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GASB 68 and Your Audit Process
Because your net pension liability appears on your balance sheet, your auditors will need assurance that the numbers related to your retirement plan are reliable. This is a shared responsibility between TCDRS and the employer.
TCDRS provides a Service Organization Control (or SOC 1) Report to help assure your auditors that financial reporting data is reliable. The SOC 1 Report:
Lists high-level business and IT objectives that support financial statement data.
Details the supporting controls that we have in place to mitigate operational risk.
Shows the results of our auditor’s tests of those controls.
Outlines the objectives employers are responsible for.
Your “employer controls” (called Complementary User Entity Controls in the SOC 1) are the processes you have in place to help ensure that the data in your financial statement regarding your TCDRS retirement plan is reliable. They complement TCDRS controls. Each employer control addresses some aspect of data access, data accuracy and data submission.
In addition to your employer controls, you are responsible for verifying that the data TCDRS publishes based on that data matches what you sent. Specifically, you need to review:
GASB 68 Report
SOC 1 Report
GASB Census Data
Your auditor is responsible for verifying:
Your GASB Census Data and how it relates to the GASB 68 Report
The adequacy of TCDRS’ SOC 1 Report
It is important to note that in some instances, you will not be able to directly compare the GASB Census Data to the GASB 68 Report or your internal records. For example:
The GASB 68 Report provides member deposit information for the current year while the GASB Census Data provides the total account balance for each member.
The GASB Census Data estimates annual salary for each of your employees based on member deposits for the year.
The GASB Census Data service includes periods of employment with other employers, including service with all TCDRS employers and certain other governmental entities in Texas.
The GASB 68 Report, your GASB Census Data and the TCDRS SOC 1 Report are available in May once you sign into the employer website. TCDRS will notify you when these important materials are posted online.
What you will need
Review a list of employer audit control objectives and the verifications you need to make: GASB 68 Employer Controls and Verifications
Be sure to talk to your auditor. Discuss the processes you have in place to ensure that:
Only the appropriate people have access to TCDRS plan data
Data you submit to TCDRS is accurate
Ask your auditor what documentation you need to assure them these controls are in place. Your auditor can help you identify gaps in your controls and you may want to develop additional processes to address them.
Learn how the TCDRS website can help you fulfill your audit responsibilities: TCDRS Website Tips
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Get more information on why TCDRS is a model plan when it comes to retirement.