacation days that requires payout on the last paycheck by law, or a 401k account, this type of "flex account" is really a convenient accounting category that's administered purely by corporate discretion.
If the employee gets fired for just cause, the company decided it didn't want to let him/her walk away with the flex account. For the retirees that left on good terms, they do. It's just the way they did things. I think the idea is that the the ex-employee is now viewed as a criminal so the company feels justified in withdrawing discretionary benefits.
The regular type of employee health insurance that one could extend with Obamacare or COBRA was a separate thing.
(Ninja edit to reply below: it was not an FSA or "cafeteria" plan that deducted real dollars from the employee's paycheck. It was literally "virtual dollars" that the company allocated to the employee. But the virtual money turned into real money when the retiree used it to pay Medicare premiums. If there's an industry-wide jargon for this type of virtual bank account for healthcare that the employee never directly contributed to, I don't know what it is.)
Because it was one of those "healthcare savings flex accounts" where the company puts in "virtual dollars" to pay for some types of health care. Unlike unused vacation days that requires payout on the last paycheck by law, or a 401k account, this type of "flex account" is really a convenient accounting category that's administered purely by corporate discretion.
If the employee gets fired for just cause, the company decided it didn't want to let him/her walk away with the flex account. For the retirees that left on good terms, they do. It's just the way they did things. I think the idea is that the the ex-employee is now viewed as a criminal so the company feels justified in withdrawing discretionary benefits.
The regular type of employee health insurance that one could extend with Obamacare or COBRA was a separate thing.
(Ninja edit to reply below: it was not an FSA or "cafeteria" plan that deducted real dollars from the employee's paycheck. It was literally "virtual dollars" that the company allocated to the employee. But the virtual money turned into real money when the retiree used it to pay Medicare premiums. If there's an industry-wide jargon for this type of virtual bank account for healthcare that the employee never directly contributed to, I don't know what it is.)
HRA - Health Reimbursement Arrangement, perhaps. They are entirely funded by the employer and do not involve paycheck deductions like an FSA or HSA would.
Why are our healthcare benefits so convoluted? Not being able to take the benefit with you away from an employer is a major negative that most people I'm guessing won't calculate in up front - at least it muddies the compensation question and comparisons to other employers.
Many would suggest it's because multi-billion dollar industries (insurance, medical administration, tax, accounting) are partially dependent upon its enormous complexity for their existence. Or, perhaps because the lobbying of a few said billion dollar industries is more persuasive ($$$) to our legislators than the occasional rant from a common citizen.
Or maybe... it's because playing the game is advantageous to those who know how to play. "To the victor belong the spoils."
Or maybe... it's because playing the game is advantageous to those who know how to play. "To the victor belong the spoils."
Employer-related healthcare is largely exempt from taxes.
Maybe you're talking about a different kind of account, but FSA dollars come out of the employee's own paycheck.
Sounds like they're referring to an HRA account[1][2]. It's a fully employer-funded, employer-owned, and employer-controlled reimbursement account. It's similar in function to an HSA account, but it doesn't actually belong to the employee and doesn't follow the employee when they're terminated. My employer offers both HRA and HSA based high deductible plans, as well as a PPO plan. The HRA plan is definitely the best plan on paper, especially since the unused HRA funds rollover[3], but a huge caveat being that you lose any HRA balance that you've accumulated over time if you ever leave or get terminated, since it doesn't actually belong to you.
[1] https://www.investopedia.com/terms/h/hra.asp
[2] http://www.aetna.com/producer/aetnalink/2009-4q/natlink_hra_...
[3] Employers have significant leeway over how the HRA is structured, what it will cover, whether you have to use any FSA funds you have beforehand, whether unused balances will rollover or reset next year, etc. My employer happens to have a really good HRA structure, including rollover balances and using HRA funds before FSA funds.
[1] https://www.investopedia.com/terms/h/hra.asp
[2] http://www.aetna.com/producer/aetnalink/2009-4q/natlink_hra_...
[3] Employers have significant leeway over how the HRA is structured, what it will cover, whether you have to use any FSA funds you have beforehand, whether unused balances will rollover or reset next year, etc. My employer happens to have a really good HRA structure, including rollover balances and using HRA funds before FSA funds.
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FSA dollars come out of your own paycheck, but any unspent dollars revert to your employer when your employment terminates.
On the other hand, if you save $2500/yr in your FSA, spend it in one month after only after a little over $200 has been deducted from your paycheck, then quit, you just got an extra $2300 out of your employer you didn't pay for, so it goes both ways.
On the other hand, if you save $2500/yr in your FSA, spend it in one month after only after a little over $200 has been deducted from your paycheck, then quit, you just got an extra $2300 out of your employer you didn't pay for, so it goes both ways.
>Why do we connect medical benefits to employers?
It could arguably be traced back to the war time rationing of WWII:
>To combat inflation, the 1942 Stabilization Act was passed. Designed to limit employers' freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead.
[0] https://www.griffinbenefits.com/employeebenefitsblog/history...
[1] https://www.chicagotribune.com/news/opinion/commentary/ct-ob...
It could arguably be traced back to the war time rationing of WWII:
>To combat inflation, the 1942 Stabilization Act was passed. Designed to limit employers' freedom to raise wages and thus to compete on the basis of pay for scarce workers, the actual result of the act was that employers began to offer health benefits as incentives instead.
[0] https://www.griffinbenefits.com/employeebenefitsblog/history...
[1] https://www.chicagotribune.com/news/opinion/commentary/ct-ob...
Ironically that is probably a contributing factor for the lack of socialized healthcare in the US. The law of unintended consequences strikes again.
Almost certainly. And then post-WWII, good medical benefit plans got enshrined in a lot of collective bargaining agreements and became pretty much the standard for large employers generally. At which part, taking them away is going to be very difficult.
A lot of expense procedures are fuzzy for a reason (no experiences with consulting companies).
Fraudulent expenses are the first and easiest way on the manager level / c-level to check if you want to get rid of someone. If everything is ok you need to look somewhere else.
Fraudulent expenses are the first and easiest way on the manager level / c-level to check if you want to get rid of someone. If everything is ok you need to look somewhere else.
> incorrect hotel amounts
What does this mean?
What does this mean?
Amount claimed on expense report != amount paid to hotel.
These people seem to have a strange definition of "fraud". In the first two paragraphs, they list three apparent "frauds" and then note that they were detected by analysing the receipts that the employees submitted. In other words, the employees freely disclosed what they were expensing, by the article's own admission. There's no explanation given of why the three expenses listed were illegitimate in any way; it seems reasonable to charge for the cost of having a kennel take care of your dog while you travel, and I assume the yoga and strip club were client entertainment for sales or marketing purposes. You can very reasonably disapprove of taking clients to strip clubs, of course, but doing so and then openly disclosing it isn't dishonest.
The only example of employees committing fraud - that is, gaining a personal economic benefit through dishonesty - is in the final three paragraphs. In that case, somebody billed steak as food for the office python when really they were taking it home to barbecue for their family. The rest of this article is deranged; these auditors, at least as they are portrayed by Bloomberg, seem to think that submitting an expense claim that they don't approve of, entirely honestly, is somehow magically "fraud". What the hell?
The only example of employees committing fraud - that is, gaining a personal economic benefit through dishonesty - is in the final three paragraphs. In that case, somebody billed steak as food for the office python when really they were taking it home to barbecue for their family. The rest of this article is deranged; these auditors, at least as they are portrayed by Bloomberg, seem to think that submitting an expense claim that they don't approve of, entirely honestly, is somehow magically "fraud". What the hell?
Slightly OT, but I wonder if you should be able to claim yoga/gym or even clothes as an expense. If being a consultant means projecting a certain image (fit, well-dressed), shouldn't you be paid for maintaining that image?
The IRS in the US has rules that designates things as taxable income or not for many of these questions. Businesses can still reimburse regardless of IRS categorization, but you may be taxed on the reimbursement as income.
To avoid that issue, most businesses will avoid reimbursing for incidentals that should be considered income. Suits or standard office clothing, I believe, are taxable in most circumstances. Uniforms are not. Of course there's lots of grey areas that keep accountants in business. I'd assume yoga would count as an exercise allowance and not be taxable, but that's just a guess.
To avoid that issue, most businesses will avoid reimbursing for incidentals that should be considered income. Suits or standard office clothing, I believe, are taxable in most circumstances. Uniforms are not. Of course there's lots of grey areas that keep accountants in business. I'd assume yoga would count as an exercise allowance and not be taxable, but that's just a guess.
Safety-related clothing is also deductible. When I worked in the oil business I could deduct things like steel-toed boots, overall, gloves, etc. off my taxes (or the company could have provided them for me as a business expense). At the same time, as you say, even if I only wear a suit for work, it's not deductible. Such is the simplicity of our tax code :-)
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>You can very reasonably disapprove of taking clients to strip clubs, of course, but doing so and then openly disclosing it isn't dishonest.
