How You Set Up Expense Report Auditing

You can examine, verify, and adjust the contents of expense reports as needed. Auditing expense reports ensures that employees comply with your company's policies without having to audit all submissions. You can automate several processes related to expense report auditing.

To set up expense report auditing, you can perform the following first four steps in any order:

Create audit selection rules.
Create audit list rules.
Create expense template and type rules.
Create receipt and notification rules.
Assign audit rules to business units.

For the last step, you assign the audit rules created in steps 1 to 4 to business units.

Note: To set up expense report auditing, you must create at least one audit selection rule, audit list rule, or expense template and type rule and then assign it to a business unit. Otherwise, Expenses can't audit expense reports.

Create Audit Selection Rules

To enable automatic selection of expense reports for audit, select audit selection rules on the Create Audit Selection Rule page. Audit selection rules are criteria that Expenses uses to automatically select expense reports for audit.

When you set up audit selection rules, you can optionally specify audit types. Audit types are alphanumeric codes that you create which print on the cover sheet of each expense report. These codes identify the type of audit to be performed by the auditor.

Expenses divides expense reports into the following audit categories:

Automatic Approval
Original Receipts Audit
Imaged Receipts Audit
No Receipts Required Audit

For example, your alphanumeric code can read: Autoapproval, Paper Receipts Audit, Paperless Audit, or No Receipts Required. Alternatively, you can create codes known only to your Expense Audit department. Audit types provide your audit department with a convenient method for sorting paper receipt packages.

Create Audit List Rules

To enable automatic selection of individuals for the audit list, you can:

Select audit list rules on the Create Audit List Rule page.
Specify the number of days a violator remains on the audit list.

Audit list rules are criteria that Expenses uses to automatically place violators on the Manage Audit List Membership page.

When an employee submits an expense report, Expenses determines whether the employee has violated an audit list rule. If he has, he's automatically added to the Manage Audit List Membership page with an end date that matches the value you entered for the Number of Days an Individual Remains on the Audit List. When the end date is before the current date, the violator becomes inactive. The violator's name, however, remains on the Manage Audit List Membership page for historical purposes.

If you select the criterion Maximum Number of Days to Wait for Original Receipt Package on the Create Audit List Rule page and you enter a value for the maximum number of days to wait, you must also enter a value in the Original Receipt Package Received Date field for all expense reports on the Audit Expense Report page. After you save and assign the audit list rule to a business unit, Expenses automatically places employees on the Manage Audit List Membership page who have:

Pending receipts greater than the maximum number of days to wait
Submitted receipts that were received after the maximum number of days to wait

Note: An employee membership is considered active when the current date is between the start date and the end date or no end date exists. If an active employee on the Manage Audit List Membership page violates another audit list rule, Expenses adds the new violation and restarts the count for the number of days to remain on the audit list.

Create Expense Template and Type Rules

To enable selection of expense reports for audit based on expense template and type, set up expense template and type rules on the Create Expense Template and Type Rule page. These rules can apply to an expense template only or to an expense type within an expense template. When an employee submits an expense report, Expenses determines whether it meets the criteria for expense template and type rules. If it does meet the criteria, the report is automatically selected for audit.

For example, the following table shows Entertainment expense type values associated with the Travel expense template. Together, they form the Travel and Entertainment rule.

Expense Template	Expense Type	Expense Type Amount	Expense Type Cumulative Amount	Expense Type Currency	Expense Type Period
Travel	Entertainment	250.00	250.00	USD	Month

The preceding granular Travel (template) and Entertainment (expense type) rule is interpreted as follows: If the employee spends more than $250 US dollars in a month on Entertainment using the Travel expense template, then the employee's expense report is selected for audit.

You can also create broader rules that are based solely on a specific expense template without an associated expense type. For example, suppose you want to create a rule for the Training template, then all expense reports that use the Training template are selected for audit.

Create Receipt and Notification Rules

To enable receipt and notification rules, set them up on the Create Receipt and Notification Rule page.

Create receipt and notification rules to specify:

Type of expense report receipts required: original, imaged, or both
Stage at which imaged receipts must be attached to the expense report
When missing and overdue receipts are overdue
When expense report payment holds occur
Action Expenses takes if an employee doesn't respond to notifications for missing and overdue receipts

When an employee submits an expense report, Expenses determines whether receipts are required and acts according to the receipt and notification rules you specified. Receipt and notification rules are applied at various points throughout the expense report process. Some receipt and notification rules are applied during expense entry, some are applied during the Overdue Tracking process, and others are applied during the Process Expense Reimbursement process.

Assign Audit Rules to Business Units

The final audit setup step is to assign the following audit rules to business units on the Manage Expense Report Audit and Receipt Rule Assignments page:

Audit selection rules
Expense template and type selection rules
Audit list rules
Receipt and notification rules

You can assign all or any audit rules to all business units in the All Business Units section. In the Specific Business Units section, you can assign specific audit rules to specific business units.

The rules that you assign to a business unit remain active during the effective period that you specify. If you don't enter an end date, the rules remain active indefinitely. To change the behavior of an audit rule, you must apply an end date to the existing rule and then create and assign a new one. If you don't assign an audit rule to a business unit, Expenses doesn't apply the audit rule to any business unit.

Note: If you assign an audit list rule to a business unit, you must ensure that you also assign an audit selection rule to the same business unit that has the criterion, Audit expense reports of individuals on the audit list, activated. This allows Expenses to automatically add employees to the audit list and monitor the number of days they remain on the list. If you don't assign an audit list rule to a business unit, but you do assign an audit selection rule that uses the criterion, Audit expense reports of individuals on the audit list, you can still add employees to the audit list manually.