Our objectives were to determine whether the (1) costs billed by the design/build contractors were adequately supported and allowable under the contracts’ terms and conditions and (2) process to review design/build contractors’ invoices was effective and economical.
Thank you for the opportunity to discuss how improvements in the efficiency and effectiveness of Amtrak’s operations and service can lead to financial benefits and help reduce Amtrak’s reliance on federal subsidies. The company received $562 million and $466 million from the federal government for operations in Fiscal Years (FY) 2011 and 2012, respectively. The company also received $922 million and $952 million from the federal government for general capital and debt service in FYs 2011 and 2012, respectively.
The Amtrak Office of Inspector General (OIG) received information from a confidential source alleging payroll fraud in the form of unworked overtime paid to certain Amtrak employees. This provides the summary results of our investigation of that allegation. Specifically, our objective was to disclose regular and overtime fraud and other abuses by these employees and the supervisory failures to prevent these actions.
Specifically, our reporting objectives are to (1) determine whether opportunities exist to improve food and beverage program management accountability and planning, and (2) follow up on actions taken in response to our June 2011 recommendations to reduce vulnerability to fraud, waste, and abuse.
Thank you for the opportunity to discuss our work on Amtrak’s food and beverage service. Losses on food and beverage service have been a long‐standing issue at Amtrak. In Fiscal Year (FY) 2011, Amtrak reported a direct operating loss of almost $85 million. Long‐distance routes accounted for about $74 million (87 percent) of these losses.
Based on information received by Amtrak CEO Joseph Boardman, the OIG, Amtrak Police Department, and Amtrak management coordinated an investigation of illegal drug and alcohol use on Amtrak trains. No alcohol or drug use was found; however, the investigation disclosed that several on-board service employees failed to list felony convictions as required on their employment applications, and background checks were not conducted on some on-board service employees.
OIG investigation disclosed that several Amtrak employees and entities acted inappropriately in a concerted effort to influence the procurement process and decisions involved in that process on a multi-year contract involving expenditures in excess of $800 million over a 3-year period.