Doing so and then submitting the expense as a steakhouse is dishonest at the _minimum_.
Doing so and then submitting the expense as a steakhouse is dishonest at the _minimum_.
If I go to a steakhouse and then a strip club, submitting all the receipts for the night under the heading of "steakhouse business dinner" seems basically honest. I'm assuming that's what happened, just because in my imagination a typical night out at a strip club starts somewhere else first. Maybe the version of events in my mind doesn't match reality, but the article doesn't explain either way.
If you disagree, would you also consider it dishonest to submit receipts for the client's transport to and from the steakhouse under the same heading? Or drinks in a bar afterwards? If not, why not?
If you disagree, would you also consider it dishonest to submit receipts for the client's transport to and from the steakhouse under the same heading? Or drinks in a bar afterwards? If not, why not?
Actually yes. I would consider it in any case dishonest to cram an expense item into something different. Expenses are itemized for a reason.
As an analog I would also consider it dishonest if a company fibs its accounts by booking items into different categories.
There is usually no other reason then to hide an expense, which should not be there.
If a company approves taking customers to strip clubs then there's no reason not to itemize it as such.
As an analog I would also consider it dishonest if a company fibs its accounts by booking items into different categories.
There is usually no other reason then to hide an expense, which should not be there.
If a company approves taking customers to strip clubs then there's no reason not to itemize it as such.
Inconvenience/can't be bothered? Seems highly plausible to me and not that difficult to relate to. I hate filling my expense reports, I'd rather not have to pay stuff out of pocket in the first place.
> If a company approves taking customers to strip clubs then there's no reason not to itemize it as such.
Who says it wasn't itemized as such? We know nothing about how the expenses system in question works, and a hierarchical submission that looks like
------
# Steakhouse business dinner
* Client taxi fare to steakhouse - $xxx
* Steakhouse bill - $xxx
* Strip club bill - $xxx
* Client taxi fare to hotel - $xxx
------
with a receipt for each seems perfectly reasonable (to me; apparently you think that it's dishonest for 3 out of 4 of those items to be there) and is consistent with the nonspecific description of events in the article. Evidently, the employee provided enough information for it to be clear that this was a strip club bill, because the auditing system could tell that it was a strip club bill. In order to create a narrative of dishonesty, you're having to add in details that aren't specified in the article and seem to fly in the face of the fact that an audit looking purely at the information submitted identified that it was a strip club bill.
Who says it wasn't itemized as such? We know nothing about how the expenses system in question works, and a hierarchical submission that looks like
------
# Steakhouse business dinner
* Client taxi fare to steakhouse - $xxx
* Steakhouse bill - $xxx
* Strip club bill - $xxx
* Client taxi fare to hotel - $xxx
------
with a receipt for each seems perfectly reasonable (to me; apparently you think that it's dishonest for 3 out of 4 of those items to be there) and is consistent with the nonspecific description of events in the article. Evidently, the employee provided enough information for it to be clear that this was a strip club bill, because the auditing system could tell that it was a strip club bill. In order to create a narrative of dishonesty, you're having to add in details that aren't specified in the article and seem to fly in the face of the fact that an audit looking purely at the information submitted identified that it was a strip club bill.
The story is about how AI helped discover fraud, so presumably it was not expensed correctly, but the all seeing AI went on the internet and discovered that even though the receipt is titled "Sams Fine Steak House", the address on the receipt from the limo company was a strip club. Or something like that.
Maybe I'm more cynical, but I presume that the AI just looked at the strip club receipt, identified as a strip club because the submitter had made no attempt to hide that fact, then determined that according to some official company expenses policy it was impermissible to bill for strip clubs, and then the AI's masters triumphantly declared it to be "fraud" - without worrying about niggly little questions like whether the employee had read the policy, knew the policy existed, or even had access to the policy, nor whether the employee had been authorised by their manager to submit the expense claim despite it violating the written policy.
Do you really need a formal company policy to know that you shouldn't expense a strip club?
Why shouldn't I, if the strip club bill was racked up for business purposes? My employer doesn't expect me to take clients to strip clubs, but if they did, I'd damn well expect to be allowed to expense them.
I'm not totally sure you aren't trolling me.
Somehow I just assumed it was universally agreed upon that strip clubs are not something that you go to for business reason.
And if a sales person invites a client to a strip club, they would do so understanding that it's a questionable thing to do, and that they would be smart enough not to file it in their expense report.
Even if their manager said it's okay. I mean, that would just be a perfect reason for the company to fire both the employee and the manager for colluding to defraud a totally ethical company.
Somehow I just assumed it was universally agreed upon that strip clubs are not something that you go to for business reason.
And if a sales person invites a client to a strip club, they would do so understanding that it's a questionable thing to do, and that they would be smart enough not to file it in their expense report.
Even if their manager said it's okay. I mean, that would just be a perfect reason for the company to fire both the employee and the manager for colluding to defraud a totally ethical company.
> And if a sales person invites a client to a strip club, they would do so understanding that it's a questionable thing to do,
Don't presume the sales person is inviting the client.
I do consulting now, and periodically have to go to client sites for presentations and training sessions. There's almost always a big client dinner one of the days we're there. Where we go out to eat, and what we do afterward, is usually driven by client suggestions. In my case, the "after dinner" activities almost always entailed some form of bar hopping, and has never included strip clubs. But that doesn't mean it wouldn't include strip clubs if that's what the client wanted, just that the specific clients I've serviced haven't ever had that particular inclination.
Note that I've only ever been the most senior person present from my company once, and therefore responsible for expensing the client-servicing night. The only direction I was given that time was to keep the client happy and to not blow past the budget for that trip (which had about $5k worth of cushion, after anticipated employee travel expenses). Most of the expenses are passed through to the client however (which is what dictates the budget), and some client agreements do have very strict stipulations on allowable pass-through expenses.
Don't presume the sales person is inviting the client.
I do consulting now, and periodically have to go to client sites for presentations and training sessions. There's almost always a big client dinner one of the days we're there. Where we go out to eat, and what we do afterward, is usually driven by client suggestions. In my case, the "after dinner" activities almost always entailed some form of bar hopping, and has never included strip clubs. But that doesn't mean it wouldn't include strip clubs if that's what the client wanted, just that the specific clients I've serviced haven't ever had that particular inclination.
Note that I've only ever been the most senior person present from my company once, and therefore responsible for expensing the client-servicing night. The only direction I was given that time was to keep the client happy and to not blow past the budget for that trip (which had about $5k worth of cushion, after anticipated employee travel expenses). Most of the expenses are passed through to the client however (which is what dictates the budget), and some client agreements do have very strict stipulations on allowable pass-through expenses.
You are clearly not in sales.
> I just assumed it was universally agreed upon that strip clubs are not something that you go to for business reason.
Not for personal benefit, but in the interest of winning over a client, coke-fueled stripper parties are fair game.
> I just assumed it was universally agreed upon that strip clubs are not something that you go to for business reason.
Not for personal benefit, but in the interest of winning over a client, coke-fueled stripper parties are fair game.
Do you recommend putting the receipt from the coke dealer in your expense report as well? (As long as there's no company policy against narcotics in expense reports, obviously)
Strip clubs are legal, and many people don't have any ethical issues with them.
Presumably a coke dealer is dealing in illegal drugs.
Presumably a coke dealer is dealing in illegal drugs.
Up until 5-8 years ago, it was still standard business practices at most major accounting firms to take clients to strip clubs.
It's still SOP for many investment firms...
So, no, he's not trolling you. Since the article didn't provide details, it's very possible that the expense was submitted during the transition time when there was no firm policy banning taking clients to strip clubs.
It's still SOP for many investment firms...
So, no, he's not trolling you. Since the article didn't provide details, it's very possible that the expense was submitted during the transition time when there was no firm policy banning taking clients to strip clubs.
Are you in sales?
Uh, no. Happens all the time on wall st. Have you been living under a rock?
The initial examples clearly list that the employees pretended the charge was for something else. One can reasonably argue the employer should consider covering those things, but the process should be honest on both sides. (Clearly tell employees what's covered, how to submit it and how to ask for clarification/extra consideration, in exchange for accurate claims)
None of the examples "clearly list" this. All of them permit this interpretation, but it's far from clear.
Lol big local strip joint in Denver is also a 'steak house' (they serve some type of meat and call it steak) and now I'm wondering if expensing is the reason for it haha
They do it for anyone who might take a look at expenses: spouses, etc.
I think you misunderstood.
> One employee traveling for work checked his dog into a kennel and billed it to his boss as a hotel expense.
I read this as "employee pretended that the kennel expense was a _human_ hotel expense". (And, presumably, the employee stayed with friends/family)
> One employee traveling for work checked his dog into a kennel and billed it to his boss as a hotel expense.
