1  Distance – It’s a Long, Long Road; Dealing With Those Pesky Gaps.  Distance – It’s a Long, Long Road; Dealing With Those Pesky Gaps.  Derrick Rumph.

Slides:



Advertisements
Similar presentations
What Constitutes an Audit? Presenters: Diane Robichaud-Cormier, NB Terry Hing, ON Michele Snow, ON.
Advertisements

Using Fuel Receipts to Determine Routes of Travel Case history in Oklahoma.
IFTA / IRP Audit Process Mileage Audit
IVDR Individual Vehicle Distance Report
Arizona Department of Transportation IFTA RECORD KEEPING REQUIRMENTS.
1. Management Income Statement Balance Sheet Stmt of CF Management Prepares 1 Users Basic Mistrust 2 Auditors Independent Auditor 3 Lends Credibility.
1 Motor Carrier Registration Motor Fuels Tax Division Rev. 08/09.
KC Transportation Inc. v. Dep’t. of Treasury, 2013 Mich. App. LEXIS 1197 (Mich. Ct. App. 2013) By: Sukanya Mukherjee Comptroller of Maryland.
BULK FUEL 2012 IFTA/IRP Audit Workshop. OBJECTIVE OBJECTIVE Give a broad overview of bulk fuel and its unique position for creating audit problems and.
IRP 1005/ IFTA P500 Adequacy of Records. Evaluating Vehicle Movement The source documents must contain the necessary details to trace vehicle movement.
Presented by IFTA Managers’ and Law Enforcement Seminar September 10, 2009 Joy Prenger – Missouri Ron Hester - Ontario.
Auditing Distance Michele Deering-Volz Maxime Dubuc Carl Robinson.
Developing a Standard Audit Program Using CCH Teammate Audit Software.
Managing for Compliance IFTA/IRP Compliance/Peer Reviews Guide to Preparing for Reviews “What You Need to Know” Betsy McCabe (NV) Chester Cook (GA)
Chapter 17 Completing the Engagement McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved.
2-1 McGraw-Hill/Irwin ©2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 Professional Standards: “The Rules of the Road”
International Fuel Tax Agreement (IFTA)/ International Registration Plan (IRP) Audit Overview (for non-auditors) Don Williams, Tax Policy Specialist, Idaho/
CHAPTER 2 FINANCIAL STATEMENT AUDITS AND AUDITORS’ RESPONSIBILITIES Fall 2007 u G enerally Accepted Auditing Standards u Assurance Provided by an Audit.
Welcome to: Breakout Session #3. Hodgepodge With Dawn Lietz – NV Richard Wagner – KY Audrey Martel - NH.
8/8/20151 Audit Planning IFTA / IRP 2009 Annual Audit Workshop Gerald Jackson (WY) Leroy Johnson (SC) Mark Byrne (NE)
Best Available Information Collaboration by: Mark Byrne, Rick LaRose, Audrey Martel, Carmon Martorana, Charmin Tillman and Richard Wagner.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 17-1 Chapter Seventeen Completing the Engagement Chapter Seventeen.
8 th Annual Managers’ and Law Enforcement Seminar IFTA Funds Netting Information.
1 IFTA / IRP 2010 Annual Audit Workshop Breakout Session # 1 – Part 2 Distance – It’s a Long, Long Road; Auditing That Newfangled GPS. Distance – It’s.
Conducting the IT Audit
Certification of Market Values STEB PROGRAM Briefing Points 2011 Pennsylvania Department of the Auditor General Thomas E. Marks, CPA Deputy Auditor General.
IFTA Appeals Process and the Impact of the Commercial Activity Tax (CAT) on the Transportation Industry Sarah Hedman Ohio Department of Taxation Legal.
Ballot 371 IRP Audit Rewrite A Change is Coming!.
Recordkeeping in the 21 st Century Reflections on …Where we've been …How far we've come …Where we are headed in the future Discover the intricacies of.
IFTA/IRP Audit Workshop Report Writing IARs: What’s required Effective IARs How much is too much Stacey Hammock – WY Debbie Hill – MO Bob Weber - CT.
2007 IFTA BALLOTS & A CONCESUS BOARD INTERPRETATION.
1 Designing Substantive Procedures The auditor “must plan and perform the audit to reduce the audit risk to an acceptably low level that is consistent.
