How to prevent timesheet and expense fraud within your organisation

Timesheets and expense claims help ensure staff, particularly agency and temporary workers, are paid correctly for the work they carry out and reimbursed for legitimate expenses. But when these processes lack robust controls, they create opportunities for fraud.

Leisyen Cox, Risk and Assurance Associate Partner, looks at how your organisation could be exposed to expense and timesheet fraud, and what measures you can put in place to prevent it.

How timesheet and expense fraud commonly occurs

Timesheet fraud involves exaggerating or fabricating details on a timesheet to gain payment. Examples include:

• Inflating hours worked
• Claiming for breaks not taken
• Falsely claiming overtime or on‑call hours
• Using falsified signatures

The risk increases when policies are vague, inconsistent or not followed. Vulnerability also increases when there is no clear process to corroborate claimed hours.

A particular concern arises where agency employees do not complete their own timesheets. Some agencies submit timesheets directly to organisations on their behalf, making it difficult to confirm whether the hours invoiced match the hours actually worked.

Expense claims may be manipulated when:

• Paper forms bypass normal systems
• Claims lack proof of purchase
• Agencies submit claims without proper declaration
• Approval routes are unclear or inconsistently applied

Without consistent scrutiny, paper-based processes are especially vulnerable.

How to strengthen controls

1) Secure systems – Secure systems help ensure that only authorised individuals can submit or approve timesheets and expenses, reducing the opportunity for claims to be altered or misused. Controls include:

• Ensure access to timesheet and expense systems is controlled and auditable.
• Use secure authentication methods wherever possible.
• Require that all timesheets and expenses are completed only by the individual making the claim.

2) Clear declarations and approvals – Clear declarations and proper approval steps make it easier to confirm who is responsible for each claim and help prevent inaccurate or dishonest submissions. Controls include:

• Include a counter‑fraud declaration in all timesheet and expense templates.
• Make sure both the claimant and authoriser sign each submission.
• Require authorisers to check accuracy, completeness and legitimacy before approval; incomplete forms should be returned.

3) Effective timesheet design – Well‑designed timesheets that capture essential details allow organisations to check claims properly and ensure hours, breaks and shift types are represented accurately. Controls include capturing the following on timesheets:

• Hours and location worked
• Mandatory break deductions
• Shift type (e.g. normal hours or out of hours)
• Approving managers involved in the arrangement

4) Managing paper forms – Paper forms require extra care because they are easier to amend or misuse, so controlling how they are completed and recorded helps protect against manipulation.

• Treat paper forms as higher risk and ensure they are clear and free of overwriting.
• Block out blank fields so they cannot be altered.
• Initial any legitimate amendments.
• Once approved, enter details into organisational systems and reconcile with agency invoices.

5) Oversight, reconciliation and record-keeping – Good oversight and accurate records allow organisations to verify where staff were working and whether the hours claimed match operational information.

• Keep an up‑to‑date list of authorised signatories.
• Use shift allocation records or calendars to verify attendance and hours worked.
• Conduct regular audits to identify patterns, discrepancies or potential collusion.

6) Strong organisational policy – Clear, well‑communicated policies set consistent expectations for how and when timesheets and expenses should be completed, evidenced and authorised.

• Ensure there is a current policy covering timesheet and expense processes, including overtime, unsocial hours and on‑call claims.
• Require appropriate scrutiny of expense claims, including receipt checking where relevant.
• Reject claims that do not meet policy requirements or raise concerns.

7) Training and awareness – Targeted training and ongoing awareness ensure staff understand the risks, follow correct processes and know how to report concerns if something appears unusual.

• Provide targeted training for managers overseeing agency or temporary staff.
• Encourage staff to complete fraud awareness learning.
• Promote clear routes for reporting suspected fraud.

Recommended organisational actions

Before implementing specific controls, organisations should take a step back to review how their current arrangements operate in practice, ensuring that policies, systems and staff responsibilities support a consistent and robust approach to managing timesheets and expense claims.  Actions can include:

• Review and strengthen policies and procedures on timesheets and expenses.
• Move from paper to electronic systems where possible.
• Make counter‑fraud declarations a standard requirement.
• Raise awareness across finance, HR, payroll and operational teams.
• Use proactive exercises to test control strength and assess practices against prevention guidance.

We’re here to help

If you’re looking for advice on how to strengthen your organisation’s approach to fraud, our counter fraud team is here to help.

We offer practical support through our Risk and Assurance Service, including tailored reviews and guidance on controls, fraud response, and prevention. Whether you want reassurance that your current processes are effective or need support with a specific concern, we’ll work with you to address your risks and build awareness across your organisation.

Contact Leisyen or one of the Risk & Assurance team by emailing hello@scruttonbland.co.uk or calling 0330 058 6559