Align Policies: If the company doesn't have an employee expense policy then how can the employee be held accountable. The policy should contain all forms of prohibited activity, that way there’s no miscommunication and both sides can be held accountable.
Education: Educate employees on the correct way to log and manage their expenses. Changes in corporate policies or government law may require staff to be updated. Managing expense is not difficult but, guidance must be given if data is to be recorded accurately.
Evidence: Forcing employees to supply supporting evidence in the form of receipts or proof of mileage covered is the norm these days but, some companies still record mileage in good faith.
Technology: Most large organisations have some kind of technology in place to manage expense tracking. Making it easier for the employee to accurately manage their expenses will ultimately reduce cost and fraud.
Audit: Having external auditors pick you up on employee expense fraud is an embarrassing situation for everyone involved. Running internal ad-hoc audits will keep people on their toes. It's not aimed to catch people out but to keep expenses in line, accurate, and most importantly, compliant.
Prosecute: Sounds harsh and might be the last resort but, at the end of the day, it's fraud and the employee is liable for punishment. If you commit tax fraud the government wouldn't waste any time taking you to court, it's the same thing.