Posts Tagged ‘Amtrak inspector general’

Amtrak IG Calls for Expanded Drug Testing

October 30, 2020

The Amtrak Office of Inspector General called this week for an expansion of the carrier’s random drug testing program as a way to improve its ability to detect and deter opioid abuse by employees.

 The recommendation was made after the IG’s office studied 11,356 prescription and medical claims from 2019 and found 113 that met Centers for Disease Control and Prevention indicators of potential opioid use.

The review also found 1,157 employees or about 10 percent of those in safety-related positions, has filled an opioid prescription while on active status thus making them at higher risk for impairment while the job.

The IG report recommends testing more employees and testing for more drugs.

Revenue Loss One of Amtrak’s Greatest Challenges

October 29, 2020

Steep revenue losses caused by the COVID-19 pandemic are confronting Amtrak with one of the greatest challenges it has faced in its 49-year history, the carrier’s Office of Inspector General has concluded.

That assessment came in a biennial report by the office reviewing the passenger railroad’s top performance and management challenges.

The IG said Amtrak must find ways to protect its resources, including how it uses $3.1 billion in currently available cash, and its ability to manage projects after losing a significant number of managers from a voluntary buyout plan.

“This year, the challenge of responding to the COVID-19 pandemic supersedes and permeates the company’s ability to address all other challenges,” the report said in a summary.

However, the IG said Amtrak also has opportunities to imagine a future that takes a fresh, holistic view of its circumstances and the forces that affect it.

The report is available at

California Woman Gets Prison for Defrauding Amtrak

February 8, 2020

A California woman was given a 30-month prison sentence this week in connection with a scheme to bilk Amtrak in fraudulent health care payments.

Guiqiong Xiao Gudmundsen, 53, also known as “Kimi” Gudmundsen, of Anaheim Hills, was convicted in connection with a scheme to defraud Amtrak for acupuncture treatments and other services that the Amtrak Office of Inspector General described as medically unnecessary or never provided.

The medically unnecessary procedures that were billed to Amtrak included massages and facials.

Amtrak was also billed for work-related injuries the company’s health care plan did not cover.

Gudmundsen, who was indicted by a California federal grand jury in October 2016, was the owner of Healthy Life Acupuncture Center.

U.S. District Judge Dolly M. Gee in Los Angeles ordered her to pay nearly $2.7 million in restitution to Amtrak.

A news release from the Amtrak OIG said investigators found that Gudmundsen deliberately targeted Amtrak employees in a “multifaceted and pervasive” fraud scheme and billed Amtrak’s health care plan for more than $7.1 million, about $3.8 million of which was deemed fraudulent, according to government estimates in a plea agreement.

The fraudulent billings were made during a nearly seven-year period between January 2008 and  December 2015.

Gudmundsen was accused of recruiting Amtrak employees to visit her acupuncture facilities in Riverside and Los Angeles.

The Amtrak OIG said she repeatedly billed Amtrak’s health care plan for services that were not performed or provided to people not covered under Amtrak’s plan.

In some instances services were double-billed to other insurance plans, or falsely billed in ways that would result in higher reimbursement rates.

The OIG said Gudmundsen’s bills were so frequent and costly that at their peak they ranked 32nd among all health care providers, exceeding Mount Sinai Medical Center in Chicago (No. 33) and Johns Hopkins Hospital in Baltimore (No. 39).

In December 2019, the OIG released an audit report that examined Amtrak’s internal controls for mitigating the risks of fraud in its payments to non-hospital facilities.

Auditors found that Amtrak continues to be exposed to potential fraud in its medical claims payments and has explored but not secured a capability to proactively analyze its payments for fraud.

In the report, the OIG found that there were 191 facilities that exhibited billing patterns indicative of fraud, but the company had not flagged the associated claims for further review. Because Amtrak is self-insured and pays medical claims from its operating budget, this put an estimated $57 million paid to these facilities at risk, according to the report.

Amtrak management agreed with the report’s findings and committed to working with its insurance claims administrator, Aetna, to identify fraudulent claims and seek recovery.

