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This chapter contains the following:

Audit Expense Report: Overview

Audit List: Explained

Audit Actions: Explained

Missing Receipts: How They Are Processed

Overdue Receipts: How They Are Processed

Expense Report Payment Hold Rules: Explained

FAQs for Audit Expense Report

Audit Expense Report: Overview

After approval of an individual's expense report by the applicable approvers, the Audit Expense Report activity enables an expense auditor to examine, verify, and if necessary, adjust or short pay any expense report amounts to be paid. Expense auditors can take various actions, which include completing audits, rejecting expense reports, requesting additional information from individuals, warning individuals, waiving receipts, releasing payment holds, and confirming managers' approval.

Receipt management is an integral component of auditing expense reports. Your company creates receipt and notification rules that determine when to send notifications to individuals and when to place payment holds on expense reports due to missing or overdue receipts. Your company schedules and periodically runs processes that generate missing and overdue receipt notifications that are sent to applicable employees, as well as check whether any payment hold rules are in effect. When individuals comply by submitting their missing or overdue original receipts, their expense reports can continue to the next stage in the process.

Expense auditors perform the following tasks:

  • Audit expense reports.

  • Generate overdue and missing receipt notifications.

  • Check in expense report receipt packages.

  • Manage expense report audit list membership.

To audit expense reports, you can access the Auditing work area from the Expenses work area by navigating as follows: Navigator -> Expenses -> Auditing.

The following diagram shows the Audit Expense Report activity business flow, which is integrated with the receipt management components.

Audit Expense Report activity business flow.

Audit List: Explained

The audit list on the Manage Audit List Membership page is the list of employees whose expense reports are automatically selected for audit if an audit list rule that was created on the Create Audit List Rule page was violated. You can also manually add employees to the audit list. The audit list is not maintained by each business unit. Instead, one audit list is available across all business units.

Oracle Fusion Expenses lets you:

  • Automatically add employees to and remove them from the audit list.

  • Manually add employees to or remove them from the audit list.

  • Manually add employees to or remove them from the audit list while auditing an expense report.

Automatically Add Employees to and Remove Them From the Audit List

During setup, you can select any of the following audit list rules on the Create Audit List Rule page:

  • Maximum number of days to wait for original receipt package

  • Allowable total monthly amount of all expense reports

  • Allowable number of policy violations per month

  • Allowable number of expense reports per month

Expenses automatically adds employees to the audit list if any audit list rules you select are violated by employees.

You can automatically add employees to the audit list by performing all of the following actions:

  • On the Create Audit List Rule page, select audit list criteria, which form an audit list rule.

    Audit list rules are criteria that Expenses uses to automatically place employees on the audit list if the audit list rules that you select are violated by employees.

  • Also on the Create Audit List Rule page, for each audit list criterion that you select, specify the number of days that the application automatically monitors the expense reports of the active employees on the audit list.

    Note

    If another audit list violation occurs for an employee during the number of days he or she remains on the audit list, the application resets the count for the number of days to remain on the list.

  • On the Create Expense Report Audit Selection Rule page, select the Audit expense report of individuals on the audit list rule in the Additional Rules region.

    Audit selection rules are the criteria that Expenses uses to automatically select expense reports for audit.

  • On the Rule Assignments page, associate the audit list rule and the audit selection rule with a business unit to complete the process.

You can automatically remove employees from the audit list by performing the following action:

  • On the Create Audit List Rule page, enter a value for the number of days that the application automatically monitors the expense reports of employees on the audit list. When the number of monitoring days is complete, the employee is no longer automatically monitored by the application and he or she is inactivated on the Manage Audit List Membership page.

Tip

You can use the Manage Audit List API to automatically add or remove individuals from the audit list based on your custom logic. The Manage Audit List API corresponds to the package EXM_AUDIT_LIST_EXT_PUB.

Tip

For both automatic and manual additions to or deletions from the audit list, you can add reasons to the Audit List Addition Reason choice list by extending the lookup EXM_AUDIT_REASON.

