Looks like its official - 611 will not run this year. Not a surprise at this point.

https://railfan.com/norfolk-western-611 ... n-in-2024/

Brian Barton was the 611 program director and is a CSX Transportation Manager. If he had safety concerns my guess is they were quite valid.

It sounds nefarious but it probably isn't.

As an ex-accountant, a principle applies.

I had an event that had gross revenue of $1000

I'd already bought $500 worth of hats, sold $100 (lets assume sold at cost for simple)

I netted $300 including hats, but I still have $400 of hats in inventory

Did I make $300 or loose $100? Hats in inventory are still assets. But I don't have any cash, either, to buy anything else. Accountants say Make $300

And nobody is happy. I can't pay the accountant in hats.

I saw this play out on an excursion railroad, only it was a 5-year pile of coal at current rates of consumption, but what a deal it was on coal.....

Randy makes an excellent point. In that all 6 directors who resigned were the 6 directors who ran the BB excursion program and in their different letters of resignation blamed the rest of the BOD for lack of support and for questionable practices in accounting and in keeping the VMT in compliance with the FRA , there was obviously a deep and long term chasm here that finally exploded.

The question now is how long will it take to properly address the financial issues ( audit) and to get the VMT into FRA compliance.

The sooner the better as the clock keeps ticking on the 611's boiler ticket.

Ross Rowland

The issue of merchandise to sell versus the train's operations really seems to be an issue here, and I have seen it before.

Years ago, I ran some trips for a group. While I had control over the train operations, I didn't have control or even input over merchandise, plus a number of other administrative expenses that were supposedly part of the events. Many of these expenses were not even known until after the events, so there was no way to include them in the event ticket pricing.

At several, the merchandise did not sell well, so the losses were charged to the events. At another event for the same group, the merchandise sold well, but all the profits were credited to the group's store. Certainly not a consistent practice. Administrative costs were somehow also charged to the events as a percentage of the yearly costs, although it was never clear how and what work was actually done.

The need for clear accounting and cost assignment can often solve these problems, as would sharing cost information in advance. I can certainly understand why those who raised a significant amount of money through the hard work of operating a series of excursion trains would be upset if losses out of their control and/or authority were suddenly thrown their way and blamed on them.

Not to comment in any way on VMT, but to expand on what Bartman said, in a perfect world you do your planning early in the fourth quarter for the following year and each department submits a budget, ball parked as necessary, based on that planning. That gives you a guide on what your expenses are expected to be and how much money you need to bring in. Then try to stick to it. In my experience with various small non-profits, this seems to be an alien concept.

Everyone chuckles and grumbles about the 'bean counters', but in the end they can be as critical as a cracked staybolt series and at the root of a lot of pain and decisions.

One practice I've seen more than a few places - on bigger railroads (regionals, class 1's, anybody with a rather sophisticated, project-costing system) is to know that the 'steam/excursion train' is the known pet project of the boss. And that you get evaluated on keeping your regular costs under budget... that's the safety net with a wink and a smile.

So when you go out to fix a bad crossing gate, charge it to the steam program.

I need new injectors for the switcher... we use that to move the excursion train - charge it to that.....

and on and on and on. So in the end, the losses on the boss' pet project look horrendous on paper.

Train will take an extra hour of dispatch time. Take that third trick dispatcher, all his benefits, vehicle, and anything else you can find.... and charge it to the project.

Takes a critical eye and granular evaluation to sort that stuff out, but I've seen it over, and over, and over again.

And while I haven't personally seen it, it makes me highly suspect of Amtrak accounting practices similarly worthy of examination.

Here's an update

https://www.facebook.com/share/p/WwgupG45cUqxo9v9/

The post mentions upcoming work to the Queen of Steam

"Norfolk & Western Class J No. 611
4h
At the invitation of our Board of Directors, the museum was visited by Mr. Harold Weisenger of the Motive Power and Equipment division of the Federal Railroad Administration. Mr. Weisenger is one of three Washington D.C. based FRA managers who oversee field inspectors throughout the U.S. related to steam locomotives.
He reviewed steam locomotive regulations as well as the responsibilities of owners and operators with Board and Staff.
He further explained and noted #611 was found to be compliant with FRA regulations during it's September 2023 annual inspection by four MP&E inspectors over a three day inspection. #611 was also inspected during operation at the fall Goshen excursions. No exceptions were found, meaning #611 met all parameters used in the FRA inspection process.
He also noted the wise caution exercised in taking #611 temporarily out of service at Goshen for what was only a single broken staybolt, as seen through flames to perform a comprehensive inspection of the firebox.
Currently #611 is in need of typical off season maintenance including the firebox and other appliances.
Announcements will be forthcoming late summer or early fall as to when the public will be invited to view the upcoming work and speak with the engine crew.
We look forward to having you there."

