Promoting Cooperation Between Audit and Operations
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Transcript of Promoting Cooperation Between Audit and Operations
Promoting Promoting Cooperation Between Cooperation Between Audit and OperationsAudit and Operations
Presenter:Presenter:
William P. CullenWilliam P. Cullen
Audit ManagerAudit Manager
Arizona Department of Arizona Department of TransportationTransportation
Office of Audit and Analysis- Office of Audit and Analysis- Revenue AuditRevenue Audit
Level of Cooperation Level of Cooperation Between Audit and Between Audit and
OperationsOperations• Prior to July 2005Prior to July 2005
– Limited interaction with Limited interaction with Internal/External operationsInternal/External operations
– Assistance was usually on a case by Assistance was usually on a case by case basis, mostly problem Taxpayerscase basis, mostly problem Taxpayers
– Audit defined its role in a limited basis Audit defined its role in a limited basis “We do audits”“We do audits”
Level of Cooperation Level of Cooperation Between Audit and Between Audit and
Operations continued…Operations continued…• July 2005 to CurrentJuly 2005 to Current
– Extensive interaction with operations Extensive interaction with operations and related departments- usually and related departments- usually weeklyweekly
– Continuous projectsContinuous projects– Attend weekly meetings (if needed)Attend weekly meetings (if needed)– Quarterly and semi-annual status report Quarterly and semi-annual status report
to MVD Operations Managementto MVD Operations Management
Areas Subject to Interaction Areas Subject to Interaction and Interfacingand Interfacing
• InternalInternal– MVD ManagementMVD Management– Operations ManagementOperations Management– IFTA/IRP LicensingIFTA/IRP Licensing– Fleet ServicesFleet Services– AccountingAccounting– CollectionsCollections– Enforcement (Ports of Enforcement (Ports of
Entry)Entry)– Third PartyThird Party– Information Technology Information Technology
(IT)(IT)– Office of Inspector Office of Inspector
GeneralGeneral
• ExternalExternal– Office of the Attorney Office of the Attorney
GeneralGeneral– Department of RevenueDepartment of Revenue– County AttorneyCounty Attorney– Internal Revenue Internal Revenue
ServiceService– Department of Weights Department of Weights
and Measuresand Measures– Towns and CitiesTowns and Cities– Navajo NationNavajo Nation– Department of Public Department of Public
Safety (DPS)Safety (DPS)– Federal Highway Federal Highway
Administration (FHWA)Administration (FHWA)
Implementation of Refund Implementation of Refund Processing Program 1 of 4Processing Program 1 of 4
Refund:Refund:
Refers primarily to the refund of Refers primarily to the refund of state tax ($0.26) for consumption of state tax ($0.26) for consumption of use fuel used in a non-taxable use fuel used in a non-taxable application, i.e. off highway miles, application, i.e. off highway miles, reefer gallons, etc.reefer gallons, etc.
Implementation of Refund Implementation of Refund Processing Program 2 of 4Processing Program 2 of 4
Problem:Problem:
The Attorney General’s office The Attorney General’s office conducted an audit of the Refund conducted an audit of the Refund Department. Recommendations Department. Recommendations included involvement of Audit included involvement of Audit Department to improve internal Department to improve internal controls and procedures for controls and procedures for processing of refunds.processing of refunds.
Implementation of Refund Implementation of Refund Processing Program 3 of 4Processing Program 3 of 4
Solution:Solution:• Create a Refund Team consisting of Create a Refund Team consisting of
Refund, Operations, and Audit team Refund, Operations, and Audit team membersmembers
• Met 2-4 hours per week for 2 years. Met 2-4 hours per week for 2 years. Consolidated refund forms.Consolidated refund forms.
• Developed refund processing Developed refund processing procedures and policiesprocedures and policies
• Refunds over a specified amount Refunds over a specified amount need need secondary (audit) approvalsecondary (audit) approval
Implementation of Refund Implementation of Refund Processing Program 4 of 4Processing Program 4 of 4
Result:Result:• Department and Division efficiency Department and Division efficiency
and productivity was improvedand productivity was improved• Customer service was enhancedCustomer service was enhanced• Frivolous and duplicate refunds were Frivolous and duplicate refunds were
eliminatedeliminated• Customer database was establishedCustomer database was established• Resulted in a 4 hour internal training Resulted in a 4 hour internal training
session for auditorssession for auditors• A Win-Win situationA Win-Win situation
Sanitizing the IFTA/IRP Sanitizing the IFTA/IRP Renewal Database 1 of 3Renewal Database 1 of 3
Problem:Problem:
Many IFTA registrants were Many IFTA registrants were automatically renewed, although automatically renewed, although some of them were non-compliant.some of them were non-compliant.
