Amtrak Management:

Systemic Problems Require Actions to Improve Efficiency, Effectiveness, and Accountability

GAO-06-145: Published: Oct 4, 2005. Publicly Released: Nov 3, 2005.

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Amtrak has struggled since its inception to earn sufficient revenues and operate efficiently. In June 2002, Amtrak's new president began major efforts to improve efficiency. However, the financial condition of the company remains precarious, requiring a federal subsidy of more than $1 billion annually. Capital backlogs are now about $6 billion, with over 60 percent being attributable to its mainstay Northeast Corridor service. GAO reviewed Amtrak's (1) strategic planning, (2) financial reporting and financial management practices, (3) cost containment strategies, (4) acquisition management, and (5) accountability and oversight.

Amtrak's basic business systems need to be strengthened to help achieve financial stability and meet future operating challenges. Recently, Amtrak's management has taken positive steps to instill some discipline and control over operations. However, fundamental improvements beyond these efforts are needed to better measure and monitor performance, develop and maintain financial controls, control costs, acquire goods and services, and be held accountable for results. Several key themes emerged across all five areas GAO reviewed. Amtrak lacks a meaningful strategic plan that provides a clear mission and measurable corporatewide goals, strategies, and outcomes to guide the organization. Also absent is a comprehensive strategic planning process, characteristic of leading organizations GAO has studied. Also, while Amtrak has recently taken steps to improve its acquisition function, GAO found that some major departments independently made large purchases and did not always adhere to Amtrak's procurement policies and procedures. Amtrak lacks adequate data on what it spends on goods and services, preventing it from identifying opportunities to leverage buying power and potentially reduce costs. Similarly, while Amtrak has recently reduced costs, revenues are declining faster than costs, leading to operating losses exceeding $1 billion annually. These losses are projected to grow by 40 percent within 4 years; no effective corporatewide cost containment strategy exists to address them. Financial reporting and financial management practices are weak in several areas. Financial information and cost data for key operations, while improved, remain limited and often unreliable. For example, Amtrak's on-board food and beverage service lost over $160 million for fiscal years 2002 and 2003. Amtrak's poor management and enforcement of its food and beverage contract (an outside contractor is responsible for procuring and distributing food and beverages for most of Amtrak's trains) may have contributed to this loss. Regarding financial reporting, GAO found that Amtrak had omitted or misallocated key expenses in several areas, substantially understating operating expenses in reports that managers use to assess performance. Similarly, Amtrak has not developed sufficient cost information to target potential areas to cut costs, accurately measure performance, and demonstrate efficiency. Developing transparency, accountability, and oversight is critical for achieving operational success. Since Amtrak is neither a publicly traded private corporation nor a public entity, it is not subject to many of the mechanisms that provide accountability for results. Mechanisms that do apply, such as oversight by the board of directors and the Federal Railroad Administration, are limited or have not been implemented effectively. Current congressional review of Amtrak offers an opportunity for addressing these transparency and accountability issues.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: On October 16, 2008, the Passenger Rail Investment and Improvement Act of 2008 (P.L. 110-432) was enacted into law. The law provides Amtrak with about $2 billion per year for necessary operating and capital expenses, provides additional funds for states to work with Amtrak to develop corridors for passenger rail service, increases internal controls over Amtrak's financial reporting and performance, and calls for the Federal Railroad Administration to prepare a national rail plan. The law also establishes a High Speed Rail Corridor Development program that allows states and the private sector to develop high speed rail service on various corridors in the U.S. Although this law increases Amtrak funding and increases the role of states in passenger rail decision making, it is not clear that it establishes a national policy for intercity passenger rail that addresses the 4 elements specified in the recommendation. The law does not necessarily establish a national intercity passenger rail policy that clearly establishes goals, objectives, and outcomes, roles of the federal government and other stakeholders that are not conflicting and relate to the goals and objectives, or provide strategies addressing diverse stakeholder interests. The current structure of intercity passenger rail is retained without identifying its goals, objectives, and outcomes, nor clearly identifies the federal role in accomplishing these.

    Matter: As part of the deliberation about the future of Amtrak and intercity passenger rail, Congress may wish to consider establishing a national policy for intercity passenger rail and determining the appropriate role for Amtrak by ensuring that reauthorization or reform legislation (1) establishes clear, nonconflicting goals; (2) establishes the roles of both the federal and state governments as well as private entities; (3) establishes funding approaches that focus on and provide incentives for results and accountability; and (4) provides that the strategies developed address the diverse stakeholder interests and limit unintended consequences.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In 2005, GAO reported that Amtrak had not developed a comprehensive strategic plan that articulated a mission, corporatewide goals that are tied to the mission, strategies that would be employed to achieve those goals, and outcomes for efforts needed to run all the components of its operations--both capital and operating. Amtrak developed a capital plan--which it called a strategic plan--that covered capital projects, tied to the capital budget, and supported the state of good repair goal, but Amtrak did not have a documented plan that included measurable or comprehensive corporatewide goals or strategies for other aspects of the company's operations. Units within Amtrak had developed department-specific goals, but without a strategic plan, Amtrak could not ensure that these goals supported corporatewide performance. Therefore, GAO recommended that Amtrak prepare a comprehensive strategic plan with a clearly defined mission, organizational goals and objectives that encompass all of Amtrak's activities, and strategies to achieve those goals. In 2014, GAO confirmed that Amtrak issued a strategic plan in 2011 that included a vision statement, corporatewide goals, and related performance measures. Amtrak updated that plan for fiscal years 2014 through 2018 to include a mission statement, further refined goals, and a business line strategy intended to better align day-to-day efforts with the company's strategic goals and hold the business lines accountable for results. This plan will help Amtrak more comprehensively manage the corporation and ensure that all activities and individuals within the organization are working toward goals and achieving results.

    Recommendation: To create a strategic planning and performance-based management approach and to build on the strategic planning efforts already under way at Amtrak, Amtrak's president should prepare a comprehensive strategic plan with a clearly defined mission, organizational goals and objectives that encompass all of Amtrak's activities, and strategies or action plans to achieve those goals.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  2. Status: Closed - Not Implemented

    Comments: Amtrak has not established annual performance goals that tie to the company's mission and corporate goals nor has any immediate plans to do so. Although Amtrak's strategic guidance outlines the company's mission, goals, and key performance indicators to measure progress toward these goals, Amtrak does not have annual performance goals that show how the company's departmental activities help to achieve the company's overall goals. Amtrak is in the process of establishing a timeline for developing a strategic plan, defining strategies to meet their goals, and identifying processes for reporting results, which it expects to release in October 2010, but it is not clear the extent to which this process might also result in Amtrak establishing annual performance goals.