I read this as "employee pretended that the kennel expense was a _human_ hotel expense". (And, presumably, the employee stayed with friends/family)
But as an aside why shouldn't they be covering a dog's kennel bill? If the employee only needs to utilize the kennel because of the work-related travel, that is a travel related expense.
Seems like great software if your goal as an employer is to make your employees outright refuse work-travel or to find a different job without it.
Don't misunderstand: Outright fraud is wrong. But in a lot of cases employer's travel expenditure policy was never fit for purpose, and employees worked around the problems by submitting mis-characterized claims like the dog-kennel example.
Instead of fixing the policy, they'd prefer to ignore WHY employees are doing these things (i.e. talk to them) and just lash out with punitive measures.
Seems like great software if your goal as an employer is to make your employees outright refuse work-travel or to find a different job without it.
Don't misunderstand: Outright fraud is wrong. But in a lot of cases employer's travel expenditure policy was never fit for purpose, and employees worked around the problems by submitting mis-characterized claims like the dog-kennel example.
Instead of fixing the policy, they'd prefer to ignore WHY employees are doing these things (i.e. talk to them) and just lash out with punitive measures.
“For my friends, everything. For my enemies, the law”
My children get great child care paid by the goverment just for this reason, to help me be able to work. It would not be very popular to offer the same thing to handle dogs atm.
>But as an aside why shouldn't they be covering a dog's kennel bill?
Because it's not the sort of expense that companies normally cover. Especially people who travel a lot have all sorts of second and third-order expenses resulting from the fact that they're away from home, may have to dress up for client meetings, etc. that are rarely covered by expense policies. They're also working extra hours when they travel. As partial compensation, many are also expensing fancier meals than they'd have at home--and are presumably being paid a competitive salary that reflects a fair bit of business travel.
Whether all this is "fair" is at least somewhat a value judgement but has been the approximate norm since I first traveled for work a very long time ago.
Because it's not the sort of expense that companies normally cover. Especially people who travel a lot have all sorts of second and third-order expenses resulting from the fact that they're away from home, may have to dress up for client meetings, etc. that are rarely covered by expense policies. They're also working extra hours when they travel. As partial compensation, many are also expensing fancier meals than they'd have at home--and are presumably being paid a competitive salary that reflects a fair bit of business travel.
Whether all this is "fair" is at least somewhat a value judgement but has been the approximate norm since I first traveled for work a very long time ago.
> Because it's not the sort of expense that companies normally cover.
Which is precisely what my post was saying was an issue with existing policy. I find it a little odd that you'd respond to point out the norm, to a post complaining about the norm, and expect the norm to be in and of itself a justification.
Work created an additional cost via required travel. It isn't at all similar to your "clothing for meetings" example because you'd need those without the travel component. When travel itself creates additional costs: those costs should be compensated.
Which is precisely what my post was saying was an issue with existing policy. I find it a little odd that you'd respond to point out the norm, to a post complaining about the norm, and expect the norm to be in and of itself a justification.
Work created an additional cost via required travel. It isn't at all similar to your "clothing for meetings" example because you'd need those without the travel component. When travel itself creates additional costs: those costs should be compensated.
And I'm saying there are any number of second order expenses associated with traveling a lot. For example, I have a lawn service that I probably wouldn't need if I were at home all the time. My driveway is too long to shovel by hand anyway but even if it weren't I'd need to get a service for when I'm away in the winter.
Maybe the norm is wrong and a company should cover those things. (And the kennel seems to be more directly connected to travel than my other examples.) But it's not really surprising that most don't.
Maybe the norm is wrong and a company should cover those things. (And the kennel seems to be more directly connected to travel than my other examples.) But it's not really surprising that most don't.
I had a friend whom an employer pulled back from a tropical vacation a day early for an emergency. They wanted him to fly somewhere directly from a beach to somewhere very cold. When he brought up the logistical problem that he wasn't ready for that climate, the answer was to expense a cold weather wardrobe sufficient for his stay. Abnormal, but legitimate situations come up all the time.
Sure. Exceptional situations arise. And, maybe, if someone basically never travels and they have to make a one-off trip for a customer problem or whatever, maybe it makes sense for them to tell their boss they'll need to get a dogsitter or pay for a kennel or whatever and they'll want to expense it. (At which point boss probably looks at them funny, sighs, and says "whatever, sure.")
I did work for a company once that had an "offshore inconvenience allowance" fr when we were on rigs and shipyards. It was mostly in the vein of living conditions aren't great and you're working long hours, so here's some extra money. So that's one relatively fair comp mechanism you can use. But mostly it's just baked into people's normal comp plans.
I did work for a company once that had an "offshore inconvenience allowance" fr when we were on rigs and shipyards. It was mostly in the vein of living conditions aren't great and you're working long hours, so here's some extra money. So that's one relatively fair comp mechanism you can use. But mostly it's just baked into people's normal comp plans.
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I read it as "the expenses software requires expenses to be filed under one of a small number of categories, and the employee went for 'hotel' because it was the closest one available". I guess both interpretations are possible.
Haha. Almost certainly what happened. If you want your people straining to figure out which category something is in then you're wasting their time.
Should've used the tool to select the right category instead of making a human select a category and then dinging them for it. Then Finance can approve or whatever.
The real thievery is the time expense software is stealing from the company by making people pick among all these categories.
If it takes you an hour to fill in expenses, that task just cost the company half a grand.
Should've used the tool to select the right category instead of making a human select a category and then dinging them for it. Then Finance can approve or whatever.
The real thievery is the time expense software is stealing from the company by making people pick among all these categories.
If it takes you an hour to fill in expenses, that task just cost the company half a grand.
> The real thievery is the time expense software is stealing from the company by making people pick among all these categories.
Oh yes. At my first workplace, I ended up using Emacs keyboard macros to convert from a bank statement dump to a format that could be imported into expense reporting system, and it took me less time than it would take to type in everything manually, because the system UI was so broken.
Oh yes. At my first workplace, I ended up using Emacs keyboard macros to convert from a bank statement dump to a format that could be imported into expense reporting system, and it took me less time than it would take to type in everything manually, because the system UI was so broken.
Possible, yes, but one requires multiple other leaps.
> by analysing the receipts that the employees submitted.
The article implies that at least some of those receipts were faked.
The article implies that at least some of those receipts were faked.
The article reads to me as a press release from the company with the barest of value-add from the author.
There's a good chance this company had humans review the receipts and calls it "AI".
There's a good chance this company had humans review the receipts and calls it "AI".
>According to Oversight, 30 percent of employee expense claims are risky, wasteful and potentially fraudulent.
Seriously? 30 percent? That seems quite unbelievable unless you're defining your terms to include reimbursements that are within most normal travel policies. EDITED e.g. employees book their preferred airlines, hotel chains, etc. even if they're not the absolute cheapest.
Seriously? 30 percent? That seems quite unbelievable unless you're defining your terms to include reimbursements that are within most normal travel policies. EDITED e.g. employees book their preferred airlines, hotel chains, etc. even if they're not the absolute cheapest.
100% - I can’t recall working anywhere where the expense policy was that well defined, usually it was “keep it reasonable” or “don’t raise eyebrows” (obviously not including fraud)
Additionally, in corporate America there used to be somewhat of an understood agreement that when traveling for work (and being away from your family, not getting paid for a 24hr day, etc) that that burden would be partially be made up for by nice hotels, meals, etc.
Additionally, in corporate America there used to be somewhat of an understood agreement that when traveling for work (and being away from your family, not getting paid for a 24hr day, etc) that that burden would be partially be made up for by nice hotels, meals, etc.
It varies by company and department but, yeah, that's been pretty much the norm everywhere I've worked. There do tend to be specific policies related to class of airfare as it's a major part of travel expense and the difference between economy and business can easily be 5x.
ADDED: Class of airfare is a tough one because the delta $$ are so much most of the time. Business class travel does become something of a perk for people above a certain level. It's true those people do tend to travel more and are more tightly scheduled but it's a loose correlation.
But for hotels and meals, it's always been pretty much common sense for me. No one expects me to stay in Fleabag Motel but eyebrows would doubtless be raised if I made a habit of staying at a $1,000 per night high-end hotel unless there were special circumstances such as an event at an isolated location. (Or it was in Silicon Valley--saw a Marriott Courtyard going for $1100/night the other week :-))
ADDED: Class of airfare is a tough one because the delta $$ are so much most of the time. Business class travel does become something of a perk for people above a certain level. It's true those people do tend to travel more and are more tightly scheduled but it's a loose correlation.
