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Fighting the Scourge of Expenses Fiddling at Work

Monday, 28 April 2014

Maria Miller may have been cleared of funding a home for her parents at the taxpayers' expense but her resignation once again draws attention to the murky topic of MPs’ expenses claims. Politicians have made themselves prime targets for extra scrutiny when it comes to their expenses but they are not the only people inclined to take advantage of their employers.

Although the vast majority of ordinary workers are trustworthy and honest, surveys show that a significant percentage of staff are tempted to game their firm’s expenses systems. Behaviour ranges from maximising expenses where rules lack clarity to outright fraudulent claims.

It is therefore important for employers to have proper systems in place and for employees to stick to the rules to avoid trouble.

What the MPs’ Expenses Scandal Tells Us About Expense Systems

When the Parliamentary expenses scandal was broken via the Telegraph newspaper in 2009 it revealed that abuse of MPs’ expenses was endemic. In many cases MPs had simply taken advantage of a weak and poorly conceived system and in some cases outright fraud had been committed.

The scope and scale of the abuse suggested that there was a systemic failure which had led to a culture that permitted and even encouraged unethical behaviour. The Telegraph alleged at the time that the Parliamentary “Green Book” of expenses rules gave wide scope for abuse, particularly with regard to the costs of maintaining two residences.

Leaving aside individual behaviours, it became clear from the scandal that a poorly designed, weakly enforced system had led to an unethical cultural dominated by bad practice and even outright criminality.

Employers’ Responsibilities for Expenses Claims

Employers must take the lead when it comes to expenses in order to prevent abuses.

Expenses systems should be absolutely clear about what is and what is not allowable; generally they should be limited to those expenses wholly, necessarily and exclusively incurred in connection with the business. Employees should not be financially disadvantaged or advantaged by genuine business expenses. A list of allowable expenses can be set out in an expenses policy.

There should be a fixed procedure for claiming expenses such as a form with relevant receipts attached that is approved by a line manager before being submitted to accounts departments. Payments should be made on a consistent and regular basis.

Discrepancies should be investigated in accordance with a fixed procedure. Deliberate falsification of expenses should carry the threat of appropriate disciplinary procedure such as gross misconduct and related sanctions. In very serious cases, employers may need to consider reporting to external authorities such as the police.

Employees’ Responsibilities for Expenses Claims

Employers’ expenses systems will always require a degree of co-operation from employees. Honesty and trust are important at many levels in business and employees must play their part.

Employees that are tempted to take advantage of internal expenses systems should be warned that in most cases this will be deemed gross misconduct leaving them vulnerable to sanctions such as dismissal.

Employees have many protections under employment legislation but this does not extend to those that fiddle their expenses claims. Mistakes can be made however so it is important that employees are treated fairly even where the employer suspects foul play.

For specialist advice on employment matters please contact Aneil Balgobin via e-mail or by telephone on 0207 611 4848.

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