£1.3bn spent on expense claims during 2010

UK businesses lost more than £1.3bn through excessive and fraudulent expense claims during 2010, according to a report from expenses management firm GlobalExpense.

Out of the £1.3bn loss, £324m was for fraudulent claims, and £999m was for claims outside company policy. On average 10% of claims were outside company policy in 2010. Managers were found to be 30% more likely than employees to make claims that didn’t comply with company policy.

Questionable claims included:

• a payment of over £4,000 for prep school fees;
• over £58,000 for client entertaining; and
  
• more than £26,000 for a final payment on a holiday to Las Vegas under ‘sundries’.

Other unusual expense claims in 2010 included:

• £1,200 for lap dancers at Stringfellows;
•  a porn film on a hotel invoice, for which the description of purchase given was ‘argument with the wife’;
• one frugal employee even claimed 43p for using a public toilet;
• the hire of a van – for which proof of purchase was a picture of the claimant in the van.

According to the report, the average expense-claiming employee in the UK made 33 claims in 2010 (compared to 38 in 2009). Although the average expense claim in 2010 rose to £62.08 compared to £57.46 in 2009 (largely due to increases in cost of living, particularly food and travel costs), the average amount claimed over the year dropped from £2,181 in 2009 to £2,051 in 2010. 

David Vine, CEO of GlobalExpense, said:

“Clearly bosses of UK businesses can be doing a lot more to control costs and save money within their organisations, particularly when it comes to scrutinising the company’s expense policy. The proportion of claims that are outside company policy, but are approved anyway, is still too high and fraudulent claims remain a problem. Businesses need to improve policy enforcement and should insist on getting receipts from their employees to support all claims.”

The GlobalExpense Employee Expenses Benchmark Report 2011 drew on 11.2 million expense claims made by over 308,000 UK-based employees between 2006 and 2010.