In May 2015, the U.S. Department of Labor (DOL) released a report titled, “Assessing the Quality of Employee Benefit Plan Audits,” which noted that almost 40% of plan audits had “major deficiencies.” Included in the report were recommendations, one being that the DOL increase its outreach efforts to educate plan sponsors and administrators of employee benefit plans.
During the last quarter of 2015, the Office of the Chief Accountant at the DOL began to send emails to the contacts of large employee benefit plans that filed a Form 5500 and attached an audit report. Small plans that file a Form 5500-SF did not receive the email since small plans (those under 100 participants) are not required to attach an audit.
The DOL email has a subject line “Your Employee Benefit Plan Audit” and includes correspondence and references the DOL’s pamphlet “Selecting an Auditor for Your Employee Benefit Plan.” The goal of the DOL email is to improve the audit quality of employee benefit plans.
The email and related correspondence does not require any action. However, the DOL’s correspondence provides information and guidance that employee benefit plans should consider during the process of hiring and evaluating an auditor. The link to the DOL’s website, which provides a summary of the DOL’s guidance, is as follows:
The DOL’s Office of the Chief Accountant will likely continue these outreach efforts. We also expect that the DOL will pursue enforcement efforts and work with National Association State Board of Accountancy (NASBA) and state CPA societies in order to reduce the number of deficiencies in audits of employee benefit plans.
Sarah Glynn, CPA is a Manager in the Firm’s Audit and Assurance Services practice and also serves as chair of the Firm’s Employee Benefit Plan Quality Control Committee.