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Employee BenefitPlan AuditsProtecting Your Assets and Financial IntegrityNovember 2016

SBC At-a-GlanceSBC was formed in 2005 as a regional certified accounting and business advisory firm tooffer services nationwide from our 6 east coast offices. Utilizing our leadership’s Big 4background and experience, we have built a well-disciplined and service-oriented firm toaudit and advise mid to larger-sized organizations seeking: Practical and creative solutions from diverse teams Partner attention throughout, not just in the 11th hour Business focus vs. a “check the box” mentality Reasonable fees – no “nickel and diming” Issues resolved efficiently and creatively Minority-owned Differentiation in the form of outstanding client serviceCommitment to DiversityWomen alsomake up over60% of thepartners,leadershipandprofessionalsTrack Record of QualityLeveraging prior partner experience, SBC follows “Big 4”standards of quality, client service, and development ofpeople to serve large, complex clients AICPA Quality Committee - Employee Benefit Plans Selected as AICPA Enhanced Peer Reviewer Ranked 6th nationally in firms that audit organizationswith the most Federal grant dollars Audit 8 of the top 500 employee benefit plans in the US First non Big-4 firm selected to successfully audit theState of Maryland and the DC Government Audit over 10 organizations with revenues 1 billion Perform non-financial statement services for several ofthe largest corporations in the worldNational Presence Offices along the East CoastServe clients throughout the US2

Representative Larger ClientsRepresentative ClientsType of WorkAggregate Industries, Inc.Financial Statement Audit (over 1b revenues)Baltimore CityFinancial Statement Audit (over 1b revenues)Brand USAAccounting/Compliance and Risk ConsultingCenter for Medicaid/Medicare (CMS)Insurance ReviewsDistrict of Columbia (DC)Financial Statement Audit (over 1b revenues)Hilton WorldwideAttest ComplianceHolcim US, Inc.Financial Statement Audit (over 1b revenues)Johns Hopkins Health SystemEmployee Benefit Plan AuditLafarge CorporationFinancial Statement Audit (over 1b revenues)Marriott InternationalEmployee Benefit Plan AuditMaryland State Retirement SystemEmployee Benefit Plan AuditMcCormickEmployee Benefit Plan AuditMillerCoorsEmployee Benefit Plan AuditPennsylvania State Teachers’ Retirement SystemEmployee Benefit Plan AuditPepco Holdings, LLCEmployee Benefit Plan AuditPrudential FinancialEmployee Benefit Plan AuditPrudential FoundationFinancial Statement AuditState of MarylandFinancial Statement Audit (over 1b revenues)University of MarylandFinancial Statement Audit (over 1b revenues)3

Diversity So What?Diversity is important in business for us, it’s not a “check thebox” exercise or even simply a strategic imperative; rather, SBCwas founded as a diverse firm from day one it’s in our DNA.People with different backgrounds bring new information, and ourinteractions force group members to prepare better, to anticipate alternativeviewpoints and to expect that reaching consensus will take effort. We workhard, and the outcomes are worth it.The Following Studies Have Shown a Positive Impact/BusinessSuccess of Diversity in Business: Forbes Study - identified workforce diversity and inclusion as akey driver of internal innovation and business growth. Lu Hong and Scott Page showed that groups of diverseproblem solvers can outperform groups of high-ability problemsolvers. McKinsey - companies with diverse executive boards enjoysignificantly higher earnings and returns on equity. Harvard Business School - multicultural networks promotecreativity. Catalyst Research – companies with more women on the boardstatistically outperform their peers over a long period of time.Our clients value delivery of technical quality and outstandingservice. Success for all of us is dependent on our teams’ energy,thoughtfulness and effective collaboration.The Importance ofSupplier DiversitySupplier diversity assists thecountry in job creation. U.S.statistics show that nearly50% of the U.S. workforce isemployed by small business.In December 2014, the U.S.Small BusinessAdministration reported 57consecutive months of newjobs added back to the U.S.workforce after the worstrecession in recent U.S.history. SBA Administrator,Maria Contreras-Sweetreports “ this new trajectoryis attributable to the successof America’s entrepreneursand the resurgence of ournation’s small businesses.About 7 million of the 10.9million jobs added back werecreated not by largecorporation, but by start upsand small enterprises.”4

Assurance, Risk, Tax andConsulting ServicesAssurance Financial statement audits Compliance audits Investigative/settlement Merger and acquisition Employee benefit plans Financial reporting Accounting/Audit Preparation Internal controls auditRisk Consulting IT risk and assurance Internal audit Process/controls Enterprise risk management Security/Cloud Consulting Infrastructure reviews Application reviews Data integrityQUALITY AT THE CORETax Compliance and Consulting Corporate compliance services Tax reduction strategies State and local tax strategies Emerging business strategies Tax outsource/co-source servicesBusiness Advisory/Consulting CFO services Business Process Improvement Process reviews Governance, Risk and Compliance Performance Improvement Cost Reduction Staff augmentationSBC is an independent member of the BDO Alliance USA, a nationwide association of independentlocally-owned and regional accounting, consulting and service firms with exemplary client service goals.5