The Gudmundsen case also was investigated by the IRS Criminal Investigation; the U.S. Department of Labor, Employee Benefits Security Administration; and the U.S. Attorneys for the Central District of California.

The case was prosecuted by the latter agency.

In the plea agreement, Gudmundsen acknowledged that she regularly waived co-payments, co-insurance and deductibles for Amtrak healthcare plan participants, something the plan did not permit.

She also admitted in the plea agreement to funneling money received from Amtrak through bank accounts opened in the names of a shell company and her relatives.

Amtrak IG Warns Carrier at Risk of Missing May 2021 Objective to Start Using New Alstom Acela Train Sets

January 25, 2020

Amtrak’s Office of Inspector General said this week the passenger carrier is in danger of missing its stated goal of putting into revenue service in May 2021 new equipment for its Acela Express service in the Northeast Corridor.

That could mean lost revenue because the new train sets Amtrak has purchased and are still being built will have 82 more seats than the original equipment now used in Acela Express service.

“The Acela 21 program is entering a critical stage if it is to begin revenue service on time,” the report concluded.

Although the IG found the program has used “some sound program management practices” there are management and structural weaknesses that continue to pose significant risks.

“Foremost is that project delays have eliminated any cushion in the schedule, and multiple indicators point to further delays beyond the planned service launch in 2021,” the report said.

The report came on the heels of the Federal Railroad Administration giving approval to Amtrak to move one train set from the factory in Hornell, New York, where it was built, to an FRA test site in Colorado.

Amtrak also released a video showing the train set, which was built by Alstom, getting underway on its trip to the test track.

Alstom is building 28 train sets for Acela service. The train sets have cost $2.1 billion.

Amtrak assistant IG Jim Morrison wrote in his report that it is likely that Amtrak will not meet its 2021 target date for putting the new high-speed equipment into service.

The IG report said Amtrak has not upgraded maintenance facilities or information technology systems to handle the new train.

Training of the 1,000 maintenance and onboard personnel on the nuts and bolts operations of the new equipment has yet to get underway.

The original plan had been for Alstom to deliver to Amtrak as many as nine train sets in 2021, but that timetable is in doubt.

Amtrak plans to remove one existing Acela train set from service each time a new train set is ready to run.

In order for Amtrak to meet its 2021 objective, the testing of the first train set must be flawless and construction of remaining equipment must be without significant delays.

The IG report recommended Amtrak have managers working on the Acela 21 be given the property authority to focus on and finish the project.

This includes creating contingency plans for what the passenger carrier will do if it misses its target service and deliveries falls further behind schedule.

The report was based on interviews with Amtrak managers in late 2019 and early 2020.

It noted that many of the delays were beyond the control of Amtrak. These included delays that occurred during the manufacturing process.

Amtrak agreed with the five elements the IG identified, including employee training, development of IT services, and modifications to service and inspection facilities.

However, Amtrak said it believes it has a strong management structure in place to oversee execution and delivery of the project.

“There remains an extraordinary amount of work ahead and Amtrak management is confident that the proper resources are aligned to deliver this ambitious program on scope, schedule and budget,” Amtrak wrote in its response to the report.

The contract with Alstom was approved by Amtrak’s board of directors in 2016.

Amtrak said in the video of the first new Alstom train set that it will be moved to the test track near Pueblo, Colorado, in mid-February.

Durbin Seeks to Hold RRs Accountable for Amtrak Delays

October 26, 2019

An Illinois Senator says Amtrak’s host railroads could do more to operate Amtrak trains on time.

U.S. Sen. Dick Durbin said in letters sent to the passenger carrier and the Federal Railroad Administration that he wants to work with them on the issue.

Durbin said he acted after the Amtrak Office of Inspector General issued a report that concluded report Amtrak could save $42 million annually if its trains operated on time more often.

The report was created under the direction of an amendment that Durbin won approval of last year during the appropriations process.

Of particular interest to Durbin is the poor performance of State of Illinois-funded Amtrak trains operating between Chicago and Carbondale, Illinois, on tracks of Canadian National.

