Harsh financial conditions and rising gas costs are two factors that drive employees to defraud their organizations. One of the tricks used involves sharing city-owned fuel credit cards and passcodes with family members and friends for personal financial benefits. An investigation conducted by city officials found out that several employees were already using the trick to supplement their income. In addition to carpooling and fuel conservation, fuel, and transportation fraud are other ways that employees are using to save money due to the high cost of fuel. Employees are resorting to fraudulent alternatives because the rising fuel prices are exerting great pressure on the financial situations of employees.
Employees take advantage of fuel or transportation reimbursement program to make extra money from their organizations. The most common fuel reimbursement methods include fuel depots, fuel credit cards, mileage reimbursement programs, take-home vehicles, and a combination of the aforementioned methods. To detect fraud on fuel credit cards, companies need to possess detailed information regarding the date, time, purchase price, and amount, as well as the location of purchase.
Additional information needed includes mileage logs, the capacity of the vehicle, and the employee’s schedule. Information needed to conduct a review for mileage reimbursement programs include employee work schedule, mileage request for reimbursement, detailed report of locations visited, and records of employee expense accounts. Employees defraud their companies by reporting false mileage, failing to present reports until rates go up, and documenting longer routes than those taken.
Many organizations ignore the likelihood that employees use take-home vehicle plans to commit fraud. Data need for conducting a take-home vehicle review includes vehicle policy, vehicle maintenance reports, fuel data, vehicle assignment, and assigned fuel card. Fraudulent schemes used by employees include allowing family members to use a company vehicle, using a company vehicle for personal business, using assigned fuel cards to fill up private cars, and using a take-home vehicle as a carpool vehicle.
Employees also defraud companies through bulk fuel purchases. Information needed to identify such fraud includes the capacity of onsite tanks, delivery company information, detailed contracts showing the price, amount, and grades of fuel delivered, and tank usage reports. Schemes used by employees to commit fraud include delivering lesser grade fuel, using shorting techniques to steal fuel, delaying billing so that market rates can go up, and selling fuel directly from the depot.
In large organizations, employees use a combination of fuel and transportation fraud schemes because of the availability of numerous reimbursement schemes. Possible fraud schemes include siphoning fuel from company vehicles, including personal gas receipts on rental cars that were returned empty, fueling personal cars using company fuel cards, and requesting mileage reimbursement when using company vehicles.
Companies need to collect as much data as possible when reviewing reimbursement charges form employees. Employees are usually defensive when asked to explain certain inconsistencies or anomalies in their reimbursement charges. Therefore, companies must conduct thorough investigations. The controls that an organization has put in place regarding the management of fuel and transportation reimbursement determine the level of fraud in the organization. Employees will always take advantage of reimbursement programs to defraud their companies for personal gains. To avoid widespread fraud, organizations need to conduct proactive reporting and detective analysis as well as liming reimbursement programs to one department or division of the company.