How often do you have to track employees down to validate suspicious expenses? Have you ever calculated how much time expense policing is costing you? If you dread auditing employee expense reports every month, this webinar is for you! Join Ernie Humphrey, CEO of 360 Thought Leadership Consulting, for this educational webinar!

1. Stop Fraud in Its Tracks:
How Automated Expense Management
Can Make Employee Fraud a Thing of the Past
June 19, 2018

2. Featured Speaker
Ernie Humphrey
Chief Executive Officer
360 Thought Leadership Consulting helps companies define
and unlock the strategic value of their thought leadership
programs. Formerly, Ernie served as Vice President,
Educational Programs for Proformative, as the Director of
Treasury Services and as a Director of the Corporate Treasurers
Council for the Association for Financial Professionals.

3. What is expense reimbursement fraud?

4. Expense reimbursement fraud is a fraudulent disbursement
scheme in which an employee makes a claim for
reimbursement of fictitious or inflated business expenses.
For example, an employee files a fraudulent expense
report, claiming personal travel or nonexistent meals.
Association of Certified Fraud Examiners’ (ACFE) 2018 Global Study on Occupational Fraud and Abuse

5. “The Fraud Tree”
Association of Certified Fraud Examiners’ (ACFE) 2018 Global Study on Occupational Fraud and Abuse
Corruption
Asset
Misappropriation
Fraudulent
Disbursements
Billing Schemes
Payroll Schemes
Expense
Reimbursement
Schemes
Mischaracterized
Expenses
Overstated
Expenses
Fictitious
Expenses
Multiple
Reimbursements
Check and
Payment
Tampering
Register
Disbursements
Financial
Statement Fraud

6. The Impact of Expense Reimbursement Fraud
Association of Certified Fraud Examiners’ (ACFE) 2018 Global Study on Occupational Fraud and Abuse
$31,000
lost due to expense reimbursement fraud
(median loss amount)
2 years
to detect expense reimbursement fraud
(median detection time)
17%
of all U.S. occupational fraud schemes are
expense reimbursements

7. Polling Question
Visibility into the T&E spend at my company is:
A. Excellent, almost real-time visibility
B. Good
C. Not bad, it should be better
D. Poor
E. Non-Existent

8. Highest Occurrences of Expense Fraud
Association of Certified Fraud Examiners’ (ACFE) 2018 Global Study on Occupational Fraud and Abuse
INDUSTRY
1. Professional Services
2. Religious, Charitable, or Social Services
3. Construction
4. Technology
5. Manufacturing
DEPARTMENT
1. Executive/Upper Management
2. Administrative Support
3. Sales
4. Finance
5. Accounting

9. The Impact on Small Business
Association of Certified Fraud Examiners’ (ACFE) 2018 Global Study on Occupational Fraud and Abuse
42%
< 100 employees
25%
100+ employees
29%
< 100 employees
16%
100+ employees

10. The Signs of a Fraudulent Scheme
• Purchases can be mischaracterized
• Transaction amounts are overstated
• Unassigned or unused credits
• Duplicate or fictitious expenses
• Multiple reimbursements
• Cash advances
• Accidental or unintentional fraud

11. Polling Question
How would you characterize the familiarity of your travlers’
familiarity with your T&E policy?
A. Great
B. Good
C. Not bad, it should be better
D. Poor
E. Non-Existent or we do not have a policy

12. Build the Foundation of Fraud Prevention
Must-haves for an effective T&E policy:
• Well-defined expense guidelines
Example: Will your company pay for alcoholic beverages or other client
entertainment costs?
• Distinct timeframes
Example: What are the recurring cut-off dates for expense submissions?
• Easy-to-follow expense reporting procedure
Example: Define how you will encourage employees to practice record-keeping (original
receipts, the names of people involved, project code).
• Straightforward employee communications
Example: Make it easy for employees to understand and access, so people can read through
it at the convenience, at home or in the office.

13. Effectively Communicate the Policy
• Be clear and honest about what’s changing and why
• Consider the emotional impact of the change
• Tell employees what’s in it for them
• Explain how the change will happen
• Tell employees what they need to do
• Open two-way communication channels
• Reinforce the communication of this policy with new
employees

14. Hold Managers Accountable (all of them)
• Managers/approvers are the first line of defense
• Reinforce proper approval procedures
• Empower them to ask questions and take action
• These people are your policy “enforcers”
• Create accountability across all levels
• No one is “above” your company’s T&E policy!