Household Goods Carriers “Household Goods Carrier” means a carrier handling: (a)personal effects and property used or to be used in a dwelling; (b)furniture,
NO FRAUD LEFT BEHIND The Effect of New Risk Assessment Auditing Standards on Schools Runyon Kersteen Ouellette.
PRESENTATION OF IRP BALLOTS 2008 IFTA / IRP Audit Workshop.
Chapter 17 Completing the Audit Engagement McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
QUALITY OF EVIDENCE FRCC Compliance Workshop September/October 2008.
Auditing the Revenue Process
AUDIT REPORTS 12 th Annual IFTA and IRP Audit Workshop San Antonio, TX February 2-4, 2010.
1 TOP TEN NON- COMPLIANCE ISSUES PRESENTED BY APC COMMITTEE.
IFTA ANNUAL BUSINESS MEETING DISCUSSION OF IFTA FULL TRACK BALLOTS AND
ACTIVITY IN A NON-REGISTERED JURISDICTION During the audit, you find that an apportioned & IFTA-decaled unit traveled in a jurisdiction that the carrier.
Managed by the International Fuel Tax Association, Inc. TOWN HALL MEETING 2011 Annual IFTA Business Meeting August 17, 2011 Virginia Beach, VA.
Presented By: Allen Cummings, California Jay Starling, Alabama IFTA/IRP Audit Workshop Impact of Plan Rewrite on Auditors January 2008.
Sampling and Error Rates IFTA / IRP AUDIT WORK SHOP BREAK OUT SESSION #3 Presenters: AnnMarie Chamberlain – Massachusetts Chris Turnwall – South Dakota.
Presented by IFTA Managers’ and Law Enforcement Seminar September 19, 2008 Meg Cronk – New York Ron Hester - Ontario.
Standards vs. Procedures  Auditing standards differ from auditing procedures. Procedures are acts that the auditor performs during the course of an.
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. 6-1 Chapter 6 CHAPTER 6 INTERNAL CONTROL IN A FINANCIAL STATEMENT AUDIT.
Presented by Anthony Madsen – Washington Diana Kay – Florida Bob Gattinella – Rhode Island Stacey Hammock - Wyoming Auditor 101_301.
1 IFTA / IRP 2010 Annual Audit Workshop Breakout Session # 1 – Part 3 Distance – It’s a Long, Long Road; Records ! What Records ? Distance – It’s a Long,
ISO Registration Common Areas of Nonconformances.
RUNNING ON EMPTY. Presented By Dave Nicholson - OK Audrey Martel - NH Terry Hing - ON.
 (i) has two Axles and a gross Vehicle weight or registered gross Vehicle weight in excess of 26,000 pounds (11, kilograms), or  (ii) has three.
18-1 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Travel Policy Overview 1. Policy Overview This is only a general overview for Northern Arizona University faculty, staff and students traveling on University.
ABC Trucking Case Study Applying an audit plan from the source documentation.
IFTA BALLOT #3 Overview of changes. Overview of Changes The new Language in Ballot #3 introduces 5 new requirements and defines “should” as a conditional.
F8: Audit and Assurance. 2 Designed to give you knowledge and application of: Section A: Audit Framework and Regulation Section B: Internal audit Section.
Communicating Results and Recommendations. Audit Communication Verbal –Closing Conference Written –Audit Report –Schedules / Working Papers.
IFTA BALLOT #3 Overview of changes. Overview of Changes The new Language in Ballot #3 introduces 5 new requirements and defines “should” as a conditional.
IRP/IFTA Adequacy of Records IRP International Registration Plan IFTA - P530 IFTA Procedures Manual.
Chapter 17 Completing the Audit Engagement McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Audit Evidence and Documentation
Completing the Audit Engagement
LATIHAN MID SEMINAR AUDIT hiday.
Completing the Audit Engagement
Record keeping from an auditor; and industry perspective - GPS.
By: Trina Kluever Pauli (WI) Ghyslaine Lepage (QC) Krystal Miller (NH)
Auditing with GPS and on-board recording devices
University of Pittsburgh
Presentation transcript:

1  Distance – It’s a Long, Long Road; Dealing With Those Pesky Gaps.  Distance – It’s a Long, Long Road; Dealing With Those Pesky Gaps.  Derrick Rumph (AR)  Gene Hall (VA)  Drake Israel (IL)

2 Definition: a break in continuity. When used in auditing distance, a gap signifies an interruption in odometer readings and/or trip continuity (i.e., the current trip origin and ending destination of the preceding trip are not the same).

3 An auditor must test for accuracy and completeness which addresses the issue of whether all distance traveled has been properly recorded and allocated among the affected jurisdictions.

4  To verify fleet distance, source documentation such as trip reports, summaries, odometer/hub odometer readings, and other documents used by the registrant to substantiate distance traveled must be provided as evidence to give validity to the recorded data. The documentation provided must be both valid and relevant.

5  Note: Summaries alone are not considered sufficient support for the registrant’s reporting system or the fleet distance as reported on the registrant’s IRP application for apportionment and quarterly IFTA tax returns.

6  One of the most effective methods of testing the accuracy of distance traveled is using a distance program and recapping the odometer readings on a trip/unit basis.

7  Note: A distance program can be used as a tool to provide reasonable assurance of the fleet distance reported, using the route of travel and origin/destination. Using a distance program alone may not be sufficient to determine the accuracy of the fleet distance traveled.

8  Origin/Destination  Preceding trip destination is not the same as successive trip’s origin  Unexplained period of time or distance (missing vehicle records)  Note: For an unexplained period of time, please consider whether the registrant’s type of operation is seasonal.

9  Odometer readings  Beginning odometer reading does not agree with prior ending odometer reading  Broken or incorrectly calibrated odometer  Note: Odometer readings should be corroborated by additional documents (i.e., maintenance reports, fuel reports, annual safety inspection, etc.), when possible.

10  Odometer readings exceed total distance reported or audited  Failure to record all deadhead or interjurisdictional distance  Inaccurate distance recorded and/or reported

11  Improper fee recognition or fuel tax paid for affected jurisdictions  Inability to determine carrier’s true liability

12  IRP APM 703(c) states in part, “…In the event an auditor is unable to determine any reasonable method to assign a portion of the unreported distance traveled by a Registrant, such distance traveled shall be assigned to Member Jurisdictions on the basis of each Member Jurisdiction’s audited Jurisdiction Distance. Allocation of such distance traveled must not be done in such a way as to unjustifiably increase the In-Jurisdiction Distance percentage of the Base Jurisdiction conducting the Audit.”

13  * A520 (IFTA Audit Training Manual) states in part, “…In the event that an auditor is unable to determine any reasonable method to assign or allocate unreported miles/kilometers, such miles/kilometers shall be assigned to all jurisdictions on the basis of each jurisdiction’s audited percentage of total distance. Any audit adjustment to total fleet miles/kilometers of individual jurisdictions will require re- computation of the licensee's miles per gallon/kilometers per liter and, consequently, the fuel tax obligation to various jurisdictions.”

14  The methods used in determining if gaps exit (odometers, vehicle mileage records, or trip information.)  If gaps are determined, are additional inquires made of the registrant and/or registrant’s representative?  What source documents or available trip data, including fuel purchases and odometer data, must be considered when determining whether distance should be allocated to specific jurisdictions or among all jurisdictions?

