“How To” Series: How Much Should the Payroll Auditor Test?

Posting by Phil Vivirito

In this series, I will explain several fundamental payroll auditing principles.  This post discusses guidelines for determining how much of the employer’s population a payroll auditor should test.

The payroll auditor should test one hundred percent of the employer’s population to ensure all eligible employees are being reported. Larger employers that have departmentalized payrolls can be tested and eliminated rather quickly. For organizations with a non-departmentalized payroll, the auditor can compare names on W-2s to those being […]

Update on Payroll Litigation Case: Ruling Made

Posting by Phil Vivirito

A few months ago, I shared my experience as an expert witness for a multi-employer benefit fund at a non-jury trial in Federal Court.  The case was recently decided in favor of the Funds (plaintiff).

The employer’s only defense was that the payroll audit was not actually conducted, but rather the accounting firm issued an “agreed-upon procedures report.”. To this the judge wrote in his ruling:

Much of defendant’s case during the inquest focused on the assertion that […]

The Admissibility of the Auditor’s Report: Implications of a Federal Appellate Court Decision

Posting by Travis Ketterman

For my next three blog entries, I will discuss important aspects of a federal appellate court decision that reviewed the admission of an auditor’s report in a trial seeking multi-employer trust fund contributions.  [See Trustees of Chicago Plastering Institute Pension Fund v. Cork Plastering Co., 570 F.3d 890 (7th Cir. 2009).] Importantly, the auditor’s report was premised on the assumptions set forth in agreed-upon procedures, referred to as “assumptions” throughout the appellate court’s opinion.

The appellate court […]

Questions the Payroll Audit Firm Should Ask the Trustees During the Proposal Process

Posting by Larry Beebe, CPA

We previously began a series of blog posts on the questions that trustees should ask the payroll audit firm when they request proposals to perform payroll audits .  The payroll auditing firms being reviewed should also ask the trustees a series of questions during the request for proposal (RFP) process.

Here is the list of questions the payroll auditing firm should ask; these questions will each be discussed in future blog posts:

How are disputes between […]

You are Finished with the Payroll Audits – Now What?

Posting by Kurt Needles, CPA

You have completed the audit sample, turned in the results to the fund office [i.e., the Third Party Administrator (TPA)] – now what?  How does the payroll audit program relate to the annual audit?  What procedures should you perform at the Plan level before you issue?  Following are my suggestions:

The Basics
Let me start with the basics.  Some clerks, not knowing what to do when they see a payroll audit, may “file” the report when it […]

You Want to Hire a Firm to Do Payroll Audits? Here are the Questions to Ask

Posting by Larry Beebe, CPA

Let’s say the trustees of a Plan have decided to request proposals from firms to conduct payroll audits.  What questions should be asked of the payroll audit firms during the proposal process?

This list of 20 questions should be asked of every firm responding to the proposal.  Ideally, these questions should be asked during the proposal process and the firms should be asked to respond to each of the questions in writing.  Those firms selected to […]

How to Pick a Sample for Construction Industry-Based Plans

Posting by Kurt Needles, CPA

About ten years ago, my firm was hired to be the payroll auditors for a construction industry-based group of Plans.  Their payroll audit procedures required a stratified sample of payroll audits performed over a four-year period.  We were given a list of all the contractors and their total contributions.  We sorted it, large to small, and picked every fourth company for year one, the second for year two, etc.  This seemed logical and simple but, […]

Legal Update: Administrator Can Seek Employer Contributions from Company Owner

Posting by Larry Beebe, CPA

A US District Court in the Eastern District of New York, in the case of Finkel v. Lite Tron Ltd., ruled that a plan administrator can continue with his claim to hold the owner of union and non-union companies liable for unpaid company contribution obligations.

The BNA Pension and Benefits Reporter (www.bna.com), in its November 9, 2010 Issue, summarized the findings of the case:

“According to the court, a controlling corporate officer can be held individually liable […]

“How To” Series: Putting New Hire Records to the Test – Verifying Accurate Employer Reporting

Posting by Phil Vivirito

Over the next few weeks, Phil Vivirito, Bond Beebe’s Director of Payroll and Compliance Auditing, will explain several fundamental payroll auditing principles.  This week he reviews the best practices for ensuring that new hires are properly reported.

Verifying that an employer is correctly reporting new hires should be a relatively simple task. However, you should be thorough and efficient in your methods and may need to apply different strategies if the appropriate information is not available.

Prior to […]