A U.S. Department of Labor audit may come as a shock to many employers. Knowing the audit process can better prepare your entity for an auditor’s unexpected visit.
The Office of the Inspector General usually provides a written announcement prior to the audit’s scheduled start date. However, advance notification may not be provided in some circumstances.
During the entrance conference, the auditor will introduce the audit team as well as provide management with information regarding the audit’s scope and objectives. This information will include the schedule for completion and the required records, information, and personnel for the investigation.
The Department of Labor audit team may interview staff, observe operations, and review documentation regarding the activity being investigated. During this time, auditors may collect pertinent background information, such as the mission, resources, responsibilities, and key accounting and programmatic systems within the entity.
KEEPING MANAGEMENT INFORMED:
From time to time, the audit team may inform management of their findings during the investigation. These findings will be communicated in the following ways:
Discussions/ Meetings – During meetings and discussions, the auditors take the time to explain the facts and circumstances surrounding the investigation.
Briefings – Formal briefings with management may be scheduled when serious issues arise in the investigation.
THE EXIT CONFERENCE:
At the end of the investigation, the audit team will conclude with a meeting with management to report the preliminary findings. The auditors will gather the management’s comments and recommendations before formally drafting the final report. The management’s input may clarify any misunderstandings in order to ensure an accurate representation of the results.
THE AUDIT REPORT:
The audit report will include the scope, objectives, and methodology of the investigation in addition to the description of the findings and corrective recommendations. Management will be presented with a draft of the final report, in which management may provide written commentary. After the specified time frame passes, the Department of Labor will draft the final report. The final report will include the management’s written comments as well as an explanation of any disagreement that the Department of Labor may have with management’s commentary. When it comes to audit reports, there are different types of audit management software that could help with making sure that audits are in order.
An audit recommendation will be closed when the agreed-upon corrective measure has been completed.
Stuart J. Oberman, Esq.
Stuart J. Oberman is the founder and President of Oberman Law Firm. Mr. Oberman graduated from Urbana University and received his law degree from John Marshall Law School. Mr. Oberman has been practicing law for over 28 years, and before going into private practice, Mr. Oberman was in-house counsel for a Fortune 500 Company.
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