15. Polling Question
What percentage of expense reports are audited at your
company?
A. Less than 10%
B. 10% - 25%
C. 26% - 50%
D. More than 50%
E. I don’t know

16. Audit Past Expense Reports
• Review a cross-section of past expense reports
• Take note of suspicious out of pocket expenses
• Look out for duplicate transactions
• Identify any fictitious transactions
• Analyze trends in generalized categories like “Miscellaneous”

17. Expenses by Category
Expense Report Statistics
Expense Policy Review

18. Set Limits on Corporate Cards
Leverage Corporate credit cards:
Manage where, when, and how much an employee can spend
Set parameters
Improve T&E budgeting, forecasting
Keep employees’ spending in-line with policies
Pros of using corporate credit cards over personal cards
• Less stress for employees
• Shorter processing times
• Full visibility into spending
• Added benefits such as cash back or travel rewards

19. Automate the Expense Reporting Process
Streamline work for you and your administrators
Faster and more accurate, expenses get submitted and paid sooner
Ensure compliance with corporate policies
No need to manually “check” for corporate expense policy compliance
Simplify the process for your employees
Employees can build expense reports, record and edit transactions, insert receipts
and submit reports for processing on the go

20. Polling Question
Has your company automated expense reporting?
A. Yes
B. No, but we are process of implementing
C. No, but we are considering it
D. No plans at this time

21. Certify Best Practices
• Take advantage of your time in implementation and use our expert
Implementation Coaches for guidance and suggestions
• Use the Delegate User Assignments/Delegate User Actions report to monitor
activities on behalf of another person
• Require expense details and use GLDs to help prevent mystery or fraudulent
expenses
• Use credit card feeds to rely on details coming directly from the bank

22. Certify Best Practices
• Lock credit card expenses to disallow editing in Certify
• Turn off edit rights for approvers so expense details are only provided by the
original submitter
• Use locked workflow functions as much as possible to ensure the appropriate
approvers are reviewing expense reports
• Each approver is logged in the expense report’s history, which can provide
insight into approver trends over time
• Track approval paths in the Expense Report Approvals report

23. Straight From the Certify Accounting Team
Top Certify Accounting Team Reporting
1. Accounts Payable Report
2. ACH Reimbursement History Report
3. Expense Report Accruals Report
For executive approvals, we have someone internally (Accounting/Financing) approve them. There
are certain categories that we look more closely at:
• Beverage/Snacks: we look a lot at alcohol expenses, making sure it’s not taking coworkers out to happy hour
• Cellphone & Internet Reimbursements: we don’t have a limit built in, so we evaluate case-by-case
• Travel Miscellaneous: Director of Accounting goes through unknown travel expenses individually
• Office Supplies & Miscellaneous: Director of Accounting goes through these individually

24. Client Success Story: Pitney Bowes
• Information Technology and Services Industry
• Headquartered in Stamford, CT
• Certify client since 2011
• 28,700 employees globally
• 21,983 users in Certify

25. Identifying Miscellaneous Spend
• The Certify admin at Pitney Bowes noticed a large number of expenses were
coded to, approved, and processed using the “Miscellaneous” expense category
• She used Certify Analytics to run reports on the expense category
• Analyzing vendors, locations and reasons, she found a majority of these
expenses were for golf outings

26. Controlling “Miscellaneous” Spend
• Created a new, dedicated expense category called “Pre-
Approved Golf”
• Required a reason for every golf expense and used Special
Approval Rules to assign a dedicated approver for the new
expense category
• Pitney Bowes saved thousands of dollars from reviewing
and watching golf expenses alone

27. Closing Thoughts
• Create a T&E policy to set clear expectations for all employees
• Communicate your policy and build a “culture of compliance”
• Hold all levels of management accountable
• Audit past expense reports to identify spending patterns
• Set up parameters and spending limits on corporate credit cards
• Make the most of Certify’s automation and analytics to identify, prevent, and
minimize your risk of expense reimbursement fraud