Non-Exempt (Prohibited) Transactions & Financial Statement Disclosure

Has your 401(k) Plan recently been audited by the “Employee Benefits Security Administration” of the U.S. Department of Labor?  If yes, have they identified any Non-Exempt (prohibited) transactions? For detail on what constitutes a Non-Exempt (prohibited) transaction, please review “Instructions for Schedule G” Form 5500, Financial Transaction Schedules” of the Instructions for Form 5500 – …

Keep Reading

Independent Contractors – Who Should Be Reported on Form 990?

Part 7, Section B of the Form 990 asks you to list the organization’s five highest compensated independent contractors.  It sounds simple enough, but here are some questions that might come up: What do they mean exactly by independent contractors? Independent contractors provide SERVICES, not merchandise or goods. Would this only include those that the …

Keep Reading

Violations of Loan Covenants – What Does this Mean for my Audit?

It these tough economic times, it is much more common for not-for-profit organizations to have loan covenant violations.  When a loan covenant is not met (for example, a requirement to maintain a maximum debt to tangible net worth ratio), the consequences can be very negative to the entity’s financial statements.  Remember that violating a covenant …

Keep Reading

What Fees are being Charged for your 401(k) Investment Offerings?

If you have hired an investment consultant to assist your plan participants in choosing the funds offered in your 401(k) plan, you probably feel comfortable with your investment options, even more so if you periodically replace poor performing funds with funds that have more potential. These are good practices; however, the responsibility of the plan …

Keep Reading