Is it wrong to spend as much as allowable on a business expense report?
According to the Association of Certified Fraud Examiners’ (ACFE) 2024 Report to the Nations, one of the most common “occupational fraud schemes” in the United States and Canada involves expense reimbursement. Internationally, roughly 20% of businesses with fewer than 100 employees and 12% of business with more than 100 employees are affected by expense fraud according to the ACFE report.
Filing a fraudulent expense report is wrong, both legally and ethically.
But how careful should employees be expected to be when following the rules of spending their company’s money while doing company business?
A reader we’re calling Tuppence asked if she was being foolish because she tries to be as frugal as possible when traveling on her company’s dime. Whenever possible she eschews an overnight stay that would incur hotel costs and instead books an early flight to her destination and a late flight home. Tuppence also rarely spends the allowable amount on meals or other incidentals while traveling.
What caused Tuppence to ask her question, she says, is that colleagues regularly tease her for being so careful about incurring allowable expenses. Partly she believes they can’t understand why she would care about limiting how much of the company’s money she spends. But she also worries that they think she’s making others look like they might be spending too much.
If Tuppence’s frugality is getting in the way of her doing her job as well as possible, then she might reconsider her approach. If, for example, she regularly is exhausted at meetings while on the road because she arose at an obscenely early hour to catch a flight, then her efforts might not have the best outcome for the company. She also shouldn’t do anything that results in her being personally out of pocket for any expenses that should be legitimately reimbursed. And neither should she be expected not to eat a decent meal while away on company business. Vending machines might be handy, but Tuppence’s health is likely better served by finding something better to consume.
But if Tuppence’s frugality while on company business results from her belief that she doesn’t want to spend more of the company’s money than she has to, even if it’s allowable, she should have no second thoughts regardless of the teasing of colleagues or a fear of somehow not behaving as a hard-driving employee should behave.
The right thing is for Tuppence to do her job as best as she can while on the road and to continue to act in what she believes to be the most responsible way for her company. The right thing for Tuppence’s or anyone’s company is to make sure that when it asks an employee to be away from home that it reimburses them for whatever personal expenses they incur and develops an expense reimbursement policy that is fair, clear and helps ensure that its employees are safe while on the road.
Jeffrey L. Seglin, author of The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice, is a senior lecturer in public policy and director of the communications program at Harvard's Kennedy School. He is also the administrator of www.jeffreyseglin.com, a blog focused on ethical issues.
Do you have ethical questions that you need to have answered? Send them to jeffreyseglin@gmail.com.
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