PRESENTATION OF IRP BALLOTS 2008 IFTA / IRP Audit Workshop

ARTICLE 4 REGISTRANT RESPONSIBILITIES 405. Accountable Distance Traveled Total distance traveled by an Apportionable Vehicle must be supported by Operational Records as required in APM Article 4 and APM Article 5. In recording the actual Total distance traveled on by an Apportionable Vehicle, the Registrant must record all movement (interJurisdictional and intraJurisdictional) including loaded, empty, deadhead and/or bobtail distance. Total distance traveled by an Apportionable Vehicle must be supported by Operational Records as required in APM Article 4 and APM Article 5. It shall further be the responsibility of the Registrant to record all distance traveled by Apportionable Vehicles while operating with Trip Permits. Ballot 338 APM SECTION 405

ARTICLE 6 PRELMINARY AUDIT COMMUNICATIONS 603. Request for Operational Records (a) During the preliminary phase of the Audit, the auditor will have made a request for IVDR’s and distance summaries that support the apportioned registration application as filed. Operational Records must be adequate and complete for each Vehicle of the Fleet being audited. If the Operational Records are not made available, or if the records made available are inadequate for Audit purposes, an assessment of liability may be imposed in accordance with Article X of the Plan. If an estimate of the Registrant’s true liability cannot be determined, the Registrant may be assessed an additional 20% of the original Apportionable Fees paid for each affected Member Jurisdiction. Any credits calculated for Member Jurisdictions which are caused by the inadequacy of the Operational Records will not be reflected in the fees netted under Article X of the Plan. Ballot 339 APM SECTIONS 603 and 901

ARTICLE 9 SUMMARY 901. Summary (c) Any Registrant failing to maintain adequate records from which true liability can be determined and was subject to an estimated fee assessment as indicated in Article 6, Section 603, of the APM. The Registrant is also subject to further penalties as prescribed by the laws of the Base Jurisdiction, and/or the cancellation of registration. Ballot 339 APM SECTIONS 603 and 901 (cont…)

ARTICLE 7 AUDIT PROCEDURE AND DOCUMENTATION 705. Distance Reporting Errors If actual distance was reported in a Member Jurisdiction, and it is determined through audit that no actual distance was traveled in the Member Jurisdiction during the Reporting Period, the auditor may convert the reported actual distance to a distance estimate determined in accordance with Article IV of the Plan. If the distance reporting error is determined to be an error in registration, and registration in the Member Jurisdiction was not intended, the distance reporting error will be corrected to ensure proper fee payment. Ballot 340 APM SECTION 705

ARTICLE X OPERATIONAL RECORDS AND AUDITS 1015 FREQUENCY OF AUDITS (c) The following guidelines shall be used in selecting audits to fulfill the IRP auditing requirements: (i) At least 15 percent of each Member Jurisdiction’s Audit requirement shall involve low-distance Fleets (low-distance Fleets are considered to be the 25 percent of the previous Registration Year’s Fleets that had the lowest number of actual miles/kilometers reported in all Member Jurisdictions). (ii) At least 25 percent of each Member Jurisdiction’s Audit requirement shall involve high-distance Fleets (high-distance Fleets are considered to be the 25 percent of the previous Registration Year’s Fleets that had the highest number of actual miles/kilometers reported in all Member Jurisdictions). (iii) Low-distance computations and high-distance computations shall be based on the total actual miles/kilometers reported by all IRP renewed Fleets included on the annual report of activity filed by each Member Jurisdiction pursuant to Section 1220 of the Plan. (iv) If the Member Jurisdiction performs combined IRP and IFTA Audits, and it successfully meets the IFTA stratification requirement, that Member Jurisdiction will be considered to have successfully met their IRP stratification requirement. Ballot 341 PLAN SECTION 1015

Ballot 341 ARTICLE X OPERATIONAL RECORDS AND AUDITS 1015 FREQUENCY OF AUDITS ( d ) Previous Registration Year’s Fleets referred to in (c)( i ), (c)(ii) and (c)(iii) above are the fleets that were reported in the annual report filed pursuant to the Plan. Existing c becomes d Existing d becomes e Existing e becomes f PLAN SECTION 1015

ARTICLE 8 AUDIT COMPLETION AND AUDIT REPORTING PROCEDURES 803. InterJurisdictional Audit Report (b) The InterJurisdictional Audit Report shall contain, but not be limited to, the following information: (viii) Months and year records examined; (ix) Source documents/summaries reviewed in support of distance. Check boxes within the InterJurisdictional Audit report shall include, but not be limited to, the following line items: Driver trip sheets, IVDRs, driver logs, driver pay records, freight bills or manifests, receiving contracts, rental or lease contracts, computer-generated miles/kilometers, weekly Fleet summaries by Vehicle, and quarterly Fleet summaries by Vehicle. Ballot 342 APM SECTION 803