    Recommendation: To create a strategic planning and performance-based management approach and to build on the strategic planning efforts already under way at Amtrak, Amtrak's president should establish annual performance goals that tie to the mission and corporate goals.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  3. Status: Closed - Implemented

    Comments: In October 2005, GAO found that the National Railroad Passenger Corporation (Amtrak) lacked a pay-for-performance management system to provide incentive for achieving goals. GAO recommended that Amtrak develop such a system to ensure that responsibility for goals was clearly articulated. In response, in 2007, Amtrak began implementation of a performance-based management approach for its non-agreement employees that was designed to, among other things, establish clear and measurable goals for employees and reward employees based on their performance. Amtrak also began implementing a web-based tool called IMPACT--Improving Amtrak (by): Managing and Coaching, Performing Consistently, Achieving Goals, Compensating Employees, and Training for Success--designed to establish and track employee performance goals. In 2009, Amtrak instituted a pay-for-performance system for its salaried non-agreement employees and assigned senior managers responsibility for each of the company's overall key performance indicators (KPIs) established in Amtrak's strategic guidance. Finally, in January 2010, Amtrak upgraded the IMPACT system to provide on-line access for non-managers and also more easily allow an employee's individual goals to be aligned with their department's business goals. According to Amtrak, the IMPACT system allows Amtrak to hold managers accountable for ensuring employees have clear, measurable goals and rewarding employees based on their performance against established goals. Given the importance of linking individual performance against goals to improve corporate performance, Amtrak's actions have substantially increased its ability to provide this link. Amtrak's actions will also greatly facilitate further strengthening of this link as Amtrak develops its strategic plan and refines its mission, vision, corporate goals, and metrics.

    Recommendation: To create a strategic planning and performance-based management approach and to build on the strategic planning efforts already under way at Amtrak, Amtrak's president should develop an incentive-based performance management system that ensures responsibility for goals is clearly articulated at all levels of the organization.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  4. Status: Closed - Implemented

    Comments: In October 2005, GAO found that the National Railroad Passenger Corporation's (Amtrak) ability to monitor, evaluate, and report on performance was hindered by its data systems and reporting processes. In particular, GAO found that Amtrak's monthly performance reports--the key document used by managers and stakeholders to gauge Amtrak's performance--did not contain relevant information, such as key cost metrics, to assess whether resources were being used efficiently. In addition, these reports included information of questionable reliability. GAO recommended that Amtrak assess and develop the data systems and processes necessary to monitor, evaluate, and report on progress toward Amtrak's mission and strategic and annual performance goals. In response to GAO's recommendation, beginning in 2009, Amtrak established a performance management tool--referred to as a "dashboard"--to help Amtrak's management and Board of Directors monitor and evaluate performance of the key performance indicators (KPIs) outlined in the company's strategic guidance. According to Amtrak officials, the status of the KPIs, as reflected on the dashboard using a color coded system, is discussed in Amtrak's weekly executive committee and monthly Board of Directors meetings. In addition, Amtrak reports the status of its KPIs in their publicly available monthly performance reports. GAO believes that Amtrak's actions in establishing KPIs and the dashboard substantially improves its ability to monitor, evaluate, and report on company performance. The KPIs and dashboard will also substantially improve Amtrak's ability to monitor progress as it develops its strategic plan and further defines the processes for reporting results.

    Recommendation: To create a strategic planning and performance-based management approach and to build on the strategic planning efforts already under way at Amtrak, Amtrak's president should assess and develop the data systems and processes necessary to monitor, evaluate, and report--both internally and externally--on progress toward Amtrak's mission and strategic and annual performance goals.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  5. Status: Closed - Implemented

    Comments: Update as of 6/24/2010: The Federal Railroad Administrator required Amtrak to submit plans, which includes specific actions to be taken, anticipated outcomes (consistent with the recommendations we made to the president of Amtrak in GAO-06-145), and completion dates, to improve its financial reporting and financial management practices. The recommendation will be closed as implemented based upon the actions of FRA to require Amtrak to submit 2 different plans which address the intent of this recommendation. (MPZ 6/24/2010)

    Recommendation: To ensure that Amtrak's financial reporting and financial management practices support sound business decisions and the efficient and effective use of federal funds provided to Amtrak, the Secretary of Transportation should direct the Federal Railroad Administrator to require Amtrak to submit a plan, which includes specific actions to be taken, anticipated outcomes, and completion dates, to improve its financial reporting and financial management practices.

    Agency Affected: Department of Transportation

  6. Status: Closed - Not Implemented

    Comments: Update as of 6/24/2010: FRA has not provided evidence to support the feedback and direction on Amtrak's plans to address the 8 GAO recommendations related to financial management matters (in Chapter 3 of GAO-06-145). FRA also did not identify whether it provided input on the quarterly reports which more specifically covered the GAO recommendations. While FRA indicated that it provided some feedback to Amtrak on the Managerial Cost Accounting plan, it did not provide any support or documentation to evidence the feedback provided. As a result, we closed this recommendation as unimplemented. (MPZ 6/24/2010) Update as of 12/15/2008: We are in the process of evaluating information provided by FRA in September 2008 related to this recommendation.

    Recommendation: To ensure that Amtrak's financial reporting and financial management practices support sound business decisions and the efficient and effective use of federal funds provided to Amtrak, the Secretary of Transportation should direct the Federal Railroad Administrator to review and provide Amtrak with feedback and direction, as necessary, on this plan to ensure that the most effective approach(s) to improving financial reporting and financial management practices are implemented.

    Agency Affected: Department of Transportation

  7. Status: Closed - Not Implemented

    Comments: Update as of 6/24/2010 The information provided by FRA to evidence its communications with Congress on Amtrak's progress in implementing our recommendations did not include the information called for by our recommendation. Specifically, it did not address Amtrak's progress in implementing improvements of its financial management and reporting practices or did not identify any specific actions either Amtrak or Congress should take to facilitate such improvements. While some monitoring by FRA of Amtrak's actions has been done, the information provided to the Congress did not evidence FRA monitoring actions to help ensure Amtrak was following the plans or Amtrak's progress in implementing the financial reporting and financial management practices needed to support sound business decisions and the efficient and effective use of federal funds provided to Amtrak. As a result, this recommendation will be closed as unimplemented. (MPZ 6/24/2010) Update as of 12/15/2008: We are in the process of evaluating information provided by FRA in September 2008 regarding this recommendation.

    Recommendation: To ensure that Amtrak's financial reporting and financial management practices support sound business decisions and the efficient and effective use of federal funds provided to Amtrak, the Secretary of Transportation should direct the Federal Railroad Administrator to monitor Amtrak's performance under the plan and report, at least annually, to Congress on progress being made by Amtrak regarding improvements of its financial reporting and financial management practices--this report should identify any specific actions either Amtrak or Congress should take to facilitate such improvements.

