Are your firm’s employee benefit plan audits and single audits on point?
With an imminent US Department of Labor assessment of the quality of ERISA plan audits, and the release of historic amounts of federal funding as coronavirus relief, your firm’s employee benefit plan (EBP) audits may undergo additional scrutiny and you may be asked to take on a new or more complex single audit of entities receiving government COVID relief money. For more, see below.
US Department of Labor (DOL) assessment of audits of employee benefit plans subject to ERISA
- The U.S. Department of Labor (DOL) Employee Benefit Security Administration (EBSA) will assess the quality of employee benefit plans subject to ERISA by reviewing a statistical sample of audits submitted with the 2020 plan Form 5500 filings, including those filed on extension by October 15, 2021.
- The DOL last performed an assessment of the quality of ERISA plan audits submitted with the 2011 plan Form 5500 filings (click here for the DOL report). That study reviewed 400 statistically selected audits.
- Starting later this year, the DOL will contact selected plan sponsors and their audit firms asking them to provide a full set of audit workpapers. Firms will have only ONE opportunity to provide all supporting workpapers. So, it is critical that everything relevant to the plan audit is provided to the DOL. For example, if certain information related to a plan audit is in the sponsor company’s audit file, those workpapers should be submitted with the plan audit workpapers.
Helpful resources from the Employee Benefit Plan Audit Quality Center (EBPAQC)
- Performing quality ERISA employee benefit plan audits: Firm best practices
- Common EBP audit deficiencies planning tool
- Summary of Frequent “Unacceptable, Major” Deficiencies in 2011 DOL Audit Quality Study
- Peer review findings in employee benefit plan audits
Interested in deepening your committing to audit quality? Join the Employee Benefit Plan Audit Quality Center (EBPAQC).
Questions about EBP audits? Call 919.402.4502, option 3 or email email@example.com.
Increased demand for single audit engagements
- States and localities, not-for-profits, and other entities have received historic amounts of COVID-19 federal funding. The result is a significantly increased demand for single audits. Prior federal audit quality studies and the results of peer reviews over time have found significant audit quality issues with single audits. We have some suggestions to help mitigate these issues.
- Peer review data has shown that firms that specialize in single audits and assign partners and staff with strong experience to those audits perform significantly better than firms that do not.
- If your firm’s experience in single audits is not sufficient, we recommend you decline the engagement. Or you could partner with another firm that has single audit experience.
- If your firm is asked to perform a single audit, focus on engagement acceptance to ensure you have the right experience, training, and sufficient resources before taking it on.
Helpful resources for experienced single auditors
Single audits: Deliver high quality in a challenging time
COVID-19 funding could present new single audit challenges
Summary of Governmental Audit Quality Center (GAQC) COVID-19 Resources
Archived GAQC Alerts and Free, No CPE Webcasts, including both single audit fundamentals and Yellow Book fundamentals
Interested in deepening your commitment to audit quality? Join the Governmental Audit Quality Center (GAQC).
Questions about single audits? Call 919.402.4502, option 3 or email firstname.lastname@example.org.