Plan Audit Question

[bzorc]

401(k) Plan with over 100 participants was audited by a CPA firm for the period 4-1-19 to 3-31-20. Plan sponsor has changed the year end to September, with a short plan year 4-1-20 to 9-30-20. Question is whether the short year audit can be put off under 29 CFR 2520.104-50, and be included with the audit for the plan year 10-1-20 to 9-30-21? Looks like it can, but  I've never seen this or been asked the question before. 

Thanks for any replies.

[C. B. Zeller]

I've never seen it done either but it certainly seems like you could. This is from the instructions for Schedule H:

Quote

Line 3d(2). Check this box if the plan has elected to defer attaching the IQPA’s opinion for the first of two (2) consecutive plan years, one of which is a short plan year of seven (7) months or fewer. The Form 5500 for the first of the two (2) years must be complete and accurate, with all required attachments, except for the IQPA’s report, including an attachment explaining why one of the two (2) plan years is of seven (7) or fewer months duration and stating that the annual report for the immediately following plan year will include a report of an IQPA with respect to the financial statements and accompanying schedules for both of the two (2) plan years. The Form 5500 for the second year must include: (a) financial schedules and statements for both plan years; (b) a report of an IQPA with respect to the financial schedules and statements for each of the two (2) plan years (regardless of the number of participants covered at the beginning of each plan year); and (c) a statement identifying any material differences between the unaudited financial information submitted with the first Form 5500 and the audited financial information submitted with the second Form 5500. See 29 CFR 2520.104-50.

I would advise checking with the auditor first and make sure they are on board before doing this.

[Bill Presson]

Yes, as long as the plan year is less than six months. I've seen it done a number of times and it should not be an issue.

[Bob the Swimmer]

YES, it's still 2 audits of the plan, but can be done in one visit which may save both sides time and money