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IRP Chapter 10: Recordkeeping

IRP Chapter 10: Recordkeeping

10.000 – INTRODUCTION

The registrant must maintain adequate records to substantiate the reported distance traveled, purchase prices, and dates of all apportioned vehicles, and provide such records for examination within 30 days from the date of the Department’s request for such records, in accordance with IRP Article X and CVC Section 8057.

Records provided for audits must be complete, well organized, and readily support the reported vehicle and distance information on the applications.

Registrants apportioning leased/rental vehicles or owner-operators’ vehicles under their names are responsible for substantiating vehicle and distance information of such vehicles.

10.005 – RECORDS REVIEW A records review involves evaluating a registrant’s distance accounting system and internal controls to ensure compliance with the Plan. The primary purpose is to educate the registrants on the IRP recordkeeping requirements and increase compliance.

Records review program can educate new registrants on proper Recordkeeping requirements, and may also serve to confirm whether established registrants are adhering to the requirements. The review of the registrant’s distance accounting system is limited in scope and does not impact fees.

A records review is not an audit; however, when done properly, it should encourage registrant compliance. The registrant will receive a report outlining any Recordkeeping deficiencies and there will not be any fee adjustments. Also, a records review should not be converted into an audit merely because a registrant’s records are non-compliant.

If the registrant is not prepared for a records review, the auditor will conduct a visit and provide samples of adequate records and explain the IRP requirements. The auditor will not work out of the registrant’s home but will attempt to secure a neutral site such as a hotel lobby, business location, or a Department field office that has sufficient work space.

The auditor shall request the last complete quarter of records and records from the current quarter in progress. The auditor will photocopy or photograph sample records supporting the auditor’s findings of compliance or non-compliance.

10.010 – RECORD RETENTION AND PRESERVATION

Distance RecordsIn accordance with CVC Section 8057(a), any registrant whose application for apportioned registration has been accepted shall preserve all the records on which the application is based for a period of three years after the close of the registration year. Vehicle cost and declared or combined gross weight records shall be retained for four years after the close of the registration year in which the vehicle was deleted.

Cost RecordsIn accordance with CVC Section 8057(a), vehicle cost records must be preserved for four years after the close of the registration year in which the vehicle was deleted.

10.015 – PURCHASE PRICE AND DATE

The Vehicle License Fee (VLF) portion of the California fees is based on the purchase price and purchase date of the vehicle. In accordance with California Revenue and Taxation Code, Section 10753, the reportable purchase price must reflect the cost price to the current owner. It includes the delivery charge, Federal Excise Tax, and value of any accessories (e.g., refrigeration unit, lift gate, etc.) added to the vehicle, any cash that changed hands, and trade-in and other considerations, but excludes license fees, extended warranty, interest or finance charges, and any sales or local tax.

The reportable purchase price of a leased vehicle transferred from the lessor to the lessee at the termination of the lease is based on the original capitalized cost price and lease date shown on the lease document to the lessee.

10.020 – ACCEPTABLE VEHICLE COST DOCUMENTS

All reported purchase prices and dates on which California fees are based must be substantiated by acceptable documentation.

Failure to substantiate any reported purchase prices and/or dates may result in higher VLF classifications, as determined by the Department. Acceptable documentation includes a certificate of cost and a purchase invoice.

The auditor may also request other documents such as equipment depreciation schedules to help substantiate the reported purchase price.

The following items are considered insufficient as sole documentation for determination of the purchase price because of the absence of a detailed breakdown of the total cost price:

Security agreement Lease agreement Canceled checks

10.025 – SOURCE RECORDS

Source records are the documents completed by the driver for each trip made by an apportioned vehicle. The common source records are the driver’s trip sheets, trip reports, trip envelopes, etc. These documents are for recording trip and distance information of individual apportioned vehicles, and help the auditor determine the accuracy and validity of total distance and allocation of in-jurisdiction distance.

The Plan Section 1010 “Contents of Records” in part state “Records containing the following elements shall be accepted by the base jurisdiction as adequate under the Plan Section 1005(a)”:

For records produced by a means other than a vehicle-tracking system:

the beginning and ending dates of the trip to which the records pertain the origin and destination of the trip the route of travel the beginning and ending reading from the odometer, hubodometer, Engine Control Module (ECM), or any similar device for the trip the total distance of the trip the distance traveled in each jurisdiction the vehicle identification number or vehicle unit number

If the in-jurisdiction and total distance cannot be accurately determined due to the absence or inadequacy of information on the source records, the records are deemed to be unauditable and inadequate.

