In a world of heightened scrutiny for anything out of the ordinary, the cost to a company for missteps that become public can go well beyond the out-of-pocket expenses, with a direct hit on the stock price and a reduction in brand value. One of the areas of exposure is the travel expense reporting process for high-level executives, where the monetary values are often high, and a greater level of review for compliance with the policy may be warranted. In addition, in some cases, it may also be a good plan to have the Purchasing Card activities for the executive’s administrative assistant reviewed by someone other than the executive, to whom the administrative person directly reports.
iPollingTM Results Review
Recently, Peeriosity’s iPollingTM was used by the Manager of Financial Supplier Services at a large health services company to find out how companies set up the approval process for executives and their administrative assistants. The poll results indicate that 36% of the companies follow the traditional process for all employees of having the review performed by the next level of management. At 64% of member companies, a different control point is used, including the Controller (16%), the Head of Audit (16%), the CFO (11%), the Shared Services Leader (11%), the Account Payable Supervisor (5%), and the Head of Ethics and Compliance (5%).
One potentially simple method for an executive to include expenditures that might otherwise raise suspicion is to have their assistants make the purchase using a company-issued Purchasing Card. Interestingly, the majority of companies, at 58%, have the Purchasing Card transactions reviewed by the direct manager; and in other words, by the Executive who might be requesting a purchase be made where an additional level of review may be appropriate. In 16% of the companies, another person is responsible for the review, and 5% have the review performed by someone in Procurement. Here are the details:
Here are a few of the poll comments from Peeriosity members:
- First, the report comes through a review team that audits 100% of all corporate card transactions. Once it is found that the expenses are compliant, it then goes to their approving manager for payment processing.
- C-Suite approved by CEO. CEO expenses are approved by the Chairman of BOD.
- Our Controller approves expense reports for all CEO directs (i.e. leadership team), except for CFO, which is approved by the CEO.
As a simple control point that is easy to design and implement, it probably makes sense to have a special process in place for the review of expense reports for high-level executives. To provide even greater control, you might also want to include a special process for the review of the Purchasing Card activities for the executive’s administrative assistant.
Does your company have a special process in place for the review of expense reports for high-level executives? Does this special process extend to include the purchasing activities of the executive’s administrative assistant?
Who are your peers and how are you collaborating with them?
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