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Amtrak gives lavish bonuses for only losing $214 million last year
Employees of Amtrak, the publically-funded railroad service, earned themselves a round of bonuses because their agency only lost $214 million last year.
 A second set of bonuses was scrapped after Amtrak fell far short of its customer satisfaction goals, according to the agency's inspector general.
Amtrak handed out $11.2 million in bonuses as part of a short-term incentive program, which was designed to reward staff if they managed to keep operating losses under $305 million in 2014.
The other half of the incentive program would have seen millions in additional bonuses showered on employees had they been able to satisfy 84.25 percent of their customers.
Perhaps because that was considered a lofty goal, Amtrak said it would still pay a partial round of bonuses if customer satisfaction levels had reached 83.5 percent. Customer satisfaction sat at 81 percent last year.
Amtrak overpaid employee bonuses by $36,907 to 32 staff members, the report said. Even so, the agency declined to reclaim its overpayments. The railroad service's management "opted not to collect overpayments," Amtrak said in comments on the report, because "payments were made to employees who were underpaid."
The agency also had little in the way of a plan when it began the incentive program.
"Award-payment policies and procedures for certain cases were developed as the process was being implemented," the inspector general found.
The report acknowledged the possibility of a similar set of bonuses being approved for 2015.
Go here to read the full Amtrak inspector general report.
Source Article.
Excerpts from the report
Incentive Awards Were Appropriate, But Payment Controls Can Be Improved
Office of Inspector General, Report No. OIG-A-2015-009
To: Barry Melnkovic, Amtrak’s Chief Human Capital Officer.
The Board of Directors approved and Amtrak (the company) implemented the FY 2014 Short Term Incentive (STI) Plan. The Passenger Rail Investment and Improvement Act of 2008 encouraged the Board of Directors to develop an incentive pay program for management employees. The initial plan was developed and implemented in fiscal year (FY) 2013. The plan gives non-agreement employees the opportunity to receive monetary awards based on the company achieving pre-determined financial and customer service goals. The plan applies to all non-agreement employees hired on or before July 1, 2014, except employees of the Office of the Inspector General and the Northeast Corridor Advisory Commission. To be eligible for the awards, employees must have received a performance rating of “Met Goals “or higher for FY 2014. The STI award was to be paid no later than December 31, 2014.
The objective of the OIG’s audit was to review the accuracy of the company’s reported plan goal achievement and payments to employees.
note: The OIG took no exception to the concept of incentive bonuses for an enterprise that loses money. The notable complaint throughout the OIG’s report was with the software used to compute the bonuses and the lack of clear standards for their application.
The payments made to employees in 98.4 percent of the cases were accurate. The relatively minor payment errors included $36,907 in overpayments, $2,389 in no payments, and $171 in underpayments. These errors were the result of weaknesses in controls for implementing the payment process. We also noted that these weaknesses led to inefficiencies in implementing the process.
The company made award payments totaling $11.2 million. We determined that 98.4 percent of eligible employees (2,831 out of 2,876) received the correct award payment. We also determined that 1.6 percent (45 employees) received an incorrect award payment. Overpayments totaling $36,9071 were made to 32 employees. Payments totaling $2,389 were not made to 9 award-eligible employees, and 4 employees were underpaid by $171.2 These errors resulted from using incorrect information for salaries, hire and rehire dates, transfer dates from union to management positions, and errors in calculating leave-of-absence days.
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