Manually Add Employees to or Remove Them from the Audit List

On the Manage Audit List Membership page, you can select any of the following predefined reasons from the Audit List Addition Reason choice list to manually add employees to the audit list:

  • Majority of expenses under the receipt threshold

  • High frequency of same expenses

  • Disproportionate number of cash expenses

  • Violation of company policy

You can manually add employees to the audit list on the Manage Audit List Membership page by performing the following action:

  • Click the Add icon button to search for and manually add an employee to the audit list.

Note

You can select an audit selection rule on the Create Expense Report Audit Selection page, such as Audit expense reports of individuals on the audit list, that automatically selects expense reports for employees who are on the audit list, but you do not have to also create an audit list rule on the Create Audit List Rule page for which violators will be automatically added to the audit list. If an employee was not automatically added to the audit list through the Create Expense Report Audit Selection page or the Create Audit List Rule page, you can always manually add him or her.

You can manually remove employees from the audit list on the Manage Audit List Membership page by performing the following actions:

  • Specify an end date. If no end date is specified, an employee remains on the audit list indefinitely.

  • Select a reason from the Audit List Addition Reason choice list:

    • Satisfies company policies

    • Reason for addition no longer relevant

Manually Add Employees to or Remove Them From the Audit List While Auditing an Expense Report

While auditing an expense report on the Audit Expense Report page, you can manually add employees to the audit list by performing the following actions:

  • Select the Add to audit list check box if visible.

  • Select a reason from the Reason choice list:

    • Majority of expenses under the receipt threshold

    • High frequency of same expenses

    • Disproportionate number of cash expenses

    • Violation of company policy

While auditing an expense report on the Audit Expense Report page, you can manually remove employees from the audit list by performing the following actions:

  • Select the Remove from audit list check box if visible.

  • Select a reason from the Reason choice list:

    • Satisfies company policies

    • Reason for addition no longer relevant

Audit Actions: Explained

Audit actions are actions that the auditor can take on expense reports by selecting the appropriate option on the Audit Expense Report page. When an expense auditor selects a particular option from the Actions menu, he is presented with a dialog box in which he enters pertinent information. With the exception of the Complete Audit and the Waive Receipts and Complete Audit audit actions, the dialog box triggers a notification that is sent to the employee. Notifications are sent by E-Mail or they can be accessed through the Worklist from any Fusion Application. If an expense report has not received approval from the employee's manager, the expense auditor cannot audit the expense report or take any audit actions.

Audit actions include the following:

  • Complete audit.

  • Reject expense report.

  • Request more information.

  • Waive receipts or Waive receipts and complete audit.

  • Warn user and complete audit.

  • Release hold.

  • Confirm manager approval.

Depending on the audit action selected by an expense auditor and the contents of the expense report, Expenses recalculates the expense report status.

Complete Audit

To complete an audit, click the Complete Audit button in the Audit Expense Report page. This action occurs after all approvals are complete and after the expense auditor has completed the expense report audit. Selecting this action results in the following:

  • No action is required from the employee.

  • The expense report status is set to Pending Payment and is ready for payment processing in Oracle Fusion Payables.

  • Any short payments or line adjustments made by the expense auditor are reflected in the reimbursement amount.

Reject Expense Report

To reject an expense report, select the Reject Expense Report option from the Actions menu in the header on the Audit Expense Report page. The employee receives a notification that includes the reason for the rejection, specific read-only instructions, and any additional instructions from the auditor. Selecting this action results in the following:

  • The expense report is returned to the employee with a status of Rejected.

  • The employee can resubmit the report or delete it.

  • The employee must resubmit the rejected expense report with the requested remedy before it can be approved.

  • A resubmitted report must complete all required approvals before it can be audited.

Note

When an expense auditor rejects an expense report, Expenses discards any line adjustments made by the expense auditor. Line adjustments are changes to the expense amount by the expense auditor, which modifies the amount that the individual will be reimbursed.

Request More Information

To request more information for an expense report, select the Request More Information option from the Actions menu in the header on the Audit Expense Report page. The employee receives a notification that includes the reason for the request, specific instructions, and any additional instructions from the expense auditor. Selecting this action results in the following:

  • The employee does not need to resubmit the returned expense report, but he must reply to the notification before the reimbursement process can continue.

