MERS of Michigan achieves timely and cost-effective implementation of new GASB 68 standard.
- Complete and issue a SOC 1 Type 2 audit of its internal controls by February 2015 (the most cost-effective method) along with a separate opinion on the Schedule of Changes in Net Position by Employer as a whole, or
- Issue a direct opinion on each employer’s Schedule of Changes in Net Position; this would be a much more costly alternative.
Even prior to the release of the AICPA pension white papers, it was helping prepare MERS to respond quickly with the most cost-effective audit solution. After several discussions, MERS decided to proactively complete a SOC 1 Type 2 audit of the controls surrounding its defined benefit pension plan system in order for the participating municipalities and their auditors to be able to rely on the GASB 68 information provided by MERS and its actuaries. The audit report would identify the controls in place and report on the design and effectiveness of controls to provide reasonable assurance that contributions, net investment income, and benefit payments as reported by the organization are accurate.
In order to complete the SOC 1 audit by December 31, 2014, our engagement team performed a readiness assessment within a condensed time frame. This process resulted in the documentation of descriptions of the MERS defined benefit pension plan system. Once the system that was to be audited was documented, we identified the controls within that system and identified any gaps for MERS to remediate. Then, within a very short turnaround, we performed a SOC 1 Type II examination covering the period January 1, 2014, through December 31, 2014, that was issued in February 2015. We were able to draw upon our deep bench of government experts to assemble a team of specialists that was able to successfully complete the examination within the aggressive deadline.