Section 11 of 15
Chapter 11: Common Errors Found in Audits
11.000 – FAILURE TO PRESERVE AND PROVIDE ADEQUATE RECORDS FOR AUDITS
Per the Plan Section 1000 and CVC Section 8057(a), the registrant is responsible for preparing, preserving, and providing the required operational records on which the application is based for a period of three years after the close of the registration year.
CVC Section 8057(a) also requires vehicle cost and weight records be retained for four years after the close of the registration year in which the vehicle was deleted.
Proper maintenance of records alleviates the assessment of penalties and interest for inadequate records, and enables the registrant to receive credits or refunds for any overpaid jurisdictional fees as determined in an audit.
11.005 – VEHICLES OPERATED IN CALIFORNIA WITHOUT PROPER REGISTRATION
Vehicles operating in California, including those that were previously based in another jurisdiction and those that are being added to or deleted from a fleet, are required to possess proper California vehicle registration upon termination or expiration of the prior registration.
11.010 – IMPROPER REPORTING OF DISTANCE (AVERAGE PER VEHICLE DISTANCE)
Actual distance generated by vehicles apportioned in the fleet must be reported when the fleet has actual distance accrued in the jurisdictions in the reporting period, despite changes in fleet vehicles, IRP account numbers, base jurisdictions, business names, business ownership, or business addresses.
If the fleet did not accrue any actual distance during the respective reporting period, an applicant shall use the California Average Per-Vehicle Distance Chart.
Whenever actual fleet or vehicle distance exists, average per-vehicle distance is not allowed on original or renewal applications.
11.015 – USE OF INCORRECT REPORTING PERIOD
Except as provided below, reporting period means the period of twelve consecutive months immediately prior to July 1 of the calendar year immediately preceding the beginning of the registration year for which apportioned registration is sought.
If the fleet registration year begins on any date in July, August, or September, the reporting period shall be the previous such twelve-month period.
11.020 – SUMMARIES DISAGREEING WITH REPORTED DISTANCE
The inconsistency could be caused by addition errors, posting distance to the wrong jurisdictions, not using the summaries to report actual distance on Schedule B, or other reasons.
11.025 – MISSING OR INCOMPLETE SUMMARIES
The registrant must prepare and maintain monthly, quarterly, and yearly summaries to recap all distance accumulated by apportioned vehicles and support the in-jurisdiction and total distance reported on the apportioned registration renewal application.
11.030 – MISSING OR INCOMPLETE SOURCE RECORDS
The registrant must prepare a source record for each trip made by an apportioned vehicle, and support by the source records the distance information recorded in the monthly summaries. No summaries shall be accepted at face value in an audit. The registrant must provide the source records to substantiate the distance summaries.
11.035 – UNSUPPORTED TIME LAPSES OR IDLE PERIODS
The registrant is to maintain and provide adequate operational records (e.g., fuel logs, equipment maintenance/repair records with recorded odometer readings, etc.) to substantiate extended periods of no operation or down time by any apportioned power units.
11.040 – SOURCE RECORDS NOT BATCHED IN DATE SEQUENCE BY EQUIPMENT NUMBER
The source records, which serve as the source documents for distance summaries and the reported actual distance, must be organized in a manner as specified in this handbook to facilitate the review of the recorded distance for individual power units.
11.045 – INSUFFICIENT INFORMATION ON SOURCE RECORDS
The source records must contain all the necessary vehicle, trip and distance information, including power unit number, distance by jurisdiction and total trip distance, trip dates, beginning and ending odometer readings, and routes traveled. Sufficient information ensures accuracy in computing the total distance and allocating in-jurisdiction distance for reporting and audit purposes.
11.050 – GAPS IN ODOMETER READINGS
Just as the origin of a trip must agree with the destination point of the previous trip, the beginning odometer reading of a trip must match the ending odometer reading of the previous trip; otherwise unrecorded movements are indicated, which may require an audit adjustment.
11.055 – DIFFERENCE BETWEEN TOTAL DISTANCE AND ODOMETER READINGS
The recorded distance should agree with the total distance derived from the odometer readings.
11.060 – UNREPORTED LOCAL OR INTRASTATE DISTANCE
Accountable distance includes all local, intrastate, and deadhead distance accrued by all apportioned vehicles.
11.065 – IMPROPER INCLUSION OF DISTANCE ACCRUED BY VEHICLES NOT APPORTIONED IN THE FLEET
Reportable distance is that accrued by the power units apportioned in the fleet in the reporting period. Distance accumulation begins from the date the vehicle is added to the fleet and ceases upon its deletion from the fleet. Any distance accrued by vehicles not apportioned in the fleet during the respective reporting period must be properly excluded from the fleet summaries and the reported distance.
11.070 – ABSENCE OF INTER-JURISDICTIONAL MOVEMENT
Each apportioned vehicle must travel in two or more member jurisdictions. Vehicles operating solely in California or in any one jurisdiction are not eligible for apportioned registration and are subject to 100% fee assessment, unless intent to travel interstate can be established.
11.075 – IMPROPER REMOVAL OF DISTANCE FROM TOTAL FLEET DISTANCE
In general, distance remains with the fleet in which it was generated. When transferring a vehicle to another fleet; delete the vehicle promptly on a supplement and retain the distance accrued by the vehicle prior to the transfer. Also, report the vehicle’s distance generated following the transfer to the new fleet.
11.080 – UNSUPPORTED PRUCHASE PRICES AND DATES
The reported purchase prices and dates must be based on the proper cost documents such as purchase invoices, which must be made available for audit upon request by the Department.
11.085 – EXCLUSION OF FEDERAL EXCISE TAX AND OTHER REPORTABLE COSTS FROM PURCHASE PRICE
Unlike sales and local taxes, the Federal Excise Tax is includable as part of the purchase price for registration purposes. Other reportable items are the delivery charge, the value of any trade-in, and the cost of any additions or modifications.