APM and Plan Document Changes

47 Pages·2010·0.19 MB·English

IRP AUDIT PROCEDURES MANUAL
AND
INTERNATIONAL REGISTRATION PLAN

ARTICLE 1
INTRODUCTION

Current Text Proposed Text/Comments
101. Purpose of the Manual 101. Purpose of the Manual
(a) The purpose of the Audit Procedures The purpose of the Audit Procedures Manual is
Manual is to establish a uniform procedure for to establish uniform audit procedure for all
all Member Jurisdictions to follow. This Member Jurisdictions to follow. This includes
includes notifying the Registrants of an Audit, notifying the Registrants of an audit,
conducting the Audit, reporting the Audit, conducting the audit, reporting the finding,
assessing shortages, granting credit, and assessing amounts owing or refundable, and
canceling Registrants, should it become canceling Registrants, if required.
necessary.

(b) The purpose of auditing Registrants under
the International Registration Plan, hereafter
referred to as “the Plan”, is to protect the
integrity of the Vehicle registration laws of all
Member Jurisdictions and to ensure equitable
treatment of all Registrants subject to the Plan.
In accordance with the purpose and principles
of the Plan in providing for efficient use of the
Member Jurisdictions’ highway systems, it is
incumbent upon each Member Jurisdiction to
meet its obligations under the provisions of the
Plan, i.e., proportional registration of
commercial Vehicles, by insuring proper
Operational Records of Registrant Total
Distance operated, and official Audit of the
appropriate Operational Records of all
Registrants as prescribed by Article X of the
Plan and the Audit Procedures Manual (APM).

102 Background
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(a) The International Registration Plan is an
agreement providing for registration reciprocity
among Member Jurisdictions. The unique
feature of the Plan is that, even though
Apportionable Fees are paid to the various
Jurisdictions in which Vehicles of a Fleet are
operated, the only Plate and Cab Card issued
for each Fleet Vehicle are the Plate and Cab
Card issued by the Base Jurisdiction. The Plan
provides for payment of Apportionable Fees on
the basis of the proportion of Total Distance
operated in all Jurisdictions by the Fleet of
which a Vehicle is part.

(b) Under the provisions of Article X of the
Plan, each base jurisdiction shall audit the
apportioned registration applications and
supporting documents of Registrants to verify
the accuracy of distance figures derived from
operational records and other registration
information. This does not preclude audits of
individual Registrants several times during the
peer review period. Such audits may cover one
to four registration years. The base jurisdiction
shall notify all affected Member Jurisdictions
(as defined in Section 803.2), in which the
Registrant paid apportioned fees, or should
have paid apportioned fees of the audit results
upon the completion of any such audits.

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ARTICLE 2
GENERAL ACCOUNTING AND AUDITING STANDARDS

201. Training and Proficiency 201. Proficiency and Due Professional Care
The Audit is to be performed by a person or For an audit to be acceptable to all Member
persons having adequate technical training and Jurisdictions, it must be conducted with due
proficiency as an auditor. professional care and the results clearly
documented. An audit is to be performed by a
person or persons having adequate training and
proficiency as an auditor.
202. Professional Care 202. Professional Care
(a) For an Audit to be acceptable to all (a) Proficiency – Auditors performing the
Member Jurisdictions, it must be conducted in engagement should possess the knowledge,
a professional manner and the results clearly skills and other competencies needed to
documented. perform the audit. The audit function
collectively should possess or obtain the
(b) Since the concept of the Plan is for the knowledge, skills, and other competencies
Registrants to pay fees to the various Member needed to perform its responsibilities as
Jurisdictions based on the percentage of Total outlined in Article 3, Chapter 304 of this
Distance traveled, it is obvious that an manual.
effective, uniform Audit program is essential to
verify the integrity of transactions. If such a (b) Due Professional Care – The auditors
program is not established, each Member should apply the care and skill expected of a
Jurisdiction will be inclined to send auditors reasonably prudent and competent auditor.
into other Member Jurisdictions to verify the
accuracy of the In-Jurisdiction Distance
percentages and Apportionable Fees paid,
creating an undue burden on Registrants. It is,
therefore, essential that the basic Audit
program adopted by each Member Jurisdiction
be uniform and thorough to ensure accuracy. It
is each Member Jurisdiction’s responsibility to
conduct an accurate Audit in a professional
manner and to submit a report to each Member
Jurisdiction in which the Registrant paid
Apportionable Fees or should have paid
Apportionable Fees. Any discrepancies in
Total Distance reported for Member
Jurisdictions are to be reported, and the Base
Jurisdiction should make a complete Audit of
the registration for the Member Jurisdictions,
making whatever adjustments are necessary.

