Anyone who is tasked with managing corporate travel cards will agree it is a tedious and often thankless job. The move from traditional, paper-based methods to electronic processes is daunting, and users often don’t know how to work the system, or to work it wisely. Eliminating paper does not automatically eradicate suspicious and questionable transactions. The greater the number of corporate policies and procedures, the stricter the check of receipts must be.
For internal auditors, human resources professionals, and travel desks or departments in large firms and government organisations, a corporate travel card plays almost the same role as a corporate credit card. The overall objective is to control spending and improve compliance requirements. Thereby, many shared concepts become familiar during an audit: tracking and graphing the biggest spenders, duplicate or split transactions that fall just under transaction limits for a long period, and odd transactions that happen too often.
Travel card auditing
Earlier this year, the US-based National Association of Purchasing Card Professionals (NAPCP) conducted a panel discussion on travel card auditing and the summary of the discussion has emerged as the first document to record guidelines for travel audit professionals. Since the industry body is committed to advancing global best practices in the commercial cards industry, it is seen as an impartial resource and its findings have been widely published and publicised around the world. Unsurprisingly, the document is titled We Are On To You.
According to the panellists, the three key checks that must be implemented on travel card expenditure are inflated automobile mileage expenses, cash tipping, and regularly occurring duplicate payments. Within the industry, the latter is determined by the Same, same, same test. “Think to yourself, ‘That is happening too often, for this one person,’” advises the report.
The report suggests tracking and graphing the biggest spenders, looking for spikes over time, and using reporting tools to establish month-over-month patterns.
Shortcomings
Despite the best policies, the administration and control of corporate travel cards can fall short for a variety of reasons including lack of communication.
One of the best illustrations is the audit of the travel card programme of the Board of Governors of the US Federal Reserve System, which was made public last year. A total of 1,617 cardholders made 21,921 transactions and charged around approximately $6.4 million (around Dh23.5 million) to their government travel cards (GTCs) in one year. The September report, prepared by the Office of the Inspector General, pointed out the shortcomings of the programme.“We did not find any weaknesses with the design and operating effectiveness of controls over GTC issuance or with cash advance and credit limit increases, but our audit did find that controls are not providing reasonable assurance that GTCs are properly administered, controlled, and used in accordance with Board procedures. We also found that controls are not detecting or preventing unauthorised transactions.”
The audit report recommended that the Travel Office strengthen controls to detect and prevent improper use of cards by providing training to employees; regularly reviewing reports of attempted and charged transactions and retaining evidence of the reviews; and updating the list of allowable and blocked merchant category codes.
The corporate world will do well to mirror the prudent use of travel cards at the Federal Reserve System without reservations.
— GN Focus Report
