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The grey moral ground of lying on expense travel reports

By October 22, 2023No Comments

(This column originally appeared in The Guardian)


A Citibank employee was recently fired for fudging receipts, but companies are striving to follow the rules laid down by the IRS

I’m in a moral quandary about a story circulating this week about a Citibank analyst who was fired because he was caught charging the company for a two-sandwich lunch he had with his partner without authorization … and then subsequently lying about it.

The analyst, Szabolcs Fekete, was fired for gross misconduct after initially claiming that he had consumed two sandwiches, two coffees and two pasta dishes during a business trip to Amsterdam. No, he wasn’t stoned. He later admitted that his partner had shared some meals.

Fekete who, oh the irony, specialized in financial crime, subsequently sued for unfair dismissal noting that the claims were well below the bank’s €100 ($106) a day travel spending limit.

But a judge ruled in the bank’s favor. “I have found that this case is not about the sums of money involved. This case is about the filing of the expense claim and the conduct of the claimant thereafter,” said the judge.

There may be more to this story than meets the eye, but regardless I kind of feel for the guy. Haven’t we all been tempted to “cheat” on our expense reports?

It doesn’t seem that hard to do. Not all the documentation is being reviewed by today’s understaffed and overworked accounting departments. And besides, we don’t get paid enough for the hard effort we make on behalf of our employers, right? So passing through a few measly extra expenses – even if they’re not really kosher – isn’t going to make or break the bank, especially a giant one like Citibank.

As an accountant, I’ve been on both sides of the equation – reviewing and submitting expenses – and I have to admit there’s definitely a grey line.

Of course, there are people that are outright fraudsters. I’ve seen employees doctor airline receipts, “lose” documentation for meals and submit expense claims that are clearly in violation of even the most gratuitous company policy. In one case an employee tried to sneak through a reimbursement for new shoes because he lost one on a business trip, a request that was firmly denied and then joked about in my department for years.

But aren’t there some receipts that are kind of arguable? Can I get reimbursed for those three – yes three – old fashioneds I downed at that group dinner in Vegas? What if I rented a BMW instead of a Honda? Can I claim the hotel wifi if all I am doing is streaming movies? Am I a criminal for doing so or are reimbursable travel expenses a perk of the job?

Most employers I know fashion their policies to follow the IRS rules on what travel, entertainment and meal expenses are deductible. But unfortunately this is becoming a difficult path to follow because the IRS’ rules are so convoluted that the agency felt it necessary in 2020 to publish a 56-page memorandum in an attempt to clarify them. Not surprisingly, they only muddied the waters further. Even my smartest accounting colleagues admit that their heads begin to spin by page 16.

Silicon Valley has attempted to solve this problem with expense management software solutions – like Expensify, Concur and ExpensePoint – which purportedly makes it easier for documentation to be scanned, texted, emailed, coded and then routed to the right people (or robots) for approval. But although faster, this is also a flawed process and still no match for the expert road warrior. Did he really leave a $50 tip for housekeeping? Was that $4.25 charge for Starbucks in the middle of the day any different than the coffee she normally gets when she’s not at a conference? There are people who are seasoned pros at inflating travel expenses and, rest assured, they will always find a way around the world’s most advanced AI algorithms and the most powerful supercomputers.

To me, cheating on travel expenses tells a lot about a person. In this case, leaning in on the lie until he was eventually caught out seems to have been a big mistake. Maybe you think that it’s not only petty to overcharge your employer but unethical, deceitful and dishonest and the guy deserved to be canned? Or maybe the bank, with all its billions, could spare someone’s partner a sandwich – especially if it’s under the daily limit?

In the end, dishonesty is dishonesty and business is built on trust. So yes, even though it would take some thought, I probably would have fired him too. Of course, if he’d taken me out for lunch, it would be a different story.

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