Workplace Doctor: One of my team members is cheating on expenses

I am of the opinion that one of my team members is behaving in a manner I consider unethical. I work for a large corporation in the tourism sector. As well as this person using company time for personal matters — using their company desk phone to call their bank, landlord etc — I suspect this individual is falsifying elements of the company's expenses system for personal gain. I am concerned about both what this person is doing and the risk to the whole team's reputation. How can I approach this? BD, Dubai

Unethical behaviour and illegal activities do not always equate to the same thing; corporations may have different approaches on how they deal with such behaviour, and whether there are legal or disciplinary implications or not. Personal views can also be diverse on what is considered ethical and unethical, in the workplace and elsewhere. Some may think that making personal phone calls using company resources and time is justifiable, while others may consider a slightly altered version of the truth to be perfectly acceptable.

According to a 2015 study by the Ethics Resource Center in Washington, almost half of the workforce in the US have personally witnessed some form of ethical misconduct at work. Misusing company time and employee theft were among the top five behaviours among fellow employees. Perhaps not surprisingly, misuse of company time is at the top of the list. Misconduct under this category includes showing up late, altering time sheets and using company time for personal business.

Theft, unfortunately, is fairly common in the workplace as well it seems, and is clearly unethical. It may range from something as small as taking a few office supplies, to much more serious acts of embezzlement.

Although it is less tangible, doing personal work during company time is considered a form of theft. A survey by Salary.com found that 64 per cent of employees visit websites not related to their work; checking your Facebook at work, therefore, could be considered an ethical issue. Employee fraud, which includes falsifying expense claims, also seems to be on the rise. According to the FBI, employee theft is the fastest growing crime in the United States today. 

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If you do not already have a company ethics policy to refer to, the first step would be for the company to create a written document, outlining the ethical standards of behaviour and conduct in alignment with its mission, values and vision.

It should be evident what the company’s stance is on conducting personal business during work hours as well as the use of company resources, ie phones and the internet, for personal use. Be clear about the expectations around conduct within the company and advise employees what to do if they witness unethical behaviour from others. Clearly state the consequences of unethical behaviours. Each employee should receive a copy of this document.

Realistically, a company cannot easily scrutinise every single expense item from every employee every time an expense claim is submitted.  Where you have concerns, make sure that filed expenses correspond with day-to-day work, and insist on receipts to support the claims.  To minimise the risk of employees submitting falsified expense reports, once again it is important to have a written policy and procedure on submitting claims.

You may want to provide guidelines and approval requests for entertainment and events, and limit expenditure on petrol and taxi fares, for example.  Ensure that there is a control system in place, where no employee is able to authorise their own expenses.

So what can be done?  For a start, consider whether the company’s expense policy could be too lax. Is it possible that the employee is merely guilty of poor recordkeeping?

 If this is not the case, investigate the employee's expenses.  The employee should be given the chance to explain their expense report and make corrections as needed. It is likely that the employee is in breach of their employment contract if they are found to be falsifying their expense claims, so dismissal would be warranted. Fictitious expense claims can amount to theft and criminal charges. There may also be implications for the company if it claims back VAT on some of these false expenses.

Doctor’s prescription

For this individual, assess what needs to be addressed in the first instance.  Using company time to deal with personal matters may be less of an immediate concern and could be something to evaluate across the organisation at large.  If you feel that disciplinary action is warranted, be sure to work in conjunction with your HR department to follow due process.

Yolande Basson is an executive coach and consultant at Ashridge Executive Education – Middle East