Amtrak: Improved Management and Controls over Food and Beverage Service Needed

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A letter report issued by the Government Accountability Office with an abstract that begins "Food and beverages have been served on board National Railroad Passenger Corporation (Amtrak) trains since Amtrak was created. Amtrak's 11 commissaries, located around the country, are responsible for receiving, warehousing and stocking food, beverages, and other items for Amtrak's on-board dining and cafe service. January 1999, Amtrak ran these commissaries with its own employees. Since then, Amtrak has contracted out the responsibility for the commissaries and for ordering and stocking all food, beverage, and related items under a contract that expires in September 2006. Gate Gourmet, ... continued below

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United States. Government Accountability Office. August 24, 2005.

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Description

A letter report issued by the Government Accountability Office with an abstract that begins "Food and beverages have been served on board National Railroad Passenger Corporation (Amtrak) trains since Amtrak was created. Amtrak's 11 commissaries, located around the country, are responsible for receiving, warehousing and stocking food, beverages, and other items for Amtrak's on-board dining and cafe service. January 1999, Amtrak ran these commissaries with its own employees. Since then, Amtrak has contracted out the responsibility for the commissaries and for ordering and stocking all food, beverage, and related items under a contract that expires in September 2006. Gate Gourmet, the contractor, is also a supplier of food and beverages to several major airlines. During fiscal years 2002 through 2004, the period we focused on in our audit work, Amtrak paid Gate Gourmet between $59 million and $64 million a year in reimbursements and fees. Gate Gourmet personnel operate Amtrak-owned commissaries and order, receive, store, and stock trains with food, beverages, and other related items, such as table linens and napkins. Food and beverage supplies are charged to Amtrak employees who provide on-board food and beverage service and account for the food and beverages en route. When a train arrives at its final destination, all remaining stock items are returned to a commissary. Gate Gourmet charges Amtrak for the items used, as well as for labor, management, and other fees.Since Amtrak started operations in 1971, Amtrak has struggled financially and has depended on a federal subsidy of more than $1 billion a year since fiscal year 2003 to remain solvent. For fiscal years 2002 through 2004, Amtrak's food and beverage expenses were about $487 million--or only about 5 percent of the company's total expenditures. However, during that same time period, Amtrak's food and beverage service earned about $243 million in revenue. This means that Amtrak spends about $2 to earn $1 in food and beverage revenue. Because of the importance of food and beverage operations to Amtrak and the continued interest of Congress in Amtrak's financial performance, Congress asked us to review Amtrak's food and beverage costs. We examined the following three areas: (1) the provisions written into Amtrak's contract with Gate Gourmet International (Gate Gourmet) to control costs, (2) the types of management controls Amtrak exercises to prevent improper payments, and (3) the information Amtrak collects and uses to monitor the service and to report to stakeholders such as its Board of Directors."

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Government Accountability Office Reports

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the U.S. Congress investigating how the federal government spends taxpayers' money. Its goal is to increase accountability and improve the performance of the federal government. The Government Accountability Office Reports Collection consists of over 13,000 documents on a variety of topics ranging from fiscal issues to international affairs.

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  • August 24, 2005

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  • June 12, 2014, 7:50 p.m.

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United States. Government Accountability Office. Amtrak: Improved Management and Controls over Food and Beverage Service Needed, report, August 24, 2005; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc301300/: accessed May 20, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.