Travel Expense Fraud: How It Works, What to Look, and How to Stop It

Business travel is supposed to support operations — not become a leak in the budget. Yet travel fraud remains a persistent problem across companies and government institutions alike.

According to detik.com, Indonesia’s Supreme Audit Agency (BPK) uncovered Rp39.26 billion in irregular business travel expenditures across 46 ministries and government agencies in its 2023 audit report alone. The schemes are growing more varied — from forged tickets and duplicate claims to trips that were never taken in the first place.

Left unchecked, these practices don’t just drain finances. They erode the transparency and credibility of an organization’s financial management as a whole.

What is travel expense fraud?

Travel expense fraud refers to any act of misconduct aimed at obtaining personal gain from a company’s or institution’s travel budget.

It can take many forms: forged documents, inflated expenses, or claims submitted for trips that never actually happened.

Broadly speaking, expense travel fraud falls into several categories:

• Fictitious business trip: Travel that never took place, yet full documentation and reimbursement claims are submitted anyway.
• Inflated expenses: The trip did happen, but the claimed costs are deliberately marked up to secure a larger reimbursement.
• Duplicate claims: The same expense is submitted more than once to receive multiple payouts.

The ACFE (Association of Certified Fraud Examiners) classifies travel reimbursement fraud into four primary types:

• Fictitious expenses: Costs claimed for things that never occurred.
• Mischaracterized expenses: Personal expenses disguised as business travel costs.
• Overstated expenses: Real costs that have been deliberately inflated.
• Multiple reimbursements: The same claim submitted more than once.

It’s also worth noting that travel expense fraud isn’t confined to the public sector. It’s widespread in private companies too — particularly those where approval and reimbursement processes are still handled manually.

Read more: Business Travel Expenses Guide: How to Manage & Tracking

Five years of travel expense fraud data

Travel expense fraud is not a rare or isolated occurrence. Audit findings over recent years show that it continues to happen repeatedly, with increasingly varied methods.

Cases in Indonesia

Here are some notable findings that illustrate the ongoing nature of the problem:

• 2026 – Bank DKI case: BPK identified suspected irregularities in travel reimbursements with potential overpayments reaching Rp389 million. Among the findings: 163 plane tickets with a “Not Used” status had still been claimed for reimbursement.
• 2021 – BPK findings across ministries and agencies: In its First Semester Audit Summary for 2021, BPK found fictitious travel expenses totaling Rp2.54 billion and duplicate or above-standard travel claims totaling Rp13.16 billion
• 2022 – KPK special focus: Indonesia’s Corruption Eradication Commission (KPK) identified fictitious business trip as one of the most frequently occurring fraud schemes at the regional government level — including budget disbursements for activities that simply never took place.

During the same period, BPK recorded approximately 15,000 state financial management issues, with total potential losses reaching Rp18.37 trillion.

Global data: expense fraud remains rampant

The problem extends well beyond Indonesia. According to the ACFE 2024 Report to the Nations:

• The average loss per reimbursement fraud case is USD 251,000
• Fraud goes undetected for an average of 18 months before being caught
• 20% of small businesses and 12% of large companies have experienced expense fraud

Perhaps most telling, the leading reason fraud goes undetected isn’t that the schemes are too sophisticated — it’s that internal controls are too weak:

• 32% of cases slipped through due to insufficient internal controls
• 19% succeeded because existing controls were bypassed
• 18% went unnoticed due to weak management review

These numbers make one thing clear: travel expense fraud is not merely an administrative oversight. Without proper approval systems, verification processes, and ongoing monitoring, organizations can hemorrhage budget slowly — and silently.

The most common travel expense fraud schemes

Travel fraud can be carried out in many ways, from document manipulation to fabricated claims that are nearly impossible to spot through manual review. Here are the schemes that come up most often:

• Fictitious trips: The perpetrator creates official travel documents for a trip that never actually happened.
• Fake or unused tickets: A ticket is purchased and then cancelled, but the cost is still claimed as a travel expense.
• Forged or altered documents: Receipts or invoices are modified — amounts are changed, dates are adjusted — to support a fraudulent claim.
• Inflated expenses (overstated): The trip was real, but the amounts claimed are deliberately exaggerated.
• Duplicate claims (multiple reimbursements): A single expense is submitted more than once across different reporting periods or reimbursement channels.
• Personal expenses claimed as business costs (mischaracterized): Non-work-related spending is folded into travel expense reports to get company reimbursement.
• Double-claimed travel: The same travel costs are claimed by more than one person, or claimed even when expenses were already covered by another party.

Warning signs and red flags of business travel fraud

Travel fraud is often hard to detect precisely because the people doing it understand how the company’s approval and reimbursement workflows operate.

That said, there are patterns worth watching. Finance teams, HR, and internal auditors can look out for the following red flags before losses spiral out of control.

