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Recent Posts:


  • 401(k) Service Providers and the Role They Serve

  • Frequent 401(k) Audit Finding Series - Documentation Failures

  • Withdraw from Your 401(k) at Age 55

  • What is a 3(16), 3(21), or 3(38) Fiduciary?

  • Frequent 401(k) Audit Finding Series - Use of Forfeitures

  • Frequent 401(k) Audit Finding Series - Hardship Distributions

  • Frequent 401(k) Audit Finding Series - Late Remittances

  • Frequent 401(k) Audit Finding Series - Failure to Remit All Contributions


  • Frequent 401(k) Audit Finding Series - Failure to Remit All Contributions

    Background

    The Plan Sponsor has the responsibility to remit all employee contributions to the Plan and to do so in a timely manner.

    Observations

    In our opinion, one of the most important responsibilities an auditor has during a 401(k) audit is to verify that all the money withheld from employee pay was remitted to the Plan and that it was credited to the proper individuals.

    Failures

    During audits, we are occasionally unable to reconcile employee 401(k) deferrals shown in payroll to the amounts received in the Plan.  When this occurs, we will assist the Sponsor in determining why the amounts do not reconcile.  In some cases, it may be necessary to reconcile each employee’s account to identify the underlying cause of the failure.

    Corrective action

    At the conclusion of our audit, we provide Sponsors with a letter outlining any control failures.  This would include a list of employees who had differences noted between payroll and 401(k) record keeper reports.

    We recommend the Sponsor works with the Plan’s record keeper to make the necessary corrective action needed to make any impacted employees whole.


    Scott M Dufek, CPA | 03/19/2018




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