(x) Items reflected on the IVDR/distance source documents. Check boxes within the InterJurisdictional Audit report shall include, but not be limited to, the following line items: Registrant name, Fleet number, Vehicle unit number, driver name, trip origin location, trip origin date, trip origin odometer/hub reading, trip destination location, trip destination date, trip destination odometer/hub reading, Jurisdiction-line odometer/hub reading, distance by Jurisdiction, total trip distance, and routes (highway name/number) traveled. (xi) Source(s) used by the Registrant to determine reported distance. Check boxes within the InterJurisdictional Audit report shall include, but not be limited to, the following line items: Odometer readings, hubodometer readings, distance software, Jurisdictional maps, on-board computer recordings, Household movers guide, and Estimated Distance. (xii) Source(s) used by the auditor to determine the Registrant’s reported distance. Check boxes within the Interjurisdictional Audit report shall include, but not be limited to, the following line items: Odometer readings, hubodometer readings, distance software, Jurisdictional maps, on-board computer recordings, Household movers guide, and Estimated Distance. (xiii-xv) Renumbered. Ballot 342 APM SECTION 803 (cont…)

ARTICLE 7 AUDIT PROCEDURE AND DOCUMENTATION 707. Unreported Distance When distance is not reported in a Member Jurisdiction, and through an Audit actual distance is determined, the auditor must verify that the Vehicle(s) operated in that Member Jurisdiction with proper credentials or trip permits during the Reporting Period. If the auditor determines that the Vehicle(s) operated in a Member Jurisdiction without proper credentials or Trip Permits during the Reporting Period, registration fees shall be determined for the Member Jurisdiction in accordance with Article 415 of the Plan. Ballot 343 APM SECTION 707

ARTICLE 6 PRELMINARY AUDIT COMMUNICATIONS 603. Request for Operational Records (a) During the preliminary phase of the Audit, the auditor will have made a request for IVDR’s and distance summaries that support the apportioned registration application as filed. Operational Records must be adequate and complete for each Vehicle of the Fleet being audited. If the Operational Records are not made available, or if the records made available are inadequate for Audit purposes, an assessment of liability may be imposed in accordance with Article X of the Plan. If an estimate of the Registrant’s true liability cannot be determined, or the records provided are not in compliance with Article X of the Plan and Article 4 of the APM, the Registrant may be assessed 100% of the original Apportionable Fees for the Base Jurisdiction. Any credits calculated for Member Jurisdictions which are caused by the inadequacy of the Operational Records will not be reflected in the fees netted under Article X of the Plan. Ballot 344 APM SECTION 603

ARTICLE 4 REGISTRANT RESPONSIBILITIES 401. Adequacy of Records (c) The Base Jurisdiction may waive either item (iii) or (iv) above, but may not waive both items (iii) and (iv). Documentation of the waiver shall be clearly stated and included in the audit file. 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. Ballot 345 APM SECTION 401

ARTICLE 4 REGISTRANT RESPONSIBILITIES 401. Adequacy of Records (b) 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. 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) – (ii) Unchanged (iii) Route of travel; the name or number of the highway or road. (may be waived by Base Jurisdiction); (iv) – (vii) Unchanged Ballot 346 APM SECTION 401

ARTICLE 7 AUDIT PROCEDURE AND DOCUMENTATION 706. Travel Only in One Jurisdiction If it is determined that an Apportioned Vehicle did not operate in two or more Member Jurisdictions during the Reporting Period, it shall be presumed that the Registrant did not intend to operate the Vehicle in two or more Member Jurisdictions and therefore is not an Apportionable Vehicle, as defined by the Plan. Such a presumption may be overcome, however, by other circumstances presented by the Registrant. The reported distance will be subtracted from the reported Total distance and 100% full fees will be calculated for the Vehicle for the Member Jurisdiction in which the Vehicle operated. Apportionable Fees resulting from this provision will be adjusted in accordance with Article X of the Plan. Ballot 347 APM SECTION 706

ARTICLE X OPERATIONAL RECORDS AND AUDITS 1025 NOTIFICATION OF AUDIT FINDINGS Upon the completion of an Audit the Base Jurisdiction shall provide notice of the Audit findings to the Registrant and to all Member Jurisdictions in which the Registrant was apportioned or in which it traveled. The findings shall include a determination of any Apportionable Fees owed by the Registrant, net of any Apportionable Fees due the Registrant. The time periods specified in Sections 1035 shall begin with the date on which the Base Jurisdiction sends notice to the Registrant of the final Audit findings. The time period specified in Section 1040 shall begin with the date on which the Registrant’s appeal period has concluded. Ballot 348 PLAN ARTICLE X

1035 AUDIT APPEALS (a) The Base Jurisdiction shall provide a Registrant 30 calendar days from the date the Registrant is notified of the findings of an Audit or a reexamination to file a written appeal of the Audit or reexamination with the Base Jurisdiction. Such an appeal shall proceed in accordance with the administrative and appellate procedures of the Base Jurisdiction. In the conduct of a Registrant’s appeal, the Base Jurisdiction shall represent affected Member Jurisdictions. (b) Upon the conclusion of the Registrant’s appeal process, the Base Jurisdiction shall notify all affected Member Jurisdictions of the results. If one or more findings of the Audit remain unresolved after these procedures have been exhausted, the Registrant may challenge disputed Audit findings that remain by filing a dispute in accordance with Section Ballot 348 PLAN ARTICLE X (cont…)