  • The expense report status remains Pending Payables Approval.

    • After a number of days, the expense report is returned to the employee as an updateable expense report in a Returned status. This occurs when the current date, less the date the expense auditor requested more information, is greater than or equal to the number of days as defined by setup.

  • The expense auditor can complete the audit before the requested information is received from the employee.

Waive Receipts or Waive Receipts and Complete Audit

To waive receipts when the expense report audit is already complete and therefore approved, select the Waive Receipts option from the Actions menu in the header on the Audit Expense Report page. Selecting this action results in the following:

  • The employee does not receive a notification.

  • The receipt status is set to Waived.

To waive receipts before completing the expense report audit, select the Waive Receipts and Complete Audit option from the Actions menu in the header on the Audit Expense Report page. This action is available only if the expense auditor has not already processed the expense report and when the expense report contains expense items that require receipts that have not yet been received. Selecting this action initiates the following:

  • The employee does not receive a notification.

  • The employee does not need to take any action.

  • The expense report status is set to Pending Payment and is ready for payment request creation in Oracle Fusion Payables.

  • The receipt status is set to Waived.

Warn User and Complete Audit

To warn the employee of questionable expenses and continue to complete the audit, select the Warn User and Complete Audit option from the Actions menu in the header on the Audit Expense Report page. The employee receives a notification that includes the reason for the action and any additional instructions entered by the expense auditor. Selecting this action results in the following:

  • A notification is sent to the employee that advises him to review company policies.

  • The expense report status is set to Pending Payment and is ready for payment request creation in Payables.

Release Hold

To release an expense report from payment hold, select the Release Hold option from the Actions menu in the header on the Audit Expense Report page. This action is only available when an expense report is held pending receipts. The employee receives a notification that includes specific read-only instructions and that indicates his expense report was released from payment hold. Selecting this action results in the following:

  • The payment hold on the entire expense report is released.

  • The expense report status is set to Pending Payment.

Confirm Manager Approval

To ask the approving manager to confirm a previous expense report approval, select the Confirm Manager Approval option from the Actions menu in the header on the Audit Expense Report page. This action is only available after the manager has approved the expense report and the status is set to Pending Expense Auditor Approval. The approving manager receives a notification that includes a specific read-only instruction and any additional instructions entered by the expense auditor. Selecting this action results in the following:

  • Any changes that the expense auditor made are discarded.

  • A notification is sent to the employee's direct manager that requests approval of the expense report.

  • The expense report status is set to Pending Manager Approval.

  • The expense auditor who requested manager approval will continue to be assigned to this expense report.

Missing Receipts: How They Are Processed

An expense report may require original, imaged, or both types of receipts. When required receipts are not provided by the individual, they are considered missing. Individuals control when they indicate that expense report receipts are missing, whether during expense entry or after receiving a short paid expense report or an overdue receipt notification. To check for missing expense report receipts, Expenses runs a process and, based on receipt tracking setup, generates the appropriate missing receipt notification.

Settings That Affect Missing Receipts

The settings that affect missing receipts are the following:

  • Receipt missing check box on the Create Expense Item dialog box

    This check box is selected by the individual when he creates an expense report.

  • Send missing receipt declaration notification check box in the Receipt Tracking region on the Create Receipt and Notification Rule page

    This check box is selected by the implementer during setup of a receipt and notification rule.

  • Receipt Missing button in a notification

    This button is clicked by the individual to indicate receipts are missing.

How Missing Receipts Are Processed

Your company has an explicit policy on handling missing expense report receipts. It decides whether to allow individuals to complete a missing receipt declaration form as a substitute for required receipts. To generate the appropriate missing receipt notifications, your company periodically schedules and runs the Generate Overdue and Missing Receipt Notification process that, in turn, initiates the Missing Receipt process. The Missing Receipt process checks whether the Send missing receipt declaration notification check box is selected on the Create Receipt and Notification Rule page and, based on that setup, sends you either a missing receipt notification or a missing receipt declaration notification.

