THE PROBLEM:

 

Company policy states that all expense reports must be reviewed and approved by the employee’s direct supervisor before they will be approved for payment. You as the manager tend to overview expense accounts and do an occasional “spot check” to ensure accuracy-for the most part they are typically accurate. On a recent “spot check” you discovered a $100 charge that seemed out of the ordinary. As you begin to dig deeper you discover that this employee has charged several thousands of dollars to the company for their personal use. When you question the employee they dispute the charges. In fact, they get agitated by the fact that you seem to be “snooping” on them. They accuse you of unfair treatment and state that “everyone else is allowed to spend a few dollars” so why are they being singled out? What should you do?

 

Q. Should you deduct the total amount in question from the employee’s paycheck?

 

A. No! some states prohibit an employer from deducting money from an employee’s check without authorization

 

Q. Should you fire the employee on the spot for falsifying expense reports?

 

A. No! you should consult with your Human Resources office to conduct a thorough investigation prior to termination. Human Resources will consult with their legal resources to ensure they are in compliance with state and federal laws.

 

Q. Should you consult other managers to gain an understanding of how they have handled previous situations?

 

A. No! You should have a confidential conversation with your Human Resources Representative to ensure that this sensitive matter is handled appropriately.

 

Once the investigation has been completed you will work with your Human Resources Representative to develop a plan of action that will address several issues;

  • The facts of the case and what the appropriate next steps should be with the employee(or other employees involved)
  • A change in how you the manager will review expense reports moving forward
  • Development of a communication strategy outlining the new expense review and approval process to all of your employees
  • A review and update of internal processes to ensure that checks and balances are in place to properly manage company resources

Be alert to the widespread implications of company policy and process violations and the impact they can have from both a fiscal and legal aspect.

 

If you would like more information on this topic please contact us at AllMac & Associates for further information.

 

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