But for hotels and meals, it's always been pretty much common sense for me. No one expects me to stay in Fleabag Motel but eyebrows would doubtless be raised if I made a habit of staying at a $1,000 per night high-end hotel unless there were special circumstances such as an event at an isolated location. (Or it was in Silicon Valley--saw a Marriott Courtyard going for $1100/night the other week :-))
My company has a list from somewhere of all of the cities around the world and what you should spend for a hotel in that city. I'm sure it's mostly a regional thing. If you go over you have to provide a reason or pay for the difference out of pocket. Valid reasons include things like "local price inflation due to event in town" and "staying at hotel attached to conference we are attending". For the latter the company can save a lot of money on cab fare or car rental/parking so it's pretty easy to get.
Seat upgrades on planes are pretty hard to come by these days. The only time I've managed it is when literally all of the flights into a city were booked and the only seats left were first class. Also, weirdly the price delta on those first class seats were way lower than I expected, only a couple hundred bucks.
Seat upgrades on planes are pretty hard to come by these days. The only time I've managed it is when literally all of the flights into a city were booked and the only seats left were first class. Also, weirdly the price delta on those first class seats were way lower than I expected, only a couple hundred bucks.
>Seat upgrades on planes are pretty hard to come by these days.
Yeah, I have pretty good status on United (Platinum) and I almost never get an upgrade unless I'm flying at some off-hour over the weekend these days. I was barely even able to use a couple of free upgrade certificates this year and I've even tried to do a miles + cash upgrade for a couple international flights and nothing's been available. Most flights are near capacity these days.
Yeah, I have pretty good status on United (Platinum) and I almost never get an upgrade unless I'm flying at some off-hour over the weekend these days. I was barely even able to use a couple of free upgrade certificates this year and I've even tried to do a miles + cash upgrade for a couple international flights and nothing's been available. Most flights are near capacity these days.
Odds are this isn't "your company's" list - but the IRS's list of high-cost cities. Most people don't realize it but all these policies are driven by the tax code and what the IRS allows just copies through to company policy.
Yeah, I'm pretty sure they didn't compile it themselves.
Business class travel does become something of a perk for people above a certain level
The companies I worked for it was usually depending on the travel time. Currently we get to fly in business for flights > 3 hours (which I think is generous). Managing directors probably get to fly first class on such flights, though
The companies I worked for it was usually depending on the travel time. Currently we get to fly in business for flights > 3 hours (which I think is generous). Managing directors probably get to fly first class on such flights, though
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If 30% of your employees are committing "fraud" on expense reports you either work for a criminal organization or your expense reporting system is broken in some way.
I wouldn't be surprised if a lot of what they are counting as fraud is simple errors due to a badly designed expense system. For example, when you reimburse a hotel you have to manually create a second category with an obscure label for the taxes, and anybody who hasn't been told about it never knows, so they put the whole cost of the hotel room in the hotel line and suddenly are both overbilling (the room charge) and underbilling (the taxes).
Another easy way to commit fraud is to forget to include your travel hours in your expenses. So you aren't charging them for the time sitting on the plane, which is a violation of reporting guidelines and expense charging guidelines.
There are tons of ways an ordinary employee can screw up their expense report without realizing it. This is why they are supposed to be checked by a knowledgeable third party before being committed. If the person in the example was blatantly overcharging for hotel rooms for years without being caught then that's a failure of the expense reporting system.
I wouldn't be surprised if a lot of what they are counting as fraud is simple errors due to a badly designed expense system. For example, when you reimburse a hotel you have to manually create a second category with an obscure label for the taxes, and anybody who hasn't been told about it never knows, so they put the whole cost of the hotel room in the hotel line and suddenly are both overbilling (the room charge) and underbilling (the taxes).
Another easy way to commit fraud is to forget to include your travel hours in your expenses. So you aren't charging them for the time sitting on the plane, which is a violation of reporting guidelines and expense charging guidelines.
There are tons of ways an ordinary employee can screw up their expense report without realizing it. This is why they are supposed to be checked by a knowledgeable third party before being committed. If the person in the example was blatantly overcharging for hotel rooms for years without being caught then that's a failure of the expense reporting system.
I've worked at places in the past where expense reporting felt broken by design. For example, one employer didn't allow alcohol to be expensed, but they did allow $75 per day for meals, no questions asked (no receipts required). Naturally it was very common to end a conference or whatever with a very nice meal and drinks that would be expensed across a weeks worth of meal costs.
And really, what is the problem with this? It saves paperwork down at the expenses office and makes travel a little less of a drudgery. It is ridiculous for someone to have to go through the receipts for meals and incidentals, their salary will completely eradicate any savings you might be able to force on your employees by penny pinching.
>For example, when you reimburse a hotel you have to manually create a second category with an obscure label for the taxes
That's a function of your expense system/requirement. I certainly don't take the time to itemize every line item on a multi-day hotel bill. I just put the amount and the number of days.
>Another easy way to commit fraud is to forget to include your travel hours in your expenses.
That assumes you're charging a client by time--including travel time. I must say it was nice the one time I did some legal work to be able to bill for travel and random administrivia related to the case.
That's a function of your expense system/requirement. I certainly don't take the time to itemize every line item on a multi-day hotel bill. I just put the amount and the number of days.
>Another easy way to commit fraud is to forget to include your travel hours in your expenses.
That assumes you're charging a client by time--including travel time. I must say it was nice the one time I did some legal work to be able to bill for travel and random administrivia related to the case.
It's worse than that. I have to do it day by day. Hotel cost night one, hotel taxes night one, hotel costs night two, hotel taxes night two, etc...
I have occasionally run into hotels where the price per night changes while I'm staying there. Las Vegas has hotels that do this for example. It's kind of weird to have to ask for permission to go over your limit for 2 of your 5 nights. Fortunately, every hotel receipt I've ever received has the nights and taxes broken out so it's just copying numbers onto the form.
I have occasionally run into hotels where the price per night changes while I'm staying there. Las Vegas has hotels that do this for example. It's kind of weird to have to ask for permission to go over your limit for 2 of your 5 nights. Fortunately, every hotel receipt I've ever received has the nights and taxes broken out so it's just copying numbers onto the form.
A company tried to do that when they put in a new expense system. People basically rioted and that and some other requirements were dropped.
I believe that's rooted in arcane parts of the IRS regs where you are subject to certain limits based on the room charge but not on the taxes paid on the rooms, and for high-cost areas the combined total may exceed the room-charge-only limit.
Sounds like the accounting department created the system to fit into their workflow.
They can probably claim a credit on the sales taxes they’ve paid on the sales taxes they have to remit on their own sales (VAT/GST/HST).
Now it depends if the sales tax they paid is eligible for that (in country or foreign).
They can probably claim a credit on the sales taxes they’ve paid on the sales taxes they have to remit on their own sales (VAT/GST/HST).
Now it depends if the sales tax they paid is eligible for that (in country or foreign).
I got chewed out when I expensed WiFi at a hotel once because "it seemed unlikely that I was using it for business." The funny thing is that I spent way less than everyone else on that trip, to the tune of maybe $400 over the course of 6 days (I rarely take cabs because I prefer to walk places, and I find large fancy restaurants in major cities to be bland to the point of interchangeability, so I typically eat at smaller local places), but the fact that I spent $40 on WiFi was a huge problem.
I'm sure this is the kind of fraud that this thing would detect. "Ah, you split your meal between two different food stands! That is fraud!"
I'm sure this is the kind of fraud that this thing would detect. "Ah, you split your meal between two different food stands! That is fraud!"
Anti-fraud software salesman has discovered that fraud is rampant! News at 11!
Does anyone else feel like the entire system of expensing is kind of bizarre? This is kind of a tangent, but I feel like a few examples of expense fraud are less interesting than the fact that we're all using this deeply ingrained system that incentivizes cheating.
I'm thinking just about travel expenses here, obviously taking out clients is somewhat different. But most companies will have a per diem for travel but you still have to itemize every cost within that range. It's a pain for employees, and they are forced to lend the company sometimes thousands of dollars for a month or two at 0% interest. I think you could also argue that it's a pretty regressive cost as I'd imagine it could be hard in some cases for lower-income employees or people with extenuating circumstances to front the cost of their work travel before getting reimbursed. There's also the constant effort of deciding what should and should not qualify as a valid expense, which isn't always black and white.
Why not just pay the per diem in cash? Even aside from any actual fraud, I'm sure everyone has seen a lot of wastefulness when it comes to work travel, like going to relatively fancy restaurants every night or ordering extra rounds of drinks because you can expense it. Why should it matter to the company whether I'm doing that stuff or eating cheaply and pocketing the money? Why should it matter to the government for tax purposes whether I'm doing one or the other?
I have no idea what a different system would look like, since this is a pretty fundamental part of how individuals and businesses are taxed. But it seems like there should be a better way.
I'm thinking just about travel expenses here, obviously taking out clients is somewhat different. But most companies will have a per diem for travel but you still have to itemize every cost within that range. It's a pain for employees, and they are forced to lend the company sometimes thousands of dollars for a month or two at 0% interest. I think you could also argue that it's a pretty regressive cost as I'd imagine it could be hard in some cases for lower-income employees or people with extenuating circumstances to front the cost of their work travel before getting reimbursed. There's also the constant effort of deciding what should and should not qualify as a valid expense, which isn't always black and white.
