Financial Management: Observations on Payment Processes in the Company’s Electronic Procurement System

During our ongoing audit of Amtrak’s oversight of a construction services contract, we found that the company’s electronic procurement system allowed an employee to bypass automated controls in the invoice approval process. This resulted in the company incorrectly charging an $18,902 invoice to an unrelated project and an unrelated federal grant. The supplier subsequently issued a credit to the company, and we found no evidence of fraud. After we brought the issue to the company’s attention, however, it conducted a broader review and identified two other invoices that bypassed required review and approval and were paid using funds for other projects.

Until the company addresses the weaknesses we identified, it will remain at risk of improper payments and potential noncompliance with federal grants. Such noncompliance could leave the company at risk of using funds for purposes not authorized by Congress.

We provided two considerations for management to address the issues we identified. The company agreed with our considerations and is working to identify other occurrences of the weaknesses and develop longer-term solutions.