By Jim McElhatton, The Washington Times
When Amtrak assured Congress it was on a “glide path” to free itself of federal subsidies early last decade, a handful of top executives secretly had reason to know better. In fact, the rail service was on the verge of bankruptcy.
But Amtrak’s public assurances were based on far more than overly rosy financial projections.
A previously undisclosed seven-year investigation later uncovered serious accounting shenanigans inside Amtrak that kept federal officials, Congress and the public in the dark about the national rail service’s true finances, according to documents obtained by The Washington Times through the Freedom of Information Act.
No criminal charges were filed, but the activities were serious enough to warrant a federal grand jury and the involvement of the U.S. attorney’s office in Washington. The investigation was headed by Amtrak’s office of inspector general and the U.S. Postal Service Inspection Service.
What authorities ultimately unraveled was that two former Amtrak officials, in fiscal 2001, either booked false or incorrect accounting entries in Amtrak’s monthly financial statements or else failed to report the activities.
In turn, these same misleading accounting entries helped make Amtrak’s monthly financial results appear closer to budget than they really were. What’s more, the “inappropriate entries” were being made when Amtrak was sending monthly and quarterly financial reports to its own board of directors, the Department of Transportation, the Federal Railroad Administration and others, records show.
Amtrak spokeswoman Karina Romero said the accounting misstatements had been corrected and that several changes were made in the wake of the investigation, including the issuance of quarterly financial statements and the establishment of an audit committee.
“This was a serious breakdown in complying with basic financial reporting requirements that rendered interim unaudited financial statements unreliable,” Amtrak Inspector General Ted Alves said in a statement to The Times on Friday.
To read more, visit: http://www.washingtontimes.com/news/2010/may/31/amtrak-misled-congress-on-finances/
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