IFTA AUDIT COMMITTEE AUDIT PROCEDURES SUBCOMMITTEE HISTORY Article

IFTA AUDIT COMMITTEE AUDIT PROCEDURES SUBCOMMITTEE

HISTORY • Article XVIII R 1810. 200. 020 – Defines the Audit Committee responsibility to review and maintain the IFTA Audit Manual • IFTA Audit Committee Charter – Article III provides for making recommendations for change to the IFTA Board of Trustees – Article VI provides for the establishment of subcommittees with Board Liaison approval

HISTORY • 2007 IFTA/IRP AUDIT WORKSHOP – Auditor 101 – Managers’ course – Breakout Sessions – Town Hall – Closed Session

HISTORY • IFTA Ballot Process – Multiple count ballots – Audit requirement ballots – Audit stratification ballots • IFTA Program Compliance Reviews – Audit count compliance (3%) – Audit stratification requirement compliance

HISTORY • Review of the Governing Documents – IFTA Compliance Review Requirements Committee – IFTA Compliance Review Ballot Development Committee • Identified areas of material versus non-material issues • Created several ballots in 2006

HISTORY • Review of incoming IFTA Audits – Discussion (and, yes, emails) between auditors, supervisors, and managers – Taxpayer compliance – Jurisdictional compliance • Discussion and proposal of ballot language • Concern about: – – Jurisdictional disputes Non-compliance by jurisdictions Non-compliance by the licensee Invoking jurisdictional statute in lieu of the Agreement

DEVELOPMENT OF THE SUBCOMMITTEE • Presentation of the issues – Several ballots were initially proposed, the Audit Committee believed it was premature to present and support them – A telephone call was held on March 22, 2007 between Arthur Gumbs and Rick La. Rose to discuss the issues and a potential method of addressing them

DEVELOPMENT OF THE SUBCOMMITTEE • Presentation of the issues (cont’d) – Rick requested that he address the Audit Committee with a proposal • Conference call held on April 10, 2007 • A multi-faceted plan was unveiled for consideration by the Audit Committee • Request was made to seek approval for and develop a subcommittee to research the issues, create, and implement a comprehensive survey for the membership

DEVELOPMENT OF THE SUBCOMMITTEE • Creation of the Subcommittee – Discussion held with Arthur Gumbs on June 5, 2007. The Audit Committee and its Board Liaisons decided to go forward with the proposal to develop the subcommittee

DEVELOPMENT OF THE SUBCOMMITTEE • Subcommittee Members – Arthur Gumbs (ON) – Ann. Marie Chamberlain (MA) – Hoa Quach (AB) – Dan Young (MT) – Rick La. Rose (CT)

IDENTIFICATION OF CORE ISSUES • The subcommittee identified several key areas that should be explored – JURISDICTIONAL COMPLIANCE • • • Audit Count Audit Strata Sampling Independence/Audit Standards Application/Interpretation of Error Rates

IDENTIFICATION OF CORE ISSUES • The subcommittee identified several key areas that should be explored (cont’d) – JURISDICTIONAL COMPLIANCE • Joint Audits • Minimum Audit Period/Standard Audit Period – LICENSEE COMPLIANCE • Adequate/Inadequate vs Compliant/Non-Compliant • Recordkeeping Requirements • Fuel Use Estimation

IDENTIFICATION OF CORE ISSUES • The subcommittee identified several key areas that should be explored (cont’d) – LICENSEE COMPLIANCE • Penalties (Beyond Fuel Use Estimation) • Credits and Refunds

CREATION OF THE SURVEY • Based on the “core” issues, a draft survey was developed and circulated among the subcommittee members on July 18, 2007. • Based on several generations of revisions, a finished survey of 37 key questions was presented to the IFTA Audit Committee Chair on September 7, 2007. The survey was forwarded to IFTA, Inc. on September 11, 2007 for posting to the IFTA website.