Executive SummarySBC believes there are opportunities to help companies better manage riskand compliance with respect to their Employee Benefit Plans.CoreCompetencyClientsBullseyeApproachBig 4FoundationEmployee Benefit Plan Audits is a highly technical and complex industry, one that requiresdedicated resources and a deep understanding of the accounting and reporting issues andguidelines. Ten years ago, we recognized the opportunity to develop this practice as a corecompetency based on our experience as members of the AICPA Employee Benefit PlansQuality Center Executive Committees, as well as, leading the EBP audit practice at a Big 4(Arthur Andersen). One of our former partners now works for the Department of Labor(DOL) overseeing benefit plan quality.SBC audits over 150 benefit plans including 8 benefit plans in the Nation’s top 500.Our “Bullseye” delivery approach ensures we deliver Quality – as it relates to our Products,Client Relationship Management and Transfer of Knowledge, all necessary to help our clientsmake better decisions. Our partners spend significant time listening to understandexpectations so that together, we develop a plan to exceed them. We follow up with ourrigorous Exceed Client Expectations (ECE) process to measure and continuously improve.Our leadership team spent many years within the Big 4 (as did a number of our experiencedhires), so we follow a similar discipline - hire the best people; provide technical training andcontinuing education; teach soft skills (listening, problem solving); and adhere to strictquality control measures.We build one client at a time by providing services that best leverage our strengths inorder to sustain our track record and generate continued growth.6

SBC Employee Benefit Plan Audit LeadershipGraylin SmithManaging PartnerOver 35 years of experienceFormer Arthur Andersen andErnst & Young PartnerLed Andersen’s Mid-AtlanticEBP audit practiceScott SomervilleTax Advisory DirectorOver 35 years of experienceFormer Arthur Andersen andErnst & Young Partner andTax Division HeadChris LehmanPartnerOver 11 years of experienceSB & CompanyEnhanced Peer ReviewerBill SeymourPartner and EBP Practice LeaderOver 19 years of experienceFormer Arthur AndersenFormer AICPA EBP QualityCenter MemberEnhanced Peer ReviewerSheila EichelbergerTax PrincipalOver 18 years of experienceFormerPricewaterhouseCoopersSisilia MoPartnerOver 11 years of experienceSB & CompanyFormer DeloitteRick WilliamsIT Risk Management PrincipalOver 25 years of experienceTiana WynnSenior Audit ManagerOver 11 years of experienceFormer Ernst & YoungUzma Malik-DormanPartnerOver 20 years of experienceFormer KPMGChairs GWCPA EBPCommittee7

Retirement Plan Audits are MoreComplex, Requiring Technical Know-How The Department of Labor 2015 study of Retirement Plan Audit Qualityfound: 40% of the 81,000 employee benefit plan audits contained majordeficiencies representing 653 billion and 22 million plan participants Number of deficiencies show a direct correlation to the commitmentof the firm’s employee benefit practice Many general accounting practitioners do not have the adequateexperience or knowledge to perform sufficient audit proceduresWhat Can You Do to Minimize Risk?8

For One Hire the Right AuditorAs a quality auditor, we mitigate the risk of non-compliance and steep penalties,but assist with the implementation of processes that ensure controls are properlydesigned to minimize errors in plan operations. A quality audit by experiencedprofessionals, reviews the proper treatment of the following to ensure that thefinancial statements are complete and accurate. Value of plan assetsPlan obligationsContributionsBenefit paymentsParticipant accountsPlan’s tax statusProhibited transactionsAsset allocation strategyPlan provisions complianceActuarial assumptionsSBC audits over 150 defined benefit, health and welfare and contribution plans representing 128billion in plan assets annually. As part of these audits, we audit 5 billion in annual claims. These auditsinclude eight of the Top 500 benefit plans in the United States (ranked by Pension and Investments as of9/30/2014).9

SBC Knows Employee Benefit PlansKnowledge of the standards and extensive audit experience are critical, which the DOL hasfound to be lacking with a number of audit firms. SBC holds leadership positions within thisspecialized industry, maintaining its knowledge base and technical expertise anddemonstrating commitment through: Relationships with standard-setters at the American Institute of Certified Public Accountants(“AICPA”) and the U.S. Department of Labor (“DOL”) (former SBC partner now oversees DOLbenefit plan quality) Membership in the AICPA Employee Benefit Plan Audit Quality Center. (Two of our partnersare past members of its Executive Committee) SBC partner is a member of the newly-formed AICPA task force reviewing the financialreporting model for employee benefit plans in light of the DOL's 2015 audit quality study Firm personnel selected by AICPA as Enhanced Peer Reviewers of Employee Benefit PlanAudits SBC partner is the Chair of the Greater Washington Society of CPA Employee BenefitPlan Committee Periodic discussions with a key member of the Office of the Chief Accountant at DOL andleadership of the AICPA Employee Benefit Plan Expert Panel Attendthe AICPA EBP National Conference and events Teach courses of EBP regulations and reporting requirements SBC Partner, formerly the head of Andersen’s Mid-Atlantic EBP audit practice10