Asset Management: Improved Inventory Practices Could Help the Company Better Manage its Maintenance-of-Way and Rolling Stock Equipment

This report assesses how effectively the Engineering department maintains accountability for the company’s maintenance-of-way (MOW) and rolling stock equipment. Company policy requires the department to maintain accountability for this equipment throughout its lifecycle—from its acquisition, during its use, and through its disposal or sale.We identified a number of weaknesses the company faces in accounting for its MOW and rolling stock equipment. This is primarily due to its lack of effective procedures that would ensure managers record key information on equipment receipt, use, and disposal in the company’s asset management system. The Engineering department has also set a $50,000 purchase price as its threshold for inspections, meaning equipment costing less than the threshold amount is not consistently inspected or accounted for. Furthermore, the department did not consistently comply with federal requirements to account for equipment purchased with grant funds.We recommended that the company develop and implement procedures to ensure that it records this key information in its asset management system throughout the life of the equipment, inspects it as required, and consistently accounts for it. This includes procedures to ensure that the department complies with federal requirements governing equipment purchased with grant funds.