Posts Tagged ‘Amtrak Office of Inspector General’

OIG Finds Amtrak Handled CARES Funds Well

December 21, 2020

The Amtrak Office of Inspector general has found the passenger carrier has made effective use of its federal CARES Act relief funds.

The OIG said there were some flaws in how Amtrak addressed use of those funds for state-supported intercity rail passengers service but otherwise the carrier has been effective in its use of and accounting of relief funds.

Amtrak received $1.018 billion in CARES Act funding and through October had spent about 87 percent of that money.

Amtrak underreported its use of the funds set aside for state-supported costs by about $686,000 out of a total of $97 million, the OIG audit found.

The OIG report said Amtrak’s finance department has since revised its reporting to more accurately reflect the remaining funds.

In another finding, the OIG said Amtrak could more consistently apply its coronavirus paid leave policy.

Amtrak OIG Says PTC Systems Could be More Reliable

December 18, 2020

The Amtrak Office of Inspector General reported this week that the passenger railroad expects to achieve positive train control interoperability with its host railroads by the Dec. 31, 2020, deadline, but can take steps to better ensure its systems are reliable.

The OIG said Amtrak faces two risks that may diminish PTC’s safety benefits.

These include a lack of electronic tools to easily access data needed for it and the Federal Railroad Administration to monitor PTC system performance.

This means reports on reliability are incomplete and the processes to manually compile PTC data are inefficient and error-prone.

The OIG said the risks involve Amtrak’s practices when PTC systems do not initialize before a train leaves a station or disengages while en route.

The report said Amtrak does not consistently follow the stringent practices for PTC malfunctions that will be required by the FRA as of Jan. 1, 2020, and that data input processes contain a risk of human error.

The report noted that Amtrak achieved full implementation of its PTC systems last August

The OIG review found at least twice as many reliability incidents in a month than Amtrak officials identified after reviewing the same source of information.

As a result, the OIG report concluded, “reports on PTC reliability are incomplete and Amtrak cannot easily identify potential problems it may need to address promptly or longer-term.”

Although Amtrak officials acknowledged the need for electronic tools, they told the OIG “they have not fully researched available options because they have been focused on meeting the implementation deadline.”

Amtrak officials also cited funding constraints because of the pandemic.

Amtrak has “invested hundreds of millions of dollars” in PTC, including about $370 million from fiscal years 2008 through 2020, according to the report.

The passenger carrier has three PTC systems including the Advanced Civil Speed Enforcement System used on the Northeast Corridor and connecting corridors it owns; Incremental Train Control System in Michigan; and Interoperable Electronic Train Management System onboard locomotives that operate on freight railroads where it is a tenant.

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 https://amtrakoig.gov/reading-room-documents/management-challenges/amtrak-top-management-and-performance-challenges-2?utm_campaign=mgmt_challenges&utm_source=pr&utm_medium=email

Amtrak OIG Cites, Planning, Oversight Issues in Moynihan Train Hall Project in New York City

August 21, 2020

Amtrak’s Office of Inspector General said this week that planning and oversight problems in the initial stages of Amtrak’s development of Moynihan Train Hall in New York City have led to $72.8 million in cost increases.

The OIG reports said completion of the project could be extended beyond its late 2020 target date.

The work is converting the James A. Farley Post Office building into a transportation center located adjacent to Penn Station.

The project cost has been put at $1.6 million and Amtrak’s initial $106 million share has increased by 69%, according to the OIG report.

The report faulted Amtrak for its failure to include into its projections such elements as design costs, construction management, and information technology.

OIG said in a news release that the problems “are another example of a longstanding pattern of program management challenges the OIG has reported on extensively.”

Amtrak OIG to Review How Amtrak Charges States for Cost of Providing Corridor Services

July 18, 2020

Amtrak’s Office of Inspector General will conduct a review of how the passenger carrier shares costs on state-supported corridor services.

A memorandum posted on the Amtrak OIG’s website said the audit “will be to evaluate the company’s actions to address longstanding concerns with the [Passenger Rail Investment and Improvement Act] 2009 cost-sharing methodology and the company’s billing process with its state partners.”

The memo said the OIG may expand the scope of its investigation or modify its objective during the audit.

The OIG said that during the audit it will analyze documents, invoices, and agreements related to state partner billing.

It will also interview Amtrak and state officials knowledgeable about the cost-sharing methodology and the state-supported billing process.

By federal law state and local governments must fund rail service on routes of less than 750 miles.

In the Midwest, the states of Michigan, Illinois, Wisconsin and Missouri fund Amtrak corridor services with most of those routes linking Chicago.

Pennsylvania funds Amtrak’s Pennsylvanian between New York and Pittsburgh and service in the Keystone Corridor between Philadelphia and Harrisburg, Pennsylvania.

Indiana once funded the Chicago-Indianapolis Hoosier State but withdrew its funding in 2019 and that service was discontinued. Minnesota also once funded service between the Twin Cities and Duluth.

Amtrak OIG Calls for Defining the Roles, Priorities of the Passenger Carrier’s Police Department

July 9, 2020

The Amtrak Office of Inspector General has called on the passenger carrier to define more precisely the role and priorities of its police department before it decides how large of a force to have.

The OIG report said determining the optimum size of the force and how it will be used will help managers determine if the Amtrak police force is being used efficiently and effectively.

Amtrak and its police force need to reach a consensus on those foundational issues, and then developed data-driven processes to determine the agency’s size and how its resources are allocated.

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.”