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Highlights

GAO reviewed financial management weaknesses in the Federal Railroad Administration's (FRA) civil penalty program.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation 1. The Secretary of Transportation should direct the Administrator, FRA, to initiate a program to enforce adherence to internal controls by FRA personnel so that the integrity of the civil penalty program's financial management is not compromised. In particular, this program should emphasize updating and maintaining civil penalty case records, including documenting railroads' responses to penalty notifications and negotiations in official case files.
Closed - Implemented
The FRA Office of Chief Counsel (OCC) now requires that all responses to penalty notification letters in hazardous materials and top priority cases be placed in the case file.
Department of Transportation 2. The Secretary of Transportation should direct the Administrator, FRA, to initiate a program to enforce adherence to internal controls by FRA personnel so that the integrity of the civil penalty program's financial management is not compromised. In particular, this program should emphasize establishing formal accounts receivable records when railroads are initially notified that violations have been cited and civil penalties assessed.
Closed - Implemented
The FRA Office of Financial Services (OFS) now establishes a memorandum general ledger account for the initial penalty demand amount when the initial penalty notification letter is sent.
Department of Transportation 3. The Secretary of Transportation should direct the Administrator, FRA, to initiate a program to enforce adherence to internal controls by FRA personnel so that the integrity of the civil penalty program's financial management is not compromised. In particular, this program should emphasize forwarding receipts directly received by OCC to OFS within required time limits and ensuring that deposits are made in accordance with federal requirements.
Closed - Implemented
OCC revised its log for tracking penalty checks received to increase accountability, and OFS has re-emphasized to staff the need to comply with its 1-day check deposit policy.
Department of Transportation 4. The Secretary of Transportation should direct the Administrator, FRA, to initiate a program to enforce adherence to internal controls by FRA personnel so that the integrity of the civil penalty program's financial management is not compromised. In particular, this program should emphasize enforcing statutory and agency provisions for charging interest, penalties, and administrative costs on overdue civil penalty debts.
Closed - Implemented
OFS now assesses interest, penalties, and administrative costs on overdue civil penalty debts in accordance with federal requirements.
Department of Transportation 5. The Secretary of Transportation should direct the Administrator, FRA, to set realistic goals for the settlement of claims against railroads based on analyses of attorney and administrative staff work loads.
Closed - Implemented
FRA developed attorney staffing standards to estimate the enforcement work loads that can be handled. The standards have been used to prepare an action plan for eliminating the FRA enforcement backlog.
Office of Chief Counsel 6. The Office of the FRA Chief Counsel should begin enclosing envelopes that are preaddressed to OFS when settlement agreements are sent to railroads. This would reduce the recurrence of situations in which railroads mistakenly send civil penalty checks directly to OCC.
Closed - Implemented
OCC has: (1) amended letters and agreements to highlight that checks must be sent to OFS; and (2) sent letters to companies that send checks to OCC explaining the need to send checks to OFS to ensure proper accounting.

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