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203. Study and Evaluation 202. Study and Evaluation
For a proper Audit to be conducted, a study As part of the audit process, the auditor(s) must
and evaluation of the Registrant’s reporting gain an understanding of and document the
system and internal accounting controls must Registrant’s reporting system and make an
be performed. It is essential that the auditor evaluation of the Registrant’s internal controls.
gain an understanding of the Registrant’s A walk through of the Registrant’s system
reporting system to aid in the Audit process. should be performed to ensure that internal
Additionally, where reliance is to be placed on controls are functioning as described. Any
internal accounting controls for sampling test weaknesses in internal controls should be
work and projections, the auditor must documented and their impact on the audit taken
determine the reliability of the internal into account through changes to the audit
accounting controls and the impact of any program.
weaknesses in the controls on sampling
procedures employed in the Audit.
204. Adequate Planning and Supervision 203. Adequate Planning and Supervision
(a) Audit work shall be adequately planned and (a) Audit work must be adequately planned and
supervised. A standardized Audit program (or supervised. A standardized audit program
checklist), describing the Audit procedures should be utilized. The use of a standardized
contained in this Audit Procedures Manual and audit program provides for consistent
other recommended Audit procedures, should application of audit procedures. It serves as a
be utilized. The use of a standardized Audit training tool for new auditors, and facilitates
program provides for consistent application of the review of the audit by the audit supervisor.
Audit procedures. It serves as a training tool It does not, however, preclude the use of
for new auditors, and facilitates the review of auditor judgment, when the auditor and
the Audit by the Audit supervisor. It does not, supervisor have reason to believe that a
however, preclude the use of auditor judgment, situation warrants an adjustment to standard
when the auditor and supervisor have reason to recommended procedures. Deviations from the
believe that a situation warrants an adjustment standard recommended procedures shall be
to standard recommended procedures. documented and approved by the Audit
Deviations from the standard recommended supervisor.
procedures should be documented and
approved by the Audit supervisor. (b) The audit function must have a system
which includes a supervisory review of the
(b) The Audit report and working papers working papers to ensure accuracy, and
should be reviewed and approved by an Audit completeness. This review should be
supervisor. This will assure that all Audits are documented in the working papers.
conducted accurately and consistently.
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205. Auditor Independence 204. Auditor Independence
(a) The auditor must be free from personal and (a) In all matters relating to the audit work, the
external impairments to independence. In all audit organization and the individual auditor,
matters relating to the assignment, whether government or public, must be free
independence in mental attitude is to be from personal, external, and organizational
maintained by the auditor. The auditor must be impairments to independence, and must avoid
without bias with respect to the Registrant the appearance of such impairments of
under Audit, since otherwise the auditor would independence.
lack the impartiality necessary for dependable
Audit findings. (b) Auditors and audit organizations must
maintain independence so that their opinions,
(b) In order to maintain independence, auditors findings, conclusions, judgments, and
should not be involved with the processing of recommendations will be impartial and viewed
registration applications. as impartial by objective third parties with
knowledge of the relevant information.
Auditors should avoid situations that could
lead objective third parties with knowledge of
the relevant information to conclude the
auditors are not able to maintain independence
and thus are not capable of exercising objective
and impartial judgment on all issues associated
with conducting the audit and reporting on the
work.
206. Working Paper Documentation 205. Working Paper Documentation
(a) The Audit report shall be supported by (a) The Audit Report must be supported by
adequate working papers. The working papers adequate working papers. The working papers
should be prepared by the auditor and shall be prepared by the auditor and
reviewed/approved by an auditor supervisor. reviewed/approved by an auditor supervisor.
They should support the basis for the findings They shall support the basis for the findings
and recommendations in the Audit report. and recommendations in the Audit Report.
Working papers should be sufficiently detailed Working papers shall be sufficiently detailed
so that a reviewer (internal or external) can so a reader can understand them without
understand them without extensive oral extensive oral explanations from the auditor.
explanations from the auditor.
(b) Working papers may be in the form of
(b) Working papers may be in the form of paper or electronic media (imaged documents,
paper or electronic media (imaged documents, spreadsheet files, databases, word processing
spreadsheet files, databases, word processing documents). Working papers must:
documents). Working papers should:
(i) Provide the principal support for the Audit
(i) Provide the principal support for the Audit Report;
report; (ii) Aid in the performance of and review of
(ii) Aid in the performance of and review of audits;
Audits; (iii) Document planning, audit procedures
(iv) Document whether Audit objectives were performed, and conclusions reached
achieved; and (iv) Document whether audit objectives were
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(iii) Facilitate third party reviews; achieved.
(v) Document planning, Audit procedures
performed, and conclusions reached.

