GOVERNANCE: Observations on Amtrak’s Use of CARES Act Funds
The objective for this management advisory report was to monitor and assess how the company is using CARES Act funds and the controls it has in place to accurately account for and report on them.
The company experienced a sharp drop in ridership and passenger revenues in March 2020 as a result of the coronavirus pandemic. The company’s response included aggressive cost-cutting actions such as cancelling some of its train service and reducing management pay and retirement benefits. Despite these actions, the company projected that revenues would still not cover its reduced costs and requested assistance from Congress. Congress responded by providing the company with $1.018 billion through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to “prevent, prepare for, and respond to” the coronavirus pandemic.
On April 16, 2020, we began an audit to monitor and assess how the company is using CARES Act funds and the controls it has in place to accurately account for and report on them. So far, the company’s initial steps to use, account for, and report on the CARES Act funds are encouraging. By its actions, the company appears committed to providing transparency and demonstrating fiscal responsibility over its use of these funds.
We identified three areas where additional focus could reduce risks. Going forward, a focus on providing more transparent data on how changes in service will affect state costs will help states as they develop their own budgets. In addition, a more-timely verification of pandemic-related expenses will help demonstrate that the company is being a responsible steward of taxpayer dollars. This is especially important considering that the company has requested $1.475 billion in supplemental funding for FY 2021 to mitigate expected shortfalls in passenger revenue. Finally, ensuring that adequate controls are in place to safeguard scarce pandemic-related materials and equipment throughout all links in the supply chain will ensure that these products are available to support the safety and health of the company’s workers and the traveling public.