Retirement Plan Audit Alert from U.S. Department of Labor with Jones & Roth Guidance

By Evan Dickens, CPA

The U.S. Department of Labor is getting serious about the quality of retirement plan audits—and they’re reaching out directly to plan sponsors.

Last month, an email with the subject “The Importance of a Quality Benefit Plan Audit” was sent to all individuals who are registered as plan administrator of a retirement plan that is required to have an annual financial statement audit. That email, from “PlanForAuditQuality – EBSA” is a legitimate email from the Employee Benefits Security Administration to plan administrators reminding them of their responsibility in selecting a high-quality auditor for their retirement plan.

This effort is a result of a recent DOL study that concluded that almost 40% of retirement plan audits performed are deficient, and further a plan audit is more likely to be deficient if performed by a firm that has only limited experience and/or performs a low number of retirement plan audits. Deficient audits are not just a problem for the auditor, because they can cause the DOL to refuse the filing of the Form Series 5500, which can lead to very substantial financial penalties for the retirement plan sponsor.

If you received this email from the DOL, don’t worry, you haven’t been specifically targeted. However, this letter is a great reminder that the Department of Labor continues to increase its oversight of the retirement plan audit process, and a good opportunity to consider the expertise and experience of your plan’s audit firm. The DOL has also published a pamphlet with some great ideas and tips for selecting a high-quality auditor:

Selecting an Auditor for Your Employee Benefit Plan

The retirement plan audit team at Jones & Roth CPAs recommends hiring a firm that performs a minimum of 10 retirement plan audits annually and is a member of the Employee Benefit Plan Audit Quality Center. If your plan is a 403(b), ESOP, or other specialized type of plan, make sure your auditor has experience in that specific area. For more information or to speak with one of our plan audit specialists about your audit, please contact us.

Evan Dickens, CPA leads the Jones & Roth Retirement Plan Audit Team