PMC, thanks for sharing the words that was in the initial Facebook post. I'm one of those that has been banned by VMT for questioning them on some of their claims and comments in the past and their solution is to simply ban people instead of answering questions of concern. Kind of cowardly if you ask me but I digress.....

I'm not sure I really understand the point of their post / announcement other than to brag on themselves and somehow said everyone's mind to ease that the engine is in fine condition. Since the FRA-s last detailed inspection was before five rough weekends of misfiring and poor banking, this post has nothing to do with the current state of the locomotive. Many would even suggest that the broken bolt would not have happened if the engine was being properly operated and maintained. Let's hope that it only is "routine maintenance" that is needed.

The visit from the FRA did not touch on or mention anything about the qualifications or lack thereof of many of the crew and operating personnel. While this nice diversion from the museum might get the hopes up in the rail fan community, everyone should remember that one of the big complaints and concerns of those that resigned from the board centered around the operating techniques.

The post from the museum also failed to mention that they recently hired a local lawyer who specializes in White Collar crimes.

It is interesting to watch the museum suddenly try to act engaged and make it seem as if they're doing things on site. They even went so far as to make a nice little music video and deem it a "cosmetic restoration" when they took a day to wash the 1218 sitting on display. Cute.

A November 12, 2024 article on the Roanoke Rambler website:
'Unfounded': Virginia Museum of Transportation Says Probe Finds Nonprofit Accounted for State Grant Money

So, the organization in question did their own internal audit with a firm they hired, and no wrongdoing was found? I bet nobody could see that coming a mile away. Kind of like letting the bank robber add up his take after robbing the bank....

Their first move after the meeting with the resignations was to hire a law fire that specializes in white collar crimes. Interesting to say the least.

Also, in the Rambler article, it is easy to miss the part in which the law firm sent a cease-and-desist letter to the Rambler for the article about the BOD meeting with the resignations, demanding that they take the article down and never repost it while threatening legal action if they don't. So now VMT is resorting to threats and stomping on the reporter's first amendment rights?

Keep in mind that the reporter was at the meeting, took his own notes, AND those notes and article are the same as the minutes from that meeting and statements from others that were there. Again, VMT is now resorting to threats?

The former BOD member that calls for an independent audit it spot on. That is what needs to happen to determine what is the truth and what is not. The Vice Pres at VMT has a history of blaming everyone else for the problems up there and even making inaccurate statements. For example, the Rambler article says that 2024 611 excursion were cancelled by the BOD after discussion with NS and the Buckingham Branch. That is the truth and in the minutes.

However, in the attached article from the Roanoke Times, the previously mentioned VP says that 'their abrupt parting caused the cancellation of this year’s excursions event' before he takes a couple of childish swipes at them. That is a lie. So if he will lie about that, how much should be believed of his other comments around the finances?

I also question the comments from the FRA as to the condition of the engine. Their dog and pony show earlier this year had the FRA rep speak to the condition of the engine.....from a year earlier. After 5 or 6 weekends of poor maintenance and operations, what is the true condition of the engine and not what it was a year ago? I doubt anyone will get the full story but there is a lot of work going on for an engine in such good shape.

Something else that wasn't mentioned in these new articles was the request made by multiple members of the museum to have another membership meeting within 90 or 100 days of the annual meeting where the BOC members resigned. That didn't happen and only after being called out about it, the museum sent an invite for another meeting to just a few of the members and not the entire group. I would think if your own investigation determined you were correct, you would want to tell everyone that would listen?

Sadly, it doesn't seem the nonsense at VMT is anywhere nears its end.

Sorry, I can't post the article due to the size to trying to post it here......


Law firm review: Virginia Museum of Transportation in compliance
Luke Weir
Nov 12, 2024
1/9
https://roanoke.com/news/local/governme ... e_9336f350…
11/12/24, 6:59 AM

Review finds Virginia Museum of Transportation in compliance

A four-month look into finances, accounting and safety practices at Virginia
Museum of Transportation determined that allegations by former board
members were unfounded, directors said last week.
Virginia Museum of Transportation Director Mendy Flynn earlier this year: “We’ve done some things, but
there’s a lot more to do,” Flynn said. “We have a few exhibits we’re looking to change up, that would be part
of the (state) money.”
HEATHER ROUSSEAU, The Roanoke Times
Some of the six departed museum board members said they remain skeptical until
they can review the report in detail. Those past members, including the former
president, resigned during the museum’s annual meeting in June, claiming various
issues with the nonprofit’s management and spending.
Gentry Locke Attorneys reviewed dozens of museum documents in search of legal
compliance issues, according to a summary letter from the law firm.


