Review of Employee Claims Points to Inconsistencies and Improvement Needed in Government Expense Approvals

• FOI request by Emburse finds 8 out 14 respondent departments claim to have no rejected expense claims despite 2.19 million submitted by their employees
• 7 out of the 12 departments that were able to access data claim to have trained staff, yet few claims are being identified or denied

A Freedom of Information request by Emburse, a global leader in spend management, has uncovered data that might indicate a lack of oversight from ministerial departments in relation to expense claims. Of more than 2.9 million expense claims submitted over a period of 24 months, just 1,607 were rejected, representing only 0.07% of all expense submissions. The total value of expenses uncovered as fraudulent or rejected as out-of-policy among all departments was just under £20,000.

Of the 23 ministerial departments sent the FOI request, only 14 responded within the legal window, two of which claimed to have no access to any of the data requested. Of those that responded to the request, the investigation found that only four departments reported rejecting expenses, while five departments, processing over 1.7 million expenses, could not access any data on rejected claims, despite HMRC’s requirements to retain expense information for six years. Some departments did not respond including the Home Office, the PM’s Office and the Ministry of Justice.

Research by Emburse has shown that, on average, approximately 5% of employees submit fraudulent expenses, and this rate has remained consistent over the past several years.

Key findings include:

• Only 0.07% of all expense claims were rejected across departments – just 1,607
• Four departments did not reject expense claims in the past two years, despite processing 470,255 claims between them. Of those that did:
  • HM Treasury rejected 12% of claims
  • Ministry of Defence (MOD) rejected 0.2% of claims
  • Department of Business, Energy and Industrial Strategy rejected one claim out of 18,053 submitted
• Eight departments did not carry out investigations in two years, despite processing a total of 1.82 million expense claims between them. Of those that did:
  • MOD held 246 investigations out of 743,171 claims submitted
  • FCO held seven investigations out of 374,218 claims submitted
  • DEFRA held two investigations out of 12,325 claims submitted
• Only two departments recorded any expense fraud in two years:
  • MOD uncovered £14,690 – an average of £59 uncovered per investigation
  • FCO uncovered £4,842 – an average of £691 uncovered per investigation

Additional findings:

• The Department for Work and Pensions processed over 1.6 million expense claims between 2019-2021, yet the department could not confirm if claims had been denied and the department did not answer whether managers go through training to enable them to spot potentially fraudulent expense claims
• The Attorney General’s Office and Office of the Advocate General for Scotland did not hold any information relating to their expenses
• Of the 23 departments contacted, five have no access to key information regarding expense claims that have been rejected
• Great offices of state including the Home Office and the Prime Minister’s Office refused to respond
• No individuals were dismissed or disciplined for misuse of expenses

Kenny Eon, SVP EMEA at Emburse commented on the findings: 

“Given the increased cost of living in the UK, it’s vital that the government leads by example. When we’re all expected to tighten our belts, I think the public has a right to know if taxpayers’ money is being squandered through outdated, inefficient processes, and a lack of oversight.

“Studies have consistently shown that about 5% of employees admit submitting fraudulent expenses, more than 300 times the levels reported by this data. If the rate of out-of-policy expenses in the government is anything even close to that, we could be looking at many millions of pounds of employee spend that shouldn’t have been reimbursed. Even if all expenses are submitted in good faith, it’s statistically improbable that such a low number of them were returned as being out-of-policy, even if a mistake was inadvertent.

“Whether this points to departments using outdated processes that are unable to effectively identify out-of-policy spend, a lack of staffing, or a lack of auditing of expenses, the potential loss of taxpayer money in the staggering amounts that is suggested by this data is quite startling.”