Written By Larry Beebe
Bond Beebe
P: 301.272.6025 E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

“We Used to do Payroll Audits but We Never Had Any Findings”

This statement does not make sense when compared with the statistics that have been gathered by those who have performed payroll audits over a prolonged period of time.  Kurt Needles, in his blog posting of March 25, 2008 provided the following stated that for the 686 audits he performed from 2001-2005, the average audit finding was $7,369.63 in contributions due and that 365 of the audits performed (or 53.21%) had audit findings.

Why didn’t your payroll audit program produce similar findings?  One reason for the lack of findings may be that those doing the payroll audits did not know what they were doing.  I am very suspicious of a payroll audit program, where the auditor agrees to do all payroll audits for a very low fee.  Let’s assume that an audit form agrees to do all payroll audits for $500 each.  For that low fee, they won’t be working very many hours on the average audit and they won’t be assigning anyone to the job that is competent.  I cannot do even the smallest payroll audit for $500.  Perhaps some others can, but no one can do a complex audit which could take several days and could result in significant deficiencies for $500.

My suspicion is that if you didn’t have findings in your payroll audits, then those audits were not being done properly.  Some audits won’t have findings, but other should and will have significant findings.

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