    Agency Affected: Department of Transportation

  8. Status: Closed - Implemented

    Comments: Update as of 6/1/2010: Amtrak officials have indicated that, while not done yet, the APT system will include the relevant public information in monthly performance reports described in this recommendation. Amtrak officials have provided documentation to support that APT has the ability to produce reports that provide information on food and beverage service, comparisons of budget versus actual allocated expenses, and information for each line of business. Amtrak continues to work with Volpe to address the development of the depreciation allocation via a synthetic capital charge, which is scheduled to be in the June data released in July 2010. Amtrak has essentially addressed the intent of this recommendation through the development of the APT system and as a result this recommendation is closed as implemented. (MPZ 6/1/2010)

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should add the following information to monthly performance reports: (1) food and beverage services: separate revenue and expense information, gross profit analysis, information on the cost of meals, and other metrics basic to a food service operation; (2) employee benefits: cost trends, changes in the components of benefit costs, and initiatives to manage these costs; (3) each line of business: components of key expense line items and functional activities (such as salaries and benefits), trends in key expense components, differences in actual versus budgeted results, and appropriate performance metrics (such as revenue per passenger mile and expense per passenger mile); and (4) each train route in the route performance information (RPI): comparative expense and net profitability or loss, amounts for depreciation expense, and amounts for other components of expenses (such as salaries and benefits).

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  9. Status: Open

    Comments: Update as of 6/1/2010: Amtrak did not perform the recommended risk assessment of its Route Performance System (RPS), and it has now been replaced by the new Amtrak Performance Tracking (APT) system. However, Amtrak has not demonstrated how, in developing APT, it has taken adequate steps to help ensure that APT is not vulnerable to the same financial reporting process weaknesses we previously found with its RPS cost and performance information. As Amtrak continues to implement additional components of APT, we will continue to obtain and evaluate information from Amtrak related to this recommendation. (MPZ 6/1/2010) Update as of 12/15/08: No change. We are continuing to seek information from Amtrak and evaluating information provided by Amtrak over the last several months. Amtrak is in the midst of a major overhaul of its financial accounting and reporting system which is expected to take years to complete. RJ 12/15/08. We are in the process of obtaining information about this recommendation as of August 2007. A substantial turnover of management staff in recent years has lowered the priority of this recommendation. RAJ 8/29/07

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should perform a comprehensive risk assessment of financial reporting processes that support preparation of monthly performance reports and the RPI, to include determining areas of vulnerability, implementing appropriate compensating and mitigating internal controls, and ongoing monitoring to ensure compliance.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  10. Status: Open

    Comments: Update as of 6/1/2010: Amtrak has implemented most of its Amtrak Performance Tracking (APT) system, which is intended to fully allocate Amtrak's costs. Amtrak officials have indicated that Amtrak is currently developing documentation to define responsibility centers and allocation rules in APT and set forth related procedures and processes for the review and approval of the implementation, and any subsequent changes to, those rules. When fully implemented, Amtrak should have the information needed to take actions to address the intent of the recommendation. Amtrak is also still working on guidance for justification and authorization of changes made to the allocation methods developed in conjunction with Volpe. We will continue to obtain and evaluate information from Amtrak related to this recommendation. (6/01/2010) Update as of 12/15/08: No change. We continue to seek information from and evaluate information related to this recommendation from Amtrak. Amtrak is in the midst of a major overhaul of its accounting and financial reporting system. RJ 12/15/08. We are in the process of obtaining information about this recommendation. A substantial turnover of management staff has delayed providing updated information. RAJ 8/29/07

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should document policies and procedures related to controlling the information in the monthly performance reports, including the RPI. The policies and procedures should cover how expenses are allocated to Amtrak's routes, as well as specific guidance on documenting the justification and authorization of changes made to allocation methods.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  11. Status: Closed - Implemented

    Comments: Update as of 3/8/2010: Amtrak developed a method to allocate its accrued postretirement health benefit expenses among Amtrak's lines of business. Amtrak's method to allocate its accrued postretirement health benefit expenses allows it to bill for the amount it has determined through the allocation method under its reimbursable agreements with outside entities. Finally, Amtrak adjusts its standard benefit expenses rate on a quarterly basis to reflect within a fiscal year the changes in estimates versus actual expenses. As a result, Amtrak has implemented this recommendation. (MPZ 3/8/2010)

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should allocate accrued postretirement health benefit expenses among Amtrak's lines of business and reflect accrued costs in billings for employee benefits under reimbursable agreements with outside entities. Adjust standard benefit expenses rate on a timely basis.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  12. Status: Closed - Not Implemented

    Comments: Update as of 6/1/2010: Amtrak officials have confirmed that no Supplemental Executive Retirement Plan (SERP) awards have been issued since October 2005 when the GAO report was issued and that there are currently no plans to issue any awards under the SERP. Amtrak management is not planning to take any action to address this recommendation until it decides to issue new plan awards. Accordingly, the recommendation has been closed as unimplemented. (MPZ 6/01/2010) Update as of 12/15/08: We continue to seek from and evaluate information received from Amtrak related to this recommendation. Amtrak is in the midst of a major overhaul of its accounting and financial reporting system that will not be completed for several years. RJ 12/15/08. As of September 30, 2006 Amtrak has incorporated this project in a new Retirement Benefits Review initiative and plans to update plan documents to define such terms. Amtrak will reconsider the timing of SERP awards. We are in the process of obtaining updated information. RJ 8/29/07

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should modify existing controls by (1) clearly define all significant terms used in Supplemental Executive Retirement Plan (SERP) determinations (such terms include management committee member, senior staff employee, compensation, financial targets, and performance goals) so that they can be consistently applied throughout the process; and (2) reconsider the timing of management proposals for SERP awards to ensure that decisions are based on information from audited financial statements.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  13. Status: Open

    Comments: Update as of 6/1/2010: Amtrak officials indicated that progress on addressing this recommendation centers on its ongoing efforts to develop and implement its new Strategic Asset Management (SAM) system, which will replace its current aging financial system. Amtrak does not anticipate beginning to implement SAM until FY 2011. The Amtrak OIG started a "pre-implementation audit" of SAM's design scheduled in 03/15/2010 and Amtrak management anticipates that this review will include procedures to consider both preventive controls and capital asset accounting. This recommendation will remain open as Amtrak working on actions to complete the design and implementation of the SAM system. We will monitor the status of Amtrak and the Amtrak OIG's efforts on the SAM system. (MPZ 6/01/2010) Update as of 12/15/08: No change. We continue to seek information from and evaluate information received from Amtrak regarding this recommendation. Amtrak is in the midst of a major overhaul of its accounting and financial management system. RJ 12/15/08. As of September 30, 2006, Amtrak in the short-term has developed and implemented back-end controls that mitigate the lack of an integrated financial system. Long-term, Amtrak has been taking steps since April 2004 toward implementing an integrated financial system. Recently, Amtrak has developed with an outside consultant, a comprehensive plan to implement an integrated financial system beginning in Fiscal Year 2006. A Request for Proposals has been sent to vendors for SAP system implementation process. Implementation activity expected to begin in Jan/Feb 2007. As of August 2007, we are awaiting updated information on this recommendation. RJ 8/29/07

