DFVC filing for large plan

We were TPA for a plan that transitioned from small (5500-SF) to large (5500) in 2012.  We completed all work for the 5500 and were just waiting for the audit, which was never done.  After repeated follow-ups, we eventually resigned.  Periodic checking of the EFAST website confirmed that nothing was ever filed on the plan after the 5500-SF for 2011 which we handled.

Apparently due to a personnel change, the sponsor has become aware of the missed filings and contacted us.  If we bring them into compliance, it would involve a DFVC filing for 2012-2017 (6 years).  My question is, does the sponsor have to get 6 separate audits - one for each year - or can he get one comprehensive audit covering the entire 6 year period?

And if he can get one comprehensive audit, how does this work on EFAST?  Do we attach the same audit reports to each year's filing, or is there some way to override the missing audit and submit it only with the final 2017 report?

Due to the electronic filing nature of one year at a time, it would be most prudent to file the collective audit for all years to each filing.  However, if the audit can audit 'in mass', but provide individual year audit reports, that would be best.

Thank you CJ.  So from your response, am I correct in inferring that they can use one comprehensive audit covering the 6 year period?

While I would strongly encourage a separate report for each year, if the auditor provides only a comprehensive "package" report of all years, you deal with what you have.  I know the "short year" audit deferral rules allow the "short year" 5500 filing to include a statement that the following 5500 filing will include audit reporting for the "short year" as well as the next "full year" plan period.  However, that is a regulatory allowance; whereas, this situation seems to be quite a few "full year" periods where a statement may not necessarily be received/reviewed well by the EBSA.

I would disagree.  I know of no authority that would allow you to have anything done but 6 separate audits.  I doubt an auditor would do an audit that spans 6 years vs 6- 1 year audits. 

The client might be able to get the CPA firm to factor into the costs the fact they would only need to send their people into the field once and look at all 6 years at that time.  Although I doubt it would be a huge savings as there will be close to as much work as having done 6 audits over a 6 year span.  

But the way I understand the rules you need 6- 1 year audits.  They can be done at the same time but you need 6. 

I agree with you as having dealt with the Big 4 audit firms as well as other firms.  However, I've also been privy to many more small auditors who don't necessarily understand all of the requirements and do as they wish.  These tend to have very strong assertions, and don't take kindly to corrective responses.

Given that ERISA (29 USC 1032) requires an annual report with financial statement and opinion attached, I cannot conceive the DOL accepting a comprehensive audit covering six years in one fell swoop.  The auditor (per statute) would have to write a separate report and provide an opinion along with the required schedules for each annual period. 

They could package it all in one novella-sized book for you, but then you'd have to separate them before you could file.  And it's hard to see getting any discount.  More likely it will cost more to go travel back in time to 2012, 2013...

Ran into a similar issue but it was only two years needed.  Internally we determined that they needed separate audits (at least separate audit reports) which was agreed with by both outside ERISA Counsel and the independent auditors. 

I agree with ESOPGuy.  It is an ERISA requirement that there be an audit for each plan year.  You need a separate audit for each year. 

A word of caution about following the practices of smaller accounting firms as they are a focus for the DOL in trying to improve plan audit quality.

Worked for a Big 4 for 20 years and reviewed several hundred audits in that time span

---you will need 6 x 1-year audits as many here have said, no question.