Why not just pay the per diem in cash? Even aside from any actual fraud, I'm sure everyone has seen a lot of wastefulness when it comes to work travel, like going to relatively fancy restaurants every night or ordering extra rounds of drinks because you can expense it. Why should it matter to the company whether I'm doing that stuff or eating cheaply and pocketing the money? Why should it matter to the government for tax purposes whether I'm doing one or the other?
I have no idea what a different system would look like, since this is a pretty fundamental part of how individuals and businesses are taxed. But it seems like there should be a better way.
>Why not just pay the per diem in cash?
It's sometimes done. But, when there's a system like that, the per diem amount is usually low enough that you'd have to stay at a low-end hotel and eat fast food if you don't want to be out of pocket.
>I'm sure everyone has seen a lot of wastefulness when it comes to work travel, like going to relatively fancy restaurants every night or ordering extra rounds of drinks because you can expense it.
You call it wastefulness. I call it a small compensation for being away from home, dealing with airports, and otherwise living out of a suitcase.
It's sometimes done. But, when there's a system like that, the per diem amount is usually low enough that you'd have to stay at a low-end hotel and eat fast food if you don't want to be out of pocket.
>I'm sure everyone has seen a lot of wastefulness when it comes to work travel, like going to relatively fancy restaurants every night or ordering extra rounds of drinks because you can expense it.
You call it wastefulness. I call it a small compensation for being away from home, dealing with airports, and otherwise living out of a suitcase.
FWIW, I used to work for a company that paid cash per-diems on top of accommodation.
Worked out a treat on an extended gig to Thailand, where I was pulling in $70/day while my actual expenses were closer to $5!
Worked out a treat on an extended gig to Thailand, where I was pulling in $70/day while my actual expenses were closer to $5!
I had this in China. I could expense the hotel and taxis to and from the office and, per Polish law, company had to pay me 55EUR per diem. Given how cheap China is relatively, it essentially doubled my paycheck for the two months I was there (but then those were two grueling months of 10+h/day Monday-Saturday work).
Yep. Especially if you're away at the weekend, you're away from family, and need to find time to do weekend jobs at some other time. Traveling for work is tiring and inconvenient at the best of times. A $50 meal is the least a company could do.
Per diems can be paid up front, or after the fact. My workplace does both, since we send a lot of employees overseas very regularly. The itemizing requirement for per diems is a feature of the tax code, which requires expense reports to be itemized or else treats the per diem as income to the employee. (These same rules also provide daily caps on the untaxable portion of per diems, divided between food & incidentals, and lodging.)
For the most part, employees paid per diems choose the cheapest option for food and pocket the difference. The people eating fancy are the ones, like the C-suite, that get to expense their meals since the per diem limits don't apply to those expenses.
And let's face it: if your company is making you travel away from home for work, they need to provide a little something to make up for it. Letting the employees eat fancy meals on company dime is just part of it.
For the most part, employees paid per diems choose the cheapest option for food and pocket the difference. The people eating fancy are the ones, like the C-suite, that get to expense their meals since the per diem limits don't apply to those expenses.
And let's face it: if your company is making you travel away from home for work, they need to provide a little something to make up for it. Letting the employees eat fancy meals on company dime is just part of it.
I think one big difference would be taxes. A per diem over expenses would be considered compensation, and would involve both income and payroll taxes. Otherwise, I'd work for free, have the company give me a per diem of X a day and just not pay taxes on it and the company wouldn't pay payroll taxes either!
The government is strongly incentivized to make sure that employers can't give employees untaxed money.
The government is strongly incentivized to make sure that employers can't give employees untaxed money.
I don't think that's necessarily true. The per diem would presumably need to be reasonable, e.g. based on the (low) government per diem for the location.
I know in my case, most expenses are itemized but you can expense a small fixed daily amount if you stay with friends. (I assume the thinking is that you buy some groceries, a bottle of wine, etc. when you stay with people that you can't really expense.)
I know in my case, most expenses are itemized but you can expense a small fixed daily amount if you stay with friends. (I assume the thinking is that you buy some groceries, a bottle of wine, etc. when you stay with people that you can't really expense.)
US government per diems are actually quite high. The standard per diem for daily food is roughly $50...and more than that in high-expense locations like LA, SF, DC, etc. There is a separate per diem that can go toward lodging, which is significantly higher and generally would cover the cost of most hotel stays excluding resorts or 4 or 5 star hotels.
Correct - and incidentally these are the limits allowed by the IRS if employers choose to compensate you that way. There are some limits - like if you are at a conference that serves food, you get a deduction for that based on which meal. that's why a lot of conferences have some amount of food around but not technically "Breakfast" in the morning, because it would make people lose part of their per diem.
I used to work in state government and at a fed contractor. Travel department booked our hotel, generally subject to said per diem amounts (interestingly, our hotel contracts were almost almost exactly the limit) and we never got to pocket anything on that.
Food we just got paid the IRS limit (including calculation for partial days and otherwise provided meals) and we did not have to submit receipts on that. It was certainly enough to eat well enough and go home with a little extra, especially since I don't really eat breakfast.
It's really note enough to hit the booze hard on, though. People who drank on trips hated it, people who don't drink much came out ok. Some of my poorer/cheaper co-workers would pick up food at a corner store, make sandwiches in their room, and end a week trip with $150 in their pocket and were stoked about it.
I used to work in state government and at a fed contractor. Travel department booked our hotel, generally subject to said per diem amounts (interestingly, our hotel contracts were almost almost exactly the limit) and we never got to pocket anything on that.
Food we just got paid the IRS limit (including calculation for partial days and otherwise provided meals) and we did not have to submit receipts on that. It was certainly enough to eat well enough and go home with a little extra, especially since I don't really eat breakfast.
It's really note enough to hit the booze hard on, though. People who drank on trips hated it, people who don't drink much came out ok. Some of my poorer/cheaper co-workers would pick up food at a corner store, make sandwiches in their room, and end a week trip with $150 in their pocket and were stoked about it.
Yep, at my last job, I was one of those guys who would buy a bag of groceries at the beginning of the trip and end up with extra cash at the end. I thought it was great.
My current job just reimburses actual expenses up to a daily limit. On my very first trip, I bought my bag of groceries on day one and it ended up at about double the limit. They told me that that violated the policy, but they'd make an exception and approve just that once. Now I just eat out like everyone else and don't bother with groceries :/
My current job just reimburses actual expenses up to a daily limit. On my very first trip, I bought my bag of groceries on day one and it ended up at about double the limit. They told me that that violated the policy, but they'd make an exception and approve just that once. Now I just eat out like everyone else and don't bother with groceries :/
> employees are forced to lend the company thousands of dollars at 0% interest
This may be technically true, but in practice people charge things to their credit cards and don't actually pay the expenses until a month later anyway. And my company reimburses me within a few days, I always assumed that was normal.
This may be technically true, but in practice people charge things to their credit cards and don't actually pay the expenses until a month later anyway. And my company reimburses me within a few days, I always assumed that was normal.
And you get some tax-free points for later.
While the company doesn’t pay you interest, you can rack up significant amounts via credit card cash rewards and loyalty rewards. So, the ROI on that risk free loan can turn out to be pretty great.
How expensive (to a corporation) are the low-level-employee expenses, fraudulent or not? I mean, nobody likes to waste money on fraud or strip clubs or extra steaks, but is the cost of AI Oversight more than you'd retrieve?
How about expenses for directors/VP/Executive VP/CxO? Does this AI look over their expense reports, too? I would guess that even legit expenses from that level look a bit odd, but having AI audit employee expenses but not management expenses could contribute to a morale problem.
Another place that this AI oversight could help society as a whole is having corporations/companies get audited for wage theft. Wage theft is supposedly the largest dollar amount of theft in the US, and it probably exists because audits are so seldom done. AI wage theft audits could have a large beneficial effect for employees.
How about expenses for directors/VP/Executive VP/CxO? Does this AI look over their expense reports, too? I would guess that even legit expenses from that level look a bit odd, but having AI audit employee expenses but not management expenses could contribute to a morale problem.
Another place that this AI oversight could help society as a whole is having corporations/companies get audited for wage theft. Wage theft is supposedly the largest dollar amount of theft in the US, and it probably exists because audits are so seldom done. AI wage theft audits could have a large beneficial effect for employees.
To answer the question about the value of "AI," it is a black box of pretexts you can use for leverage.
Expenses policies are usually grey enough that if you want someone out of the company without significant severance, using the expenses policy as a pretext imposes costs on the target they probably won't fight. If a company wants to keep someone, there is no end to the excesses they will tolerate barring any liabilities greater than the value they bring. If they want to get rid of someone, the mechanism and the true reason are usually very different.
