IFTA/IRP Audit Workshop

Improving your Audit ProcessIFTA Closing/IRP Exit Conference

Presenters

• Kristie Zanis – New Hampshire• Bob Weber – Connecticut• Don Williams - Idaho

IFTA Closing Conference

What is required?

IFTA Closing Conference (A650.100)

• The closing conference may be:– In person,– By telephone,– In writing (by fax, email, or snail mail).

• It must communicate:– Preliminary findings with penalty and interest,– Recommendations for improvement,– Rights to appeal,– Who gets the audit report.

IFTA Closing Conference (A650.200)

• An audit conducted in accordance to R1210:– No closing conference is required, but– The auditor must document why no closing

conference was held.• R1210 allows an assessment, when the

licensee:– Does not file a return,– Does not provide records,– Does not keep records showing true liability.

IRP Exit Conference

What is required?

IRP Exit Conference (APM 404)

• An exit conference should be held to:– Review identified, documented audit issues,– Preliminary findings.

• Auditor must document conference with:– Overview of the post Audit process,– Recommendations for improvement,– Rights of appeal,– Who gets the audit report.

• If no conference possible, document why.

Planning your Closing Conference

• Prepare for the closing conference– Review the file and draft report (be prepared)– The audit findings:

• What issues are there?• Prepare an Agenda to help guide you through the

conference.• What will the licensee/registrant ask?

• Express the findings– Clearly.– Without judgment.

Exit Meeting Purpose

• To provide the Registrant/Taxpayer with an understanding of the contents of the draft report and any concerns that may not be set out in the report.

• Help avoid any misunderstanding or misrepresentation of facts by providing the auditee the opportunity to clarify specific issues and express their views on significant audit findings & recommendations.

Effective Closing/Exit Conference

What can you do to ensure your conference is effective and successful?

Effective Exit Meeting

• Meeting should be open and courteous.• Summarize what was done.• Outline significant audit concerns &

recommendations. • Provide justification for conclusions &

recommendations.

Effective Exit Meeting

• Highlight any audit concerns which have already been addressed/corrected.

• Be willing and able to discuss all matters in whatever detail is necessary.

• Be sure all significant matters have been discussed so the report contains no surprises.

Principles for Communication

• Be curious, positive, and patient.• Be an active listener.

– Ask questions. (Open/Closed)– Respectfully acknowledge opinions.– Restate answers by paraphrasing.– Be friendly and approach the audit in a positive

manner.

Principles for Communication

• Be confident, however be careful not to sound arrogant or aggressive.

• Be able to give and receive Feedback.• Be clear and concise, provide your message in

as few words as possible.• Avoid interrupting the respondent.

Case Study

Case Study: Audit Findings• Licensee/Registrant with three locations.• Single IFTA reported from central location.

• All vehicles are single fuel type (DSL).• IFTA travel: AAA, CCC, & DDD.

• Multiple registration records show:• Three registration accounts.• Vehicle weights from 26,000 lbs. to 80,000 lbs. GVW. • IRP travel: AAA, BBB, CCC, & DDD.

• Assume conference is with the authorized company representative.

Closing Conference Case Study

• Distance Summary Error:– The auditor found no trip records for BBB. – All fuel was purchased at local fueling station across

the street from Location 3 headquarters.– Location 3 had other trucks registered for AAA

travel plus the IRP trucks registered for AAA & BBB.

AAA BBB CCC DDD TotalRptd IRP 255,653 208 11,978 58,164 326,003

Rptd IFTA 260,601 0 9,930 58,670 329,201Difference -4,948 208 2,048 -506 -3,198

Closing Conference Case Study

• Fuel Summary Error:– All fuel is purchased in AAA at Location 1, 2, or 3

headquarters.– Fueling station is across the street from the various

location head quarters.– Vehicles return each night to fleet headquarters.

AAA BBB CCC DDD TotalFleet Gas 1,724 0 0 0 1,724Fleet Dsl 10,761 0 0 0 10,761

Total 12,485 0 0 0 12,485

Rptd Dsl 11,673 0 0 0 11,673

Closing/Exit Conference

“The nine most terrifying words in the English language are, ‘I’m from the government and I'm here to help.’ “

Ronald Reagan

Reference

• Dale Carnegie, How To Win Friends And Influence People

• Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler, Crucial Conversations: Tools for Talking When the Stakes are High

References

• http://www.helpguide.org/mental/effective_cmmunication_skills.htm

• http://www.mindtools.com/pages/article/newTMC_88.htm

• http://skillsyouneed.com/ips/questions-types.html

• http://jobsearch.about.com/od/skills/qt/communication-skills.htm