Department of Internal Audit and Compliance

Human Resources - Employee Benefits

Effectiveness and efficiency of operations 

A. Participant data is properly recorded on a timely basis.

1. Are participant forms for procedures such as enrollment, transfers, and investment allocation controlled and maintained for future reference?
2. When contracting with a third-party service provider, do plan administrators adhere to established policies to follow up on all reconciling items in a timely manner?

B. Approved adjustments and changes to data are input for processing completely and accurately.

1. Are reports following inputs and updates compared to source documents for system adjustments as part of a one-to-one check to verify completeness and accuracy?
2. Is a one-to-one check of adjustments input into the system performed via a comparison between post input/update reports to the adjustment source of data to verify accuracy of key data fields including date?
3. In using batch totals, after separation of input documents into groups, are numerical totals calculated in such categories as the quantity of documents, dollar amount, and hash items? Are batch totals compared to reports following inputs and updates?  Are all out-of-balance conditions researched and corrected data reentered on a timely basis?
4. Does the system produce a report of changes in certain types of standing data or for changes falling outside certain parameters and the report forwarded to management for review?

C. Participant eligibility is verified.

1. Are enrollment applications or third-party enrollment reports reviewed and approved by the plan committee or a responsible official?
2. Are sponsor or employer payroll records compared with contribution calculations? In multiemployer plans, is there some form of periodic payroll audit?

D. Participant database and supporting data are safeguarded.

1. Do computer security administration personnel follow written instructions from authorized management to remove or modify access rights of terminated and transferred employees?
2. Is access to computer resources such as application programs, data files, sensitive utilities, and system commands limited to authorized individuals?

 

Reliability of financial reporting 

A. Complete and accurate data are used in actuarial valuations.

1. Does the plan committee or other responsible and knowledgeable officials assess for reasonableness results of the actuarial calculations, including the benefit obligation, prepaid (accrued) benefit cost, and net periodic benefit (income) expense?
2. Does the plan committee compare any contemplated plan changes to the plan document to confirm that actions comply with terms of the document? Examples of actions to be reviewed include changes in investment options, creation of voluntary employees' beneficiary association (VEBA) trusts, plan mergers, and curtailments.

B. Access to accounting records is properly authorized.

1. Is segregation of duties maintained between 1) benefits record keeping; 2) benefits record approval 3) benefits payment preparation 4) benefits processing; 5) benefits distribution; 6) other cash disbursements; 7) benefits bank account reconciliations; 8) benefits bank account reconciliations approval; 9) employee benefits payment approval; 10) personnel hiring and termination; 11) and general ledger functions?
   
   

   Back