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Employee reimbursements take the Micky

Employee habitually pays for business expenses then claims it on reimbursement

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I'm fairly new to the charity concerned and have an employee who habitually buys items for the business using their own credit card before submitting expense claims/ reimbursement claims while stating they need the money in time to pay the credit card bill. I have had a quiet word with them on more than one occasion and they still can't see that this is not the best practice. I'm tired of worrying if the reimbursements should be taxable based on the minimal detail they provide on the reimbursement form.

Can anyone point me in the direction of some legislation I can "shove under their nose" to try and finally persuade them that they need to submit purchase requests properly?

ps. I know the committee won't be happy if a suggest firing them for this as I'm certain it comes down to no-one explaining it properly to them sooner and I don't think it's covered in their employment contract (being a charity, things have been done on the cheep by well-meaning volunteers and I'm now trying to sort out the mess).

Thank you for your help.

Replies (15)

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By Matrix
10th Aug 2020 16:51

What is the process for reviewing the expenditure? And are the costs authorised before they are incurred?

It is the controls which need to be tightened up. If you only reimburse with a receipt and a copy of an authorisations email, then that may also help.

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By Anonymous.
10th Aug 2020 16:54

Either the employee is acting as permitted or not. From what you say, there is no expenses policy. The best plan would be to suggest to the board of trustees/chair of trustees that a policy be drafted and implemented to address the reasonable concerns that you have. It's not a question of legislation; it's basic good financial control which the trustees should support (and presumably the Charities Commission expect).

That's assuming that the employee is not committing fraud - which would be the only reason to "suggest firing them" (and then only if you had very good evidence of criminality).

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By WhichTyler
10th Aug 2020 17:47

+1 for Expenses policy (and procedure)

And is there a practical alternative to them using their own money? Does the the charity have any debit/credit cards of its own? Or an account with eg Amazon Business that would mean the actual items (and where they are delivered) are automatically recorded rather than reliant on missing receipts?

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Replying to Anonymous.:
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By CHRISTINA GORHAM
10th Aug 2020 18:54

Thanks everyone. I think I need to ask the committee if they have and expenses policy, when it was last updated and if it's still relevant. I may not be happy with "how things have always been done" but I've a mountain to climb in convincing the oldest committee members.

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Replying to CHRISTINA GORHAM:
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By WhichTyler
10th Aug 2020 19:02
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Replying to CHRISTINA GORHAM:
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By WhichTyler
10th Aug 2020 19:02
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By memyself-eye
10th Aug 2020 17:44

remind the 'committee' that they are trustees and as such are personally liable for the charity's operations. It's up to them to dictate (and I mean dictate)how this employee operates.

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By lionofludesch
10th Aug 2020 17:57

You can only give clients advice and say "I told you so" when it goes wrong.

You can't make them take your advice, though you can wear them down by repeating it every time you write to them.

Alternatively, make sure that reimbursement is always after the date the employee's credit card bill is due.

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By kestrepo
10th Aug 2020 19:21

Provided the employee submits bone fide receipts and the expense claim has been authorised by a senior person I don't see what the problem is!

If you think that the claims are not genuine I would highlight your concerns and give specific examples to the committee or senior management team.

If you think that the claim is really for out of pocket expenses I would let the employee know that they should really be treated as a taxable expense and I would also report to the committee:

https://www.gov.uk/expenses-and-benefits-cash-sum-payments

If the employee is spending on their credit card they should be getting 30 to 60 days dating on the transactions so there should be no need for expediency on your part. Explain this and insist on a copy of the credit card statement before you pay them. This should not only buy you some time but also enable you to check the receipts to the statement - very easy to pick up a handful of receipts (at the end of a till say) and not actually have paid for the goods!

Let them know your deadlines for processing and stick to it - a one off favour is a one off.

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By winton50
13th Aug 2020 11:07

+2 for the expenses policy

But as kestrepo says there isn't really a problem as long as the expense is genuinely for business, they aren't making a profit on it and you can prove there is no element of personal use.

The thing that it seems to me you are annoyed about is the habitual payment and then demanding reimbursement at short notice. We've all been there!

I'd suggest explaining the problems this causes you to the person involved. If they take no notice then have a quiet word with a friendly trustee and ask them to take the person aside.

Also, when you have an expenses policy on place then you can ask the committee to back you on enforcing it.

If you need a template policy then DM me

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By tom123
13th Aug 2020 11:12

Does the employee have a reasonable alternative?

If not, then what are you proposing instead?

I would always prefer some form of card payment over petty cash, for example.

What are they buying?

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By Mike Nicholas
13th Aug 2020 15:12

The method (cash or plastic) by which the employee purchases the items for the business is immaterial.
I have sympathy for anyone incurring expenditure for their employer and then having to wait for reimbursement.
I suggest you simply 'accept' the situation, or provide an employer credit card or advance/loan money to the employee against their future expenses. Of course, they need to submit expenses claims with receipts (for VAT, amongst other things).

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By CardiffAccountant
17th Aug 2020 20:55

Having been the treasurer for a charity for some years (and filed the accounts to the Charities Commission) it seems to me that there are few, if any, financial policies in place.

The Charities Commission will expect such policies to be in place and will take a very dim view if there aren’t any, or if they are not robust.

I would first check with the person to whom you report to, and ask if there are any such policies in place. Though, I would have thought that these would have been brought to your attention from just about day one.

If not, I would suggest you meet with the trustees/people in charge and explain what needs to be done.

When I joined the charity, what financial policies that were in place were very vague and did not cover many ‘situations’.

Having then explained to the trustees what needed to be done, I developed policies with their full backing.

That was the easy part!!!

Getting the employees/volunteers to adopt the new policies wasn’t so easy.

Suddenly, many felt that they were no longer being trusted and that the organisation was checking up on them.

Some would blatantly not follow due process, saying ‘this is how it’s always been done’. This is when you will need the backing of trustees.

Also, with you being new to the organisation, you may well get something along the lines of ‘Who does she think she is? Only been here a few weeks, and now thinks she runs the place!’

Stick with it though, because eventually even the most resistant person will move with the times, and will acknowledge the value of having such policies in place.

If you want any further help/advice, just let me know.

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Replying to CardiffAccountant:
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By CHRISTINA GORHAM
17th Aug 2020 21:17

Thank you CardiffAccountant. Do you have any links I can read to widen my research base and help me persuade the trustees that this action is needed and for the best?

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Replying to CHRISTINA GORHAM:
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By CardiffAccountant
17th Aug 2020 21:30

Hi Christina.
I would go to the Charities Commission website. There’s a few PDFs on there that will offer guidance on financial controls and various other types of policies eg governance.

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