The report found that Amtrak must make penalty payments to crews as a result of poor on-time performance of the Illini and Saluki trains.

“As a firm supporter of passenger rail, I stand ready to continue working with Amtrak, as well as with the FRA, to push Canadian National to improve Amtrak’s reliability for Illinois riders,” Durbin wrote Amtrak President and CEO Richard Anderson.

In his letter to FRA had Ronald Batory, Durbin called on the agency “to take a more active role in ensuring improvements to Amtrak’s [on-time performance], particularly along its Chicago-Champaign-Carbondale routes.”

Durbin is calling for CN to be held accountable for repeated freight interference and speed restrictions imposed on Amtrak trains in the Chicago-Carbondale, Illinois, corridor.

“As you are well aware, freight railroads continue to ignore their statutory obligation to provide Amtrak with preference on their tracks,” Durbin wrote to Batory.

“As a result, freight interference has hampered Amtrak’s financial stability as well as reliability for riders — and it caused roughly 60 percent of Amtrak’s delays in FY2018.”

Report Says Better OT Could Save Amtrak Money

October 19, 2019

An improvement of 5 percent in on-time performance on all routes could save Amtrak $12.1 million a year the carrier’s Office of Inspector General said this week.

That would include $8.2 million in reduced costs and $3.9 million in increased revenue, the OIG officials said in a news release.

“In the longer term, if OTP on long-distance routes could improve to 75 percent and be sustained at that level for at least a year, the company could realize an estimated $41.9 million per year in cost savings, and a one-time savings of $336 million by reducing equipment replacement needs,” the OIG reported.

The OIG said Amtrak doesn’t fully and systematically measure the impact of poor OTP, resulting in limited data to use to determine consequences.

In its report, the OIG recommended Amtrak update its methods of measuring on-time performance so that it can more reliably determine the financial impact that late trains have on the railroad.

In a response, Amtrak said it agreed with OIG’s findings and recommendation.

The carrier said poor on-time performance is primarily driven by delays caused by its host railroads.

The Amtrak OIG’s findings were in addition to savings that the U.S. Department of Transportation’s OIG found were possible if Amtrak improved on-time performance.

The Amtrak OIG report “confirm late trains impact every aspect of our operations, from equipment usage and staffing, to trip-time competitiveness and reliability for our customers,” said Dennis Newman, Amtrak executive vice president of strategy and planning, in a statement.

“Extrapolating the results over a five-year period, there is more than $1 billion denied to our state and federal investors because Amtrak customers are not getting the reliable service they deserve and are lawfully entitled to receive,” Newman added.

In a releated development Amtrak released its annual report card that grades each of the six Class I host railroads based on delays caused to Amtrak trains over the past year.

For 2018, Amtrak gave the Class Is’ a “C” average based on the “passenger experience” of late trains and on-time arrivals.

Amtrak IG Report Faults Drug Use Detection

March 17, 2019

The Amtrak Inspector General has found fault with the carrier’s approach to identifying and addressing drug and alcohol use among its employees.

The Amtrak IG said in a recently released report that the matter has been  “a longstanding challenge for the company.”

Among the key findings of the report are that testing requirements are not consistently followed, testing data is not collected efficiently, testing databases are incomplete, supervisors are not trained to detect impairment in employees and Amtrak provides only limited oversight of prescription drug use.

The report said Amtrak’s oversight is “weak,” as evidenced by the fact that 33 of 783 locomotive engineers who worked at Amtrak between 2014 and 2016 never had an annual drug test.

Another 448 had fewer than the three required drug tests, which the IG said reflects a lack of an “effective procedure for tracking and monitoring” tests to make sure employees were meeting their requirements.

Only 45 of 196 supervisors of employees in safety-sensitive positions had completed the company’s had completed the required training on detecting drug and alcohol use.

As for employee use of prescription drugs, the IG report said Amtrak workers are supposed to report any use of prescription medicine to the company’s human resources department, which then assesses if the medication is “compatible with the duties of each employee.”