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ARTICLE 3
AUDITOR QUALIFICATIONS AND RESPONSIBILITIES

301. Auditor Qualification 301. Auditor Qualification
Each Member Jurisdiction is responsible for Each Member Jurisdiction is responsible for
the staffing of qualified auditors based on the staffing of qualified auditors based on
Member Jurisdiction’s personnel guidelines. Member Jurisdiction’s personnel guidelines.
The staff assigned to conduct Audits must The staff assigned to conduct audits must
possess adequate professional proficiency for possess adequate professional proficiency for
the tasks required. This standard places the tasks required. This standard places
responsibility on the Member Jurisdiction to responsibility on the Member Jurisdiction to
ensure that each Audit is conducted by auditors ensure each audit is conducted by auditors who
who have the knowledge and skills necessary have the knowledge and skills necessary to
to conduct the Audit. In cases where the Audit conduct the audit. In cases where the audit is
process is performed by a private concern, the performed by a third party or contract audit(s),
Member Jurisdiction must ensure that the the Member Jurisdiction must ensure the third
contracted auditors meet applicable party or contract auditor(s) meet applicable
professional standards. professional standards.
302. Auditor Responsibilities 302. Auditor Responsibilities
(a) Auditors must give all Registrants equal (a) Auditors must give all Registrants and
and fair consideration. There must be no Member Jurisdictions equal and fair
preferential treatment given. consideration to promote consistency in the
application of regulations.
(b) Auditors must conduct Audits in
accordance with the Audit Procedures Manual (b) Auditors must conduct audits in accordance
and Member Jurisdiction’s Audit procedures. with the APM and their own jurisdiction’s
audit procedures.
(c)Auditors conduct Audits on behalf of all
Member Jurisdictions. Auditors must conduct (c) Auditors should conduct themselves in a
Audits giving each Member Jurisdiction equal manner promoting cooperation and good
and fair consideration. relations with Registrants and Member
Jurisdictions.
(d) Auditors should conduct themselves in a
manner that promotes cooperation and good
relations with Registrants and Member
Jurisdictions.
303. Scope of Duties 303. Scope of Duties
(a) The Base Jurisdictions are responsible for (a) The base jurisdictions are responsible for
the actions of their auditors as they work the actions of their auditors as they work
within the scope of their duties. Auditors shall within the scope of their duties. Auditors shall
not have organizational restrictions that not have organizational restrictions precluding
preclude them from conducting a full scope them from conducting a full scope professional
professional Audit in accordance with this Audit in accordance with this manual.
manual.
(b) The auditor must discuss any discrepancies
(b) The auditor shall be allowed to discuss any with the Registrant.
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discrepancies with the Registrant.
(c) The auditor should make recommendations
(c) The auditor shall be able to make to the Registrant.
recommendations to the Registrant.

304. Training
(a) The jurisdiction must ensure auditors
maintain proficiency in IRP auditing by
providing formal or informal training
opportunities through internal or external
training sources.

(b) The auditor is responsible for the
following:

(i) Continuing their own educational
opportunities in order to enhance and maintain
auditing proficiency.
(ii) Pursue Continuing Professional Education,
CPE (related to their organization’s activities
and industry) in order to maintain their
proficiency with regard to the governance, risk
and control processes of their unique
organization.

