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Auditor 101 BreakoutWayne Brown – MEJoel Foreman - NEWelcome Participate Have fun!1
What we’ll cover today Acronyms in the business Department of Transportation (DOT)versus IFTA/IRP Auditor 101 Synopsis Q&A discussionQuiz Time! Acronyms AAMVA - American Association of MotorVehicle Administrators ATA- American Trucking Associations CCMTA - Canadian Council of MotorTransport Administrators CDL- Commercial Driver's License CMV- Commercial Motor Vehicle CNG- Compressed Natural Gas DOT- Department of Transportation ELD- Electronic Logging Device2
Acronyms (cont’d) EOBR - Electronic On-Board RecorderFHWA - Federal Highway AdministrationFMCSA - Federal Motor Carrier Safety Admin.GPS- Global Positioning SystemGVW- Gross Vehicle WeightHAZMAT - Hazardous MaterialHOS- Hours-Of-ServiceHVUT - Heavy Vehicle Use TaxAcronyms (cont’d) IVDRKPLLNGLPRMPGNTSBSAFER- Individual Vehicle Distance Record- Kilometers per Liter- Liquified Natural Gas- License Plate Reader- Miles per Gallon- National Transportation Safety Board- Safety and Fitness ElectronicRecords System3
Acronyms (cont’d) UCR- Unified Carrier Registration USDOT - United States Department ofTransportation VIN- Vehicle Identification Number WIM- Weigh-in-MotionIf there was an acronym that described you, whatwould it be?DOT/ELD vs. IFTA/IRP What are the key differences betweenDOT records (ELD/Drivers’ Logs) andIFTA/IRP record keeping requirements?– Qualifying vehicles– Record keeping responsibility– Record retention– Fuel data– Reporting requirements4
DOT vs. IRP vs. IFTAWhat is a “qualified vehicle” according toDOT? A commercial motor vehicle Engaged in interstate commerce GVW or combined GVW 10,000 poundsDOT vs. IRP vs. IFTAA commercial motor vehicle is a “qualifiedvehicle” according to IFTA with:– 2 axles and a GVW or registered GVW 26,000 lbs / 11,797 kgs OR– 3 or more axles (axles apply to powerunit), regardless of weight OR– A combination (truck / trailer) where theweight is 26,000 lbs / 11,797 kgs5
DOT vs. IRP vs. IFTAA commercial motor vehicle is a “qualifiedvehicle” according to IRP if it is a power unitthat is used, or “intended for use”, in 2 ormore jurisdictions with:– 2 axles and a GVW or registered GVW 26,000 lbs / 11,797 kgs OR– 3 or more axles regardless of weight OR– A combination (truck / trailer) where theweight is 26,000 lbs / 11,797 kgsRecord keeping responsibilityDOT/ELDIndividual DriverIFTA and IRPVehicles and fleetRecord retentionDOT/ELD6 monthsIFTA4 yearsIRPUp to 6.5 yearsFuel documentationDOT/ELDPart of supportingdocumentationIFTARequired records forIFTA returnsIRPNot required6
Reporting requirementsAuditor 101 Synopsis What is IFTA and IRP? Differences and similarities Why do we – Audit– Evaluate Internal Controls– Sample– Project– Issue Inadequate Records Assessments7
What is IFTA and IRP? IFTA IRP– Licensee– Fuel tax– Distance/Fuel/MPG/KPL– Quarterly tax returns– Registrant– Registration fees– Distance Percentages– Annual reportingperiodIFTA and IRP Differences IFTA– Audit count is stratified– 1 fleet/licensee IRP– Multiple license years,– Registration of vehiclesfuel types, or both 1with GVW 26,001auditallowed– No specific requirement– Multiple fleets allowedto sample 1 quarter per– 1 registration year, 1license yearfleet 1 audit– Allows intrajurisdiction– 1 quarter sample foronly units and dualeach audited yearcredentialing– 1 plate / 1 cab card8
IFTA and IRP Similarities Audit Requirements Audit Standards, Procedures,Qualifications & Responsibilities Audit Communications Recordkeeping Audit ReportWhy do we Audit?To:1. Ensure compliance with the IFTA, IRP, andjurisdictional laws2. Ensure the proper payment of registrationfees and fuel taxesWhat do we look at to ensure compliance?Records9
Records – Record KeepingRequirements Manual records distancerequirements Electronic distance requirements Fuel records requirements No or partial records inadequaterecords assessments10
Manual Record Example11
Electronic Records Original GPS or other location data Date and time of each GPS or other systemreading Beginning / ending reading (Odometer, hub,ECM, etc.) Calculated distance between each GPSreading Route of travel Total distance and distance per jurisdiction Vehicle identifier12
Electronic Record – GPS Report13
Fuel Records - Requirements Date of purchase Vendor name, address, station location,city and state/province Quantity (gallons/liters) Fuel type Price per gallon/liter Vehicle number Company name14
More fuel recordsInternal Control EvaluationsWhy do we need them?It’s requiredWhat’s the Process?-Review & documentPreliminary evaluationTests of complianceStrengths & weaknessesReliability15
Why do we Sample? RequiredEfficiencyInternal controlsTypes of samplingSample sizeSampling16
Sampling Errors Recurring Errors – errors determined tobe systemic that consistently happenthrough the audit Isolated Errors – errors that occurrandomly during the audit and/or do notshow a pattern of occurrenceType of Errors Distance testing errorsUnreported distance/fuelClerical errorsNo evidence of reported jurisdictionUnsupported fuel purchasesNo bulk fuel withdrawalsHigh or low unit MPGs/KPLs17
What would you do if Q: You have looked at a good portion of yoursample and found:- No Errors- Minor ErrorsA: Discontinue and move forward.Q: Your sample reflects significant errorsthroughout and/or errors in specific jurisdictions?A: Expand testing and sampling.18
Why do we Project Errors? Sampling is required when possible Efficiency– Facilitates error correction withoutperforming 100% of the audit19
Summaries vs. Reported Are summaries available? If so, do they agree with thereported data? If not, which is accurate?– Test the source documents. Are the IFTA and IRP fleets thesame?20
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What about Inadequate RecordsAssessments? IRP – 20%, 50%, or 100% of fees IFTA – P570 and A350Reduce MPG to 4.0For a licensee travelingin two jurisdictions (AZand CA) and operatingone unit, the auditassessment can reach: 18,886.1222
Reduce MPG & Disallow Fuel CreditFor a licenseetraveling in twojurisdictions (AZand CA) andoperating oneunit, the auditassessment cannow reach: 52,362.12Important Takeaways Read– IFTA and IRP publications– Jurisdiction Audit Program Adequately plan the audit Understand the auditee’s– Business operations– Record keeping procedures– Internal controls COMMUNICATE23
Q & A DiscussionResources www.iftach.org www.irponline.org What you can find– Agreement, Plan, Procedures Manual,Audit Manuals– Best Practices Guides– Materials from past workshops– Webinar materials24
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DOT vs. IRP vs. IFTA A commercial motor vehicle is a “qualified vehicle” according to IRPif it is a power unit that is used, or “intended for use”, in 2 or more jurisdictions with: –2 axles and a GVW or registered GVW 26,000 lbs/ 11,797 kgsOR –3 or more axles regardles
