AUDIT REPORTS

1. AUDIT REPORTS 12th Annual IFTA and IRP Audit Workshop San Antonio, TX February 2-4, 2010

2. PRESENTORS • Charmin Tillman (MS) • Gerald Jackson (WY) • Dan Young (MT)

3. ARE REPORTS GETTING TO BE A BURDEN?

4. RUNNING OUT OF GAS AND NEED SOME INSPIRATION?

5. WE WANT TO GIVE YOU SOME CONCRETE IDEAS!

6. Licensee/Registrant Audit Report

7. Licensee/Registrant Audit ReportWHAT IS TIPICALLY SENT TO AUDITEE? • Audit Narrative? IFTA IRP • Document Summary? IFTA IRP • Workpapers? IFTA IRP • Who sends Interjurisdictional Audit Report as Licensee/Registrant Audit Report? IFTA IRP

8. Licensee/Registrant Audit ReportHEADER INFORMATION REQUIRED • Name and address. IFTA IRP • Account number. IFTA IRP • Fleet number. N/A IRP • Audit period. IFTA IRP • Signature of auditor or reviewer and date. IFTA IRP (Name only required for IRP)

9. Licensee/Registrant Audit ReportDISTANCE EXAMINATION REQUIRED ITEMS • Types of records audited. IFTA IRP • Description of audit techniques employed. IFTA IRP • Net distance adjustment. IFTA N/A • Audited and reported distance. N/A IRP (Not normally in the narrative part of the audit report, but included with the final workpaper summaries.)

10. Licensee/Registrant Audit Report FUEL EXAMINATION REQUIRED ITEMS • Types of records audited. IFTA N/A • Description of audit techniques employed. IFTA N/A • Net tax paid fuel purchases adjustment. IFTA N/A • Net fuel tax adjustment per jurisdiction. IFTA N/A (Not normally in the narrative part of the audit report, but included with the final workpaper summaries.)

11. Licensee/Registrant Audit Report MPG EXAMINATION REQUIRED ITEMS • MPG/KPL as reported. IFTA N/A • MPG/KPL as result of audit. IFTA N/A

12. Licensee/Registrant Audit Report FEE EXAMINATION REQUIRED ITEMS • Amount of percentage factor change. N/A IRP • Net fees due per jurisdiction. N/A IRP (Not normally in the narrative part of the audit report, but included with the final workpaper summaries.) • Identify vehicles assessed full plate fees. N/A IRP

13. Licensee/Registrant Audit ReportCLOSING CONFERENCE AND RECOMMENDATIONS • Remarks andrecommendations. IFTA IRP

14. Interjurisdictional Audit Report

15. Interjurisdictional Audit ReportWHAT IS TIPICALLY TRANSMITTED? • Audit Narrative. IFTA IRP • Document Summary. IFTA IRP • Final Workpaper Summary. IFTA IRP

16. Interjurisdictional Audit ReportHEADER INFORMATION REQUIRED • Name of base jurisdiction. IFTA IRP • Name and address of licensee/registrant. IFTA IRP • FEIN or equivalent. IFTA IRP

17. Interjurisdictional Audit ReportHEADER INFORMATION REQUIRED cont. • Registration years audited. N/A IRP • Number of vehicles apportioned. N/A IRP • Date report was issued and auditor’s name. N/A IRP

18. Interjurisdictional Audit ReportDISTANCE EXAMINATION REQUIRED ITEMS • Reported distance, percentage and fees by jurisdiction. N/A IRP • Audited distance, percentage and fees by jurisdiction. N/A IRP (Not normally in the narrative part of the audit report, but included with the final workpaper summaries.)

19. Interjurisdictional Audit ReportDISTANCE EXAMINATION REQUIRED ITEMS • Brief narrative of audit procedures, findings, any additional information. N/A IRP • Statement on adequacy/inadequacy of distance accounting. N/A IRP

20. Interjurisdictional Audit ReportFUEL EXAMINATION REQUIRED ITEMS • Reported tax by jurisdiction. IFTA N/A • Audited tax by jurisdiction. IFTA N/A (Not normally in the narrative part of the audit report, but included with the final workpaper summaries.)

21. Interjurisdictional Audit Report REQUIRED SUMMARY ITEMS • Penalty IFTA N/A • Interest by jurisdiction IFTA N/A • Total by jurisdiction IFTA N/A (IRP interest only for base jurisdiction and only net fees are communicated by jurisdiction by application year)

22. Additional Requirements Documenting the following requirements in the Audit Reports may satisfy the Compliance/Peer Review teams.

23. Additional RequirementsTAXPAYER INFORMATION • Document previous audits of registrant. N/A IRP • Conduct review of applications under audit noting trends and drawing conclusions. Document in audit file. N/A IRP

24. Additional RequirementsPRE-AUDIT CONTACT AND OPENING CONFERENCE • All pre-audit contact was confirmed in writing. IFTA IRP • Document licensee/registrant was contacted in writing at least 30 days prior to audit. IFTA IRP • Opening conference documented. IFTA IRP

25. Additional RequirementsSAMPLING METHODOLOGY • Licensee/registrant allowed input into sample selection if reason . IFTA IRP • Sampling and extrapolation procedures documented IFTA IRP • Sample was representative of operations. IFTA IRP • Sample must consist of at least three representative months. IFTA IRP

26. Additional RequirementsREVIEW OF INTERNAL CONTROLS • Review the licensee’s/registrant’s accounting system. IFTA IRP • Identify potential weaknesses in accounting system. N/A IRP • Document tests of internal controls. N/A IRP • Communicate and document weaknesses to registrant. N/A IRP

27. Additional RequirementsREVIEW OF INTERNAL CONTROLScont. • Identify records used to support returns/applications IFTA IRP • Document any changes in accounting procedures or operations during audit period. IFTA IRP

28. Additional RequirementsAUDIT DOCUMENTATION • Results of audit clearly communicated. IFTA IRP • Audit procedures documented and justified. IFTA IRP • Source of audit results documented. IFTA IRP • Documentation clearly supports audit findings. IFTA IRP

29. Additional RequirementsAUDIT DOCUMENTATION cont. • List records maintained and presented by licensee (IRP) and state whether records comply with IFTA agreement. IFTA IRP • Document if a BIA audit. IFTA IRP

30. Additional RequirementsDISTANCE EXAMINATION • Document any discrepancy between summary and application distance. N/A IRP • Provide statement on adequacy/inadequacy of distance accounting system. IFTA IRP

31. Additional RequirementsOPENING AND CLOSING CONFERENCE • Auditor conducted an opening conference with licensee/registrant. IFTA IRP • Auditor conducted an closing conference with licensee/registrant. IFTA IRP • Synopsis of opening and closing conference notes along with attendees. IFTA IRP