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should develop a comprehensive action plan for immediately implementing preventive controls to enhance the reliability of financial data and address the reportable condition over accounting for capital assets in the most recent reports and letters of comment from the independent public accountant.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  14. Status: Closed - Not Implemented

    Comments: Update as of 6/1/2010: Amtrak officials do not plan to engage their external auditor to assess compliance with certain federal regulations or expand the IPA's work on quarterly financial statements. Because this recommendation will not be acted upon by Amtrak management, we have closed this recommendation as unimplemented. (MPZ 6/1/2010) Update as of 12/15/08: We continue to seek information from and evaluate information received from Amtrak regarding this recommendation. Amtrak is in the midst of a major overhaul of its accounting and financial reporting system. RJ 12/15/08. We are in the process of obtaining information about this recommendation. A substantial turnover of management staff in 2006-2007 has made delayed providing updated information. RJ 8/29/07

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should engage an independent public accountant to provide (1) special services as necessary to provide assurance over compliance with federal regulations concerning overhead rates developed and applied to recover indirect costs associated with work performed for outside parties and (2) review-level attestation work on Amtrak's quarterly financial statements.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  15. Status: Closed - Implemented

    Comments: In response to our recommendation, Amtrak management has continued to have its independent public accountant (IPA) conduct its financial statement audit in accordance with U.S. generally accepted government auditing standards (GAGAS). In addition, effective with the FY 2009 audit report, Amtrak officials have made the IPA auditor reports on the financial statements and internal control and compliance publicly available on its web site. The FY 2009 report noted several significant deficiencies in Amtrak's internal control related to financial reporting and acknowledged that other matters related to internal control over financial reporting had been communicated separately to Amtrak management. Furthermore, Amtrak officials have advised GAO that they intend to continue to have their IPA conduct their financial statement audits in accordance with GAGAS and to make resulting auditor reports on the financial statements and internal control and compliance available to public. As result, this recommendation is closed as implemented. (MPZ 6/1/2010)

    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should continue to have annual audits of its financial statements performed under U.S. generally accepted government auditing standards (GAGAS) and, effective beginning with its fiscal year 2004 financial statement audit, make publicly available the auditor reports prepared under GAGAS reporting standards for financial audits, including those on internal control and compliance with laws, regulations, and provisions of contracts and grants.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  16. Status: Closed - Not Implemented

    Comments: Update as of 04/29/10: Closed, Not Implemented. While Amtrak has comprehensively reviewed its cost structure during the development of its new Amtrak Performance Tracking system or APT, it has not been able to demonstrate the performance of its individual assets to GAO. Therefore, we are closing this recommendation as not being implemented. Update as of 12/15/08: No change. The Strategic Asset Management Plan is expected to be completed in fiscal year 2009. RJ 12/15/08. According to FRA, Amtrak is developing a Managerial Cost Accounting Plan, whose major elements include a strategic asset management plan, an activity analysis project and the replacement of the Route Profitability System. The Plan will fully integrate Amtrak's financial, supply chain, and material and asset management systems. In September 2008, Amtrak issued a contract to a consultant to assist in the development of this system. (GMH 10/20/08) In response to this recommendation, Amtrak sent a copy of its draft NEC master plan. This report is intended to produce information for policy discussion among NEC stakeholders. It contains a section on Amtrak's NEC operational costs and major NEC capital projects; however it discusses them in a general and summary fashion with not a lot of details. In addition, the report does not address Amtrak's entire cost structure nor does it assess the performance of all of its assets, which include more than the NEC. In response to a GAO recommendation from another report (GAO-06-470), Amtrak officials summarized the work that the Amtrak Finance department is conducting with the FRA's Volpe Center to develop a new performance tracking system that will utilize 34 cost centers to allocate then aggregate Amtrak's costs into related cost categories. According to Amtrak, this system will replace the Route Performance System and allocate revenues as well. Testing of this system will occur into the first fiscal quarter of FY09. More follow-up is needed to determine what business lines and assets are included in this system, how revenues and costs are calculated and how this information will be used by Amtrak. GMH 09/18/08. We are in the process of obtaining updated information about this recommendation as of August 2007. RJ 8/29/07 Amtrak's response: Efforts are underway to assess cost structure and improve utilization of Amtrak fleet and infrastructure assets, including tracking of performance against key measures such as fleet reliability and availability. Current status: Requirements defined, fleet optimization model and Northeast Corridor infrastructure master plan (including asset condition assessment) under development, performance tracking under development as part of fleet plan and dashboard. (09/06)

    Recommendation: To ensure that Amtrak can better meet the challenge of increasing its efficiency and reducing its operating costs, the president of Amtrak should comprehensively assess Amtrak's cost structure and the performance of its assets.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  17. Status: Open

    Comments: Update as of 09/13/11: The new SAP system has the ability to apply cost charges to capital and operating activities which will allow Amtrak to better identify unit costs. The new SAP system in these beginning stages currently doesn?t produce any standard set of unit costs, however, according to Amtrak, unit costs can be more easily derived based on the activity. For example, in SAP, any portion of work that is performed on a project will be applied as a secondary cost and attributed to the activity which will allow Amtrak to better derive a unit cost calculation. It is clear Amtrak is developing the tools to establish unit costs for its assets and is moving in the direction of establishing such unit costs. Amtrak also plans to begin reporting a synthetic capital charge in their fiscal year 2012 route reports, which could provide more insight into Amtrak?s asset use costs. Update as of 04/29/10: Amtrak is developing its Strategic Asset Management data warehouse project which, in conjunction with its new APT reporting system, will allow for the creation of efficiency and unit cost measures with clear inputs from its accounting, payroll and other systems. We are leaving this recommendation open at this time to allow Amtrak to develop these systems and measures. Update as of 12/15/08: No change. We will continue to seek information about this recommendation. RJ 12/15/08. According to FRA, Amtrak is continuing to develop measures of corporate performance and outcomes in conjunction with FRA on-site personnel. According to Amtrak's grant agreement with FRA, these measures must be posted on Amtrak's website and addressed through Amtrak's monthly performance report. These are overall corporate measures (such as ticket yield and revenue per seat mile) and do not show individual asset performance or unit cost metrics which could help Amtrak determine where opportunities to lower its costs are. (GMH 10/20/08) Amtrak's updated response: Amtrak Finance department officials sent a March 4, 2008, memo documenting personnel shifts to facilitate Amtrak's strategic planning under its relatively new president and an August 5, 2008, memo documenting the formulation of a business strategy working group to develop Amtrak's NEC, State Corridor, and Long Distance business strategies and related plans. These documents do not mention any formulation of efficiency and unit cost measures with clear inputs to benchmark individual asset or corporate productivity nor do they link any of the working group's efforts toward developing these measures. In previous responses, Amtrak officials indicated that a set of performance metrics had been developed and was sent to Amtrak's Board of Directors for approval. Amtrak Finance has since stated that these metrics were never formally adopted by Amtrak's Board and were discontinued. Amtrak does report some measures of corporate productivity in its Annual Statistical Report as part of its Annual report, such as system wide load factor, ticket yield, total revenue per seat mile, total expense per seat mile, core revenue per seat mile and core expense per seat mile. GMH 09/18/08. Amtrak's response: Efforts are underway to develop key performance metrics, unit costs and external benchmarks, consistent with recommendations in Amtrak's Strategic Reform Initiatives (SRI) plan. Key corporate level metrics have been defined. Implementation of corporate dashboard to track metrics underway. Current Status: Key corporate level metrics have been defined. Implementation of corporate dashboard to track metrics is underway. We are in the process of obtaining updated information regarding this recommendation. RJ (08/07)

