Managers happy to sign off £6bn of bogus expenses a year

2008

Employees around the world are pocketing almost £6bn a year in false expense claims because managers are happy to sign almost anything shoved under their noses.

Research by employee expenses company GlobalExpense has calculated that fraudulent expense claims in the UK alone accounted for around £350m a year, while another £670m was mistakenly paid out to workers each year, despite the fact that the items being claimed for were not covered by company policy.

The survey of more than 4.8 million expense sheets from more than 100,000 employees in 140 companies concluded the total worldwide outlay was an estimated £5.8bn last year, with employees claiming on average £1,555 each.

Eight employees shared the highest claim of £24,000 for a week's training. Other claims included the purchase of 20 bibles, haircuts, a visit to a strip club in the U.S. and even a betting slip.

GlobalExpense, which drew on data covering a three-year period, said company policies were widely and routinely ignored.

While on average around 12 per cent of all employee claims fell outside policy guidelines, managers rejected just 0.5 per cent of them.

David Vine, GlobalExpense managing director, said: "Companies and organisations are throwing away money by failing to check claims. Not all out-of-policy expenses are phoney – it may be that an employee has overstepped the spending limit by one pound or failed to produce a valid receipt. But this is an area where public figures and working professionals can forget their ethics."

He cited the example of a group of management consultants overheard at a London business hotel discussing how to pay for a round of drinks.

"It was decided that one of them would cover it with a bogus mileage claim," he pointed out.

"A lax attitude to expenses can result in public scandal and damage the reputations of directors and their organisations," he added.

Financial services firms were the biggest spenders, accounting for almost a quarter of last year's claims for hospitality and entertainment. Media and publishing firms were the second biggest.