Annual Employee Benefit Plan audits safeguard against error, fraud, and abuse. They provide organizations with a process to uncover any deficiencies and self-corrects them. Almost all plans with over 100 participants must be audited annually, and as a plan sponsor, you have a fiduciary responsibility to engage an independent qualified public accountant. It is often beneficial for smaller plans to engage a qualified independent CPA to perform limited procedures to ascertain the plan’s compliance with the applicable provisions of the plan document.
In recent years, the Employee Benefits Security Administration (EBSA), a division of the US Department of Labor (DOL), has increased their scrutiny of not only employee benefit plans, but also of the plan’s auditor and the quality of their audit. The EBSA’s more recent findings revealed that nearly 39% of the audits reviewed contain “unacceptable, major” deficiencies, which would lead to rejection of a Form 5500 filing. Read the full EBSA Report.
- Notes receivable from participants
- Contributions received and receivable
- Benefit payments
- Participant data, including individual participant accounts
- Compliance with DOL rules and regulations