    Recommendation: To ensure that Amtrak can better meet the challenge of increasing its efficiency and reducing its operating costs, the president of Amtrak should establish efficiency and unit cost measures with clear inputs to benchmark individual asset and corporate productivity, which will demonstrate efficient use of Amtrak's resources.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  18. Status: Closed - Not Implemented

    Comments: Update as of 04/29/10: Amtrak management is still developing its Strategic Asset Management system, which could be an asset to developing a corporate-wide cost containment strategy. Amtrak is focusing on developing these systems and metrics that could be created from them and not focusing on broader cost containment strategies. Therefore, we are closing this recommendation as not implemented. Update at of 12/15/08: We will continue to monitor implementation of this recommendation. As in September 2008, it will be 2009 before information will be available to determine the status of this recommendation. RJ 12/15/08. Update: Amtrak has is currently developing revenue and cost metrics by working with FRA's Volpe Center. This system is still under development and will be in testing until at least the end of the first fiscal quarter of FY09. Without these measures, Amtrak cannot address the recommendation to develop a cost containment strategy. GMH 09/18/08 Amtrak's response: Performance metrics, unit costs and external benchmarks are part of broader performance measurement framework, currently in development, that includes among its objectives cost control and improved efficiency and productivity. Preliminary planning is underway to assess the integration of this performance-based framework into budgeting and accounting systems. Current Status: Series of initiatives defined; Project Management Office in place; project managers assigned and schedules being developed; annual targets identified; Amtrak is managing to and tracking these targets. (09/06) We are in the process of obtaining information about this recommendation. A substantial turnover of management staff has delayed providing this update. RJ 8/29/07

    Recommendation: To ensure that Amtrak can better meet the challenge of increasing its efficiency and reducing its operating costs, the president of Amtrak should develop a cost containment strategy that uses these new cost measures and guides the cost reduction actions across all departments.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  19. Status: Closed - Implemented

    Comments: In October 2005, GAO reported that systemic problems required actions to improve efficiency, effectiveness and accountability in the National Railroad Passenger Corporation's (Amtrak) management of its operations. Although Amtrak's annual operating losses had reached over $1 billion, Amtrak had instituted measures to contain costs and its efforts had some success. However, Amtrak also needed to continue to use and seek to expand its use of cost reduction practices prevalent in the railroad industry--such as benchmarking and efficiency reviews. Therefore, GAO recommended that Amtrak continue the use of and seek more opportunities to use cost containment practices that are widely used in the railroad industry, including a spend analysis of goods and services procured, benchmarking, outsourcing, and efficiency reviews. In 2009, in response to GAO's recommendations, Amtrak's Chief Financial Officer and other officials in Amtrak's Finance Department told GAO that Amtrak had taken steps to implement this recommendation. For example, Amtrak had created the capacity for a corporate-wide spend analysis and had increased its use of benchmarking, outsourcing, and efficiency reviews. In addition, Amtrak had begun developing a new data warehouse which will enable new cost metrics for all Amtrak departments. Amtrak officials believe the latter will significantly increase its ability to analyze cost savings in the future. As a result, that Amtrak's actions have positioned the corporation to better identify and implement practices that could significantly increase its efficiency and help reduce or control costs.

    Recommendation: To ensure that Amtrak can better meet the challenge of increasing its efficiency and reducing its operating costs, the president of Amtrak should continue the use of and seek more opportunities to use cost containment practices that are widely used in the railroad industry, including a spend analysis of goods and services procured, benchmarking, outsourcing, and efficiency reviews.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  20. Status: Closed - Implemented

    Comments: In October 2005, GAO reported that the Federal Railroad Administration's (FRA) oversight of Amtrak's compliance with procurement standards was limited, and that FRA had relied on Amtrak's assurance that it was in compliance with grant agreement requirements to comply with federal procurement standards. GAO recommended that FRA increase oversight by requiring Amtrak to submit a plan to improve its acquisition management practices. In 2008, FRA required Amtrak to develop an acquisition management plan. Amtrak developed a plan. As a result, FRA has an oversight mechanism to better ensure that Amtrak is complying with federal procurement standards.

    Recommendation: To ensure that Amtrak's acquisition management practices support sound business decisions and the efficient and effective use of federal funds provided to Amtrak, the Secretary of Transportation direct the Federal Railroad Administrator to increase oversight by requiring Amtrak to submit a plan, possibly as part of the company's application for grant funds, identifying the specific actions that will be taken, consistent with the recommendations outlined below, to improve its acquisition management practices.

    Agency Affected: Department of Transportation

  21. Status: Closed - Implemented

    Comments: In October 2005, GAO reported that the Federal Railroad Administration's (FRA) oversight of Amtrak's compliance with procurement standards was limited, and that FRA had relied on Amtrak's assurance that it was in compliance with grant agreement requirements to comply with federal procurement standards. GAO recommended that FRA review Amtrak's plan to improve its acquisition management practices and provide Amtrak comments on its plan. In 2006, FRA required Amtrak to develop an acquisition management plan. Amtrak developed a plan and submitted it to FRA for review. FRA officials indicated that they reviewed the plan, had Amtrak make revisions to the plan, and approved the plan in September, 2008. As a result, FRA has an oversight mechanism to better ensure that Amtrak is complying with federal procurement standards.

    Recommendation: To ensure that Amtrak's acquisition management practices support sound business decisions and the efficient and effective use of federal funds provided to Amtrak, the Secretary of Transportation direct the Federal Railroad Administrator to review and provide comments on this plan to Amtrak and work with Amtrak management and staff to develop the most cost-effective approach(es) to improving acquisition management practices. The approach(es) developed should ensure that Amtrak, FRA, and others, as appropriate, have adequate information on which to make business decisions regarding the acquisition of goods and services and the use of federal resources provided to do so.

    Agency Affected: Department of Transportation

  22. Status: Open

    Comments: According to FRA, as of September 2008 Amtrak had not submitted its formal acquisition plan to FRA. Consequently, FRA is not able to report to Congress about this plan. We will continue to obtain information about this plan and FRA's monitoring/reporting efforts and plan to discuss this with FRA in early October 2010.