Review finds Virginia Museum of Transportation in compliance
Whistle blows for audit at Virginia Museum of Transportation
Accountants from Winchester-based Yount, Hyde and Barbour consulting were also
involved reviewing financial documents, according to the letter written by attorney
John Danyluk of Gentry Locke.

The review was asked for by the museum’s board, which voted to approve it. The cost
of the review was not immediately available.
“After thoroughly reviewing all of this documentation, investigators determined that
there were no identifiable issues or concerns with respect to VMT’s handling,
spending, or accounting of state grant funds,” Danyluk wrote. “Further, VMT’s
balance sheet and profit & loss statement, along with the banking documentation to
support these financial statements, indicates that VMT is financially healthy.”
Resignations rattle Virginia Museum of Transportation
The report shows that Virginia Museum of Transportation had spent $175,000 out of
a $500,000 state grant as of June 30. Some of the departed board members’
questions revolved around how that money was being spent.
“Investigators determined that the allegations leveled against VMT at the annual
meeting were unfounded,” the report said.
3/9
https://roanoke.com/news/local/governme ... e_9336f350…
11/12/24, 6:59 AM
Review finds Virginia Museum of Transportation in compliance
Volunteers, staff and board members at Virginia Museum of Transportation do it out
of love for their community, said President Tom Cox.
“We’ve been doing things the right
way,” Cox said. “Are we perfect? No.
But have we done anything with
malice, or engaged in any malfeasance
or mismanagement? No.”


Cox said the museum was enduring financial hardship during his initial time as
president in the 2000s. He said he has served on other museum boards with similar
financial challenges.
“Museums are always hand-to-mouth at times. There’s an ebb and flow to them,” Cox
said. “Right now, we’re on the flow. VMT is in a very financially strong position, and
as a consequence we’re able to invest money back into the museum and build it up.”


Review finds Virginia Museum of Transportation in compliance
The Virginia Museum of Transportation is described as the state’s “official” transportation museum, but it is
not a formally recognized state agency.
HEATHER ROUSSEAU, The Roanoke Times

In the 2023 fiscal year, the museum generated about $850,000 in revenue, and spent
more than $1.5 million, for a net loss of $700,000, according to publicly available
financial statements. The museum’s 2024 fiscal report isn’t due until May 2025.
“We get more outside visitors than anybody else, out of town visitors. That gives us an
opportunity to put the community’s best foot forward,” Cox said. “We want everybody
to be proud of this place, and we want it to be here.”
He said allegations by the former board members came not only as a surprise, but
could potentially harm the museum’s chances to gain recognition as an official state
agency. Although the museum received funds from the state budget this year, it has
not achieved official state agency status from the legislature, nor the recurring
funding that would come with that.


Amid some questions about the Virginia Museum of Transportation’s operations, its current leaders say it’s
in good financial shape and new projects are being discussed.


“We’re putting the money into capital improvements, badly needed ones. All types,
electrical and so forth,” Cox said. “We’ve got a lot of positive things going. We knew in
the back of our minds that nobody was going to find a smoking gun.”
He said the investigation cost the museum money, and added, “we’ve given
everything but a cavity search.”
Cox said one positive initiative upcoming for the museum is a new exhibit upstairs,
focused on aquatic transportation. He said that exhibit should have a grand opening
by the new year.
The resigned museum board members have all been replaced, Cox said. The departed
members were part of the crew that managed the museum’s Norfolk and Western 611
steam train, and their abrupt parting caused the cancellation of this year’s excursions
event.


“I’m not going to prognosticate about their motivations,” Cox said. “Other than, for
people who profess to care so much, they certainly didn’t handle themselves in the
most professional manner.”
He said the board “absolutely” wants to keep the 611 operating as much as possible,
and hopes to return the popular excursions events next fall.
Some of the former members, speaking off the record until they learn more about the
review, said they want to see copies of the full report before their concerns are put to
rest. They want to know for sure how thorough the investigation was.
The report from the accounting firm said it conducted an “agreed-upon procedures
engagement,” rather than “an examination or review engagement, the objective of
which would be the expression of an opinion or conclusion.”


