FINANCIAL MANAGEMENT: INTERNAL CONTROL WEAKNESSES IN FRA'S CIVIL PENALTY PROGRAM

The General Accounting Office (GAO) conducted a study of the financial management of the Federal Railroad Administration's (FRA's) civil penalty program. This program, which is managed by FRA's Office of Chief Counsel (OCC) and Office of Financial Services (OFS), assesses the railroads' penalties for violations of safety regulations that pose an immediate safety hazard. GAO found internal control weaknesses in the financial management of FRA's civil penalty program that undermined compliance with federal standards for settlement, collection accounting, and recordkeeping. Additionally, FRA's actions did not comply with its own internal standard operating procedures and policies. Specific problems identified were as follows: OCC did not keep adequate records or railroad correspondence in numerous cases and was therefore unable to readily determine which railroads had and had not responded to notifications of safety violations and potential civil penalty assessments; OFS did not establish accounts receivable for millions of dollars in civil penalty payments because OCC staff did not follow required procedures, resulting in a loss of control over government receipts; OCC did not process and OFS did not deposit some receipts in a timely manner, leading to a loss of revenues due to foregone interest earned on deposits; OCC frequently did not enforce provisions for charging interest and administrative costs for overdue civil penalty payments, with the result that the federal government lost potential revenues; and OCC was not timely in settling railroad violation cases and collecting civil penalties, resulting in increased federal government borrowing.

• Supplemental Notes:
  • Report to the Secretary of Transportation.
• Corporate Authors:

  U.S. General Accounting Office

  441 G Street, NW
  Washington, DC  United States  20548
• Publication Date: 1990-12

Media Info

• Features: Appendices;
• Pagination: 15 p.

Subject/Index Terms

• TRT Terms: Finance
• Identifier Terms: U.S. Federal Railroad Administration
• Uncontrolled Terms: Financial management
• Old TRIS Terms: Civil penalty program
• Subject Areas: Administration and Management; Finance; Highways; Railroads;

Filing Info

• Accession Number: 00603508
• Record Type: Publication
• Report/Paper Numbers: GAO/RCED-91-47
• Files: TRIS
• Created Date: Feb 28 1991 12:00AM