Joint Audit Subcommittee Overview 2009 IFTA/IRP WORKSHOP TEMPE AZ Thom Rabaglia – WI (IRP Co-Chair) Dawn Lietz – NV (IFTA Co-Chair) Rick LaRose – CT; Jeff Hood – IN; David Nicholson – OK (Committee Members) Mark Byrne – NE

Goal & Objectives Goal: Objectives: Determine the feasibility of conducting joint audits with multiple jurisdictions. Objectives: Identify obstacles and present solutions Provide comprehensive feedback to the IFTA/IRP Audit Committees Summarize findings from Joint Audit conducted by NE and present to attendees at the 2009 IFTA/IRP Workshop

Topics of Discussion What is the role of the base jurisdiction? What is the role of the participating jurisdictions? What constitutes a “Mega-fleet”? What if a request for audit is made by another jurisdiction to the base jurisdiction. If the base jurisdiction refuses to cooperate, what happens?

Role of Base Jurisdiction Coordinates audit Determines who will be audited and when Invites participation by other jurisdictions Communicates with Carrier/Registrant Determines software/audit tools to be used Issues final report

Role of Participating Jurisdictions Consensus on sample periods; sample size; waiver of odometer or route of travel. Support audit findings with the base jurisdiction through the DRC process, if necessary. Adherence to IRP APM & IFTA Audit Manual

Obstacles If base jurisdiction refuses to audit, what happens? How will adjustments be handled when credits result from improper or negligent reporting by the carrier. IE: Using pre-determined miles to file tax returns in lieu of reporting actual. Does the clearinghouse have to be used?

Obstacles - Continued How do we measure the effectiveness of any program resulting from our work? How do we minimize any negative impacts to licensees? IE: Travel expenses, larger audit teams. Should the process extend beyond the mega-carriers?

Unresolved Issues Should there be a list of auditor resources for jurisdictions to draw from? Should this be maintained by the respective Audit Committee’s Should it be geographical?

Joint v. Standard Single Jurisdiction Audits Advantages Disadvantages

Where do we go from here? Before we continue to pursue joint audits, it is vitally important that all jurisdictions be on the same page. Guidelines to conduct the joint audits. Ballots to clarify ambiguous or silent language on areas of potential conflict. IE: What constitutes a waiver of routes of travel or odometer? Does every jurisdiction need to participate like we do for the Compliance Review Teams? (Once every four years) Audit counts for participating jurisdictions.

Where do we go from here? (Part 2) How can we ensure each jurisdiction is auditing the carrier consistently? How do we reduce conflict in the field when differences between auditing techniques arise? How does auditor judgment affect an audit? Does IRP or IFTA provide enough direction for a jurisdiction to consistently conduct joint audits?

Where do we go from here? (part 3) What is your jurisdiction willing to do to ensure you protect the interests of the other member jurisdictions when a carrier is clearly non-compliant? Lack of required recordkeeping but enough documents to ‘audit’ what is provided. What does “making the carrier whole at any cost” mean to you? Are you willing to support uniformity among the jurisdictions and vote for any needed changes?

Additional Discussion: Joint v. Standard Single Jurisdiction Audit Mark Byrne – NE Jeff Hood - IN