IFTA AUDIT COMMITTEE 2015 Annual IFTA Business Meeting

IFTA AUDIT COMMITTEE 2015 Annual IFTA Business Meeting Audit Committee Report Presented by David Nicholson (OK), Chair August 12 -13 2015 Annual Business Meeting San Antonio, Texas

Audit Committee Beth Duda AZ* Diana Kay FL Joel Foreman NE* Lynden Landholm KS* Stacey Hammock WY Helen Varcoe MT Vice-Chair Board Liaisons Joy Prenger MO IFTA Board IFTA, Inc. Advisors Debbie Meise IFTA, Inc. August 12 -13 Bob Gattinella RI Jimmy Tompkins AL Kristie Zanis NH Maxime Dubuc QC Jeff Hood IN Ex-Officio David Nicholson OK Chair Steve Nutter VA IFTA Board Tammy Trinker IFTA, Inc. 2015 Annual Business Meeting San Antonio, Texas

AC Charter Authority And Purpose • The AC is established by the IFTA Articles of Agreement pursuant to Article R 1810. 200. 020. The purpose of the AC is to review and maintain the IFTA Audit Manual, and to complete other responsibilities assigned to it by the International Fuel Tax Association, Inc. (IFTA, Inc. ) Board of Trustees (Board). • R 1350 REVIEW/REVISION OF AUDIT REQUIREMENTS • . 100 The Audit Committee shall review the audit requirements of this Agreement at least once every three years. August 12 -13 2015 Annual Business Meeting San Antonio, Texas

AC Charter Committee Responsibilities A. advising the IFTA membership regarding audit matters; B. planning and conducting an annual audit workshop; C. reviewing and commenting on ballot proposals, D. reviewing and preparing responses for consensus board interpretation drafts referred to it by the Board, August 12 -13 2015 Annual Business Meeting San Antonio, Texas

AC Charter Committee Responsibilities E. developing ballot proposals and Board interpretation requests, F. maintaining a committee member rotation chart, G. recruiting members and maintaining a list of potential committee members, H. making recommendations to the Board to fill committee vacancies; and I. maintaining the IFTA Best Practices Audit Guide. August 12 -13 2015 Annual Business Meeting San Antonio, Texas

AC At Work • 2015 IFTA/IRP Workshop • Held February 2015 San Antonio • 206 attendees from jurisdictions and industry • Continued work on Ballot #3 2014 • Ballot #3 is currently out for a 4 th comment period. August 12 -13 2015 Annual Business Meeting San Antonio, Texas

AC At Work • Currently working on the 2016 Audit Workshop • Recently filled 3 vacancies • Working on updating the Best Practices Guide • Responded to several inquiries from the membership • 2015 Ballots are being reviewed in relation to audit August 12 -13 2015 Annual Business Meeting San Antonio, Texas

Ballot #4 2014 • Currently reviewing Ballot #4 2014 – What constitutes an audit for count? • This ballot failed – Why? • Current language indicates an audit of a license year. • The proposed language would have been 4 consecutive quarters in lieu of licensing year. August 12 -13 2015 Annual Business Meeting San Antonio, Texas

Ballot #4 2014 • At last years ABM, there was discussion of being able to include “short period audits”. Current language requires all four (4) quarters in the license year. • The AC would like your input – • Any 4 consecutive quarters • 4 consecutive quarters tied to the IRP (registration year) • Short period audits - An audit of a company with less than 4 quarters of operations - When a licensee closes an account prior to four (4) consecutive quarters, an audit will qualify as long as all auditable quarters are included. August 12 -13 2015 Annual Business Meeting San Antonio, Texas

Changes to Ballot 3 -2014 After the first 3 Comment Periods • Requirements moved back to the Procedures Manual • Removed the term “Evidence” • Removed the Proposed Sampling Language • Inadequate Records Assessment – The audited or reported MPG/KPL can adjusted. • The Ballot has been vetted by the ASSC. With the changes identified, the proposed language does not affect the defensibility or three core provisions of the Agreement. August 12 -13 2015 Annual Business Meeting San Antonio, Texas

Comments/ Questions? Thank You! August 12 -13 2015 Annual Business Meeting San Antonio, Texas