1. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Program Compliance Review Committee 2016 Annual IFTA Business Meeting August 17-18, 2016 Indianapolis, Indiana Presented by Richard Wagner, Chair, Tim Ford, Vice Chair, and Joe Dian, Past Chair

2. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting IFTA has now been around for decades. All jurisdictions have now gone thru multiple Program Compliance Reviews. Non-compliance findings range from the number of audits completed to the size of the letters on IFTA decals. PCR Breakout

3. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting How relevant has it been to find that a jurisdiction’s letters on a decal were 1/32 nd of an inch too small back in 2010?

4. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The Review Guide and Review Process were created back in 1995. In 2000 E-Reviews were added to the mix. Since that time there have been no MAJOR overhauls to the process!

5. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The current Review Guide consists of 17 separate worksheets and 268 questions that must be filled out. 1,000’s of the questions have to be answered for each jurisdiction review by the review team. There has to be a better way to conduct these Reviews! Current Review Guide

6. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Board Charge: In 2013 the IFTA, Inc. Board of Trustees charged the PCRC to complete a comprehensive review of processes and procedures and make recommendations for changes. Hence the recent ballots and the draft Review Guide unveiled last year at the ABM in San Antonio, Texas.

7. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The PCRC met in Chandler, Arizona this past March to discuss the processes, what works or doesn’t work, and the complete review process. After much discussion, the Committee determined the most important part of the review process is R1555. The Work Begins

8. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting By focusing on the items found in R1555, the PCRC can better serve membership by reviewing those key factors that membership has determined are the most important to the Program Compliance Review process. Changes…

9. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The draft review guide has been updated to reflect only items that are disputable in R1555. Generally these cover financial items as well as audit cites. Proposed PCR Process

10. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The Committee also determined the review process needed to be more timely and should use the Clearinghouse data already posted whenever possible to complete the review.

11. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting What does that mean for all other requirements found in the Governing Documents as well as the current Review Guide? They are still requirements, only the Review Teams won’t be looking in depth at those items for non-compliance.

12. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The Committee determined there are several ways we can better serve membership: 1.A two year review cycle for all elements except for Audit Accountability: A250 & A260. 2.Audit Accountability will be the responsibility of the Committee. 3.Use Clearinghouse Data. A New Process!

13. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Use the Clearinghouse transmittals to sample/test tax returns and audits for required elements and calculations. Over 90% of review can be done with Clearinghouse data. Jurisdictions will be contacted when issues are noted. Two Year Cycle

14. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Your first review in 2018 or 2019 may include more than two years. This will allow for continuity to your last review cycle. Two Year Cycle

15. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting PCRC will complete this portion of review. In March of each year we will report to each Jurisdiction progress with A250. In March after five year cycle has ended, the PCRC will determine compliance and close review or move to follow up and/or reassessment. Audit Accountability

16. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting To make this more efficient the PCRC will work with the Annual Report Working Group to have Jurisdictions include High / Low data on their annual report. Audit Accountability

17. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Beginning January 1, 2017 more details required in the IAR’s and there are new requirements for distributing reports:  Recent ballots require much more details.  Jurisdictions to be notified of results at same time licensees are notified. Building a Better Audit

18. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The Review Team will be reviewing the IAR’s for content, required elements and funding. Thanks to these changes, the reviewers will get a good feel for the audit procedures used. Audit Content

19. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting The PCRC is not trying to expand their role. Any final determination of non-compliance will be sent to membership to initiate disputes. With these changes, the PCR program will become more efficient and timely with any non- compliance findings.

20. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Upon ratification of this review guide, R1510.200 Conditions for Membership, will need modifications. Language will need to be changed to alter “…once every five years…”. PCRC will review all Manuals for any additional language changes and propose ballots Future Ballots

21. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting Following our Webinars we received great feedback. We have noted those items and will be looking into them in the very near future.

22. August 17-18Indianapolis, Indiana 2016 Annual Business Meeting August 17-18Indianapolis, Indiana 2016 Annual Business Meeting