Audits on Electronic Data

At the IFTA Audit Workshop I watched the same presentation on GPS Audits three times. There was a LOT of great information, great questions, and great feedback.

ELDs are being used to create IFTA returns, and this can be great, or it can be not so great. Naturally it depends on the device you’re using, the data you get out of it, and the luck you have with your auditor. It seems that “ELDs’” have become a bad word in the IFTA/IRP industry, and for good reason. ELDs are about tracking the driver for hours of service. IFTA and IRP are about tracking the vehicle for mileage by jurisdiction.

Now, any good business person is going to try to get as much out of their ELD as they can. But there are some questions auditors are beginning to ask that maybe those business people should add to their collection. If you’ve already got a device, if you’re looking into a new device, you need to know the answers to these questions:

Questions

• Have you read the manual of your chosen ELD? Does it specifically say the device should NOT be used for IFTA and IRP? Some do.
• Have you read your contract completely and carefully? Does it guarantee the accuracy of the data for the purpose of tax reporting? Many don’t! Don’t take your sales guys word for it, get it in writing.
• How does your ELD system handle system updates and the status of historical data? Will they go back in time and do updates to data you’ve already reported on? Some do – and if the changes are good, may require you to amend your filing. You need to know their policy.
• How long do they keep your records? Do they say “as long as you need” and if so, does that mean for the ELD audit period? Have you told them you’re using the data for tax reporting? Do you have a copy? Is that copy backed up?

 Questions like these, are just the tip of the iceberg, and like that iceberg as you look beneath the surface you will find more questions to ask.

Internal Controls

Have you ever heard the term “Internal Controls?” It’s a hot topic with auditors, and it’s your key to turning your ELD into your IFTA/IRP data solution.

Internal controls are whatever you DO with your data to be sure it’s right. It’s how you review, it’s how you find and fix errors, it’s how you get confidence that the data matches what you actually did. While your auditors may not ask you specifically, “What are your internal controls,” they probably will ask you questions like if and how you monitor your MPG, or how you receive and save your data from the vendor, or what you do with problems with the data.

Bottom line – you can’t just take the ELD data at face value, delete it after 6 months, and think you’re covered. You need to review that data, keep it for the recordkeeping period of the tax you’re filing, and then you’re covered.