Questions to Ask the Employer During a Payroll Audit

Posting by Phil Vivirito

We do certain tests for each payroll audit. Such as: Are new hires reported correctly? Are all pay periods accounted for? Are vacations being reported correctly? There are a few questions that the payroll auditor can ask an employer which can direct the auditor to test specific time frames in the audit period, which can lead to a finding.

Ask the person preparing the contribution reports if he or she has been doing so for the entire […]

Lack of Cooperation by the Employer

Posting by Larry Beebe, CPA

Most of the time employers cooperate fully when selected for a payroll audit.  A small minority of employees, however, refuse to cooperate.  The lack of cooperation can occur in many ways.  Here is a list of ways in which employers fail to cooperate:

1. Cannot be reached to schedule the audit
2. Refused to allow the audit in the time period selected by the auditor
3. Tries to schedule the audit at an inconvenient time and/or location
4. Calls and reschedules
5. Calls and cancels […]

Why We Don’t Do Payroll Audits – Reason 9

Posting by Larry Beebe, CPA

“All of Our Employers are Honest”

How could any trustee make that statement with certainty?  Let us assume that statement is correct.  How do you know that all or your “honest employers” have reported their obligations accurately under the collective bargaining agreement (CBA).  An employer may not be interpreting the CBA terms correctly.  For example, the employer may only be reporting up to 40 hours a week in a situation where the CBA clearly obligates the […]

Why We Don’t Do Payroll Audits – Reason 8

Posting by Larry Beebe, CPA

“It is a Waste of Plan Assets to do Payroll Audits”

I would agree that a plan can waste plan assets in performing payroll audits.  An ill conceived and/or poorly executed payroll audit program is a waste of plan assets.  I do not believe, however, that a well conceived and well executed payroll audit program is ever a waste of plan assets.

What can the trustees do to insure that they are spending plan assets properly in […]

Contributions of a Stated Amount

Posting by Larry Beebe, CPA

One of the subscribers to this blog asked the following:

Do you have experience with multi-employer plans where the employer contributes a stated amount per hour as written in the CBA and the contribution in excess of participant elected health and welfare benefits spills over into the retirement plan?  If so, what are some of the audit techniques you have found to be successful with these situations?

Please send me your thoughts at [email protected] and I will […]

Why We Don’t Do Payroll Audits – Reason 7

Posting by Larry Beebe, CPA

“Our Management Trustees Don’t Want us to Audit Employers”

Many years ago, I did my first payroll audits for a plan in the construction industry.  The employers had never been audited before, and I had numerous findings of unreported hours.  I knew that the union trustees would want to take immediate action to collect the amounts due.  What I found surprising was that the employer trustees were equally vigorous in wanting to pursue the delinquent amounts.  […]

Why We Don’t Do Payroll Audits – Reason 6

17Posting by Larry Beebe, CPA

“The Employers Would Never Let Us Look At Their Records”

Of all the reasons cited for not doing payroll audits, this is probably the weakest.  If I were a contributing employer to a benefit plan, I would willingly open my books and records to the plan’s auditor.  I would want to show everyone that I am reporting honestly.  Management trustees for plans often insist that their companies be the first ones audited in each cycle.  If […]