Growing regulatory noncompliance and T&E fraud
This global engine manufacturer was concerned. Increasing fraud and unusually high T&E expenses compelled the company to take a closer look.
There were several warning signs. Duplicate claims and incorrect classification were suspicious but could have been clerical errors. Other red flags, however, pointed to potential fraud or failure to follow approval procedures.
For example, missing receipts were most frequently found under the category of “personal expenses," some receipts were submitted before the actual transaction date, and expenses had been claimed for events that cardholders hadn't attended. Also, transactions such as gifts to clients often didn't meet pre-approval requirements.
The manual approach to expense audits with limited use of data analytics led to poor visibility into T&E spend and noncompliance with anti-bribery and anti-corruption legislation, such as the Foreign Corrupt Practices Act and the UK Bribery Act. Fraud was going undetected. With no defined process for root-cause analysis, getting actionable insights to make process and policy changes proved challenging.
The company also lacked a standard reporting approach, so the leadership team couldn't be regularly updated on non-compliant expenses and spend leaks.