If your receipt tracking setup requires you to replace missing receipts with a completed missing receipt declaration form, the declaration form serves as an official substitute for required receipts. When the expense auditor receives the missing receipt declaration, the audit and payment process can proceed, and you will not receive subsequent reminders for missing receipts that are considered overdue.

Overdue Receipts: How They Are Processed

You can set up Expenses to automatically track expense reports for overdue receipts after expense report submission. Overdue expense report receipts are those that are required by your company, but not yet sent by the individual. Overdue receipts can be imaged, original, or both. To check for overdue expense report receipts, Expenses runs a process and, based on receipt tracking setup, generates the appropriate overdue receipt notification.

Settings That Affect Overdue Receipts

The settings that affect overdue receipts are the following:

  • Enable overdue process check box in the Receipt Tracking region on the Create Receipt and Notification Rule page

    This check box is selected by the implementer during setup of a receipt and notification rule.

  • Receipts are overdue after number of days field in the Receipt Tracking region on the Create Receipt and Notification Rule page

    A value is entered by the implementer during setup of a receipt and notification rule.

  • Notify individual when receipts are overdue choicelist in the Receipt Tracking region on the Create Receipt and Notification Rule page

    An option is selected by the implementer during setup of a receipt and notification rule.

  • Configuration of the Expiration and Escalation Policy region on the Event Driven tab for the task named FinExmWorkflowExpenseApproval

    The escalation policy is set up by the implementer in the BPM Worklist.

How Overdue Receipts Are Processed

Based on its overdue receipt policy, your company periodically schedules and runs the Generate Overdue and Missing Receipts Notification process that generates overdue receipt notifications. The Overdue Receipt process checks whether the Enable overdue process check box is selected on the Create Receipt and Notification Rule page and if it is, then checks the specified overdue receipt tracking rules.

Tip

If your company prefers to notify individuals as soon as receipts are overdue, as defined by the receipt and notification rules, then consider running the Generate Overdue and Missing Receipts Notification process daily. Otherwise, individuals may be notified several days after the overdue date, depending on when the process runs.

Overdue receipts are measured by the number of days that Expenses has not received imaged or original receipts after expense report submission. Expenses compares the expense report submission date to the current date to determine if receipts are overdue.

If receipts are overdue and setup requires that the individual be notified, then Expenses automatically sends a notification to the individual to inform him that receipts are overdue. Similarly, if overdue receipt tracking rules specify, Expenses also sends escalation notifications to the individual's applicable approvers.

Expense Report Payment Hold Rules: Explained

You can set up expense report payment hold rules for individuals and corporate card issuers in the Expense Report Payment Hold region on the Create Receipt and Notification Rule page. You can then schedule and periodically run the Process Expense Report Reimbursement process, which checks whether any payment hold rules are in effect. An expense report payment hold rule is a component of the receipt and notification rule that is assigned to a specific business unit. A payment hold rule places current or future expense reports on hold when receipts are not received or when they are overdue. When expense report payment hold rules are implemented, reimbursement to the individual or payment to the corporate card issuer cannot occur until expense reports holds are released. The Process Expense Report Reimbursement process also checks whether expense report holds can be released.

Payment holds are released in the following ways:

  • The expense auditor manually releases the payment hold at his discretion on the Audit Expense Report page by selecting the Release Hold option on the Actions menu.

  • Based on receipt status, Expenses detects that receipts are received or waived and automatically releases the payment hold.

Note

Expenses does not create payment requests for expense reports that have missing or overdue receipts.

Holding expense report payments from individuals and corporate card issuers can include any of the following options:

  • Hold payment until receipts are received.

    Each expense report payment is held if required receipts are not received.

  • Hold payment if receipts are overdue.

    All submitted expense reports that require receipts are evaluated. If any have outstanding receipts, then payments for all subsequent expense reports are placed on hold.

Note

If an expense report is placed on payment hold due to overdue or missing corporate card transaction receipts, then neither the individual nor the corporate card issuer is reimbursed. This is applicable only when the payment liability for the card issuer is Both Pay.

