Payroll audits are performed to verify that those employers who have signed collective bargaining agreements are contributing the proper amount on behalf of each participant on a timely basis.
Some of the procedures we perform are as follows:
• Random selection of employers: We assist the fund in randomly selecting the employers to be audited. We normally recommend that all employers be audited within a three–year period. However, certain high-risk employers might be put on a priority list if they meet predefined criteria such as a sharp increase or decrease in contributions.
• Comparison of employer's payroll records to contributions paid: We compare employers' payroll records and time cards to hours and wages to calculate contributions paid by the employer in order to determine whether the employer paid the correct contributions on behalf of plan participants. We also verify that the correct rate of pay was paid as detailed in the collective bargaining agreement.
• Agreed Upon Procedures Report: We provide our clients with an Agreed Upon Procedures Report at the end of each payroll audit that describes our procedures and reports our findings. Our report is in the format that is required by standards governed by the AICPA. However, the procedures we perform are individually discussed with each client. In addition to performing the procedures that each of our clients request, we make sure that our clients thoroughly understand these procedures. We will also make suggestions when we feel additional procedures are necessary to achieve a complete and accurate payroll audit.
• Reporting to the Governing Board: If requested, we report to the client's governing board on a regular basis. We prepare and present to the Board, a summary detailing the status of each payroll audit, including payroll audits for which the employer is not fully cooperating. We also work with a client's attorney, if necessary, to resolve any audit differences in a timely manner.
Many of our clients do not have the expertise or the personnel to perform payroll audits on a regular basis. The auditors at Schultheis & Panettieri recognize the importance of these payroll audits as a way to increase the collection of employers' contributions and to verify participant eligibility. We are always willing to assist our clients by performing payroll audits whenever necessary.
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