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Quarterly Report on Amtrak's FY 2009 Operational Reforms Savings and Financial Performance

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On June 3, 2009 as mandated by the fiscal year (FY) 2008 Consolidated Appropriations Act, we issued our quarterly report to the House and Senate Appropriations Committees on Amtrak’s savings from operational reforms and year–to–date financial performance. Amtrak’s operating loss through March 2009 was $259.9 million, 6.9 percent less than budget as declining passenger revenues were largely offset by declining fuel and employee benefit costs. Amtrak’s financial performance is expected to continue to erode through the remainder of the fiscal year, resulting in a forecasted year–end operating loss of $25.8 million. Thus far, Amtrak has not yet identified the measures it will take to close this funding gap. Amtrak has shifted $24 million in costs from general operating to capital and now expects to end the year with a cash balance of $182 million, well above the minimum year–end level the OIG believes is necessary. These funds could be used to close the funding gap if Amtrak can not implement sufficient operating efficiencies. The OIG also found that Amtrak could do more by providing a transparent and detailed analysis of the financial risks and external factors, such as forecasted economic growth and fuel prices, impacting the company’s revenues and expenses. Doing so would improve policymakers’ understanding of the magnitude of these risks going forward. Finally, the OIG believes that while Amtrak has enhanced its internal reporting of financial and operating measures, it will be important to integrate this reporting with the measures required under the Passenger Rail Investment and Improvement Act of 2008 to better link Amtrak’s actions, external risks, and its bottom line. As directed by Congress, reports requested by the House and Senate Appropriations Committees are subject to a 15 day hold before being publicly released. In compliance with that requirement, the report was withheld from public release until June 18, 2009.