Useful rule is to treat any company expense as a vulnerability that will be used against you in a severance negotiation.
Arguably, a more accurate Turing test would be one where instead of being indifferent as to whether we are communicating with a human or machine - we decide that a machine is sufficiently intelligent if it can provide us with pretexts for political leverage against other people.
Expenses policies are usually grey enough that if you want someone out of the company without significant severance, using the expenses policy as a pretext imposes costs on the target they probably won't fight. If a company wants to keep someone, there is no end to the excesses they will tolerate barring any liabilities greater than the value they bring. If they want to get rid of someone, the mechanism and the true reason are usually very different.
Useful rule is to treat any company expense as a vulnerability that will be used against you in a severance negotiation.
Arguably, a more accurate Turing test would be one where instead of being indifferent as to whether we are communicating with a human or machine - we decide that a machine is sufficiently intelligent if it can provide us with pretexts for political leverage against other people.
The example that was so hilariously ludicrous that you had to have real admiration for the PR people keeping a straight face was when Mark Hurd was forced out at HP because he supposedly expensed a business dinner that wasn't actually a business dinner. (Which turned out to have almost certainly been about more than a dinner but nonetheless doubtless a trivial sum of money in the scheme of things.)
Visited a lawyer friend in Hong Kong (pre takeover) where client entertaining frequently required visits to hostelries of ill repute - all claimable and signed off.
Knew someone who sold his company and agreed to stay on for X months handover period. The new owners tried to go back and prove from previous expense claims that fraudulent activity had occurred and that they shouldn't pay some amount previously agreed. You need to be careful.
A long time ago, a project manager was paid 3X per month for a flat in Germany because at their level that was what they were entitled to. Then new junior person on same project came in, and happened to take over same flat and claimed X (with receipts). At the time this was just ignored - different folks different rules.
Knew someone who sold his company and agreed to stay on for X months handover period. The new owners tried to go back and prove from previous expense claims that fraudulent activity had occurred and that they shouldn't pay some amount previously agreed. You need to be careful.
A long time ago, a project manager was paid 3X per month for a flat in Germany because at their level that was what they were entitled to. Then new junior person on same project came in, and happened to take over same flat and claimed X (with receipts). At the time this was just ignored - different folks different rules.
I always remember how they used to nickel and dime me about hotels and flights (I couldn't even get the "comfort" seat on two 9 hour flights in a row), however the Director positions and up (about 20 people at my office) used to fly First Class everywhere. I had to fly from SF to Germany to India in the worst, smallest, most uncomfortable seat for 18 hours in a row, but they could spring for First Class from SF to LA!
Another issue is that many companies (and most governements), have policies prohibiting the acceptance of meals or other gifts in excess of certain amounts, that I would guess are routinely exceeded. Having too detailed a records on expense accounts attached to dealing with those types clients could lead to problems for the clients and the company.
This would be motivation to not have some robot auditor - it probably demands enough detail that expense accounts could track down those accepting gifts/meals of too much value. It would be another case of "because we can detect it", sort of like DUI as soon as breathalyzers were in use.
This is one of those areas that I never "got" in that I just filed expense reports for what I spent and didn't see the advantage of getting an extra $10 or $100 from the trip. And I knew people who loved to push it as far to the limit as they could, like a manager who had a private table at a Sunnyvale restaurant and filed a huge reimbursement request for 'team lunches' and a baggie full of receipts. Betting that nobody would actually go and verify the receipts.
So at some point you have to be in a somewhat adversarial relationship with the company right? I suppose if you felt the company was taking advantage of you this would make sense as a way to 'get back', but wouldn't you rather be working somewhere else instead?
So at some point you have to be in a somewhat adversarial relationship with the company right? I suppose if you felt the company was taking advantage of you this would make sense as a way to 'get back', but wouldn't you rather be working somewhere else instead?
The only time I've done anything like this is when the company did their best -- using Concur -- to avoid paying legitimate expenses. ie we got into an argument over whether my taxi ride home from SFO was "too expensive". I was like, um, I got in the fucking taxi, told it my address, and paid the bill.
My employer used Concur and stupid rules to argue me into giving up and just paying the taxi ride out-of-pocket. I'm pretty sure that was the point, and many of the stupid expense "fraud" companies would notch that as a win. But I made my $57 back elsewhere, don't worry.
And yeah, the fix was get an employer that wasn't ass.
My employer used Concur and stupid rules to argue me into giving up and just paying the taxi ride out-of-pocket. I'm pretty sure that was the point, and many of the stupid expense "fraud" companies would notch that as a win. But I made my $57 back elsewhere, don't worry.
And yeah, the fix was get an employer that wasn't ass.
Similar story here.
I work remotely, and my previous employer wanted me to come up to the office for a few days as we did every now and then.
But I didn't really want to go this time, I had other obligations, but ended up going anyway.
Expense report time comes around, and they complain that I don't have the receipt from the rental car company that includes the gas refill information, so they aren't paying that, and they pushed back on the $7-per-day economy parking I had my car in for the week.
So I looked over the handbook and some stuff in Concur, saw that I was entitled to like $10 for a breakfast each morning, and like $20 for dinner each night without a receipt. So I added a couple of those in there, it all added up, and they happily paid it...
And while that alone wasn't a major reason I left the company, stupid penny-pinching stuff like it was a big part of it.
I work remotely, and my previous employer wanted me to come up to the office for a few days as we did every now and then.
But I didn't really want to go this time, I had other obligations, but ended up going anyway.
Expense report time comes around, and they complain that I don't have the receipt from the rental car company that includes the gas refill information, so they aren't paying that, and they pushed back on the $7-per-day economy parking I had my car in for the week.
So I looked over the handbook and some stuff in Concur, saw that I was entitled to like $10 for a breakfast each morning, and like $20 for dinner each night without a receipt. So I added a couple of those in there, it all added up, and they happily paid it...
And while that alone wasn't a major reason I left the company, stupid penny-pinching stuff like it was a big part of it.
How about better expense claiming software so employers aren't stealing from employees through unclaimed expenses!
I have done a tiny amount of business travel in my career but recently went to a conference in a far off land and had to wrestle with the expensing system.
First, I was required to loan my employer $3000 for a month by paying for all the expenses (including the unavoidable very expensive hotel rate) on my personal card.
Afterwards I had to fight with the expensing system for several hours to get everything lined up correctly so that I could have the privilege of having my own money returned.
I was scrupulously honest with my expenses and still felt like I was being eyed suspiciously by the system.
I never once considered misrepresenting my expenses but I definitely considered pounding my keyboard. :)
I never once considered misrepresenting my expenses but I definitely considered pounding my keyboard. :)
> First, I was required to loan my employer $3000 for a month by paying for all the expenses (including the unavoidable very expensive hotel rate) on my personal card.
This is the part that kills me. In my org people frequently travel at the last minute to Asia for weeks at a time. Those claims sometimes end up into the five figure range depending on the time of year. People have been almost stranded because they've maxed out their personal cards.
This is the part that kills me. In my org people frequently travel at the last minute to Asia for weeks at a time. Those claims sometimes end up into the five figure range depending on the time of year. People have been almost stranded because they've maxed out their personal cards.
Credit Cards, like American Express, allow you to bundle current expenses to the end of the next month. If you manage correctly, you can get reimbursed for your expenses about 10-20 days before Amex bill you for that period.
So, if you end-up lending $3000 of your own money to your employer, you are doing it wrong.
So, if you end-up lending $3000 of your own money to your employer, you are doing it wrong.
I think using an employer-provided card is superior for a lot of reasons, but spending 5 figures on a personal card and being reimbursed for it doesn't sound bad as someone with an extremely high credit limit and rewards cards that give 2-3% back on most purchases. I know some people who manage to fly first class to some pretty far-flung destinations using points they got from company spending on their personal credit cards.
That being said it can be pretty risky if your accounting department loses a check
That being said it can be pretty risky if your accounting department loses a check
I use personal cards by choice but I absolutely understand someone who doesn't want to commingle thousands of dollars of company expenses with their own accounts. I would hope that most businesses offer the option of a corporate card to any employees who rack up significant reimbursable expenses.
I frequently say that the only thing I hate more than doing my expenses is not having my money. :-) (I travel a lot so the amounts add up quickly.)
I know I'm hopelessly naive but I'm surprised there isn't An App for that™
Instead of filing expenses when you get back home/a month later, you whip out the app while still travelling, take a picture of the receipts/invoice, and then filling in a short form. The app posts the item to the trip (along with photographic evidence) and that's one less thing to do upon your return.
Instead of filing expenses when you get back home/a month later, you whip out the app while still travelling, take a picture of the receipts/invoice, and then filling in a short form. The app posts the item to the trip (along with photographic evidence) and that's one less thing to do upon your return.
