Labor Union Payroll Audits (Benefits Compliance)

Ensuring collection of contributions due to employee benefit funds is one of the most challenging responsibilities that Fiduciaries encounter. Pressures facing employee benefit funds including meeting or exceeding assumed investment returns and mitigating increases in health care costs, emphasizes the value of every contribution. Furthermore, in competitive labor markets, ensuring that all required contributions are paid promotes fair competition between employers subject to collective bargaining agreements.

Schultheis & Panettieri, LLP has been performing Benefit Compliance Procedures (commonly referred to as “Payroll Audits”, “Labor Union Payroll Audits”, or “Union Payroll Audits”) for over 30 years. We currently perform in excess of 2,000 payroll audits per year for over 50 groups of multiemployer benefit funds. We have over 60 full time staff members dedicated to performing payroll audits. Our payroll audit department is directed and managed by individuals from diverse backgrounds who have extensive experience performing these services. They have lectured and regularly attend the International Foundation of Employee Benefit Plans’ Collections Institute.

As an accounting firm we structure our payroll audits as Agreed-Upon Procedure engagements in accordance with A.I.C.P.A. requirements. Each of our payroll audit programs is individually designed to meet the needs of the client. An effective payroll audit program requires an understanding of the industry being served, flexibility, and ingenuity. We work closely with Fund management to customize the procedures to ensure that every payroll audit is effective.

Our approach:

With our experience, dedication to this industry, and support from our internal IT Group, we have developed two custom software applications to (1) monitor and report the selection and status of each payroll audit, and (2) enable us to download and correlate data from fund offices as well as employers and upload findings to fund office systems. The combination of these programs gives us flexibility to design unique reports and processes for each client. Our extensive use of software in performing payroll audits saves time, reduces typographical errors, and, in most cases, enables us to cost effectively analyze 100% of each employer’s population. On the rare occasion where we determine random sampling of an employer’s population is more cost effective, we adjust our procedures accordingly.

We pride ourselves in our efforts to communicate with fund office personnel, affiliated unions, and employers as issues arise. This communication includes a comprehensive exit interview with employers when fieldwork is complete. This approach often enables us to resolve issues without wasting precious time and incurring costly litigation. We continually review the experience of payroll audits performed on behalf of each client and frequently coordinate with Trustees and Administrators to modify cycles and procedures based on that experience.

We spend valuable resources to retain and educate our employees. By offering comprehensive benefits, providing group and individualized training, and holding staff meetings our employees know they are part of a team and that individual growth potential exists in our firm.

As part of our quality control process, a detailed review of each payroll audit is performed by a manager or supervisor familiar with the client prior to the issuance of the report. This process is an interactive one which ensures open communication between the payroll auditor, manager and/or supervisor.

We believe that the consistent application of procedures by persons knowledgeable in the industry they serve results in a high accuracy ratio, avoids costly litigation, and saves the valuable time of employers, and fund office personnel.