Intercity Passenger Rail

This report reviews Amtrak's use of the Taxpayer Relief Act (TRA) funds. Specifically, GAO discusses (1) how much Amtrak has spent in TRA funds and what types of activities it has funded, (2) whether Amtrak has used TRA funds in accordance with the act, (3) what the roles of the Amtrak Reform Council and the Internal Revenue Service have been in monitoring Amtrak's use of the funds, and (4) whether Amtrak fully reports its use of the funds. Among other things, GAO found that through June 1999, Amtrak reported that it had spent about $1.3 billion of the $2.2 billion provided under TRA. GAO summarized this report in testimony before Congress; see: Intercity Passenger Rail: Increasing Amtrak's Accountability for Its Taxpayer Relief Act Funds, by Phyllis F. Scheinberg, Associate Director for Transportation Issues, before the Subcommittee on Transportation and Related Agencies, House Committee on Appropriations. GAO/T-RCED-00-116, Mar. 15 (13 pages).

GAO noted that: (1) through June 1999, Amtrak reported that it had spent about $1.3 billion of the $2.2 billion provided under the TRA act; (2) nearly two-thirds of TRA funds spent was for capital improvements, including nearly $400 million for Amtrak's high-speed rail program; (3) about one-third of these funds was spent for equipment maintenance expenses; (4) an additional $48 million was spent on servicing debt; (5) GAO reviewed 20 expenditures associated with all of Amtrak's TRA capital improvement projects; (6) GAO also reviewed 3 expenditures of TRA funds for reimbursement of expenditures that Amtrak incurred and paid before the passage of the act; (7) of the 23 Amtrak expenditures funded through the act that GAO reviewed, 18 were consistent with the act; (8) these 18 expenditures were reasonably related to the acquisition of capital improvements in intercity passenger rail service and were therefore eligible for TRA funding; (9) GAO could not determine whether 2 of the 23 expenditures were eligible under the act because it was unclear whether portions of the project to which they were charged were eligible for TRA funding; (10) GAO found that the 3 remaining expenditures were not eligible for TRA funds; (11) GAO determined that Amtrak improperly used $9 million in TRA funding for these 3 expenditures because it erroneously concluded that the act's restrictions did not apply to them; (12) in each of these 3 cases, Amtrak used TRA funds to reimburse itself for expenses that it had incurred and paid prior to the act; (13) Amtrak asked the IRS to determine whether these 5 expenditures are qualified for funding under the act; (14) the Council has not yet monitored Amtrak's use of TRA funds, and the IRS has not yet examined Amtrak's tax returns on the use of these funds; (15) the Council has not made quarterly reports to Congress on Amtrak's use of TRA funds, as required by the Amtrak Reform and Accountability Act of 1997; (16) Council officials stated that budget and staff constraints have limited the Council's ability to review Amtrak's use of TRA funds, and the Council chose not to undertake any examination of spending under the act while GAO was completing its review; (17) Amtrak's quarterly reports to the Council on its use of TRA funds do not fully disclose the extent to which Amtrak has used these funds for equipment maintenance; and (18) as a result, these reports are less useful than they could be in helping the Council comply with its responsibility to monitor the use of TRA funds.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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