The source records provide the basis for the reported in-jurisdiction and total distance. The information recorded on the source records must be accurate, complete, legible, and verifiable.

Failure to maintain or make the requested source records available for audit will result in an inadequate record assessment as explained under Section 9.065 of the IRP Handbook.

10.030 – ACCOUNTABLE VEHICLE DISTANCE

All movements generated by the power units apportioned in the fleet are accountable distance and must be recorded and reported including:

Interjurisdictional and intrajurisdictional distance Loaded and empty distance Deadhead and/or bobtail distance Toll and non-toll distance Off-highway distance

It also includes distance accrued by apportioned vehicles trip leased to other carriers or individuals.

Under the Plan Section 315, except where the Plan permits and applicate to use average per vehicle distance, an application for registration shall contain the actual distance that the fleet being registered was operated during reporting period. If the fleet did not accrue any actual distance during the reporting period, an applicant shall use average per vehicle distance.

10.035 – MAINTENANCE OF SOURCE RECORDS

The source records must be maintained so the continuous movement of each apportioned vehicle can be audited. Registrants must maintain records in sufficient detail to account for all vehicle movements.

If the audit reveals any unusual time lapses, additional records such as fuel receipts, dispatch logs and equipment maintenance files may be needed to help determine if all distances have been properly recorded, allocated, and reported.

Failure to substantiate idle or down time for any apportioned vehicle may result in an assessment to the registrant for inadequate records as provided under the Plan Section 1015 and as prescribed in Section 9.060 of the IRP Handbook.

Effort will be made to allocate any unrecorded distance identified in the audit among the affected member jurisdictions.

10.040 – TRIP DISTANCE AND ODOMETER READINGS

The Plan and California requires the recording of odometer or hubodometer readings on the source records.

Proper and consistent use of these readings assures full reporting of distance generated by the individual apportioned vehicle. To ensure continuity of the odometer or hubodometer readings, the beginning meter reading of a trip must match the ending reading of the previous trip.

The Registrant may use other methods to determine distance, including jurisdiction highway maps, commercial road atlas, distance software, Household Goods Carrier’s Bureau Mileage Guide, and Global Positioning System (GPS). However, these other sources do not exempt the registrant from maintaining odometer or hubodometer readings for each apportioned vehicle.

Reported distance based on a map or distance software must reflect the routes actually taken and local distance driven. Odometer or hubodometer readings provide a reliable source to account for and record local distance. During an audit, total distance derived from the recorded odometer readings is compared with recorded total distance for individual vehicles. Any material variances between the two sources are analyzed and adjusted, if necessary.

The registrant must ensure that the odometer or hubodometer is in good working condition. Any broken device must be repaired or replaced in a timely manner. Accountability of vehicle distance must continue despite the breakdown of the odometer or hubodometer. This can be accomplished through the use of map miles on the source records.

10.045 – FILING AND ORGANIZATION OF SOURCE RECORDS

Source documents used to support the monthly summaries shall be filed in trip date sequence by power unit number to provide a ready accountability of distance generated by individual apportioned vehicles. Documents batched by customer name, driver’s name or manifest number require reorganization of the records and increase the audit time, and they may be returned to the registrant for reconstruction.

If batching the documents in chronological trip date order by equipment number is not feasible, the registrant should prepare and maintain a vehicle continuity report or a monthly listing of trips by equipment number, with adequate cross referencing, beginning and ending odometer or hubodometer readings, and other information necessary for purposes of verifying the reported distance by individual apportioned vehicles.

10.050 – MONTHLY SUMMARIES

From the information recorded on the source records, the registrant must prepare and maintain a monthly summary to recap the total distance traveled by each apportioned vehicle in each jurisdiction during the calendar month by fleet, jurisdiction, and equipment number.

Summaries will not be accepted at face value in an audit, without a sufficient testing of the registrant’s internal controls and an adequate examination of the source records.

