You did not answer the question. How did the PRIIA teams get the avoidable cost numbers, especially in light of the fact that the FRA does not have them?
Who is the gentleman that you are referring to? Was he employed by Amtrak? Was he involved in developing the PRIIA data for the Texas Eagle and Sunset Limited? Did he do it alone or did he work with a team? Do you know him personally?
I think they just put the Avoidable Costs together as one would to determine a cost function at a factory or business, count heads, material, expendables from an analysis of the operations and internal records. I couldn’t find the name of the guy, just recall reading it, but will IM it to you if I can find it.
BTW, here is the advertisement for a replacement. Take a look at the job duties. Why don’t you just call them up and ask to speak to the individual. Partial description follows:
"Route and Service Change Analysis:
State Supported Service Pricing:
[quote user=“V.Payne”]
I think they just put the Avoidable Costs together as one would to determine a cost function at a factory or business, count heads, material, expendables from an analysis of the operations and internal records. I couldn’t find the name of the guy, just recall reading it, but will IM it to you if I can find it.
BTW, here is the advertisement for a replacement. Take a look at the job duties. Why don’t you just call them up and ask to speak to the individual. Partial description follows:
"Route and Service Change Analysis:
State Supported Service Pricing:
“I think they just put the Avoidable Costs together as one would to determine a cost function at a factory or business, count heads, material, expendables from an analysis of the operations and internal records.” So you really don’t know anymore about the avoidable costs than you know how Amtrak allocates its indirect costs!
A job description is going to tell me how the PRIIA teams arrived at the avoidable costs in 2009? I have written hundreds of job descriptions. They say what someone should do in a job. They don’t tell anyone what a person did in 2009 or 2013 or at any time. Job descriptions are window dressings in most instances. .
I could come up with a pretty good guess re: the avoidable costs (short and long term) at least by categories. Most costs associated with a product line - long distance trains - are avoidable over time, at least in the case of an aggressive, competitive business. If a real business doesn’t deal aggressively with the avoidable costs of its discontinued product lines, it eventually goes out of business.
Anyone reasonably familiar with financial and cost accounting knows that the numbers for the long distance trains don’t add up. They are a financial sink hole, and they will remain one no matter how much lipstick Amtrak puts on this pig. Amtrak has more than 40 years to get it right with the long distance trains; they have failed miserably.
My challenge was to you. You make reference to numbers that supposedly have been validated, but when challenged you cannot come up with any meaningful support. Unless you believe that numbers generated five or 14 years ago are meaningful support! Fobbing the question off on a job description is unbelievable!
You don’t have access to Amtrak’s books. Neither do I, by the way, but I don’t profess to have the access or know how Amtrak has arrived at many of its numbers. I don’t speculate. I will projec
Numbers from 4 years ago are certainly relevant as they are doing the same thing with the same equipment. I base my analysis on those numbers, and plenty of other approaches going back to 1968.
If they are to be thrown out then why are they not valid besides an opinion? 4 year old data is an infant in transportation, I have worked on bridges over 80 years old.
BTW, the route level costs are not audited for accuracy.
Even the state DOTs cannot get completely transparent numbers, like NCDOT for example, on food service and they are paying for the service.
See my last Hoosier State post for less than 1 year old numbers that came from the INDOT bidding process.
How do you know that the route costs are not audited? Are you an auditor? Do you understand audit processes? Do you have access to the auditor’s audit program?
The route level costs roll up to the financials. An external auditor, as part of the audit process, is required to verify, on a statistical sampling basis, that the auditee’s cost system allocates costs in such a manner as to not to materially misstate the financial statements. Also, the auditors need to look at the cost and cost allocations system controls in order to offer an opinion about the company’s internal controls.
If you want to summarize the INDOT bidding process, in a sentence or two, as it pertains to Amtrak’s long distance trains, and can come up with specific numbers, I would be happy to view them. Otherwise, forget it.
You don’t have access to Amtrak’s books and, therefore, you don’t know how it allocates costs or which costs would be avoidable if it discontinued the long distance trains. Today! Enough of this nonsense!
I found the gentleman’s contact information and sent it to you as a Message which is under your login name on the front page. He is now a consultant so he might not be giving information out for free.
As to your FOIA request, why don’t you just ask for the Avoidable Cost/Loss of the Routes. Since NRPC is required by statue to report this I can see them having a hard time suggesting the information is privileged.
In the Saving the Hoosier State Again thread I back-calculated that the short-term avoidable costs were less than 30% of the Total Costs and the Long-Term Avoidable Costs were less than 50% of Total Costs. INDOT is accepting bids to provide the complete service or parts.
I still don’t see how the route level costs roll to the financials (by the way it is a half year since the close of FY 2013 shouldn’t the report be out now). They are not part of the actual audited financial statements. I believe how they account for cost is by cost center and type and then they have to allocate costs.
The Hoosier State is hardly representative of the costs associated with the long distance trains. It has no checked baggage, food service, or premium class seating. It does not have any premium cars, i.e. diner, lounge, and sleeping cars, all of which are labor intensive.
The avoidable costs associated with the discontinuance of one train are different than the avoidable costs associated with the discontinuance of an entire product line, i.e. all of the long distance trains, which is what I have advocated since I joined these discussions.
I am not concerned about the veracity of Amtrak’s accounting methodologies, i.e. avoidable costs, allocation of shared costs, etc… No one has demonstrated that Amtrak is accounting for its costs or allocating its overheads improperly. No one that I have challenged, i.e. Fred Frailey, Don Phillips, you, has convinced me that he has access to Amtrak’s books. And until you get access to the company’s books, including the auditor’s work papers, it is pure speculation. People can speculate (believe) all they want. That is all it is.
Ernst & Young signed off on Amtrak’s 2012 financial statements on December 21, 2012. Following sign-off by the external auditor, the financial statements have to be incorporated into the Annual Report, which takes some time to prepare and publish. In addition, the Amtrak’s IG did not sign-off on the company’s internal controls until February 1, 2013. Attestment to the veracity of the internal controls is required by the American Financial Accounting Standards Board as well as Generally Accepted Auditing Standards. It is an integral part of the company’s financial statements.
It does seem that Amtrak is a bit late making its annual report available, but the September 30, 2013 Monthly Operating Report, which includes the results for FY13, has a set a financial statements. They are not audited at that point, but over the years I