    Recommendation: To ensure that Amtrak's acquisition management practices support sound business decisions and the efficient and effective use of federal funds provided to Amtrak, the Secretary of Transportation direct the Federal Railroad Administrator to report at least annually to Congress on progress being made by Amtrak regarding improvement of its acquisition management. This report should identify any specific actions either Amtrak or Congress should take to facilitate improvement in acquisition management, particularly improvement in its knowledge and information system and the use of acquisition data in identifying opportunities for cost savings.

    Agency Affected: Department of Transportation

  23. Status: Closed - Implemented

    Comments: In October 2005, GAO reported that Amtrak's procurement department had made presentations about acquisition policies and procedures to Amtrak's major departments, but did not plan to provide these presentations to other departments, despite the fact that these departments also acquired goods and services. GAO recommended that Amtrak's procurement department ensure that all departments receive information on procurement policies and procedures, similar to the presentations that had already been given to other departments, and ensure that all departments are held accountable for following those policies and procedures. In 2008, Amtrak's procurement department revised its Procurement manual, provided training to its employees, and made the manual available to all Amtrak employees. In November 2009, the procurement department also developed plans to begin providing training on the revised Procurement policies and procedures to other Amtrak departments. The procurement department has developed an agenda for this training and and has scheduled training sessions with various Amtrak departments beginning in September, 2010, through December, 2011. In 2012, the procurement department plans to provide additional training at other Amtrak locations throughout the country. The procurement department has also enhanced procedures to ensure that other departments follow its policies and procedures, specifically for small dollar purchases, non-competitive procurements, and changes to purchase orders. In addition, Amtrak has taken steps to ensure that other departments process acquisitions through the procurement department. As a result, Amtrak departments will be more aware of procurement policies and procedures. In addition, Amtrak's procurement department will be better able to ensure that goods and services are acquired appropriately.Amtrak

    Recommendation: To help improve Amtrak's acquisition function and better promote efficiency, effectiveness, and accountability when acquiring goods and services, Amtrak's president should work with the vice president of procurement to take actions that will address the various issues raised in this chapter. These actions include ensuring that all departments receive information on procurement policies and procedures, similar to the presentations that have already been given to a number of departments, and ensuring that all departments are held accountable for following those policies and procedures.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  24. Status: Closed - Implemented

    Comments: Amtrak's Procurement Department is now part of Amtrak's Finance Department and the Chief Logistics Officer reports to the Chief Financial Officer. This better aligns budget, financial management, procurement, and logistics. The Procurement Department also now sets goals and has implemented inventory controls and appears much more integrated into the acquisition process of Amtrak's various departments.

    Recommendation: To help improve Amtrak's acquisition function and better promote efficiency, effectiveness, and accountability when acquiring goods and services, Amtrak's president should work with the vice president of procurement to take actions that will address the various issues raised in this chapter. These actions include taking additional action to become more integrated into the planning of all service acquisitions, similar to the actions Amtrak's human resources and labor relations departments are taking with regard to awarding health benefits contracts.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  25. Status: Closed - Implemented

    Comments: In October 2005, GAO reported that 1)Amtrak departments acquired goods and services independently of the procurement department; 2)Amtrak departments did not always obtain justification for noncompetitive acquisitions; 3)Amtrak procurement officials approved contract changes based on the incremental value of changes, resulting in officials approving contracts with a cumulative value exceeding their approval authority; and 4)Amtrak departments inappropriately used payment requests--a tool for small dollar purchases with a maximum threshold of $5,000 and for which no separate contract was in effect--to acquire goods and services exceeding the threshold and when Amtrak had a contract in effect. GAO-10-1806A: GAO recommended that Amtrak ensure user departments required to procure goods and services through the procurement department cannot acquire them independently. In 2009, the procurement department rolled out the Acquisitions and Contracts Electronically (ACE) System, which centralized procurement activities electronically. ACE requires that all procurement correspondence and actions take place within the system and, as a result, precludes user departments from taking procurement actions independent of the procurement department and helps better ensure goods and services are acquired appropriately. GAO-10-1807A: GAO recommended that the procurement department enforce its requirement to obtain justifications for noncompetitive acquisitions. In 2008, the procurement department took steps to establish better control over noncompetitive acquisitions by automating the justification form for noncompetitive acquisitions of $25,000 or more as part of eTrax, the electronic procurement system Amtrak departments use to initiate acquisitions. During the acquisition process, departments complete the form online and electronically submit it to the procurement department for review and an approval decision. As a result, the procurement department can better ensure these noncompetitive acquisitions are sufficiently justified and approved. GAO-10-1927A: GAO recommended that Amtrak ensure changes increasing the cost of contracts are approved in accordance with Amtrak's delegation of authority, which required that approvals be based on the cumulative value of contracts, not the incremental value of the change. Amtrak initially disagreed with our recommendation and planned to change the delegation of authority to allow changes to be based on the incremental value of the change. However, in December, 2009, a procurement official told GAO that they decided to revise the policy. The revised delegation of authority establishes limits on approval authority for changes, specifically the lower of specified dollar limits, depending on a contracting official's position or 25 percent of the contract's original cumulative value. Amtrak's Law Department approved the change and plans to take it to Amtrak's Board of Directors for approval. As a result, Amtrak will be able to better ensure contract changes have been appropriately authorized. GAO-10-1804A: GAO recommended that Amtrak ensure the appropriate use of payment requests by enforcing the requirement that payment requests not exceed $5,000 and ensuring that they are not used when a contract and purchase order are in effect. In response, Amtrak's procurement department instituted a policy to review payment requests exceeding $5,000. In December, 2009, GAO reviewed examples of Amtrak's documentation for payment requests. The documents showed the procurement department reviewed payment requests and denied requests exceeding the threshold. This documentation also showed the procurement department determined if a contract was in effect for these purchases. As a result, Amtrak can better ensure that requirements related to the use of payment requests are followed and enforced.

    Recommendation: To help improve Amtrak's acquisition function and better promote efficiency, effectiveness, and accountability when acquiring goods and services, Amtrak's president should work with the vice president of procurement to take actions that will address the various issues raised in this chapter. These actions include developing an action plan to better ensure that acquisition policies and procedures are communicated, followed, and enforced. This includes (1) ensuring that user departments required to procure goods and services through the procurement department cannot acquire them independently; (2) ensuring that services are acquired competitively to the maximum extent possible, such as enforcing the requirement to obtain justifications for noncompetitive acquisitions; (3) ensuring that changes increasing the cost of contracts are approved in accordance with current delegation of authority, which requires that approvals are based on the cumulative value of contracts, not the incremental value of change orders; and (4) ensuring the appropriate use of payment requests by enforcing the requirement that payment requests not exceed $5,000 and ensuring that they are not used when a contract and corresponding purchase order are in effect for a particular vendor.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  26. Status: Closed - Implemented

