Company credit card misuse

BitterAndTwisted

Banks don't do audits in the same way that big publicly-listed companies have to on behalf of the shareholders. The bank are unlikely to be able to drill down into enough detail to be able to spot where the extra expenditure is going, what it's been spent on or by whom.

OllysMum_2

BitterAndTwisted wrote: »

The CEO has been told and has shown no interest. Therefore it's implicit that the boss has use of a company credit-card as part of his remuneration package and his personal expenditure is being analysed as a business expense. If it's a private company the only parties who would be interested are the shareholders or the Revenue

This is true, but if anything was to come of it then the sister wants to take steps to ensure she's not viewed as complicit in what is fraud. If the company has an external auditor then I would perhaps have a quiet word with them, and then take a note of time and place of the meeting.

Some of the things I've seen in small companies would make your hair curl - but all done in full knowledge of the company shareholders. I know one company director whose drive is like a company car park - the teenage kids all have access to the "pool cars". This is when employees were under threat of redundancy..

andygb

Mulberry_bush wrote: »

I have told her to do this but she thinks I am being melodramatic! Hence why I posted here and she can read the comments herself.

Your sister seems quite laid back about what could be a very serious situation. If the company goes under, then the administrators will want the company card, and even though it is your sister's responsibility, the card does not belong to her (at least I hope it doesn't because that would be even more dodgy), it belongs to the company.
If I were in her position, then I may be tempted to mention the "unusual" spending to the local fraud squad, and get them to give her a reference number, in case she wants to contact them again.
It is best to keep yourself covered in cases like this, and that doesn't mean just telling the MD of the company, a person who may or may not have good reason to be bothered by it all.

FBaby

Did the CEO ever questioned your sister when he was told (I am reading that he was told by other persons, not your sister). If he never bothered (or anyone else), I would read that he is into the fraud (as surely, otherwise, the first thing you would do is go and question the account owner, your sister).In that case, I would do nothing. If he did and she pretended all was normal, then clearly she is in trouble.

mountainofdebt

Every company I have ever worked for, that has any card of whatever type has the correspondence sent to the business address and is in the company name.

The fact that it is in your sister's name, and correspondence is being to her home address suggests that that it will be looked upon as HER card and therefore HER debt.

Yes she has every right to be worried but not for appearing to carrying out/ party to fraud

sassyblue

Mulberry_bush wrote: »

I have told her to do this but she thinks I am being melodramatic! Hence why I posted here and she can read the comments herself.

I don't want to be mean but your sister is a fool, thank God she's got you to help her see where she's gone wrong....

If she's unwilling to go back to the CEO then l think l would have a chat to the police and get their take on events. In any case, she is covered in plenty of ways because her BOSS signed off the card which makes him technically liable. Also, the things that have been bought will have delivery addresses for the invoices, holidays with itineries... If and when the poop hits the fan these will go a long way to prove she did not have these goods herself and was at work so wasn't on the holidays nor was her passport used for those holidays.

Please tell me she is not receiving any goods at her home address which she then brings to work for the boss and his wife....

So maybe she could carry on as she is knowing her backside is covered BUT just how much her boss will blame her remains to be seen if its all found out - she has been silly to allow herself to be bullied in this way, l know it must be hard but she should not be terrified of her boss, bullies back down when you confront them. The worst that would happen is that she would have lost her job and unless it pays extremely well I'd say she's better off out of it.

Let us know how she gets on.... X

sassyblue

mountainofdebt wrote: »

Yes she has every right to be worried but not for appearing to carrying out/ party to fraud

But holidays CAN be put through as expenses if you have customers or suppliers where you've holidayed and can prove it was business related. I.e you were looking for a new cheaper supplier, you went to buy stock or were meeting the customers to build up a working relationship to hopefully gain more work.

Plus as l said it can be found out who the holiday was for, and what passports were used.

Technically she's in the clear but if the people who enjoyed these benefits can't prove themselves it will be interesting to see how much they blame her. For instance, they could say they gave her cash for the stuff she put through on the credit card hence a long trawl through her own financial affairs to prove her innocence, bet she never thought of that.

