Late deposit due to mail service

[Guest SueJ]

An EE contribution for 1/11/03 that was mailed 1/16/03 was just received with a note of apology from the postal service. Client never questioned that their check had not cleared.

Should this be reported as a "late" contribution or will the documentation of the lost mail be sufficient if any questions come up?

[Guest b2kates]

I would assert, under the mail box rule, that it was timely. Maintaining a copy of the post office documentation would support the position.

Question, why did the client not reconcile in the 3 month interval?

[Guest SueJ]

That was my question, too and why I wasn't sure the postal service apology meant anything.

I received no answer to my inquiry, however.

[GBurns]

Considering that most people do not and even cannot balance their own checkbook, why would you want to put the burden on the employee to reconcile the account? In addition, what happens if the employee gets Quarterly statements, he/she probably had not yet received the statement for reconciliation anyhow. In any case this is not a problem that can be blamed on the employee even without the mail box rule.

Sue,

You did not state what your function was and why the contribution was sent to you. I also wonder why this contribution was alone by itself.

When amounts are deducted from employees on a payroll it is treated as an Accounts Payable item and there is a total for each category of deduction such as "401 (k) EE deductions Payable" "FICA Payable" etc. The total amount of the category has to be distributed (to the Trustee etc) usually as a single check accompanied by a list showing the amount for each individual. If there are distributions to multiple parties, the distributions must add back to that total. A simple balancing of the accounts.

If an employee contribution is missing it should have shown up long ago and should have been questioned without the involvment of the employee.

This does not look like an employee problem, this looks like a sloppy bookkeeping and alack of accounting controls by the recordkeepers.