Is the Administrative Flexibility Originally Provided to the U.S. Railway Association Still Needed?

CED-78-19: Published: Feb 22, 1978. Publicly Released: Feb 22, 1978.

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The United States Railway Association (USRA) is a non-profit, mixed ownership Government corporation created under the Regional Rail Reorganization Act of 1973 to develop and carry out a plan to reorganize bankrupt railroads in the Midwest and Northeast. It has broad discretion in the use of its administrative expense appropriations, and its employees are not Federal Government employees. Therefore, many of the statutes and practices which apply to traditional departments are not applicable to USRA. It is managed by an 11-member board of directors consisting of 3 ex officio Government members (the Secretaries of Transportation and the Treasury and the Chairman of the Interstate Commerce Commission) and 8 other members.

A report by the Treasury Department Office of Audit questioned many USRA practices. USRA administrative policies and practices were compared with those of four similar corporations: the National Railroad Passenger Corporation, the Consolidated Rail Corporation, the Corporation for Public Broadcasting, and the Legal Services Corporation. They were found to be similar and all within legal boundaries. USRA has revised many of the policies and practices discussed in the Treasury audit report. For example: policies for controlling and accounting for reception and representation were strengthened and expenditures were reduced, consulting contracts with former officers are now on a daily-rate basis for time actually worked, USRA no longer pays for its employees' traffic fines, and the board has taken a more active role in reviewing and approving administrative policies. The flexibility originally provided for USRA may no longer be needed because it has sent its Final System Plan to Congress, and it no longer operates under the tight time constraints that existed in its original mandate.

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