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10 Ways to Ensure Success in a First-Year Employee Benefit Plan Audit

Although all benefit plan audits involve complexities, a first-year audit can seem especially daunting. With decades of experience serving employee benefit plans, Blue & Co. works as a team with our clients to make sure each audit experience is an efficient, yet effective, one!

While the list below was put together with first-year audits in mind, all plan sponsors may find useful tips below.

  1. Start early. Begin discussions with your auditor about timing, request lists and logistics. While the Form 5500 filing deadline may be months away, a first-year audit will always take additional time. The auditor can do much of the up-front work very early in the year!
  2. Request online recordkeeper access. Many recordkeepers allow for online access to be provided to your auditor, which greatly reduces your auditor’s information requests made to you. Providing this access to your auditor as soon as possible will allow your auditor to get an early start on the audit testing.
  3. Establish a timeline. Within this timeline, include planning meeting, receipt of audit packages and other information from your service providers, receipt of testing samples from your auditor, delivery of requested support to your auditor, draft of Form 5500 and audit finalization. Allow time for resolving open questions.
  4. Schedule meetings with your auditor. Regular meetings to discuss status updates, open requests and other questions will help to make sure your timeline stays on track! For a first-year audit, a face-to-face meeting between your plan sponsor contacts and your auditor may also be helpful!
  5. Determine a method of providing requested information securely. Your auditor will provide a detailed request list, which will include Plan documents, amendments, adoption agreements, summary plan descriptions and payroll reports. Provide these items early! As requests will include sensitive data, it is important to exchange information via a secure link or platform.
  6. Document your internal control structure. Your auditor is required to understand what internal controls are in place to prevent and detect fraud and may provide a documentation template or interview you to gather this information. This will include an understanding of the plan’s fiduciary oversight, so a list of those charged with governance will be needed.
  7. Understand your responsibilities. An ERISA Section 103(a)(3)(C) election will require you to obtain and assess custodian certifications for plan assets, determine that the certification is covered by an allowable provider and understand what assets are covered. The AICPA has several informational tools that your auditor can provide.
  8. Understand your plan’s definition of compensation. Provide requested payroll reports showing the detail of compensation types for all employees, along with a list of pay codes subject to deferral. Compare this list with your plan document and ensure that your plan is treating bonuses and other compensation correctly.
  9. Identify any known compliance issues. Communicate with your auditor any contribution corrections or areas in which your plan was not operating per the plan document terms. Consider any contributions that were not remitted timely. Contact your third-party administrator regarding any necessary corrections.
  10. Review the draft Form 5500. A review of the Form 5500 in conjunction with your recordkeeper report should also include agreement of the Schedule H amounts with your auditor early in the audit process. This will allow plenty of time to resolve any differences with your third-party administrator.

Remember, use your auditor as an educator. An auditor well-versed in employee benefit plan audits has a wealth of information and guidance to offer in compliance requirements and fiduciary best practices.

If you have any questions, please contact our team of experts:

Debbie Herbert

Senior Manager

Phone/fax: 812-405-1733

Email: dherbert@blueandco.com


Abby McDonough


Phone/fax: 317-275-7421

Email: amcdonough@blueandco.com

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