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OIG - Amtrak not planning acquisitions properly ?

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<div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">I spent nearly 40 years working for several large corporations.  Of that time 28 years was with a large investor owned electric and gas utility.  I was the Audit Director for the company’s mining and natural gas pipeline subsidiaries for four years, IT Audit Director for nine years, and chief auditor of the company’s Australian subsidiary for five years.  The other years were spent in management roles in accounting and finance.  </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;"> </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">Most audit reports contain recommendations for improvement.  I never encountered anyone who liked to be told by the auditors that they can improve the internal controls associated with their business.  They tend to push back on them, i.e. you don’t understand our business, your methodology is flawed, etc.  I always liked the one about methodology.  When pressed to say what was wrong with the methodology, I cannot remember anyone ever coming up with a legitimate response. </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;"> </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">To help defuse the push back associated with audit findings and recommendations, auditors write their reports in the passive voice as opposed to the active voice.  It is softer.  And it tends to go down easier.  But it is wordy.  </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;"> </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">Audit reports are read by senior and executive management, external auditors, audit committee members, and board members.  They are also read by regulators, creditors, investors, etc.  And in Amtrak’s case they are read by all sorts of politicians or their staffs.  For this reason the reports usually contain more detail and/or explanatory language than would be the case if they were being written for a narrower audience. </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;"> </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">I don’t know who was on the Amtrak IG audit team.  Amtrak does not tell us.  However, if the Amtrak team is typical of the teams in most large companies, it would include subject matter experts and internal control experts.  In our company, a team that was auditing a mining company activity, for example, would include a mining engineer, a maintenance engineer, an IT professional, a financial guru, and several general auditors.  Moreover, if required, we would engage outside experts to help with the audit.</span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;"> </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">We had subject matter experts, i.e. engineers, purchasing specialists, etc., on staff.  They came from throughout the company.  They usually spent two to three years in Internal Audit.  If they performed well – almost all of them did because we were highly selective - they were usually promoted upon leaving IA.  Their perspectives were broadened by their audit experiences, and the company placed great value on it when considering them for promotion.  Of the people who worked on my teams, one is an IT Director, another is a Controller, and a third is a Vice President of Regulatory Affairs. </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;"> </span></div> <div style="margin:0in 0in 0pt;"><span style="font-family:Calibri;">I have skimmed the report.  I plan to read it in depth and may have some additional thoughts about the subject matter.  But for now I wanted to correct what I believe is a misunderstanding of the audit processes, audit reporting, and the personnel composition of most large audit groups.  </span></div>
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