Sanitizing the IFTA/IRP Sanitizing the IFTA/IRP Renewal Database 2 of 3Renewal Database 2 of 3
Solution:Solution:• Create an ongoing system to ensure a Create an ongoing system to ensure a
compliant registration processcompliant registration process• A Motor Carrier Process Team was formed A Motor Carrier Process Team was formed
which included Operations, Audit, and ITwhich included Operations, Audit, and IT• A preliminary letter was sent to Taxpayers A preliminary letter was sent to Taxpayers
who had a missing report, only traveling who had a missing report, only traveling intrastate, or did not file any activityintrastate, or did not file any activity
• A second letter with action by a bonding A second letter with action by a bonding deadline was sent- If not complied with, deadline was sent- If not complied with, result could be revocationresult could be revocation
Sanitizing the IFTA/IRP Sanitizing the IFTA/IRP Renewal Database 3 of 3Renewal Database 3 of 3
Result:Result:• Hundreds of (Non-compliant) Licensees Hundreds of (Non-compliant) Licensees
have been removed from active account have been removed from active account statusstatus
• Audits required are based on number of Audits required are based on number of active renewed registrants. active renewed registrants.
500 removed accounts = 15 IFTA Audits500 removed accounts = 15 IFTA Audits
15 entities = One Auditor15 entities = One Auditor
Implementation of Record Implementation of Record Keeping Agreement 1 of 3Keeping Agreement 1 of 3
Problem:Problem:
Many Taxpayers do not meet the Many Taxpayers do not meet the minimum record keeping minimum record keeping requirements and some Taxpayers requirements and some Taxpayers do not keep records for the required do not keep records for the required four (4) year retention period.four (4) year retention period.
Implementation of Record Implementation of Record Keeping Agreement 2 of 3Keeping Agreement 2 of 3
Solution:Solution:
Educate the Taxpayers by having Educate the Taxpayers by having them sign a Record Keeping them sign a Record Keeping Agreement which identifies all Agreement which identifies all records to be maintained and the records to be maintained and the time period for keeping all the time period for keeping all the records.records.
Implementation of Record Implementation of Record Keeping Agreement 3 of 3Keeping Agreement 3 of 3
Results:Results:• A partial mailing was sent in July 2008 with A partial mailing was sent in July 2008 with
the remainder to be mailed to all IFTA/IRP the remainder to be mailed to all IFTA/IRP registrants in September 2008. Early registrants in September 2008. Early indications are very positive. Follow up indications are very positive. Follow up training at several levels will be required. Full training at several levels will be required. Full impact of the project will take 3 years.impact of the project will take 3 years.
• Should enhance the revenue being reported Should enhance the revenue being reported from IFTA tax reports and annual IRP from IFTA tax reports and annual IRP applications.applications.
• The improved record keeping will dramatically The improved record keeping will dramatically reduce the number of hours required to reduce the number of hours required to conduct IFTA and IRP audits.conduct IFTA and IRP audits.
Making it HappenMaking it HappenPromoting Cooperation Between Promoting Cooperation Between
Departments and AgenciesDepartments and Agencies• Not one solution, situations are uniqueNot one solution, situations are unique• Have patience, change will not happen Have patience, change will not happen
overnightovernight• Empathy- Try to look at things through their Empathy- Try to look at things through their
eyeseyes• Look at the Big Picture, all the ramificationsLook at the Big Picture, all the ramifications• Be responsive to requests and suggestionsBe responsive to requests and suggestions• Use a Transparent ApproachUse a Transparent Approach• Get to know the Players inside and outside of Get to know the Players inside and outside of
work environmentwork environment• Invite to meetingsInvite to meetings• Have lunchHave lunch• Attend conference togetherAttend conference together• Share credit- send a thank you e-mailShare credit- send a thank you e-mail
BenefitsBenefits
• Both department enjoy productivity Both department enjoy productivity gainsgains
• More relaxed atmosphereMore relaxed atmosphere• Audit referrals from many Audit referrals from many
departmentsdepartments• Career opportunitiesCareer opportunities• Much more informed- holistic Much more informed- holistic
knowledgeknowledge