To be acceptable for audit, monthly summaries must be fully supported by the source records and reasonably reflect the months in which the trips were made. Monthly summaries must agree with and provide ready support for the quarterly and yearly summaries.

Monthly summaries are essential documents in IRP audits. It is not the auditor’s job to reconstruct summaries from the source records. If source documents are provided for audit without the required summaries, the records will be deemed inadequate or unacceptable for audit purposes and returned to the registrant, and the Department will issue an assessment to the registrant for inadequate records as provided under the Plan Section 1015 and as prescribed in Section 9.060 of the IRP Handbook.

10.055 – QUARTERLY SUMMARIES

From the monthly summaries, the registrant must prepare and maintain a quarterly summary that recaps, by equipment number, by jurisdiction and by fleet, the total distance traveled in each jurisdiction during each quarter of the registered year.

Preparing quarterly summaries does not relieve the registrant of the responsibility to prepare and maintain monthly summaries in the manner as described in Section 10.045 of the IRP Handbook.

Note that the International Fuel Tax Agreement (IFTA) Quarterly Fuel Use Tax Schedules are not acceptable summaries for IRP audit purposes.

10.060 – YEARLY SUMMARY

From the monthly or quarterly summaries, the registrant must prepare a yearly summary that recaps the total distance traveled in each member jurisdiction during the reporting period by fleet, month/quarter, and jurisdiction.

The registrant shall use the yearly summary to report the in-jurisdiction and fleet distance on Schedule B of the renewal application. Therefore, the fleet distance in the yearly summary and Schedule B should be identical.

The Department recommends preparing a yearly summary that recaps the total distance traveled in each jurisdiction during the reporting period by fleet, equipment number, and jurisdiction.

10.065 – NEW FLEETS

Establishing a new fleet by an applicant does not in itself qualify the applicant to have the apportioned fees for the new fleet calculated using the Average Per-Vehicle Distance Chart.

An applicant may not use the Average Per-Vehicle Distance Chart when the new fleet is composed entirely or primarily of vehicles which the applicant operated or over which the applicant exercised control during the reporting period and these vehicles accrued actual distance in the member jurisdictions for which the applicant seeks apportioned registration.

If a registrant reports average per vehicle distance for a fleet, and it is discovered that actual distance was traveled in any Member Jurisdiction, the auditor must remove the average per vehicle distance and replace it, as necessary, with the actual distance traveled in the Member Jurisdiction.

10.070 – REGISTRANTS WITH MULTIPLE FLEETS

Registrants operating more than one apportioned fleet must prepare and maintain separate source records and summaries for the respective fleets.

10.075 – FLEET CONSOLIDATION

A registrant may combine two or more existing fleets of its apportioned vehicles. In such a situation, the apportionable fees of the vehicles in the resulting fleet shall be determined based on the actual distances accrued in the reporting period by all the vehicles in the resulting combined fleet.

10.080 – INTERJURISDICTIONAL TRAVEL

Only commercial vehicles that travel interstate or “intended” to travel interstate are eligible for apportioned registration. “Intent” will be established by records of travel and verifiable contracts.

Vehicles traveling solely in California or in another jurisdiction are not eligible for apportioned registration and are subject to 100 percent regular registration fees.

The fact that a vehicle is not used in more than one jurisdiction for the entirety of a registration year and for six additional months gives rise to a presumption that the registrant did not intend to use the vehicle in more than one member jurisdiction.

10.085 – UNREGISTERED OR IMPROPERLY REGISTERED VEHICLES

CVC Section 4000 requires proper registration and payment of such fees for vehicles operating or standing upon California streets and highways, except for those vehicles that are specifically exempt by law.

California has no grace period in vehicle registration. California fees, interest, and penalties will be assessed on vehicles that are found to have operated in California without proper vehicle registration.

10.090 – RESIDENT REGISTERING VEHICLE IN FOREIGN JURISDICTION

CVC Section 8804 provides that, while a resident of this state, a person is guilty of misdemeanor if operating any foreign plated vehicle in the state without the payment of appropriate California fees and taxes.

10.095 – ADDITIONAL INFORMATION

It is the Department’s intent to carry out the IRP Audit program fairly and uniformly, with minimum disruption to the registrant’s business and at the lowest cost consistent with the standards and good audit practices.