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ARTICLE 4
REGISTRANT RESPONSIBILITIES

401. Adequacy of Records 401. Adequacy of Records
(a) A Registrant’s distance accounting system **The record keeping requirements which are
must consistently produce the information outlined under the current APM will be
required by the Audit Procedures Manual as incorporated into the IRP Agreement (Plan)
necessary to evaluate the accuracy of Vehicle under Article X.
movement and to substantiate the Registrant’s
application for apportioned registration under
the Plan. The Registrant’s source documents
must contain sufficient detail that Vehicle (a) A Registrant’s distance accounting system
movement may be traced. must consistently produce the information
required by the Audit Procedures Manual as
(b) The Registrant must maintain Operational necessary to evaluate the accuracy of Vehicle
Records that support the total In-Jurisdiction movement and to substantiate the Registrant’s
Distance and Total Distance traveled application for apportioned registration under
everywhere. Operational Records include the Plan. The Registrant’s source documents
source documents suitable for verification of must contain sufficient detail verifying
Fleet distance as reported on the Registrant’s Vehicle movement.
application for apportionment. An acceptable
source document for verifying Fleet distance (b) The Registrant must maintain Operational
traveled is an “Individual Vehicle Distance Records supporting the total In-Jurisdiction
Record” (IVDR). A standardized IVDR is Distance and Total Distance traveled.
suggested and encouraged, but not required. Operational Records include source
While it is desirable, the necessary information documents suitable for verification of Fleet
for a trip need not be contained on a single distance as reported on the Registrant’s
source document. IVDRs shall contain the application for apportionment. An acceptable
following information: source document for verifying Fleet distance
traveled is an “Individual Vehicle Distance
(i) Date of trip (starting and ending); Record” (IVDR). A standardized IVDR is
(ii) Trip origin and destination; suggested and encouraged, but not required.
(iii) Route of travel (may be waived by Base While it is desirable, the necessary
Jurisdiction); information for a trip need not be contained on
(iv) Beginning and ending odometer or a single source document. IVDRs shall
hubodometer reading of the trip (may be contain the following information:
waived by Base Jurisdiction);
(v) Total Distance; (i) Date of trip (starting and ending);
(vi) In-Jurisdiction Distance; and (ii) Trip origin and destination;
(vii) Power Unit number or vehicle (iii) Route of travel; the name or number of
identification number. the highway or road (may be waived by Base
Jurisdiction);
(c) The Base Jurisdiction may waive either item (iv) Beginning and ending odometer or
(iii) or (iv) above, but may not waive both items hubodometer reading of the trip (may be
(iii) and (iv). Also, a Base Jurisdiction may, in waived by Base Jurisdiction);
its discretion, require an IVDR to include (v) Total Distance;
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additional information as follows: (vi) In-Jurisdiction Distance; and
(vii) Power Unit number or vehicle
(i) Fleet number; identification number.
(ii) Registrant’s name;
(iii) Trailer number; and (c) The Base Jurisdiction may waive either
(iv) Driver’s signature and/or name. item (iii) or (iv) above, but may not waive
both items (iii) and (iv). Also, a Base
Jurisdiction may, in its discretion, require an
IVDR to include additional information as
follows:

(i) Fleet number;
(ii) Registrant’s name;
(iii) Trailer number; and
(iv) Driver’s signature and/or name.

402. Monthly, Quarterly, and Yearly 402. Monthly, Quarterly, and Yearly
Summaries Summaries
(a) From the information recorded on IVDRs, (a) From the information recorded on IVDRs,
the Registrant must prepare and maintain: the Registrant must prepare and maintain:

(i) A monthly summary that recaps In- (i) A monthly summary recapping In-
Jurisdiction and Total Distance traveled by each Jurisdiction and Total Distance traveled by
Power Unit operated during the calendar each Power Unit operated during the calendar
month; month;
(ii) A quarterly summary that recaps In- (ii) A quarterly summary recapping In-
Jurisdiction and Total Distance traveled by the Jurisdiction and Total Distance traveled by the
Fleet during each calendar quarter; and Fleet during each calendar quarter; and
(iii) A summary of the quarterly recaps used in (iii) A summary of the quarterly recaps used in
preparing the application for apportionment. preparing the application for apportionment.

(b) Summaries are not acceptable at face value (b) Summaries are not acceptable at face value
and must be supported by source documents and must be supported by source documents
such as IVDRs in order to be of any use during such as IVDRs in order to be of any use
an Audit. during an Audit.

403. Receiving Contract 403. Receiving Contract
The IVDRs as mentioned can be utilized by any
Registrant; however, a different situation is
encountered in accumulating distance on one-
way vehicle Fleet Vehicles. The source
documents or IVDRs on a one-way Vehicle is
the “receiving contract,” which is the paper
work completed when a one-way vehicle is
turned in or otherwise “received.”

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