Church Plan

A Christian School sponsored 403(b) plan filed a 5500SF.  The plan has over 100 participants.  They indicated on the form they didn't purchase a fidelity bond. 
They have determined they are a 3121(w)(3)(a) organization and should not be covered by ERISA.  What measures can they take to stop filing 5500.  In addition, are they still required to perform an audit?

Amend the prior 5500 to indicate that it is a final return.  Include an attachment that says the plan is not covered by ERISA and no further filings will be made.  I had this situation before (about 4 years ago) and this is what the DOL told me to do.  We never had a problem with the DOL since.

Thanks for your take on this matter!

And no audit.  The audit is "caused" by filing a long form 5500.  No 5500; no audit.  I also agree with BenefitsPerson.  I have followed that procedure for Non-Electing Church plans which had filed 5500's for years before they hired us.  Filing a 5500 does not make a church plan an "electing" church plan.  I would be careful about whether a school (Christian or otherwise) qualifies as a "church" or QCCO.  We require that the organization furnish us a copy of whatever they have obtained from an attorney or whoever made this determination and we also make it clear to them that we did not and will not make such determinations.