The Alaska Railroad:

Its Management Is Being Improved, Its Future Needs To Be Decided

CED-78-137: Published: Jul 27, 1978. Publicly Released: Jul 27, 1978.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The federal government has owned and operated the Alaska Railroad (ARR) since 1923. ARR played an important role in developing Alaska and in meeting national defense needs; it has become an integral and essential part of Alaska's transportation system. The environment, in which ARR now operates, changed considerably since 1923, however, and competing transportation modes have grown rapidly.

Because it operates in a competitive environment, the ability of ARR to attract customers is essential. ARR had management weaknesses, including no overall marketing plan, a tariff structure which did not ensure that it could meet costs and reinvestment needs, and unreasonably low real estate rental rates. ARR did not have an adequate system of internal controls; as a result, the potential for improper financial transactions existed; potential operating revenues were lost; and property and materials were not adequately protected. Financial management procedures and practices were inadequate, resulting in inaccurate and unreliable accounting data. Pay scales were unreasonably high in relation to other federal agencies in Alaska.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should decide whether the federal government should continue its ownership and operation of ARR.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Transportation should direct the General Manager, ARR, to: (1) periodically make a systematic assessment of transportation needs in its service area; (2) develop a plan for actively marketing its services; (3) determine the actual cost of providing service on specific commodities so that its tariff can be set fairly; and (4) evaluate the effect of the railroad's marketing and rate policies on consumers and competitors. The General Manager, ARR, should assess its procedures and implement an effective management and control system. He should also establish procedures designed to give reliable accounting data, adequate control over the expenditure of funds, and compliance with federal regulations.

    Agency Affected:

 

Explore the full database of GAO's Open Recommendations »

Sep 14, 2016

Sep 2, 2016

Aug 8, 2016

Jul 28, 2016

Jul 13, 2016

Jul 7, 2016

Jun 24, 2016

Jun 21, 2016

May 26, 2016

Looking for more? Browse all our products here