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CBI 61-07

CBI 61-07. Sonia Sanders (KY) Robert Turner (MT) IFTA, Inc. Board of Trustees. REQUESTING JURISDICTIONS. Colorado Iowa Utah Nevada. Issues. Reasonable Cause for Re-Audit Re-Audit in Cooperation with Base Jurisdiction Licensee Subject to Re-Audit

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CBI 61-07

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  1. CBI 61-07 Sonia Sanders (KY) Robert Turner (MT) IFTA, Inc. Board of Trustees

  2. REQUESTING JURISDICTIONS • Colorado • Iowa • Utah • Nevada

  3. Issues • Reasonable Cause for Re-Audit • Re-Audit in Cooperation with Base Jurisdiction • Licensee Subject to Re-Audit • Re-Audit Provision (R1360) and Audit Provision (R1310) - Contradictions

  4. Affected IFTA Provisions • R1310 • R1360 The IFTA, Inc. Board of Trustees reviewed the CBID (1-2007; now CBI 61-07) presented by the four requesting jurisdictions and did not consider any facts or details pertaining to any specific matter. The Board merely issued a proposed interpretation of the Agreement language.

  5. Issue 1 - Reasonable Cause for Re-Audit Is it allowable under the IFTA for a jurisdiction to delay or dismiss any reasonable request for a re-audit? • The jurisdictions requesting a joint re-audit believe there is reasonable cause and notified the base jurisdiction in writing Discussion Points:

  6. The base jurisdiction informed the requesting jurisdictions verbally and in writing that, in their opinion, they do not see a ‘reasonable cause’ for a re-audit. • R1360 Re-Audit and Re-Examination, .200, states, “A member jurisdiction may re-audit a licensee if said member jurisdiction notifies the base jurisdiction and the licensee of reasonable cause for the re-audit.”

  7. Issue 1 - Proposed Board Interpretation • R1360.200 allows a member jurisdiction to re-audit a licensee if the jurisdiction notifies the base jurisdiction and the licensee of reasonable cause for the re-audit. It is not allowable under this provision for a jurisdiction to dismiss a request if these conditions are met.

  8. Issue 1 - Proposed Board Interpretation Continued • R1360.200 does not establish timeframes for a jurisdiction to respond to a request for re-audit. The Agreement does not state whether a jurisdiction is allowed to delay a request for re-audit. However, R1360.300 clearly establishes the requirement for a requesting member jurisdiction and the base jurisdiction to cooperate which implies timely cooperation.

  9. Issue 2 - Re-Audit in Cooperation with Base Jurisdiction Please define “must be performed in cooperation with the base jurisdiction.”

  10. Discussion • R1360 Re-Audit and Re-Examination, .300, states, “The re-audit or re-examination by a member jurisdiction must be performed in cooperation with the base jurisdiction. An adjustment to original audit findings as a result of such re-audit or re-examination must be reconciled with the original audit findings issued by the base jurisdiction. New audit findings shall be issued by the base jurisdiction. A member jurisdiction conducting a re-audit or re-examination shall pay its own expenses”

  11. Issue 2 - Proposed Board Interpretation • R1360.300 requires a re-audit or re-examination to be completed through the cooperation of the requesting jurisdiction and the base jurisdiction. This section does not specify which aspects of the re-audit or re-examination process the base jurisdiction must participate in; however, this section clearly suggests that the base jurisdiction must cooperate in a manner that allows the re-audit or re-examination to occur. R1360.300 does require that any resulting adjustments be reconciled with the original audit findings. The reconciliation process would require the cooperation of the jurisdictions and the new findings must be issued by the base jurisdiction.

  12. Issue 3 - Licensee Subject to Re-Audit Does the IFTA prevent a re-audit of a carrier by other jurisdictions? If yes, this appears to be opposite of the intent of the IFTA.

  13. Discussion • If the base jurisdiction refuses to cooperate with other member jurisdictions, wouldn’t the carrier enjoy a safe harbor by veiling itself behind an uncooperative jurisdiction? • The audited carrier has informed the four (4) jurisdictions they will have to work through the base jurisdiction per R1360.300 regarding any type of questions, re-audit, or re-examination.

  14. Issue 3 – Proposed Board Interpretation • R1360.200 states that a member jurisdiction may re-audit a licensee. IFTA does not prevent a re-audit of a carrier by other jurisdictions.

  15. Issue 4 - Re-Audit Provision (R1360) and Audit Provision (R1310) - Contradictions The base jurisdictions of Colorado, Iowa, Utah and Nevada respectfully request a CBI of the contradictions inherent between R1310, which permits audits by member jurisdictions, and R1360, which appears to give the base jurisdiction the ability to ‘veto’ a re-audit.

  16. Issue 4 – Proposed Board Interpretation • R1310 addresses the audit of a licensee while R1360 addresses the re-audit or re-examination of a licensee. As such there is no inherent contradiction between R1310 and R1360.

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