“Accordingly, we do not express such an opinion or conclusion,” the report said. “Had
we performed additional procedures, other matters might have come to our attention
that would have been reported to you.”
The Virginia Museum of Transportation received funding from the state’s new budget. Resignations from the
museum's board generated questions about where it stands. A recent audit released by the museum's board
found no serious issues.


Cox said he hopes the report eases peoples’ concerns, and that former board members
can move past their disagreements with the museum.
“Not only has the museum been spending its monies wisely, and in the manner
expected, but we’ve also accounted for all of it, and we’ve also obviously kept good
records of all of our board minutes, and all of our procedures and protocols have been
properly followed,” Cox said. “We’ve done what we were expected to do, and done
what we needed to do in order to keep the museum safe and stable.

In the interest of full disclosure please allow me to say that I am good friends with a number of the 6 directors who resigned from the VMT BOD , I do not know the remaining Board members so my opinions are heavily influenced by those relationships.

I witnessed first hand the immense investment in time, money and all out effort that Will Harris ( former CEO of the VMT ) and his 5 disciples put out in the months preceding the highly successful 611 excursions run in Nov. 2023. Many,many 18 hour days were spent building an entire operating base in Goshen ( on Harris's land) which included a brand new 1700 ft. long dedicated siding used for boarding, a 400 car parking lot, a large welcoming center tent that functioned as a waiting room, souvenir shop and credentials center. Also, brand new 3/4 mile long gravel entrance road off the main highway, 220V commercial power, city water line, ample lighting so as to fully function after sunset, extensive signage and on and on.

I rode 3 of the trips ( all SRO ) and can testify that it was a 1st.rate operation and a credit to all involved.

In can also testify to the fact that the 6 directors who resigned did so in no small part as they said that the highly successful ( financially and operationally ) 611 program had generated scant support from other Directors AND that other questionable expenses ( souvenirs etc.) were being laid against the 611 projects P&L statements.

The 611 team also had some serious concerns regarding the 611's mechanical management both in terms of crew training & discipline , FRA record keeping and a lack of near term and longer term PM budgets. Those concerns had been an issue for an extended period of time and remained ( as of their resignations) unresolved.

Would an audit done by a respected auditor who had no prior or future relationship with the VMT carry more credibility? Yes.

IMHO the planets have aligned in Va. so that all the critical ingredients are there to lead to the creation of a world class Heritage Rail operation that would see historic steam & diesel powered trains made up of era appropriate cars be operated state wide over the recent lines acquired by the state and thus be a major tourism generator bringing loads of out of state railfans into Va. to spend their money also on motels, restaurants etc. It's a natural in a state that has committed itself to devote huge funds towards future passenger rail and tourism.

It would be the ONLY place in all of America that you could buy a ticket ( at a reasonable price ) to ride a mainline steam locomotive pulled excursion in your choice of open/window or a/c coaches or vintage 1st. class cars, at track speed with no diesels anywhere in sight , enjoy multiple real runbys and know that it is professionally run with a very high probability of delivering what was advertised.

They will come from all parts of the nation and from overseas as this will be the only place in all of No.America offering the " Full Monty".

I hope that the state does decide to make the VMT an official part of the state's holdings as that will make the Heritage Rail program that much easier to create.

As we speak Va. spends over $ 30M/year for tourism development. We all know that there's no better tourism development tool than a mainline steam locomotive.

I also would hope that the VMT insiders can reach a viable mutual understanding to bury the hatchet and reunite and provide the leadership and vessel to make the Heritage Rail concept a reality.

Hope springs eternal. Ross Rowland

The law firm hired a CPA firm to review the finances. The report back from the law firm is that all was OK from the CPA firm.

Now, in any 'real' audit report by a CPA, there is an auditors opinion letter that states whether the financial statement submitted accurately reflect the financial condition of the entity under generally accepted accounting principles, even for a nonprofit that has some oddball IRS rules involved. Lawyers are nice, but pay attention to the CPA.

That letter is really critical, because if the CPA firm hedges even one little bit on that, they can be held responsible. Remember Arthur Andersen, RIP? So if you see a good letter, it's a good letter. And if you see a qualified, adverse or disclaimer letter, run for the exits.

I've only seen one qualified opinion in the wild, and I won't even say who it is from, but it was from an excursion railroad - not this one. True case of CYA, and justified. The audit firm was a 'friendly connection', too, but when it came right down to it...a qualified letter. They weren't taking the fall for it. Nope.

But if you've got a good one people, uh..... drop it. Shake hands. Resume.