There is. Concur is one that's commonly used. You're right of course that if you keep up with things as you go along it's much easier. Some of us aren't always disciplined like that :-) and, in practice, I usually don't want to fuss around with taking pictures of receipts in the restaurant.
For more complicated trips, it's not always completely straightforward though. It's not uncommon for me to mix some pleasure with business so it's often not as simple as just expensing everything.
For more complicated trips, it's not always completely straightforward though. It's not uncommon for me to mix some pleasure with business so it's often not as simple as just expensing everything.
That would be very convenient for the employee, but it's probably more profitable to sell management on an AI based machine learning automatic fraud detection system that practically pays for itself!!!
Expensify
On the other hand, getting 2% back on that $3000 because you used your own card is a nice perk.
the $3000 on your own card is actually a perk for some people as it allows you to get credit card points
My mom got flagged by a system like this a few years ago. The state was in a financial bind, so they hired an algorithmic auditing firm to claw back public funds from medical professionals who billed Medicare/Medicaid. They had been lax about the documentation they accepted so, they were able to claim just about anyone was missing years worth of legally required documents. She did in-home medical evaluations for rural communities and worked long hours. The amount of hours and miles she billed set off red flags, so they sent her a bill for tens of thousands of dollars and threatened her with criminal prosecution. It took her months and who knows how much in legal costs to fight it.
What are the chances that they actually have effective AI doing this? I have a very strong suspicion, admittedly based on nothing at all, that they just have some simple rules based algorithms and mostly just hire cheap labor to look over expense reports.
if (expense_for_flight > 2 * average_expense_for_flight) {
flag_for_review()
}"AI"
A.I. = Almost Intelligent
This is unnerving. I don't really have an issue with people who commit fraud being caught in the act. It still bothers me that we're closing out the 2010s and most of what we've achieved as an industry is make it easier for employers to surveil their people.
The story of the 20th century included a moon landing and ubiquitous personal computers. The 21st century's story seems to be about advertisers, health insurers, and employers using technology to get every edge on the common people that they can get.
The story of the 20th century included a moon landing and ubiquitous personal computers. The 21st century's story seems to be about advertisers, health insurers, and employers using technology to get every edge on the common people that they can get.
Being able to find reference material, how-tos, self-paced, self-led education seems like a really good thing we’ve achieved as asiciety. Obvs this carries over from the last years of prev century, but it’s now uniquitous.
That was the story of the late 20th century. The story of the early 20th century was industrialized warfare killing 37 million people because a prince got shot.
I never really got it why people cheat on expenses. Apart from the fact that theft (at least in this case) is morally repugnant it's a sure fire way to get fired if your employer needs any reason at all.
Expenses, as implied in the name, are meant to reimburse employees for expenses fronted for their employers. It's not an enrichment scheme to pad your salary or to lay off unrelated expenses on your employer.
Bonus for those geniuses, which expense strip club visits. This seems the expense equivalent of surfing porn at work; stupid!
Expenses, as implied in the name, are meant to reimburse employees for expenses fronted for their employers. It's not an enrichment scheme to pad your salary or to lay off unrelated expenses on your employer.
Bonus for those geniuses, which expense strip club visits. This seems the expense equivalent of surfing porn at work; stupid!
Most of the expense “fraud” I’ve seen has actually been implicitly or explicitly condoned by the firm - e.g corporate wants higher sales - sales team delivers, in the process taking clients to expensive dinners, strip clubs, skiing etc. (all out of policy) - management is happy and doesn’t want to “know”
It depends on the environment and the employee.
In the cases I personally know of, there was at least an element of the employee believing they had been cheated out of something: perks being removed, legitimate expenses being denied for seemingly arbitrary reasons.
In the cases I personally know of, there was at least an element of the employee believing they had been cheated out of something: perks being removed, legitimate expenses being denied for seemingly arbitrary reasons.
perks being removed, legitimate expenses being denied for seemingly arbitrary reasons
I think that's fundamentally wrong and should - at least in an ideal world - never happen.
I just don't think that fibbing expenses is a good way to get back at your employer.
I'm aware that this reply has a certain whiff of Euro centrism, where such things are less likely to happen and workers really have better recourse to get back at their employers.
Shit like mandatory arbitration agreements would be laughed out of court herearound.
I think that's fundamentally wrong and should - at least in an ideal world - never happen.
I just don't think that fibbing expenses is a good way to get back at your employer.
I'm aware that this reply has a certain whiff of Euro centrism, where such things are less likely to happen and workers really have better recourse to get back at their employers.
Shit like mandatory arbitration agreements would be laughed out of court herearound.
I don't think this is an EU vs US issue or an arbitration issue. Even if every dollar you spend while traveling is reimbursed, you don't really get compensated for the non-monetary annoyances of traveling.
You might have to fly at weird hours and be tired or jetlagged, and you miss a few nights away from your family. Maybe you're traveling during the work day so you are being paid for that time, but you might have had to wake up earlier than usual, or sit in traffic on the way to the airport, or all kinds of other things that aren't compensated by the company. Even if nothing does go wrong, traveling is still somewhat stressful for a lot of people just because you're aware of the risk that something might go wrong.
Not to mention the fact that you're forced to lend the company money for a month or two at 0% interest.
If you have no problem with this imbalance between the company and employee, that's great for you. But IMO it's very easy to see why employees are incentivized to stretch their reimbursements as far as possible to help make some of it back. It's hard for me to see this as morally repugnant.
You might have to fly at weird hours and be tired or jetlagged, and you miss a few nights away from your family. Maybe you're traveling during the work day so you are being paid for that time, but you might have had to wake up earlier than usual, or sit in traffic on the way to the airport, or all kinds of other things that aren't compensated by the company. Even if nothing does go wrong, traveling is still somewhat stressful for a lot of people just because you're aware of the risk that something might go wrong.
Not to mention the fact that you're forced to lend the company money for a month or two at 0% interest.
If you have no problem with this imbalance between the company and employee, that's great for you. But IMO it's very easy to see why employees are incentivized to stretch their reimbursements as far as possible to help make some of it back. It's hard for me to see this as morally repugnant.
> I think that's fundamentally wrong and should - at least in an ideal world - never happen.
Agreed. But it does. Some of the perks removed were never perks but a form of negligence. Some of the expenses being denied for seemingly arbitrary reasons were denied because there is no way they can be justified as business expenses, but somebody in the past authorized them.
> I just don't think that fibbing expenses is a good way to get back at your employer.
We're in agreement on that. Just like theft from employer, it can only realistically have one outcome regarding employment once discovered -- no matter how small.
> I'm aware that this reply has a certain whiff of Euro centrism, where such things are less likely to happen and workers really have better recourse to get back at their employers.
My experiences relate to the UK -- albeit during the period where the recourse to get back at employers required paying for an employment tribunal to hear your case. Even after that was reversed, most disgruntled employees don't go to employment tribunals.
> Shit like mandatory arbitration agreements would be laughed out of court herearound.
Agreed. But you don't need those for injustices to be felt. Most employees don't really consider that expenses have to be a justifiable expense by the employer for tax purposes and that the people authorizing them are possibly over-worked and only distrust few people enough to check every item.
Agreed. But it does. Some of the perks removed were never perks but a form of negligence. Some of the expenses being denied for seemingly arbitrary reasons were denied because there is no way they can be justified as business expenses, but somebody in the past authorized them.
> I just don't think that fibbing expenses is a good way to get back at your employer.
We're in agreement on that. Just like theft from employer, it can only realistically have one outcome regarding employment once discovered -- no matter how small.
> I'm aware that this reply has a certain whiff of Euro centrism, where such things are less likely to happen and workers really have better recourse to get back at their employers.
My experiences relate to the UK -- albeit during the period where the recourse to get back at employers required paying for an employment tribunal to hear your case. Even after that was reversed, most disgruntled employees don't go to employment tribunals.
> Shit like mandatory arbitration agreements would be laughed out of court herearound.
Agreed. But you don't need those for injustices to be felt. Most employees don't really consider that expenses have to be a justifiable expense by the employer for tax purposes and that the people authorizing them are possibly over-worked and only distrust few people enough to check every item.
I used to, a long time ago, work in a small office where we were expected to drive around and "do sales" during the slow hours. Of course we didn't but my boss wanted corporate to think we did and he would get upset if my expense report was lacking so...every mile I put on my VW Bus the entire time I worked there ended up on the expense report.
It used to be a chore keeping up with it so if they ever came out and looked at my odometer it wasn't obvious what was going on since I had to account for my actual commute to/from work but I managed to keep corporate happy which kept my boss happy which made that crappy job somewhat bearable.
It used to be a chore keeping up with it so if they ever came out and looked at my odometer it wasn't obvious what was going on since I had to account for my actual commute to/from work but I managed to keep corporate happy which kept my boss happy which made that crappy job somewhat bearable.