Document-level red flags

Some warning signs show up directly in the paperwork:

• Receipts or invoices appear edited: Inconsistencies in font, formatting, or transaction dates compared to the rest of the document.
• Invalid ticket or booking codes: Reference numbers that can’t be verified with the airline or travel platform.
• Incomplete travel authorizations: Missing signatures, unmatched dates, or approvals that don’t appear to have been properly authorized.
• No evidence of actual travel: Boarding passes, hotel check-in confirmations, or trip reports are nowhere to be found.
• Suspiciously round figures: Claimed amounts consistently land exactly at the per diem ceiling with no natural variation.

Pattern-level red flags

Beyond individual documents, unusual claiming patterns can also signal trouble:

• Frequent trips to the same location with no clear business justification
• A sudden sharp increase in travel frequency compared to previous periods
• Long-distance travel claims with no supporting transportation records (e.g., flight or train tickets)
• Hotel charges appearing on weekends or public holidays without official travel authorization
• Claimed amounts that consistently hover just below review thresholds — a common tactic to avoid scrutiny

Behavioral red flags

In many cases, employee behavior itself can point to manipulation:

• Refusing to provide original documents, only submitting photos or photocopies
• Consistently late submission of travel expense reports
• Inability to explain trip details when asked to verify
• A noticeable lifestyle upgrade that doesn’t match official income

When several of these red flags appear together, organizations should initiate a closer review or internal audit as quickly as possible to prevent further financial damage.

Why business travel fraud is so hard to catch

In many cases, travel fraud succeeds not because the scheme was particularly clever, but because the process itself was full of gaps. When approvals, reimbursements, and document verification are all handled manually, the risk of manipulation becomes extremely difficult to manage.

Several factors contribute to why this type of fraud so often slips through:

• Manual processes still dominate: Submissions and approvals handled via email, WhatsApp, or spreadsheets have no built-in mechanism to flag duplicates or validate travel bookings.
• Reviewers are overloaded: Finance teams and approvers often have to process dozens of claims at once, making it easy to miss details. ACFE found that 18% of fraud cases succeeded specifically because of weak management review.
• Documents are increasingly easy to falsify: AI tools and editing software now make it possible to produce forged receipts and invoices that look entirely legitimate.
• No digital audit trail: When the entire process is scattered across multiple channels, it becomes nearly impossible to track who changed, approved, or modified a document.
• Third-party bookings lack transparency: Booking travel through personal contacts or external vendors — without a structured validation system — creates significant room for manipulation.

Manual vs. digital travel management: a comparison

The real difference between manual and digital systems isn’t just efficiency — it’s the ability to prevent fraud before it happens.

Read more: Top 7 Unified Corporate Travel Expense Management Software

7 effective ways to prevent business travel fraud

Travel fraud is preventable — provided organizations put the right controls, approval structures, and monitoring systems in place. Here are the most effective steps to take:

1. Establish a clear travel policy: Set written rules covering expense limits, submission procedures, required documentation, and reporting deadlines — so there’s no room for ambiguity or selective interpretation.
2. Require multi-level approvals: Implement at least two levels of approval for business travel, especially for high-value trips or travel outside the city or country.
3. Mandate verifiable digital proof: Require boarding passes, hotel booking confirmations, and transaction receipts that can be verified online — significantly reducing the risk of document forgery.
4. Use an integrated travel management application: A travel management app connected to the accounting system automatically records every step of the approval and reimbursement process, making audits far more straightforward.
5. Conduct regular audits and spot checks: Random verification with hotels, airlines, or vendors can help catch fraud early — before the losses become significant.
6. Provide a whistleblower channel: Give employees a safe, anonymous way to report suspected fraud without fear of retaliation.
7. Enforce consequences consistently: Proven fraud must be met with firm action. Letting it slide — even once — creates a culture of tolerance toward misconduct.

Read more: 7 Tips on How to Choose Corporate Travel Solutions

How Mekari Expense helps prevent business travel fraud

As a spend management platform with dedicated Business Trip functionality, Mekari Expense gives companies end-to-end control over the entire travel process — from trip requests and approvals to cash advances, reimbursements, and final expense reports, all within a single integrated system.

To help detect fraud earlier in the process, Mekari Expense includes a Fraud AI Checker that automatically assigns a risk score to every transaction based on several indicators:

• Unusual amount detection: Flags transaction amounts that deviate from historical spending patterns
• Unusual vendor detection: Checks for mismatches between vendors, expense categories, and associated accounts
• Duplicate transaction detection: Identifies duplicate claims or similar transactions submitted within the same period

Additional features that help reduce the risk of fictitious business trip and expense fraud include:

• Digital trip request forms with required fields and full documentation
• Multi-level approval with real-time notifications and a complete approval trail
• OCR scanning for receipts and invoices to minimize manual manipulation
• Automated travel policies configured by job level, team, or destination
• Automatic duplicate claim detection to prevent double billing
• A complete digital audit trail to support investigations and internal audits
• A real-time dashboard for monitoring travel expenditures by team or individual
• Integration with Mekari Jurnal for more accurate financial records and reduced risk of manipulation

Use Mekari Expense Business Trip features to prevent fictitious business trip through digital approval workflows, automated fraud detection, and real-time spending monitoring — all in one integrated system.