Payroll Compliance Audit Case Studies

Case Study #1

Health Plan participants had obtained several years of eligibility through reportings from a single employer. The Plan office suspected that the participants were obtaining eligibility improperly by submitting false Reports of Contributions to the Plan office.

What We Did: We conducted an audit of the participants’ earnings and discovered that the participants were not compensated by the purported employer in the amounts listed on the Reports of Contributions. The employer, who participated in the scheme, recycled cashiers checks through its bank to give the appearance of a series of compensation payments to the participants. In addition, we examined cash receipts records of the employer that showed that the participants had repaid the contribution amounts back to the employer.

Benefit for Client: On the strength of the audit findings, the Plan commenced litigation against the employer and recovered a high five-figure settlement for benefits erroneously paid on behalf of the participants. We then consulted with the Plan in the implementation and execution of a reporting monitoring system to identify and investigate unusual reporting patterns.


Case Study #2

The Trust office did not have a comprehensive payroll audit program for signatory employers.

What We Did: We examined the Trust’s audit history and crafted a multi-year plan to cover a significant portion of covered earnings and signatory employers.

Benefit for Client: Audit findings for employers not previously examined covered the cost of the increased scope of payroll compliance audits.


Case Study #3

Trust Office commenced a new computerized Collection Program initiative.

What We Did: We worked with the Trust’s computer consulting firm in conjunction with Trust staff to develop business rules, procedures and policies to guide the computer consultants in developing the program.

Benefit for Client: Trust office standardized procedures and had a customized Collections Program that met the unique needs of the Trust.


Case Study #4

The co-owner of a payroll service working on behalf of signatory employers retained employer contributions entrusted to it and did not remit the contributions to the Plans.

What We Did: We audited the payroll service and compared the payroll invoices submitted by the payroll service to its clients the Reports of Contributions submitted to the Trust Office, noting significant discrepancies.

Benefit for Client: The Trust Office received a high six-figure settlement from the remaining co-owner for unpaid contributions and penalties, with an agreement for on-going monitoring of activities.


Case Study #5

Several participants who worked for one employer lost health plan eligibility due to reduced earnings reported to the Trusts by the employer.

What We Did: We audited the employer and discovered that, as a result of a computer systems change, it had input improper coding into its payroll reporting system, resulting in a reduction of subject compensation reported to the Trusts. We identified the source of the problem to the employer, who promptly corrected the systems error.

Benefit For Client: The Trust Office was paid the additional contributions due, plus interest, liquidated damages and recovery costs. This resulted in restoration of pension credits and the reinstatement of lost health eligibility to participants whose earnings were incorrectly reported to the Trusts by the employer.



We believe our track record speaks for itself. To find out how we can help you fulfill your payroll compliance auditing needs, please call Denise Hart at (310) 229 5175 or Brian Meath at (310) 229 5178.


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