Preparing For An Audit

The New York Compensation Insurance Rating Board (NYCIRB) requires an annual audit of any policyholder with an annual premium of $5,000 or more. Policyholders that receive a NYSIF audit notice may schedule or reschedule an audit by using our Premium Audit Scheduling System (PASS).

Your NYSIF policy (Part 4, Sections G and H) requires you to keep all business records related to your policy and allow NYSIF to examine these records, the contents of which remain confidential. Someone with knowledge of your business operations must be present at the audit to answer questions regarding duties of all employees and other issues that may arise.

Advise your auditor if the location of necessary records is different than the audit location on your notice.

NYSIF auditors determine:

  • The total amount of payroll subject to a premium charge
  • Applicable classification codes for your business and employees
  • Division of payroll for each classification
  • The accuracy of classification codes and other records to help achieve the lowest possible premium for your policy

Required Records

Please make a complete set of the following required records available:

  • Payroll records (showing totals and division of payroll by type of work performed)
  • Checkbook
  • Cash book (disbursements and receipts)
  • General ledger
  • Contracts (construction)
  • Tax returns including quarterly payroll taxes
  • Original certificates of insurance for covered subcontractors

Our auditor will determine the best records from the list above to use as a primary source to obtain gross payroll amounts. Payroll tax forms (941, NYS-45, NYS-45ATT, W-2 and W-3) are used to verify the payroll recorded in the primary records. In addition, the auditor examines the cash book, checkbook, daybook with cash expenses and general ledger to determine remuneration that is not reflected in payroll records. The auditor also uses forms 1120, 1065, 1040, 990, 1099 and 1096 to verify records used as the principal source.

The auditor may examine contracts, bills and invoices to determine and verify the nature of work done by the policyholder or its subcontractors. Premium charges for employees of uninsured subcontractors are the policyholder's responsibility. See Subcontractor Coverage for more information.

We encourage you to register for a NYSIF online customer account, where you can access previous audits, exit interview forms and audit worksheets.  More information can be found in our Audit Document Retrieval User Guide.

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