Your company schedules and periodically runs the Process Expense Report Reimbursement process, which checks whether any payment hold rules are in effect. If they are, Expenses places payment holds on expense reports according to the specified payment hold rules. Individuals who have expense report payments held receive a notification. When receipts are received or waived, Expenses automatically releases holds. Alternatively, the expense auditor can manually release a hold at his discretion.

Note

By default, payments are not held for project-only expense reports. However, an implementer can specify inclusion of project-only expense reports as eligible for payment holds by selecting the Apply hold rules to expense reports where every expense line contains project related information check box in the Expense Report Payment Hold region on the Create Receipt and Notification Rules page.

FAQs for Audit Expense Report

How can I assign expense reports to myself or to my direct reports for audit?

You can search for available expense reports to assign to yourself or to your direct reports from two locations in Expenses. The primary location is the Overview page in the Auditing work area where you can select the Unassigned Expense Reports option from the Saved Search choice list in the Search Expense Reports pane and then click the Search button.

The secondary location is the Manage Expense Reports page. To access the Manage Expense Reports page, click the Manage Expense Reports link in the Tasks pane on the Overview page. Then select the Unassigned Expense Reports option from the Saved Search choice list in the Search region, and click the Search button. Alternatively, you can select the Pending Audit option from the Report Status choice list and also select the No option from the Assigned choice list in the Search region, and click the Search button. Both search methods display expense reports in the Search Results region that are available for audit.

If you do not have any direct reports, select an expense report in the Search Results region and click the Assign to Expense Auditor button. This action assigns the selected expense report to you.

If you do have direct reports, select an expense report in the Search Results region, and click the Assign to Expense Auditor button to invoke a dialog box with a list of your direct reports who have the privilege to audit expense reports for the associated business unit. To assign or reassign the selected expense report to one of your direct reports, select an applicable name in the dialog box.

How can I enable expense auditors to audit expense reports for specific business units?

You can enable expense auditors to audit expense reports for specific business units by assigning them specific expense auditor data roles for the business units. For example, to allow an expense auditor to audit expense reports for the Vision Operations and Vision Services business units, assign the Expense Auditor Vision Operations and Expense Auditor Vision Services data roles, respectively, to the expense auditor.

How can I check in an original receipt package?

You can check in an original receipt package from three locations in Expenses. The first location is the Overview page in the Auditing work area where you can use two methods to check in an original receipt package. You can select the Bar Code option from the choice list in the Search Expense Reports pane, scan the bar code on the cover sheet using a bar code scanner, and click the Search button. Alternatively, you can select the Expense Report Number option from the choice list in the Search Expense Reports pane, and click the Search button. Either action opens the Check In Receipt Package page where you must enter the date you received the original receipt package. You can also optionally enter the expense report filing number.

The second check in location is the Manage Receipt Packages page where you can use the same methods previously mentioned.

The third check in location is the Audit Expense Report page where you can check in an original receipt package when you audit an expense report. On the page header, you must enter the date you received the original receipt package, and you can also optionally enter the expense report filing number.

Can I reject part of an expense report?

Yes. To reject part of an expense report, select the Short Pay check box in the Policy Verification region on the Audit Expense Report page for those expense items that are questionable. Additionally, select an audit issue for those same expense items from the Audit Issue choice list. When you finish the audit and click the Complete Audit button, the expense report is split into two reports. One contains the approved lines and the other contains the short paid lines. The expense report containing the approved expense lines is ready for payment, whereas the short paid expense report containing the short paid, that is, rejected expense lines, is returned to the individual along with a notification. The individual can then edit the short paid expense report, provide additional information and supporting documents, and then resubmit it or he can delete it.

Can I request confirmation of a prior approval from a manager when the expense report is assigned to me for audit?

Yes. To request confirmation of a prior approval from a manager when the expense report is assigned to you for audit, select the Confirm Manager Approval option from the Actions choice list on the Audit Expense Report page. The first approver, as evaluated by the applicable approval rules, receives a notification that includes a specific read-only instruction and any additional instructions entered by the expense auditor. After the first approver confirms approval, the expense report continues through the approval list and then returns to the expense auditor for audit completion.


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