AuditMiner is an online B2B SaaS tool that streamlines the employee benefit plan audit. In today's episode, Kim Moore, Summit CPA's Director of Auditing will be our host together with Karen Hill, Summit CPA Group's 401(k) Senior Auditor to interview our guest Kelly Mann, Co-Founder of AuditMiner to discuss how this tool benefits CPA firms conducting 401(k) audits.
Summit CPA Group has merged with Anders CPAs + Advisors! Visit our website to learn more about our 401(k) process and pricing: https://anderscpa.com/401k-audits/
"We listened to our customers. AuditMiner is so customer-lead. We don't develop a feature unless it's been requested by a customer and we get the customer feedback the whole time." Kelly Mann
The finer details in this episode:
Episode resources
Kim Moore: Good afternoon, everyone. This is Kim Moore with Summit CPA Group, and we are doing a podcast this month on our 401(k) audit CPA success show related to a tool that we use here at Summit CPA group we thought you would be interested in hearing about it. And we have a guest speaker today, Kelly Mann from AuditMiner. And we're going to talk a little bit about that tool and what it can do for you depending on if you're a plan sponsor or even if you're not, or this could be helpful to just about everybody. So welcome Kelly. We're glad to have you. We also have Karen Hill and auditor here at Summit CPA group. So, we're going to kind of go back and forth and talk a little bit about AuditMiner. Kelly, why don't we just start off? Can you tell us a little bit about AuditMiner What is it and how does it work?
Kelly Mann: AuditMiner is a tool that it's sold to CPA firms that do employee benefit plan audits. And the theory behind it is that it's streamlining the audit package for the auditor. And so, you know, it could be Fidelity, John Hancock, Voya, all of these financial institutions hold plan assets. But the auditor almost has to know 20 different languages in order to read the audit report for 20 different service providers. And so, what we do is we standardize them. And so, what the auditor gets out of AuditMiner is an audit package that looks exactly the same, no matter which financial institution the audit package came from. Then we take it one step further and we select samples for testing. We also develop audit testing workpapers with procedures, for them to consider performing. And so, they can just kind of take it and run instead of having done all the manipulation and massage.
Kim Moore: How long has the company been around?
Kelly Mann: Well, AuditMiner was founded, this is a really funny date for anyone that's a CPA, AuditMiner was founded on October 14th, 2019. That's when the company was founded. A lot of life happened including me getting a stage three breast cancer, diagnosis. It took us a while to actually get the product out there because as you can imagine, life was a little crazy having cancer during a pandemic with three little kids. So, it took a while to get the product out there. The actual AuditMiner product was released in the wild in April of 2020. So, we're about nine months old product. And when we started, when we released the product in April, we standardized audit packages across all of the service pay writers. So, when we released it, it really was a prototype. Getting it out there in the market, seeing if this was something that was going to be valuable to CPAs. I thought it was going to be, I'm a CPA myself, but you never really know. And so, we've released it with just Empower. And we got really good early adoption rates in April and May, and they were all like, we want more service providers on board. And so, after Empower, we brought on Fidelity and then we had great success with Fidelity. And so, then we brought on Voya and over the last nine months we have brought on 13 service providers onto the platform, and we continue to bring on new ones.
Kim Moore: So, if someone had an idea for a service provider, they'd like you to work on would you take that on?
Kelly Mann: Yeah. So that's actually how we figure out what service provider to do next. We listen to our customers. We don't develop a feature unless it's been requested by a customer, and we get the customer feedback the whole time. And so, we have a number of customers that say, oh, we have five CUNA mutual, 4 0 3 B plans coming up. Is that on your platform? And if not, is it something you could put together? And we say, sure, we can put it together. So, we kind of reach out to some customers, see what the interest is in the CUNA mutual, and then we work with our customer to develop it and bring it on board. It usually takes about two to three weeks to bring up.
Kim Moore: Yeah. That's not bad at all. That's pretty quick.
Kelly Mann: I mean, there's definitely a lot of work going on in the backend. It doesn't magically appear, right? But we kind of have the processes down now we've done so many to make it pretty quick. So, the new service providers that come on board are a direct result.
Kim Moore: So, if I'm somebody who's heard about this for the first time and I'm thinking what would be the benefits to me in using AuditMiner?