People don't cheat because the large repercussions if caught, they cheat if it's easy to get away with it.
If nobody even reviews your expenses you can get away with buying alcohol (as is the case at our company...) or as you say strip club visits.
If nobody even reviews your expenses you can get away with buying alcohol (as is the case at our company...) or as you say strip club visits.
If nobody even reviews your expenses you can get away with buying alcohol
When travelling on business this was completely acceptable as long as it wasn't excessive or stand-alone bar bills. A bottle of reasonable wine, or a couple beers with dinner was considered a no-brainer and fully reimbursed.
On a sidenote: When I was on training in New York dinners tended to be expensive. Often, but not always, more expensive than what I would consider reasonable. For example: 80$ (in 1996 $) for a nice steak dinner is not something I would consder reasonable.
When I came back to home office I made them aware that there where a couple or three of such dinners and they should just reimburse me what they deem reasonable, or reflected in the expense policy. I was reimbursed for the full amount. (Probably a number of 7$ deli lunches helped).
That was the Swiss subsidiary of an American software vendor.
When travelling on business this was completely acceptable as long as it wasn't excessive or stand-alone bar bills. A bottle of reasonable wine, or a couple beers with dinner was considered a no-brainer and fully reimbursed.
On a sidenote: When I was on training in New York dinners tended to be expensive. Often, but not always, more expensive than what I would consider reasonable. For example: 80$ (in 1996 $) for a nice steak dinner is not something I would consder reasonable.
When I came back to home office I made them aware that there where a couple or three of such dinners and they should just reimburse me what they deem reasonable, or reflected in the expense policy. I was reimbursed for the full amount. (Probably a number of 7$ deli lunches helped).
That was the Swiss subsidiary of an American software vendor.
[deleted]
Theft of office supplies is pervasive, even by well-paid people.
As remote employment grows, I sense a larger and larger amount of office business expenses being invisibly pushed to the remote employees, while the business saves on the expense of less or no office space. The entire area of "expenses" is ripe for an inspection revolution and formalization on all sides.
Many companies do have policies with respect to certain home office expenses.
But what's "fair" with respect to expenses generally is a bit tricky. Yes, there are home office expenses--maybe trivial, maybe a lot if you need to set up a room for the purpose. On the other hand, you're reducing or eliminating perhaps substantial commuting expenses.
Even with respect to travel, there are some perks with meals, etc. On the other hand, if you travel a lot you probably have to pay for various home services that you might otherwise not have to.
But what's "fair" with respect to expenses generally is a bit tricky. Yes, there are home office expenses--maybe trivial, maybe a lot if you need to set up a room for the purpose. On the other hand, you're reducing or eliminating perhaps substantial commuting expenses.
Even with respect to travel, there are some perks with meals, etc. On the other hand, if you travel a lot you probably have to pay for various home services that you might otherwise not have to.
I've audited my home office expenses as a remote worker, and I save way more money by not commuting and not having to take time off for minor illnesses. It turns out that the actual cost of my home office space (dedicated room % of montage) is really not enough for me to even calculate and deduct. At least in my case, I come out ahead.
Depends on where the home office is and what you do. It’s not hard to break 1,000$ a month including a modest space inside an apartment in an expensive city. People that are 100% remote often live in cheap areas, but that’s not always the case.
I'm sure that's the usual case. I have a room that's specifically an office but even that isn't dedicated for work in any normal meaning of the word. I do know someone who had a small standalone office built on their property but that's pretty unusual. Most people I know who really want a space specific for work will go to a co-working facility (which I believe my company pays for in at least some cases).
There is a similar project here in Brazil [1]. They analyse public records of government officials and detects discrepancies with their refound requests for their "official" expenses. It's a civil society totally open project.
[1] https://github.com/okfn-brasil/serenata-de-amor
[1] https://github.com/okfn-brasil/serenata-de-amor
I hope it uses Benford's law as a signal.
I've used Concur as both a user and expense report approver, and I suspect these "AI" claims are overblown. What actually happens is that Concur can import transactions directly from a corp credit card and identify a lot of them (airlines, hotels, restaurants) automatically. From what I've been told, the auditing bit consists of looking for anomalously high charges in categories ($1000 flight OK, $1000 restaurant bill not so much) and checking against a blacklist of banned establishments (gambling, adult entertainment, etc).
[deleted]
I just got a job with a corporate card, and we have SAP Concur, I assume that everything will be scrutinized by some kind of AI - as it automatically reads the receipts and essentially tells me that it is doing so. One steak dinner is not worth my job...
I don't think this is worthwhile. Most of the time employees are getting back their unpaid overtime and other unpaid work in their expense accounts.
In my company any time spent traveling is on the clock. You don't charge for time in the hotel room, but time at the airport/in a plane/in the taxi all counts. The expenses people will cross reference your timecard to make sure you did it right too.
It's kind of annoying actually, because it means feeling guilty if you aren't working while on the plane, but at the same time I can't work because the seats are too close together and the guy ahead of me has reclined all the way so I can't even open my laptop.
It's kind of annoying actually, because it means feeling guilty if you aren't working while on the plane, but at the same time I can't work because the seats are too close together and the guy ahead of me has reclined all the way so I can't even open my laptop.
Most employees are getting robbed by their employers, but those tend to be the ones who don't have expense accounts.
If you have a true expense account, you're likely on the robbing side, not the robbed.
If you have a true expense account, you're likely on the robbing side, not the robbed.
What? Why? Wtf?
I'm also slightly surprised by the first two replies.
Expenses should definitely not be a method to get back at your employer for perceived and real sleighs. Probably, if your employer steals from you this problem should be corrected at source and not via expense claims.
For what it's worth: I think that (as a for example) an Amazon employee stands in the queue for half an hour, in order to get security checked, and is not paid for that that's wage theft. Plain and simple. No matter if the courts disagree.
Nevertheless you shouldn't fib expenses (as if those folks could) to get back at your employer.
Expenses should definitely not be a method to get back at your employer for perceived and real sleighs. Probably, if your employer steals from you this problem should be corrected at source and not via expense claims.
For what it's worth: I think that (as a for example) an Amazon employee stands in the queue for half an hour, in order to get security checked, and is not paid for that that's wage theft. Plain and simple. No matter if the courts disagree.
Nevertheless you shouldn't fib expenses (as if those folks could) to get back at your employer.
The GP might be suggesting that it benefits both the employer and the employee here. The employee gets a better tax treatment and the employer can have a permissive approach to expenses when it might be politically difficult to officially give a raise.
Ah, OK. Thanks.
For what it's worth: I didn't downvote.
Nevertheless there seems to be an attitude in certain circles that expenses ar a form of free for all.
My assumption is that you have a relationship with your employer, which pays you for work provided. If something stinks in that relationship then it's the stink, which should be removed.
I'm aware that this is an idealized view. Especially in the US where courts seem to be overly employer friendly, or, even worse, where employees are completely shafted by mandatory arbitration clauses.
For what it's worth: I didn't downvote.
Nevertheless there seems to be an attitude in certain circles that expenses ar a form of free for all.
My assumption is that you have a relationship with your employer, which pays you for work provided. If something stinks in that relationship then it's the stink, which should be removed.
I'm aware that this is an idealized view. Especially in the US where courts seem to be overly employer friendly, or, even worse, where employees are completely shafted by mandatory arbitration clauses.
You are assuming the employer - at least the first level manager, but more likely all the way up - isn't aware of this, and approves.
Allowing expenses as pay is very common, widely practiced and normal. From buying books to hotel room stays to letting family travel along for long trips (and providing entertainment for them). Seems to happen all the time.
Hell, isn't the white house an example of it ?
(I would also like to point out that buying meat for a snake might simply be a mistake. I certainly would have tried feeding a python something dead first, wtf)
Allowing expenses as pay is very common, widely practiced and normal. From buying books to hotel room stays to letting family travel along for long trips (and providing entertainment for them). Seems to happen all the time.
Hell, isn't the white house an example of it ?
(I would also like to point out that buying meat for a snake might simply be a mistake. I certainly would have tried feeding a python something dead first, wtf)
Although an official policy of being permissive with what expenses are covered seems like it'd be better than "we look away when you lie on your expenses claim". Legal safety for the employee, more fairness among employees. E.g. the first example in the article of someone having the company pay for dog care during business travel seems something that'd be fairly easy to justify as a policy.
jiveturkey(2)
After the investigation, she was promptly fired without severance and also lost her flexible medical benefits (worth at least $10k).
Fraudulent expenses are no joke. Consulting companies are very sensitive about it because many consultants' expenses are included in the invoices and directly passed onto the clients. If you let clients discover a fraudulent expense instead of your internal auditing team finding it first, it is extremely embarrassing and taints all your other invoices. Integrity has to be maintained and you don't want clients questioning all the other billable hours and expenses.
[0] https://www.concur.com/