Billing schemes occur when employees cause their employer to issue a payment for an illegitimate or overstated charge. The schemes are especially difficult to detect because the payments get recorded as if they were a legitimate business expense. Two examples of common schemes are:
- An employee creates a fictitious company and bills the organization for goods or services never received or rendered.
- An employee purchases personal items and submits the invoices to the organization for payment.
This fraud alert addresses internal controls and recommends controls that can help prevent fraud, waste, and abuse.