Kelly Mann: Yeah. So, we actually see benefits in two different structures. It depends. I'm going to say small firms that only do a few and large firms that do three to four. There are two kinds of different buckets there. So, if a CPA firm is doing, I would say 10 or less, they're really going to find the benefit from the standardization. And then the fact that we put procedures in there for you to complete. And so, you might not be an expert in the employee benefit plan world because the AuditMiner tools that you're getting already have procedures that should be performed on it. It kind of helps you out being comfortable in doing the right thing. The firm's out on the higher end. I would say like 50 or more plans. I mean, we have customers that process anywhere from one plan up to 500. And so, if you're on the higher end, you probably have your own templates that you're using and the AuditMiner templates might not be advantageous for you. So, what they're actually getting is us standardizing and streamlining that data. So, they no longer have to teach their staff where to go on the website and what the reports look like for this service provider versus this service provider and where you find stuff in this report. So AuditMiner is really standardizing all of that and it takes out the time that is required to train the staff and then for the staff to kind of figure it out each time. So, they're really purchasing the data manipulation.
Kim Moore: Can you tell us a bit about which areas in AuditMiner can help with?
Kelly Mann: Yeah. So, when I think about a benefit plan audit, I think about it in three buckets. So, we have the planning, right? And all of the audit programs, we have the record keeper. So, the financial institution let's say in power, and then we have payroll ADP, Paychex, Paylocity and so right now, AuditMiner is working in the financial service side, the financial institution and so AuditMiner can help you with things like we do income allocation testing. We get that all populated from distribution testing. It does loans. It does contribution timeliness actually and then just to help with the schedule of assets, you know, it has all the assets that are listed, and the dollar amounts and a concentration analysis. So, it's really standardizing the financial service side today in the future though, we want to also get into the payroll side. And so, kind of doing the same thing on the payroll side with getting the CPA. Then being able to create eligibility testing and do contribution testing and contribution allocation testing, and kind of matching up between the financial service institution and the payroll. Now, the planning and the audit packages, the wrap up all of that is being done by other industry technology. So Auburn Year, Mind Bridge CCH, Advanced Flow, they're doing a really great job of getting the audit programs, the methodology, the file documentation structure. So, we want to be complimentary to that, and cpa.com has our OnPoint EBP. So, plug and play. It works with no matter where you’re holding your audit documentation, you can use AuditMiner.
Kim Moore: That makes sense to me because that's planning and some of the risk assessment, and that can be very standardized to the individual audit firm. So, to have your company doing that would be tough I would think.
Kelly Mann: Yeah, and you know, that's a really big project and people are doing a good job of that already. So, I would love it to where AuditMiner is engrained in those and when you run it through AuditMiner it pulls all of the data and automatically puts it into your audit file package already. So, you don't even have to drag and drop it into case.
Kim Moore: That'd be great. We like that.
Kelly Mann: Yeah. I mean, the company's only nine months old, so we still have to make these connections and strategize with different partners. We're at the very cusp of that.
Kim Moore: You mentioned a little bit about the payroll part. How far along are you with that?
Kelly Mann: So, we have started on the service provider on the financial institution side. And now that we've kind of got our hands around that we know that people want it. A lot of our customers are like, oh, when can we get payroll? We would love payroll. And so now my job this year is going to be start reaching out to those payroll companies and establishing connections, figuring out how we can work with them to benefit both of us and the end user, which is going to be the CPA. And then also the 401k plan. We hope that all of these improvements by the firms using AuditMiner will be able to be cost savings passed along to the plan itself. We're probably not there right now, but yeah, soon coming.
Kim Moore: I could even see the plan sponsor utilizing it to help double check on their end to make sure that everything's working the way that it's supposed to. Maybe even ahead of the audit, if you could get to that point, you know, and then potentially you give the auditor your package. That would be wonderful.
Kelly Mann: Yeah. It really just depends because if the auditor controls the software, they can place a little bit more reliance on those results than if it's the plan sponsor that's running the software through and providing it. And so, it's really just where is the market heading and listening to the market and then pivoting or making adjustments to our business plan based on what we're seeing. So that's definitely out of the picture.
Kim Moore: Yeah. You might have two different offerings too. I mean you might have the one for the CPA firms for you to use it. Then there's one for a plan sponsor. They wanted to do it ahead of time rather than maybe if they ran it ahead of time, the CPA firm give them a discount or something. Who knows how that would work? I could see a ton of value on that side. So, it’s just a plug for Summit. If you want somebody to give you some ideas, we'd be happy to help you with that.
