Finding 2023-001 – Equipment and Real Property Management
The single audit report included the following recommendation:
We recommend that Amtrak continue to work toward a full integration or reconciliation between Amtrak’s fixed asset system of record and the different equipment-tracking systems...
Finding 2023-001 – Equipment and Real Property Management
The single audit report included the following recommendation:
We recommend that Amtrak continue to work toward a full integration or reconciliation between Amtrak’s fixed asset system of record and the different equipment-tracking systems. We recommend that management consider redesigning one of its key controls to help ensure that the monitoring of the observations is occurring on a preventive basis to help identify any exposure to non-compliance before it occurs. For example, Amtrak should consider an automated system report that would flag an asset proactively when a 2-year inventory deadline is approaching. During the observation process, management should ensure there is a review control within the process to validate that the asset is accurately tagged and such identifying information matches the equipment-tracking system. Additionally, this review control should also be performed when the asset is first logged into the equipment-tracking system. In the interim, until such processes are fully implemented, Amtrak should enhance the current control procedures surrounding the asset documentation and ensure that field personnel are aware of and are consistently and carefully updating the asset records such that clerical/human errors are minimized and that the asset records contain the necessary asset details in order to properly track equipment by federal requirements. This would include enhancing the asset chain of custody recordkeeping so that such changes are identified and reported timely. Additionally, management should consider requiring the serial number and model number to be documented in the system of record at set up in addition to the asset tag number. This will help ensure that the equipment has a unique ID number that can help it be identified and matched to the system record should an asset number not get added timely. Finally, as it relates to condition #4 above, management should investigate the root cause of the asset that could not be located and determine if additional control changes or modifications need to be made in order to prevent reoccurrence.
Identification as a repeat finding:
This finding was identified as a repeat finding in the immediate prior year as Finding 2022-001. This finding was reported in prior years as well, beginning in at least FY2012.
Management Response/Status of Action Plans:
Amtrak agrees with the recommendation to redesign key controls to help ensure that the monitoring of the observations happens on a preventive basis to help identify any exposure to non-compliance before it occurs. Amtrak continues to progress on a multi-year effort to remediate this finding. Amtrak created the EAMDT which has been tasked to improve equipment record keeping which will resolve this finding.
1. In April 2024, Amtrak completed an engagement with an outside consulting firm that delivered three items: an updated Equipment Control Policy (ECP), standard operating procedures (SOPs) for equipment management based on the accountable property system of record, and a one-hour eLearning course that reinforces the importance of good equipment management practices and the need to follow the equipment tracking requirements of 2 CFR Part 200. These deliverables will improve policies and corporate governance over assets by providing training to the employees and improving the processes needed for oversight of equipment management, as well as to help ensure that assets are not capitalized without a complete record, which would include a unique asset identifier and the condition and location of the asset. The ECP was approved and published in the Amtrak Policy and Instruction Manual in May 2024. Amtrak will communicate the updated policy to all relevant personnel by the end of June 2024. The EAMDT is working with the Learning and Development team to identify the employees who will need to take the eLearning course, and these employees will be required to take the eLearning material beginning in the first quarter of FY25.
2. The EAMDT is implementing controls throughout the equipment lifecycle as it identifies improvement opportunities. For example, EAMDT has been added as an approver to the purchase requisition workflow for equipment purchases, and EAMDT is working with Capital Accounting to ensure that assets are recorded completely before being capitalized, which would include a unique asset identifier, condition, and location of the asset. EAMDT is reviewing assets currently in the system that do not have assigned asset IDs. EAMDT’s goal is to resolve and update existing records that are missing IDs and other information by the end of April 2025. Additionally, in August 2023, the Asset Disposition group began reporting into EAMDT which enables centralization of a more complete oversight of Amtrak’s assets. EAMDT is working to improve the record keeping for asset dispositions.
3. EAMDT is working with Amtrak’s Digital Technology (DT) Department to find ways to track equipment electronically. This includes installing location tracking technology on yard and Engineering Maintenance of Way equipment to better track and locate Amtrak assets. As of the end of April 2024, location tracking technology has been installed on over 1,500 pieces of equipment with the goal of having location tracking technology installed on approximately 2,400 assets by the end of June 2024. EAMDT is also coordinating with DT on an application accessible via a mobile device (e.g., cell phone, tablet) used by field personnel to perform audits and update equipment records.
4. EAMDT has developed trend reporting and operational reporting to help EAMDT and the departments track their compliance progress and identify assets that are out of compliance or soon-to-be out of compliance to both bring assets back into compliance, as well as to ensure an inventory is done and recorded within the two-year period. As of September 2023, two primary dashboards have been developed and can be used by all departments to help identify assets that are out of compliance and/or need to be audited.
5. EAMDT performs site visits to assist the equipment managers in performing equipment and vehicle audits. During these visits, equipment managers are educated on their responsibilities and tools available for performing audits.
The contacts for this item are Ian Hinke, AVP Supply Chain Management and Robert Hoban, Director Asset Management. Amtrak anticipates the implementation of the above procedures, along with continual process monitoring and refinement, will fully remediate this finding by June 2026.