QUESTION 1: Audit Staff questioned use
of a cash disbursement journal as a source document.
ANSWER: Sometimes especially in audit of
small employers this is the only source document
available. If in the Auditor's professional judgment
it is acceptable, then the RQC reviewer should
give the Auditor the benefit of the doubt.
February 1994
QUESTION 2: Does a narrative in the audit
report describing what the Auditor examined constitute
adequate "documentation" for RQC?
ANSWER: Yes. Documentation requirements
may be in the narrative of the audit report. Inclusion
of work papers and any other documentation that
supports the findings and conclusions of the audit
may take different forms ranging from check lists
to narratives, but must comply with the RQC/ESM
standards of RQC.
February 1994
QUESTION 3: In a "change audit" why
do we say "an audit that results in change
to wages or tax…" why is "tax" added
to the definition?
ANSWER: A change audit is by definition "An
audit resulting in the discovery of WAGES or TAXES
not previously reported or reported incorrectly
by the employer". RQC definition is consistent
with the ESM and the 581 requirements. Several
scenarios are possible that identify changes in
wages and/or taxes due:
- An audit change may occur in wages reported, but they are all in excess and no tax would be due.
- An audit change may occur in the tax due but the wages don't change. (This situation could result when the incorrect tax rate or taxable wage base is used in the calculation of taxes due.)
- An audit change may also occur when excess wages increase and taxable wages and taxes due decrease.
February 1994
QUESTION 4: Can blocked claims, delinquent
reports and status assignments that are converted
to "audits": 1. Be counted as audits
and included in ETA 581 reports and 2. Be included
in the audit universe for RQC?
ANSWER: Assignments issued to resolve report
and money delinquencies, blocked claims, and status
assignments should not be routinely converted
or expanded to audits. If circumstances indicate
problems or conditions not apparent when the assignment
was made, then expansion of the assignment to include
an audit may be warranted and should ensure the
four quarter minimum scope requirement is complied
with.
One fundamental factor in these cases is the status
of the entity being examined, at the time of the
contact. In general, if the entity is an established,
properly registered employer, any field Auditor
contact to bring the account current in any UI
aspect may be expanded to include an audit, if
conditions warrant under established State procedures.
The Auditor's report would reflect the initial
purpose for contact and the justification for conversion
to an audit.
If the audit meets the above circumstances, it should be counted as an "audit" for ETA 581 and be included in the RQC universe of audits.
May 1994
QUESTION 5: In cases where employers submit "no
wage" reports for 8 quarters and are ultimately
inactivated, the accounts are no longer part of
the universe from which field audits are drawn.
What vehicle is the SESA to use in determining
if the employer incorrectly decided the employees
were independent contractors or if the employer
really has no employees?
ANSWER: The individual SESA selects the
vehicle they use to investigate accounts to determine
if the employer has correctly or incorrectly decided
they have no employees. The SESA does not have
to wait for 8 quarters of "no wage" reports
to be filed before the account is referred for
such investigation. Also the SESAs set the parameters
for the field audit selection process and these
accounts could be included in the universe.
March 1995
QUESTION 6: N/A to Texas audit procedures.
QUESTION 7: N/A to Texas audit procedures.