Kelly Mann: Oh, we listened. We listened to you guys. We've had multiple meetings with you, and we love this partnership we have. We definitely have some, I would call, we call them AuditMiner champions, and you're definitely in that group, but a list of firms that love sharing their feeds in helping us with product development and telling us what they want, because at the end of the day, they're the ones that have the problem to solve and they get a real benefit by informing the way that we are producing our products. Well, that leads
Kim Moore: Well that leads me to time savings. You mentioned a little bit about standardization, and I know on our end that's one of the big values that we see is that the providers you have available the more of our total bucket of audits that we do in a year. Just for our listeners in case you haven't listened to me on one of our podcasts, we're kind of a niche provider. This is what we do, and this is our specialty. So, you know, we would use this tool on every audit, if we could, if it covered all of the providers. Obviously, the more providers the more standardized all of those pieces you talked about would be on our end. So that's a real value. But how about time savings? Are you hearing feedback from customers about saving time using the product?
Kelly: Yeah, I would say today when we talk to new customer or prospects, I would say we're finding that we have about 60% of their employee benefit plan practice and 60% of the service providers of the plan’s user on AuditMiner right now. So, we were over that 50% now, which is great. And the most common feedback that we get is that it saves a CPA firm anywhere from 10 to 20 hours per audit. The larger the audit the more time savings. Obviously, if you have a plan with 13,000 participants, you're going to be saving a lot more time than if you have a plan with 125. So, if your CPA firm already has templates, they have this process down because they do 200 a year. Those might even be more on the 5 to 10 hours savings. But the majority of our customers, the feedback is 10 to 20 and that takes into consideration direct time. And also, the indirect time of training.
Kim Moore: I think the training thing is a big factor, especially for firms that don't do a lot of these audits and probably have a lot of turnovers at the staff level.
Kelly Mann: Yeah, exactly, and we find there are quite a few firms that have one person that process all their principal plans and one person that process all the John Hancock and one person that processes all the empower. And what happens with that empower person, there's nobody there that knows how to pick up the empower piece. And so, they really love this because they no longer have all of their empower eggs in one basket. That no longer is something that keeps them up at night if that person leaves.
Kim Moore: That's a good idea. It's a real value add to know where to go on the website, to get things which reports some of those systems. They'll give you a thousand reports and you've got to try and pick and choose, you've never used it before you spend half your time trying to figure out where's this piece of data and how you should run it. That's a benefit of AuditMiner for those folks that have never experienced it. The automotive folks give you some very good instructions. I mean it's literally step by step, go into the system, go to this page, pull this report. We need you to run it this way, save it this way. I mean very specific instructions. And then if you're able to do that, then you know, they can just pull it right in the tool. Literally, I know we've gotten our feedback back from the system. I mean, it's sometimes not even five minutes. it's really quick.
Kelly Mann: Yeah. We promise a one business day turnaround. So, once you give us your files out of empower, we guarantee a one-day business turnaround, and you'll get them the next day. And that's because we're humans and we have to run it through the program, and we might be at a doctor's office or volunteering at your child's Valentine’s Day party. But if we're at the desk and we're working and it comes in, you might get it back in 20 minutes. The nice thing is that it's very intuitive. So, you don't have to download software. You don't have to learn software. It's really just, you provide a support. So there really is no training that or onboarding that is required for the software. And that's always going to be my goal. I know how hard it is to learn new software because CPAs are so busy.
Kim Moore: There's always something new So how do you make AuditMiner very easy for the CPA? I mean, that's been our experience. It’s really easy to use and the instructions are really great. Do you guys do anything on your end to double check as it's running through the tool to make sure that you're giving valid information?
Kelly Mann: Yep. So, every plan that we run through goes through a QC check if you will. Um, so Empower was the one we released first, and we've processed the most Empower plans. And so, there were only a couple items that we check in each plan. And if those two items match, we know the rest is good. And then for the newer ones, so CUNA mutual was one that we just released this fall. We will check like maybe five to six different data points within a plan to make sure that all of those. And then eventually we don't have any issues with CUNA mutual. We'll just go to just check the two data points again. And so, the more comfortable we are with the program for a certain service provider the less of a QC check we do.
Kim Moore: Well, that's good to know because we just want to get the data and use it. We don't want to have to go through that check process ourselves.
Kelly Mann: Yeah. I mean you still have to be able to tie it out to the certified statement and make sure to grease your balance, right? Like you still have to have your professional skepticism as a CPA, but we do the best on our end to make sure that it's all going to work out. Once you put it through the ringer on your side you don't have to worry about it.
Kim Moore: If I were to start using AuditMiner and I have trouble, how does that work? What's your customer support like?