15  If gaps are allocated/ assigned to the affected jurisdictions, how should the allocation be determined? Should it be based on the entire fleet, a quarter, a month, a specific vehicle(s) or trip, or should it be assigned to the base jurisdiction?  If gaps are based on odometer readings, what procedures are taken to determine the level of accuracy of the distance indicated?  The auditor should always document the reason or methodology for the approach that was utilized.  If gaps are determined, what recommendations are made to the registrant?

16  During an audit, an examination reveals that the distance by jurisdiction (recap) did not reconcile to the total odometer readings (198,915-recap vs. 208,795-total odometer.)  Also, the auditor noticed that the ending/beginning trip destination was not the same on various occasions.  The registrant operated two vehicles during the distance reporting period. One of the units was located in Ft. Smith, AR and the other in Little Rock, AR.  The registrant failed to maintain recaps by vehicle and all other supporting documents; however, the registrant maintained IVDR’s to support the distance traveled.

17  What inquiries would you make of company personnel?  What additional information would you request?  What procedures or method should be applied to appropriately allocate the additional distance traveled?  What would be the impact for IRP vs. IFTA reporting?

18  During an audit, it was determined that total distance traveled was not reported. The odometer readings totaled 78,863; with unreported distance of 3,896 based on a summary of the vehicle recaps.  Based on the IVDR’s, the omitted distance was a result of two weeks of additional travel not reflected within the records.  Fuel receipts revealed destinations such as Denver, Colorado and Cincinnati, OH; dated five days apart.  After discovery, the registrant provides information as to the unusual time lapses existing between the recorded trips.

19  What additional documents should be requested to substantiate the omitted distance traveled, if any?  Should a distance program be utilized to re- create the trip? If so, should the distance traveled be entered as part of the audited data?  Should denying credits/refunds be considered?

20  If gaps exist, due professional care should be taken when allocating unreported distance.  The auditor should always document the reason or methodology used in allocating unreported distance.  Allocation of such distance must not be done in such a way as to unjustifiably increase the In-Jurisdiction Distance percentage of the Base Jurisdiction conducting the Audit (IRP Training Manual). However, this does not prevent the auditor from assigning the distance to the base if facts warrant such.  If an estimate of the registrant’s true liability can be determined, the jurisdiction would generally opt to deny credits (IRP Training Manual). It is never appropriate to refund money on a guess

21  If an estimate of the registrant’s true liability cannot be determined, the registrant may be assessed 100% of the original apportionable fees for the base jurisdiction in accordance with APM 603(a) (IRP Training Manual).  In most cases, depending on the fleet size, it would not be possible to examine 100% of the registrant’s operational records; therefore, it generally will not be practical or possible to obtain assurance beyond all doubt.  No matter how difficult it may be to obtain sufficient information, the difficulty is not a valid basis for omitting proper procedures. However, it is important to note that the auditor’s role does not encompass serving as the carrier’s bookkeeper. Consequently, auditors occasionally find that it is not practical to expend the time/energy required to secure the necessary information and are therefore forced to conduct the audit per the best information available.  Most importantly, the auditor must exercise professional judgment in determining the procedures to be performed and methodology that will be applied.

22  If a carrier does not provide IVDRs (Individual Vehicle Driver Record), IVMRs (Individual Vehicle Mileage Record), Trip Reports, or Driver Logs, the following list reflects other source documents that could potentially be used to substantiate distance travel. In order to be considered “adequate” support, they must reflect the data required in Article 4 of the APM and Section P500 of the IFTA Procedures Manual; however, that data need not be contained on a single document. 1. Maintenance Records 2. Receiving Contracts 3. Bill of Ladings 4. Dispatch Reports 5. Settlement Sheets 6. Scale Tickets 7. Trip Permits 8. Over dimensional Load Permits 9. Computer Mileage Printouts 10. Fuel Receipts 11. Hotel Receipts 12. Phone Records