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IG’s First Take On Amtrak CARES Act Funds

August 7, 2020

OIG Says Amtrak Handling Rescue Funds Well, But Could Improve States’ Transparency

While overall Amtrak “moved swiftly” to develop systems to track how it’s using coronavirus rescue funds, management should be more transparent on service changes’ effects on state-supported routes, needs to catch up on reviewing its relief fund reports to the Federal Railroad Administration, and will probably have to focus “additional attention” on tracking pandemic supplies in the field, Amtrak’s Inspector General (OIG) reported today.

Through the end of June, Amtrak had spent $402 million of the $1.018 billion in coronavirus rescue aid it got from the CARES Act relief bill, with most of the money – $262 million – spent on operating labor and taxes. That category is programmed to absorb $385 million overall, while $387 million is earmarked for train-related expenses like fuel, food, and power.

OIG noted that pandemic-related disruptions to service levels on state-supported routes have “heightened longstanding issues” between Amtrak and the states on how costs are shared under PRIIA Section 209. Amtrak has set aside $239 million in CARES Act funds for state-supported services.

“Although company officials, states, and FRA told us they are working together to address issues related to the application of CARES Act funds, some state officials told us they continue to have difficulty understanding the relationship between service levels and costs, which impacts their ability to make informed decisions,” the IG reported. “For example, one state representative told us the company cannot tell a state how much it would cost to add a car to a train. Another representative told us they did not know how much it would save the state if it reduced the frequency of some routes.”

Amtrak has stepped up its communications to the states, but state officials say they need more, plus more transparency on how service changes will affect costs for their routes. The states believe this could help them as they develop their budgets. Amtrak told the IG’s office that they’re working to set up “alternative billing methods” with the states by October 30 to cover sudden service changes. These would involve offering a range of fixed-price alternatives and “pre-forecasted cost scenarios,” Amtrak said.

“Given the significance of this issue, our office initiated a separate audit to assess how states and the company are working to resolve problems and concerns inherent to the process,” the OIG said.

OIG also reported that Amtrak is behind schedule on reviewing its CARES Act expenditures and cannot ensure that the data it is reporting to the Federal Railroad Administration is accurate and complete.

“Amtrak committed to independently reviewing monthly grant expenditure reports submitted to the FRA using a two-part process that would 1) trace the amounts spent back to source accounts, and 2) test a sample of individual expenditures charged to coronavirus-related accounting codes to help verify that purchases represent appropriate uses of CARES Act funds,” OIG said. Amtrak management acknowledged that the department handling that task needs to act more quickly.