Kelly Mann: Well, we're a relatively small team. So were a team of seven people right now, which is really big compared to where we were when we issued or released. We've really grown from like three to seven. Customers correspond with processing. So, if you ever have an issue, have a question, we just say send it to processing and we'll make sure to get it taken care of. We don't have a line that you call for support. We don't have any of that established yet. We are only nine months old, but because we're a small team and we know the software inside and out right now, we're just, we're very readily available. And we pick up the phone and call you if we want more information or we want to get more feedback, or we just want to make sure we understand what your needs are
Kim More: Yeah, we have had to reach out for exports.
Kelly Mann: Yeah, AuditMiner will consume certain files and if we have the choice between a CSV and Excel files to consume, we're going to pick that CSV because a CSV is more secure than an Excel file because you can't embed anything. There can't be room for anything to get into the CSV. So, it's just naturally more of a secure file. When there's a choice to export it to Excel or CSV us auditors are like, oh, Excel, you know, Excel is our favorite thing in the world. And so, we just gravitate toward that naturally. And so, it's telling our customers, the software will throw a tantrum if you don't follow the instructions. But that is why there are step-by-step details to make it as easy as possible. My background, I've been auditing 401k plans since 2008. So, the way we've structured it really takes out auditor mentality of what would make my job easier personally, and we try to incorporate that. So, the next thing that we're working to adding to our product is a trial balance feature. And we hope to have that out around March - April timeframe, but every plan that you went through you get some sort of trial balance feature to help you reconcile to the participant activity tale and the trust statement.
Kim Moore: Are you doing something with SOC reports?
Kelly Mann: Yes, it's becoming quickly our most popular product right now. I think we had seven SOC report requests last week. So, it's really a service, any SOC report that you get. For our service providers, and it could be a payroll, it could be a trust company. It could be a record keeper. Doesn't have to be on the online platform. Any SOC report we will take it and we will produce an Excel file that's open so you can copy and paste, but it talks about the general information about the SOC one, the date who did it, if that firm is known or not, if it's a type one or type two, we address all of the carve-outs. And if you should do more procedures based on the carve out, and then we analyze all of the control objectives and put them in Excel and indicate if there are deviations to them and what those deviations are and how management address them. And then if it's a control objective that the typical CPA firm could use to reduce their testing, we put a control reliance approach on it. And then for the complimentary user entity controls, all of them are filled out. It indicates what control objective they pertain to. It has an example for procedures you could do for every single one of them. So, you no longer have to use your brain to figure out, what can I do? I do address this walkthrough. It's in there for. And then if it's a control reliance approach and that control objective is being used to reduce your audit testing, we go further and say, this is how you could do a test of control on it. And then there's a conclusion tab that will tell you where you can reduce your testing and your audit. It doesn't tell you how you can reduce your testing. That's still up to your methodology. Um, but we could say you could rely on this to reduce testing. Contribution allocation or there is a control objective 5.3 that addresses the allocation of income to participants. So, you can reduce your testing over income allocation testing at the participant level. And so that product, that product costs $250 per sock. One that we analyze. That turned around as a little bit longer. It could take up to a week if we have an analyzed that specific SOC report before. But I think we have like 10 of them now that we've analyzed. And so, you say hey, I would like the SOC report for the Empower mass mutual platform and we email you back and say great, here it is, and let me send you an invoice for today because
Kim Moore: The good thing about the SOC reports, for anybody that does EVP audits, if you're doing Voya, it's not like there's 25 different Voya SOC reports. There’s one. So, you're going to get this data once and then you can use it ongoing.
Kelly Mann: Yeah, and what we have, you know, part of the reason we have Audit Minor is to improve the quality. Everyone's talking about deficient audits in the EVP room. Well, what can we do with technology to increase the quality standard in this industry? And we find that in peer reviews, most firms get dinged on the SOC report because they don't have it in the file. And if they do, they didn't read it. And if they did read it, maybe they didn't do walkthroughs on every single user control. And maybe they're using it to reduce their testing, but they didn't do tests of controls over. And so, using this tool makes sure that you hit those bare minimum requirements for the SOC report.
Kim Moore: So, let's stick with the SOC report and then we'll go back to the regular AuditMiner. So, $250 per SOC report, if I just got ADP's SOC report and I want you to take a look at it, what do I do?
