Employees stealing from their employer is nothing new. Recently, a lawyer and his wife who were employed by the same firm were convicted of stealing in excess of $100,000 pounds from their firm’s London office. They did it with bogus expense reimbursements. This story raises the importance of having clear policies in place for expense reimbursement.
One area that employers should always be sensitive to in terms of potential theft are expense reimbursements. I cannot tell you the number of times I have had to sit through a deposition where an employee/officer, or owner in a closely held company is raked over the coals over the propriety of their expense reports. Unfortunately, there are many instances where companies, especially smaller companies, do not have clear policies in place in terms of what is reimbursable and what is not. The reality of the situation is the employee simply submits the reimbursement to be signed off on without any real detail or scrutiny paid by management. Avoid these situations.
Companies need to have clear policies, regardless of their size, in terms of what items can be reimbursed versus what items cannot be reimbursed. In addition to having these types of substantive guidance, an employer also needs to have clear procedures in place in terms of completion of expense reports, approval of expense reports and further auditing of expense reports on down the line. It will always be difficult to uncover individuals engaged in systemic fraud, but having clear policies in place is a first step.