    Comments: In October 2005, GAO reported on weaknesses in Amtrak's procurement and payment of outside legal services. These weaknesses included 1) lack of competition in selecting firms; 2) lack of specificity in documenting terms and conditions of the services to be provided; 3)Amtrak's Law Department had not analyzed spending on outside legal services to determine whether it receives the best value possible in terms of service and cost; 4) inadequate review of invoices; 5) inadequate documentation review of invoices; and 6) insufficient segregation of duites. GAO-10-1827A: GAO recommended that Amtrak develop standardized acquisition policies and procedures for acquiring outside legal services to ensure that, among other things, (1) acquisition of outside legal services is competitive to the maximum extent possible, and (2) documentation specifies the terms and conditions of the work to be performed. In December 2009, Amtrak's Law Department developed protocols outlining its policies and procedures for procuring outside legal services. These protocols require that the Law Department competitively acquire all outside legal services by issuing requests for proposals and develop engagement letters that outline the legal work to be provided. As a result, Amtrak has better control over the acquisition of outside legal services. GAO-10-2029A: GAO recommended that Amtrak develop policies and procedures to ensure that spending on outside legal services is analyzed to identify opportunities to control and reduce spending. While Amtrak has not developed the recommended policies and procedures, it has implemented a case management system and analysis that addressed the spirit of GAO's recommendation. Specifically, the law department implemented the Case Tracks system to manage current spending on outside legal services and to analyze past spending when deciding whether to hire a firm for a new case. Each quarter, the law department generates Case Tracks spending reports. These reports are reviewed and analyzed by the Managing Deputy Counsel, who uses the spending information when he meets with individual attorneys to determine how best to proceed on a given case. More recently, the Managing Deputy Counsel has begun using the reports to analyze past spending when selecting firms to hire for new cases. However, he did not maintain copies of the reports and analyses of Amtrak's past spending regarding these firms. During a January, 2010, meeting with Amtrak, GAO suggested and the Managing Deputy Counsel agreed to maintain copies of the Case Tracks reports and analyses that he generated when reviewing spend information. After subsequent follow-up in May, 2010, he provided copies of the Case Tracks reports and analysis related to Amtrak's selection of an outside firm demonstrating that the law department was maintaining such documentation. As a result of reviewing and analyzing spending information by legal case and law firm for outside legal services, Amtrak now has the ability to better identify and control its legal costs. GAO-10-2089A and GAO-10-2093A: GAO recommended that attorneys completely and consistently review invoices for compliance with Amtrak's billing guidelines, the law department follow Amtrak policy by providing approved invoices to the accounts payable section for payment, and that key duties, such as authorizing, reviewing, and receiving payments for outside legal services, are segregated. Amtrak law department management has demonstrated that they have strengthened controls over the submission, review, and approval of payment requests for outside legal firm invoices and settlement agreements to help ensure compliance with Amtrak's billing guidelines by enhancing billing guidelines, reviewing invoices for compliance with billing guidelines, requiring invoice approval, and segregating key invoice processing duties.

    Recommendation: To help improve Amtrak's acquisition function and better promote efficiency, effectiveness, and accountability when acquiring goods and services, Amtrak's president should work with the vice president of procurement to take actions that will address the various issues raised in this chapter. These actions include, together with the law and finance departments, developing standardized acquisition policies and procedures for acquiring outside legal services to ensure that (1) acquisition of outside legal services is competitive to the maximum extent possible; (2) spending on outside legal services is analyzed to identify opportunities to control and reduce spending; (3) documentation specifying the terms and conditions of the work to be prepared; (4) attorneys completely and consistently review invoices for compliance with Amtrak's billing guidelines; (5) the law department follows Amtrak policy by providing approved invoices to the accounts payable section for payment; and (6) key duties, such as authorizing, reviewing, and receiving payments for outside legal services, are segregated, and that attorneys not be allowed to create and edit payees' names and addresses.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  27. Status: Closed - Implemented

    Comments: In October 2005, GAO reported that Amtrak's knowledge and information system related to procurement could not produce meaningful and reliable data, which limited Amtrak's ability to accurately determine and analyze its procurement spending. The absence of such information made it difficult for Amtrak to identify strategic sourcing opportunities, leverage its buying power and reduce procurement costs. GAO recommended that Amtrak create an automated, centralized spend analysis system for capturing the type of reliable and complete spending data needed to identify opportunities to leverage Amtrak's buying power and provide better management and oversight of purchasing activities and suppliers. In response, in 2009, Amtrak has implemented an automated procurement system, known as Acquisitions and Contracts Electronically (ACE), which includes an analysis tool that provides a single, unified view of projects and contracts across different suppliers, provides insight into spend patterns, and highlights the performance of Amtrak departments and suppliers--including how much Amtrak is spending, what departments are spending the money, and with what suppliers Amtrak is spending money--to identify savings opportunities. Amtrak has populated ACE with procurement data and has begun analyzing its procurement spending. As a result, Amtrak has the ability to capture and analyze spending information and thus better manage its procurement of goods and services.

    Recommendation: To help improve Amtrak's acquisition function and better promote efficiency, effectiveness, and accountability when acquiring goods and services, Amtrak's president should work with the vice president of procurement to take actions that will address the various issues raised in this chapter. These actions include creating an automated, centralized spend analysis system for capturing the type of reliable and complete spending data needed to identify opportunities to leverage Amtrak's buying power and provide better management and oversight of purchasing activities and suppliers. The system should include features that would (1) provide data on what categories of goods and services are being acquired; how many suppliers are being used for specific categories; and how much is being spent on specific categories, in total and for each user department and with each supplier; and (2) ensure that data are more readily and reliably retrievable on an automated and repeatable basis.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  28. Status: Closed - Not Implemented

    Comments: After reviewing the Amtrak Board of Directors Statement of Policy, having discussions with the Chairman and Vice Chairman of Amtrak's board, and analyzing various performance indicators developed by Amtrak, it was clear that Amtrak has not yet established or implemented clear, well articulated policies and procedures related to the oversight of corporate performance. Instead, as stated by both the Chairman and Vice Chairman of Amtrak's board, the focus is on the board's monthly review of recently developed key performance indicators (called KPI's) and the board's use of these KPI's. In general, the Amtrak officials acknowledged that the KPI's do not encompass overall corporate performance but rather focus on specific aspects of performance such as ridership trends, and do represent a formal statement of oversight policies and procedures. The KPI's also have other limitations such as not being board approved and, in some instances, do not clearly align to stated Amtrak corporate goals. Amtrak's Vice Chairman, in particular, emphasized that Amtrak was still in the process of developing a strategic plan and working to align this plan with the KPI's and any other measures of corporate performance that might be developed. Amtrak's fall 2009 issuance of strategic guidance and development of KPI's to measure specific aspects of Amtrak's outputs are steps in the right direction. However, neither represents the outcome-based overall corporate performance measures and a board approved formal set of policies and procedures for oversight of corporate performance envisioned by this recommendation.