Kelly Mann: Yeah. So, you can go to our website and reach out to us and say, I would like to get the ADP SOC, or you can give us a call and we'll get it worked out with you. So, the fun thing about being a startup like we are, is we get this great idea. We test it, and we're lucky enough that it just takes off. And now it's like, okay, what can we do internally to streamline this? So, we are internally working on making like a shopping cart for the SOC. So, you could go to our website, drill down to the year that you want and then you can see all of the service providers that we have an analysis for. And you could buy several at once, and then you'll get an email with a zip file of all your SOC reports in there, and it will charge your credit card. So, it makes it easy like that. And then if it's not in the shopping cart, we hope to have an option to say, you know, I didn't see it. I would request a new one and then you would upload the PDF to the website, and it would come to us. We would get it taken care of and then get it back to you within a week. So that's where we're going internally to streamline this as quickly as we can because it's just kind of taken off, which is wonderful. So yeah, we just ask our customers, you know, it might seem a little messy at first because we're new and because we're figuring it all. But our number one goal is making it easy for you.
Kim Moore: Oh, that's great. We're definitely going to be taken advantage of that. They're very important and they serve a very important role, but they're a pain in the butt to do. The other thing that some people think about but a lot of them don't is how much our staff hate to do them. And so, you give them a SOC report and maybe it is going to be cheaper for you to do it internally. But you also have to think about the quality. These people are copying and pasting and that's not what they want to be doing. They're not using their brain. So, allowing AuditMiner to do all the monkeying is the better option. So, if I switch over to the regular AuditMiner, how does that work pricewise?
Kelly Mann: Yeah. So effective January 1st, this year of 2020 the base price is $500 per audit that you won't run through the platform. So, you don't pay up front for a bulk of them. You don't have to purchase 10 at a time. There's not a subscription fee. If you run an audit through, we will then invoice you for that audit. So, the base price is $500, but the more audits to run through the cheaper they become. So, after your first 10 audits, you start getting a 5% discount on your next 15, and then you get a 10% discount on your next one. And so, you keep running them through. And once you get to running 500 audits through the rest of them you get at 25%. We decided to do the economies of scale and internally make the process easier on us. And we get a lot of questions. Well, what about my 4 0 3 B plan that has three different? Or I have a plan that started with Empower and then they moved their money to another service provider at the end of the year, so we had a change in TPS. You might not want to pay $1,500 to run it through for three different platforms, right? So, we came up with the first platform or the first TPA per plan is the base price of $500 or wherever you are in this sliding scale at the time the second plan or the second provider is half off. So, it's kind of like for one plan, it's buy one, get one. Or get half off. We really want our customers to have a return on their investment. CPA technology gets so expensive and it's like, does it really have to be that expensive? I'm quickly finding out that yeah, technology is expensive to build, you know, but if you can't get a return on your investment, it's not worth it.
Kim Moore: Yeah. So, we are just about running out of time. Kelly, we want to make sure you give out your information so people can get ahold of you, but is there anything else that you wanted to share about the tool or the process?
Kelly Mann: Just that you know, we're constantly in the background here thinking about how we can make it better and what we're going to do. The tool we have out right now really is our prototype. It was the first release. So, I feel like we're just at the tip of the iceberg. And so, coming in future years, you're just going to see it really start expanding. And so don't think that what we're doing now is the end all be all. It's just the beginning. As for getting a hold of us, you can always go to auditminer.com. You can fill out the contact me information form there. You can book a demo directly through auditminer.com. I am on LinkedIn Kelly Mann. I post a lot about our journey on LinkedIn. So, it's kind of a behind the scenes. I'm very transparent and open about what I am posting and the progress that we're making. And then you can always email me kellymann@auditminer.com. And then if you wanted to see what record-keepers that we have integrated into our platform, you can always go to auditminor.com/construct. And that lists out all of the recordkeepers on our platform and you can see the directions on exactly how to get the reports that you need.
Kim Moore: Good thing for people to check out if they're not quite sure, they can look at the instructions and see, do I understand this stuff that I know I have access to? And just so everybody on the call knows it's AuditMiner because I'm always spelling it wrong when I'm trying to get ahold of Kelly. I don't know what I'm doing, but I always spell the minor wrong. So, Kelly thank you so much for sharing your time with us today. If there’s anybody on the podcast that has any question about Summit and how we use AuditMiner you can reach out to me directly a kmoore@summitcpa.net. Feel free to email me and I'd be happy to share our experiences, or if you just have any questions about Summit CPA, don't hesitate to reach out. We'd be happy to help. So, thanks again Kelly and Karen.