IFTA / IRP 2010 Annual Audit Workshop Breakout Session # 1 – Part 3

1. IFTA / IRP 2010 Annual Audit WorkshopBreakout Session # 1 – Part 3 • Distance – It’s a Long, Long Road; Records ! What Records ? • Drake Israel (IL) • Derrick Rumph (AR) • Gene Hall (VA)

2. A Registrant’s distance accounting system must consistently produce the information required by the Audit Procedures Manual as necessary to evaluate the accuracy of Vehicle movement and to substantiate the Registrant’s application for apportioned registration under the Plan. The Registrant’s source documents must contain sufficient detail that Vehicle movement may be traced. • The Registrant must maintain Operational Records that support the total In-Jurisdiction Distance and Total Distance traveled everywhere. Operational Records include source documents suitable for verification of Fleet distance as reported on the Registrant’s application for apportionment. 2

3. “Individual Vehicle Distance Record” Evaluating Vehicle Movement • An acceptable source document for verifying Fleet distance traveled is an “Individual Vehicle Distance Record” (IVDR). A standardized IVDR is suggested and encouraged, but not required. While it is desirable, the necessary information for a trip need not be contained on a single source document. IVDRs shall contain the following information: • (i) Date of trip (starting and ending); • (ii) Trip origin and destination; • (iii) Route of travel (may be waived by Base Jurisdiction); • (iv) Beginning and ending odometer or hubodometer reading of the trip (may be waived by Base Jurisdiction); • (v) Total Distance; • (vi) In-Jurisdiction Distance; and • (vii) Power Unit number or vehicle identification number. 3

4. The source documents must contain necessary details to trace vehicle movement. • IFTA and IRP require that the licensee/registrant have an acceptable distance recording system. This means that the carrier needs to account for all miles/kilometers traveled for each unit in these programs. • For IFTA, distance traveled shall be noted as taxable or non-taxable. • Both programs require similar documentation for each individual vehicle.Capturing this information either manually or electronically is acceptable.

5. WAIVER ovement • The IRP Audit Procedures Manual allows the Base Jurisdiction to waive either Route of travel or Beginning and ending odometer or hubodometer reading of the trip, but may not waive both items. • IFTA allows for both Routes of travel and Beginning and ending odometer or hubodometer to be waived.Ie documents must contain necessary details to trace vehicle movement. • Illinois I.R.P. Audit may waive either Odometer readings or Route of travel, but may not waive both items. The waiver must be approved prior to audit as would any alternative distance accounting system. • th programs require similar documentation for each individual vehicle.Capturing this information either manually or electronically is acceptable. 5

6. Also, a Base Jurisdiction may, in its discretion, require an IVDR to include additional information as follows: • (i) Fleet number; • (ii) Registrant’s name; • (iii) Trailer number; and • (iv) Driver’s signature and/or name. • Illinois additionally asks for the following: • Each page numbered of each IVDR for the month. • Month and year of IVDR report. • Monthly ending odometer reading of the vehicle. • Monthly beginning reading from the ending reading. • Vehicle description as shown on the IRP application. • Fleet number as shown on the IRP application. • Power plate number issued to the vehicle. • Identify trailer used in the trip. 6

7. IFTA P540 DISTANCE RECORDS: • .100 Licensees shall maintain detailed distance records which show operations on anindividual-vehicle basis. The operational records shall contain, but not be limitedto:.005 Taxable and non-taxable usage of fuel;.010 Distance traveled for taxable and non-taxable use; and.015 Distance recaps for each vehicle for each jurisdiction in which the vehicleoperated. 7

8. IFTA P540 DISTANCE RECORDS • .200 An acceptable distance accounting system is necessary to substantiate theinformation reported on the tax return filed quarterly or annually. A licensee'ssystem at a minimum, must include distance data on each individual vehicle foreach trip and be recapitulated in monthly fleet summaries. Supporting informationshould include: • .005 Date of trip (starting and ending);.010 Trip origin and destination;.015 Route of travel (may be waived by base jurisdiction); 8

9. IFTA P540 • .020 Beginning and ending odometer or hubodometer reading of the trip (maybe waived by base jurisdiction); • .025 Total trip miles/kilometers; • .030 Miles/kilometers by jurisdiction; • .035 Unit number or vehicle identification number; • .040 Vehicle fleet number; • .045 Registrant's name; and • .050 may include additional information at the discretion of the base jurisdiction 9