Plan Audit Fees Charged to the Plan?

I am trying to determine if the fees charged by the CPA firm to audit the large plan can be charged to participant accounts or taken from forfeitures.     

The plan document (SPD) says the following:  

The Plan will pay some or all Plan related expenses except for a limited category of expenses, known as "settlor expenses," which the law requires the employer to pay. Generally, settlor expenses relate to the design, establishment or termination of the Plan. See the Plan Administrator for more details. The expenses charged to the Plan may be charged pro rata to each Participant in relation to the size of each Participant's account balance or may be charged equally to each Participant. In addition, some types of expenses may be charged only to some Participants based upon their use of a Plan feature or receipt of a plan distribution. Finally, the Plan may charge expenses in a different manner as to Participants who have terminated employment with the Employer versus those Participants who remain employed with the Employer.
 

Is this an allowable administrative expense or a prohibited transaction?

Yes they can.  I've done it several times in the past.

concur - that is a fairly standard practice, especially for (very) large plans

Agree,  see this all the time.

Reasonable expenses.

So do you all see the fees taken pro-rata from participant accounts also?  Or just from forfeitures if available?

First, annual "audit expenses" required for the Form 5500 may be charged to the plan (I hate to be a stickler, but not *all* auditor's expenses fall into this category - for example, certain "project related" expenses not required for the Form 5500).  Second, you quote the SPD - which is fine - but it is *not* the plan document.  Make sure the plan document ITSELF provides that plan expenses may be charged to the plan (and how - "pro-rata", "per capita" or whatever).  If I had a nickel for every time the SPD was inconsistent with the actual plan document ... oh I regress.  Just make certain.

If plan-administration expenses are properly chargeable against the plan’s assets:

If an individual-account retirement plan’s documents provide for the allocation of expenses among participants’, beneficiaries’, and alternate payees’ accounts, those plan provisions are part of defining the benefit under the plan.

To the extent that a plan’s governing documents do not provide a specific allocation of expenses among individual accounts, the plan’s administrator must decide the expense allocation in its discretion.  ERISA provides general fiduciary principles, but does not provide express rules for how plan expenses may be allocated among participants and beneficiaries of an individual-account retirement plan.  Therefore, a plan’s administrator has considerable discretion to decide how plan expenses are allocated among individual accounts.  Obeying ERISA duties, a plan fiduciary must be prudent in selecting a method of allocation.  Prudence requires at least a process by which the fiduciary considers the competing interests of various classes of the plan’s participants and the effects of various allocation methods on those interests.

The Labor department’s internal guidance—EBSA Field Assistance Bulletin 2003-3—suggests “[a] per capita method of allocating expenses among individual accounts ([that is], expenses charged equally to each account, without regard to assets in the individual account) may also provide a reasonable method of allocating certain fixed administrative expenses of the plan, such as . . . auditing . . . and similar administrative expenses.”

https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2003-03

It’s not obvious whether “pro rata” or “per capita” is a fairer allocation of charges for an independent qualified public accountant’s fee.  I’ve had clients with reasoning for both views.