However, the IG report said its review determined that a “significantly low” level of reporting by employees had occurred.

An Amtrak HR official attributed that to self-reporting being an inherently weak control, adding that the carrier has no way of ensuring that all employees reported their prescription drug use.

The IG report recommends that Amtrak create a more reliable procedure to track drug testing, move to digital record-keeping of testing information, ensure its database includes all employees, establish a system to ensure supervisors are properly trains, and introduce new procedures to encourage employees to report their prescription drug use.

Amtrak OIG Critical of Private Car Practices

February 10, 2019

A report by Amtrak’s Office of Inspector General has found that the carrier has significant deficiencies in how it handles the financial accounting and policy making for its handling of private railroad passenger cars.

The IG report described it as a “longstanding management weaknesses in the company’s transport program for privately owned rail cars, including inadequate controls for cost and revenue management, a lack of standard operating procedures, and limited safety and parking guidelines.”

The report said additional steps are needed beyond those recently taken in order “to ensure the company can make sound business decisions about operating the program, covering its costs, and mitigating potential safety and liability risks.”

Between 2015 and 2017 Amtrak earned nearly $14 million for 1,144 private railcar movements and 315 long-term parking transactions,

However, Amtrak officials “did not know whether its billing and pricing model actually covered the costs of services provided to private rail car owners,” the IG report said.

Amtrak management told the IG it has not identified and accounted for costs associated with private rail car services because Amtrak has historically taken the position that it does not incur additional costs to move the cars on scheduled trains and that the program is relatively small compared to other activities the company must manage.

Amtrak officials also have provided at no cost some ancillary services as power, water and ice rather than deal with the administrative burden of tracking each time those services were provided.

The IG report also was critical of Amtrak for missing out on opportunities to generate additional revenue by not adjusting prices during periods of peak demand, such as during the annual New Orleans Jazz Festival or the Washington Cherry Blossom Festival.

Amtrak’s accounting practices have led to lost revenue because the carrier has not established standard operating procedures or guidelines to manage the handling of private cars.

The report said a review of 3 percent of transactions between 2015 and 2017 revealed that inconsistent billing practices—practices not previously established by operating procedures—led to a loss of $46,100 in revenue.

As the Office of Inspector General was undertaking its review, Amtrak “took steps to address these deficiencies, such as developing initial operating procedures for program staff, developing a safety manual to which private rail car owners must abide while in transit, establishing safety guidelines for private rail car owners parked in a Los Angeles rail yard, and establishing long-term parking permits requiring owners to adhere to company rules, regulations, and directives.”

However, the IG report concluded that these actions do not go far enough in addressing the weaknesses it found and recommended Amtrak better identify its program costs and factor them into decisions about the prices it charges private rail car owners for its services.

Another recommendation is that Amtrak “monitor the program’s financial and performance reporting, finalize and implement the program’s standard operating procedures, and implement guidelines and parking permits at all short- and long-term parking facilities.”

In an appendix, Amtrak said it agreed with all of the report’s recommendations.

Amtrak has hosted private railroad passenger cars since its 1971 inception, typically by carrying them on regularly scheduled trains.

The carrier has over the years charged various fees for such services as parking, switching, power, water and ice, septic pumping, and car washing.

Winters Named Amtrak IG

February 5, 2019

Kevin Winters has been appointed as Amtrak’s inspector general, replacing  the retiringTom Howard.

Winters has been the carrier’s deputy inspector general and counsel since 2015, after serving for 10 years as a senior executive with NASA’s Office of Inspector General.

“Kevin is a highly respected leader in the Inspector General community and has a strong knowledge of Amtrak’s business operations and critical mission,” said Amtrak Board Chairman Tony Coscia. “He also has the integrity and objectivity required for this independent role.”

Winter previously served in the U.S. Marine Corps, where he retired with the rank of Brigadier General.

He earned a B.S.C. and a law degree from the University of Louisville, and a Masters in Law from the University of Virginia.

Howard has been with Amtrak’s OIG since 2010, serving as deputy inspector general before being promoted to the top IG position in 2015.