Ultimately it depends on if the company's sold or goes into receivership. But either way there'll be some going through finances...
Is it worth it?

idea

As an auditor myself, I am slightly worried by some of the advice you have been given here. What your sister needs to do in the first instance is look at the agreement that should have been set up between her and the company for her to get her the credit card. What does this specifically say - for example does it allow others to use the card in her name - most sensible companies say that the card is used for a sole person and giving/allowing the card to be used by someone else in entirely unacceptable. If such an agreement is in place then your sister needs to think very carefully about what she is to do, as it will be her and not her boss that has broken the usage agreement if this sort of thing is covered.

You don't mention (or I missed it, sorry), the size of the company. If this is a small company then there is likely to be less of something called an acceptable use policy - most large companies will specify what the card is used for and will even block certain categories of expenditure to prevent misuse (for example withdrawal of cash from ATM). Nevertheless, your sister is potentially allowing a card that is in her name to be 'abused' by a third party. If I was coming in to review the situation I would look fairly dimly (sorry again, but it is the truth) at this practice. I would be suggesting that the card is removed from the individual.

I would certainly not be advising that your sister visits the CEO at home - this is very likely to put his/her back up and will more likely lead to them 'siding' with the boss.

Your sister should consider whether the company has a speak up or whistleblowing policy and should, if she feels like she is not being listened to, follow this policy. Companies have to take these seriously, and I can promise you we investigate this sort of thing thoroughly.

In the absence of such a policy, I would suggest that your sister only has two options. Either she leaves the company and works somewhere where her 'ethical stance' is matched, or she writes to the CEO/other individual such as the Finance Director if there is one (by email so can be tracked) and explains the situation. In this instance your sister should be prepared for either nothing to happen or for things to be investigated and a potentially uncomfortable time to come.

I am sorry if this sounds all doom and gloom, but from the outside view, your sister has been complicit and has been allowing potential misuse which is not something we auditors take lightly!

minimoneysaver

'Idea' is it right/wrong that she has the credit card registered to her own address?

Mulberry_bush

idea wrote: »

As an auditor myself, I am slightly worried by some of the advice you have been given here. What your sister needs to do in the first instance is look at the agreement that should have been set up between her and the company for her to get her the credit card. What does this specifically say - for example does it allow others to use the card in her name - most sensible companies say that the card is used for a sole person and giving/allowing the card to be used by someone else in entirely unacceptable. If such an agreement is in place then your sister needs to think very carefully about what she is to do, as it will be her and not her boss that has broken the usage agreement if this sort of thing is covered.

To be honest I do not know if there is an agreement - i will ask her but suspect no agreement. I know she was giving it so the the reps travel expenses could be put on it.

You don't mention (or I missed it, sorry), the size of the company. If this is a small company then there is likely to be less of something called an acceptable use policy - most large companies will specify what the card is used for and will even block certain categories of expenditure to prevent misuse (for example withdrawal of cash from ATM). Nevertheless, your sister is potentially allowing a card that is in her name to be 'abused' by a third party. If I was coming in to review the situation I would look fairly dimly (sorry again, but it is the truth) at this practice. I would be suggesting that the card is removed from the individual.

Its a medium sized company UK wide

I would certainly not be advising that your sister visits the CEO at home - this is very likely to put his/her back up and will more likely lead to them 'siding' with the boss.

Don't worry she would never do that - even if she did know where he lived!

Your sister should consider whether the company has a speak up or whistleblowing policy and should, if she feels like she is not being listened to, follow this policy. Companies have to take these seriously, and I can promise you we investigate this sort of thing thoroughly.

She has only raised it with her supervisor and boss (years ago), a couple of FDs have also asked her but they (like so many others) left the company shortly after

In the absence of such a policy, I would suggest that your sister only has two options. Either she leaves the company and works somewhere where her 'ethical stance' is matched, or she writes to the CEO/other individual such as the Finance Director if there is one (by email so can be tracked) and explains the situation. In this instance your sister should be prepared for either nothing to happen or for things to be investigated and a potentially uncomfortable time to come.

She wont do this as too scared for her job!

I am sorry if this sounds all doom and gloom, but from the outside view, your sister has been complicit and has been allowing potential misuse which is not something we auditors take lightly!

Thank you for your help