Many companies are using a certified public accountant to audit their employee benefits and check in on their compliance. However, the The United States Department of Labor’s Employee Benefits Security Administration released a study not long ago identifying that 39% of all audits of this type have one or more major deficiencies.
What this could mean for your company is major consequences. If all of your filing is not compliant, you get fined. If all employee benefits are not adequately accounted for, these plans can get thoroughly squashed. We are all painfully aware at this point. However, do you really get how much this could cost you?
Form 5500 filing rejections, due to inadequate completion, lead easily to $1000 in fines per day without limit. Rejection of or penalties on any other ACA-required forms puts your employees’ and their beneficiaries’ benefits in jeopardy. In the grand scheme of things, this 39% incidence of failure to audit properly has impacted 22.5 million plan participants and put over $635 billion in assets at risk.
Obviously, you’ll want to avoid this. Might put a damper on your day. So here’s a few ways to choose a solid certified public accountant.
They say they’re certified? You need to see some receipts.
Being a member of the American Institute of CPAs is the best way to check out the viability of a firm or individual’s auditing skill set. This organization provides rigorous employee benefit training to all of its members and adheres to high ethical standards. Most importantly, these guys keep their members fully up-to-date, constantly providing updated training as policy changes all the time. It’s a sure way to get quality audits. By searching for them here, make sure yours is currently certified.
The firm needs to prove that it’s internally up to par
Any team member should be trained rigorously as soon as they join a firm. Not only is it important for the company to be certified, but each new employee should be required to complete the same training as those already within the class of certified members. The auditor responsible for your plans should be fully trained in each type of plan they’ll be helping you with as well. Some one trained extensively in 401k auditing might not necessarily have the same knowledge of health plans, for example.
Present all the facts you have up front
Using a comprehensive request for proposal from an auditor will offer all of the information they’ll need to give you what you need. The audit objectives and requirements ought to be clearly communicated from the get go, and the reasons for having your plans audited should also be known by those you approach. If you’re in some kind of trouble requiring a solid audit, don’t sneak in your bad juju on an unsuspecting auditor. Honesty is the best way to find exactly what you need, and most firms will be better able to assist you with all the facts, even the negative ones.
Your company deserves the best possible audit to keep it compliant. Hope this helps. Let us know if you have any questions.