How Should We Handle Fake Expense Claims for Mobile Repairs and Travel? Seeking Penalty Advice

Hi Seniors, I have a question. Recently, in my organization, we asked employees to submit reimbursement requests for miscellaneous expenses such as repair and maintenance of mobile phones. Unfortunately, we have received numerous fake bill copies from employees attempting to claim expenses for mobile repair and maintenance.

Penalties for Submitting Fake Bills

Could you please advise on the appropriate penalties we should impose on employees who submit fake bills? A similar issue has also occurred with travel expenses. Kindly provide guidance and list the penalties for me to implement.

Thank you.

In the organization I worked for, staff were dismissed for submitting false expense claims when they traveled abroad. It all depends on your organizational policies and whether a person admits to their follies.

Example from Academia

For example, in academia, plagiarism is a serious mistake. When a student copied a project entirely and was questioned, they admitted to the fault. As a result, the student was not awarded the degree but was only given a diploma. In other cases, students have escaped without any penalty.

How did you realize that the person had submitted the fake bills? Do you have any proof?

It is better to set a limit based on the posts and level. Process their bills according to their eligibility. Nothing more can be done beyond that. If you need to verify things, you will have to assign 2-3 people solely for verification.

Thank you.

Hi, in my view, you should not terminate the respective employees. On the other hand, one can issue show cause notices or warning letters to the employees.

This kind of incident happens at higher levels; for example, even CEOs may engage in such activities by submitting fake bills. It all depends on the organization. Sanction is granted based on eligibility.

If you are able to prove that the bills are false, you can issue a memo and warn that such practices will not be tolerated in the future. I hope you have a framed travel policy in place, and all employees are aware of it.

Regards,
Rajeev Dixit

Holistic View on Reimbursement Policies

You need to look at this issue holistically. Why does your organization have a policy of reimbursing mobile repair expenses? Is it part of tax planning to help employees minimize tax outgo from their remuneration by using government tax laws aimed at benefiting employees, allowing them to claim tax exemption for employment-related expenses they have to incur? If so, such expense claims are limited to a ceiling on the claim depending on the level of the employee in the hierarchy. It is common practice and well known to the company that employees procure (fake!) bills to make these claims limited to their eligibility. An employee can claim only what he/she is eligible for under the company rules, as this is treated as a perk for tax planning. There is no question of excess claims using fake bills. I don't find any harm or impropriety in this, except that even though such practices are not encouraged elsewhere, they are compelled in the Indian context due to our distorted tax structure that encourages such practices. In this case, the company will have formal policies on the matter, and no one can be smarter than the other.

Integrity Issues with Open-Ended Provisions

On the other hand, if such provisions are open-ended to meet genuine expenses incurred by the employee, such as travel, gratuity, miscellaneous expenses, etc., and employees indulge in malpractices, this is to be treated as an integrity issue on the part of the employee. Established companies following transparent and ethical practices take them very seriously, and the employee may even be simply asked to leave the organization, as the disease will spread like a virus, and no organization will want such a situation in their organization. When in doubt, the supervisor, who is expected to be a person of high integrity, moral standards, and fairness, will take a call on the matter and decide. Remember, such employees always get marked!

Regards,
[Email Removed For Privacy Reasons]

Thank you all for sharing your valuable feedback. I am expecting more input on this matter.

Actions to Consider

- Issue warning letters while keeping his/her superior in CC.
- Link it to your annual performance ratings.
- Enforce the policy of making him/her subject to further action if the behavior is repeated.

Thank you.

I have always maintained that a person of doubtful integrity must be dismissed immediately. The amount of the fake bills is not important. What is really important is: can you trust such employees with company assets or sensitive data? Will you feel comfortable if they were to make any kind of purchases on behalf of the company?

Regards,
Munshi

Employee Integrity and Misconduct

If a person is employed in an organization, it is expected, and moreover, it is the duty of the said employee to be faithful towards the organization and obey rules and regulations for the betterment of the organization. However, in this case, the employees have submitted fake bills. Today, they have done this for a few hundred rupees; tomorrow, they can submit fake bills not only for mobile repairs but also for other expenses. How can you trust their integrity or dependability?

I think this is a major misconduct. The organization must have Certified Standing Orders. Take action against them as per these Standing Orders.