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11590 North Meridian St., Suite 600
Carmel, IN 46032 - 4529
Ph: 317.580.86.86 | Fax: 317.580.8699 | Email: tic@tici.com
Company Information
Payroll Auditing | Payroll Auditing-FAQ; | Audit Appointment Letter | Company Information


The following is a sample letter TIC uses to schedule appointments to perform payroll audits at employer locations.  A brief explanation of each section of the letter is shown in red print.

The Trustees of the above referenced Funds have authorized TIC to perform a payroll audit for the period _______ to date. The audit is required of all signatory contractors.

Federal law authorizes the Trustees to audit the payroll records of each contributing employer. In addition, contractors typically grant the Trustees the right to perform these audits as part of the collective bargaining agreement. If the collective bargaining agreement with the union does not explicitly address the issue of payroll audits, it makes reference to the "trust agreements" which contain the provisions for a payroll audit program.

So that this audit may be completed as swiftly and efficiently as possible, with as little inconvenience to you as possible, the following records will be needed:

1. Each employee's payroll records (regardless of craft or occupation), provided such records indicate the employee's social security number, occupation, straight time and overtime hours worked, rate of pay, gross pay, F.I.C.A. deduction, withholding tax deductions, any other deductions and net pay.

Although the audit is being performed for a specific trade or trades, part of the audit procedure is to verify the trade of each individual on the payroll. Accordingly, the auditor must have access to all payroll records, regardless of craft or occupation. When the auditor has determined the trade of each employee, the auditor will continue with the audit procedures and gather additional information (such as hours worked, wages and other information) for only those employees who performed covered work and for anyone whose trade classification is uncertain.

Payroll audits are done on a calendar year basis. Generally speaking, the auditor will bring a record of all contributions remitted on behalf of each individual for each calendar year. Thus, the ideal type of payroll records are individual payroll histories, which show each employee's wage, and hour history on one sheet of paper.

In any event, the total of each individual's annual wages must agree with the employee's W-2 statement for the year.

2. Copy of all W-2 forms and W-3 form filed for year.

This information is used to "tie out" the payroll and confirm that the payroll auditor has seen the payroll records for all employees. The W-3 form is a cover sheet and summary that employers are required to submit to the Federal government along with the W-2 forms.

3. Copy of all 1099 forms and 1096 form filed for each year, if any.

1099 forms are used as one means of helping the payroll auditor determine if there were any other individuals who performed covered work, who were not included on the payroll. The 1096 Form is similar in nature to the W-3 form, in that it is a summary of the 1099 statements issued.

4. Copy of the 941 form for the current year.

Since there is no W-2 or W-3 information available for the current year, this information is used to tie out the payroll for the period after December 31.

5. Contribution reports for all trades

Contribution reports are one method of helping the payroll auditor verify the trades of other employees and to verify the accuracy of the contributions remitted to the funds administered by TIC.

A payroll auditor will contact you to confirm an appointment to perform an audit. Please call as soon as possible to re-schedule if the date is not convenient.

TIC wants the auditing process to be as convenient as possible. We understand that the date selected for a payroll audit may not always be convenient. Schedules are usually flexible and the auditors will try to accommodate requests to reschedule an audit date. Audits must be scheduled to take place during normal business hours.

In addition to performing the audit, the auditor will be prepared to discuss any aspect of the Administration of the Fund.

The auditors are familiar with all aspects of the operations and policies of the various Funds. If the auditor cannot answer a question, resources are available to obtain the information needed.