    Recommendation: To strengthen the oversight of corporate performance and to increase the accountability of Amtrak's management for achieving the goals and objectives it establishes, and to provide the needed transparency among key internal and external stakeholders, the chairman of Amtrak's board and the board members should develop policies related to the oversight of corporate performance and the specific procedures to be used to implement these policies.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  29. Status: Closed - Not Implemented

    Comments: As stated in a previous recommendation, Amtrak has not taken action to establish policies and procedures by the board related to corporate oversight. Instead, the board is reviewing key performance indicators (KPI's) that are presented by Amtrak management each month. While the KPI's are a step in the right direction, they do not represent formal, board approved, clearly articulated policies and procedures for corporate oversight. Consequently, the intent of this recommendation (to identify and determine the information needed for corporate oversight and the type and frequency of this information) is moot.

    Recommendation: To strengthen the oversight of corporate performance and to increase the accountability of Amtrak's management for achieving the goals and objectives it establishes, and to provide the needed transparency among key internal and external stakeholders, the chairman of Amtrak's board and the board members should identify, in consultation with Amtrak's president and senior management, the type and frequency of information required to implement the policies and procedures for oversight.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  30. Status: Closed - Not Implemented

    Comments: As stated in a previous recommendation, Amtrak's board has not taken action to establish policies and procedures related to corporate oversight. Instead, the board is reviewing key performance indicators (KPI's) that are presented by Amtrak management each month. While the KPI's are a step in the right direction, they do not represent formal, board approved, clearly articulated policies and procedures for corporate oversight. Consequently, the intent of this recommendation (to identify and determine the financial resources needed to develop the information for corporate oversight, the type and frequency of this information, and develop an action plan) is moot.

    Recommendation: To strengthen the oversight of corporate performance and to increase the accountability of Amtrak's management for achieving the goals and objectives it establishes, and to provide the needed transparency among key internal and external stakeholders, the chairman of Amtrak's board and the board members should, in conjunction with Amtrak's management, assess the financial and other resources that will be required to develop the measures and information required to conduct cost-effective oversight, and prepare an action plan to implement needed changes in information and data systems to provide the reports and other documents required to meet the oversight policies and procedures adopted.

    Agency Affected: National Railroad Passenger Corporation (AMTRAK)

  31. Status: Closed - Not Implemented

    Comments: In September 2006, the Federal Railroad Administration stated that it raised the issue of corporate performance metrics with Amtrak's executive and staff levels and of development of metrics related to Amtrak's strategic initiatives. However, this effort did not result in development of corporate performance metrics. Discussion with Amtrak's Chairman and Vice Chairman of the Board of Directors indicated that, as of July 2010, measures of overall corporate performance had still not been developed. Instead, the board was using key performance indicators (KPI's) developed by Amtrak management to review the performance of certain aspects of the corporation, such as passenger rail ridership and customer satisfaction scores, on a monthly basis. Section 207 of the Passenger Rail Investment and Improvement Act of 2008 also required Amtrak, FRA, the Surface Transportation Board (STB) and others to jointly develop performance metrics for Amtrak's train operations. A draft of these metrics and standards was jointly issued in the Federal Register in March 2009. These metrics and standards were finalized and went into effect in May 2010. Although these metrics and standards are a step in the right direction, they focus solely on the performance and service of intercity passenger train operations. They do not cover overall corporate performance. These metrics and standards would be good building blocks in an overall set of metrics and standards that would permit evaluation of Amtrak's overall corporate performance on a regular basis. This recommendation envisioned a set of overall metrics and standards that would cover more than just intercity passenger train operations. It is not clear this overall set will be developed anytime soon.

    Recommendation: To strengthen Department of Transportation and Federal Railroad Administration oversight of Amtrak's performance, the Secretary of Transportation direct the Federal Railroad Administrator to work with Amtrak's board and management to develop measures of overall corporate performance and related outcomes.

    Agency Affected: Department of Transportation

  32. Status: Closed - Not Implemented

    Comments: No overall corporate performance metrics have been developed to date. FRA will report on the metrics and standards developed as required by the Passenger Rail Investment and Improvement Act of 2008, which address Amtrak's intercity passenger rail operations, on a quarterly basis starting with the quarter ending September 30, 2010. These metrics and standards do not constitute a set of metrics to measure and oversee Amtrak's overall corporate performance. Since it is not clear that a set of metrics and standards will be developed to facilitate oversight of this performance this recommendation is moot.

    Recommendation: To strengthen Department of Transportation and Federal Railroad Administration oversight of Amtrak's performance, the Secretary of Transportation direct the Federal Railroad Administrator to require Amtrak to report on these measures of corporate performance and outcomes at least annually.

    Agency Affected: Department of Transportation

  33. Status: Closed - Not Implemented

    Comments: No overall corporate performance metrics have been developed to date. FRA will report on the metrics and standards developed as required by the Passenger Rail Investment and Improvement Act of 2008, which address Amtrak's intercity passenger rail operations, on a quarterly basis starting with the quarter ending September 30, 2010. FRA currently has the ability to withhold federal funding for specific capital projects and FRA can take actions to enforce compliance with nonperformance against the PRIIA developed metrics and standards. However, neither of these relate to Amtrak's performance against overall corporate performance metrics which do not currently exist. Since it is not clear that a set of metrics and standards to facilitate oversight of overall corporate performance will be developed this recommendation is moot.

    Recommendation: To strengthen Department of Transportation and Federal Railroad Administration oversight of Amtrak's performance, the Secretary of Transportation direct the Federal Railroad Administrator to identify and make known to Amtrak the range of potential consequences of not meeting, or making sufficient progress toward, a minimum level of performance on the corporate measures and outcomes.

    Agency Affected: Department of Transportation

  34. Status: Closed - Not Implemented

    Comments: No overall corporate performance metrics have been developed to date. FRA will report publicly on the metrics and standards developed as required by the Passenger Rail Investment and Improvement Act of 2008, which address Amtrak's intercity passenger rail operations, on a quarterly basis starting with the quarter ending September 30, 2010. In addition, FRA told us it presents its views on Amtrak's performance in the annual President's Budget request and in testimony provided during annual congressional appropriation hearings. While these actions are important means of reviewing and reporting on Amtrak's performance they do not constitute the more formal report on Amtrak's performance based on the corporate performance metrics envisioned by this recommendation. At this time it is not clear overall corporate performance metrics for Amtrak will be developed which would serve as the basis for the report envisioned by this recommendation. Even if they were it is not clear FRA would prepare a report to Congress on them and FRA's evaluation of progress against those metrics.

    Recommendation: To strengthen Department of Transportation and Federal Railroad Administration (FRA) oversight of Amtrak's performance, the Secretary of Transportation direct the Federal Railroad Administrator to report annually to Congress on the results of FRA's oversight of Amtrak's corporate performance and Amtrak's progress toward meeting minimum levels of performance and outcomes (this report should identify any specific actions Congress should consider taking to better facilitate progress on achieving specific outcomes or to identify alternative ways the outcome might be achieved).

    Agency Affected: Department of Transportation

 

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