FEDERAL MARITIME COMMISSION

FY 2023 PERFORMANCE AND 

ACCOUNTABILITY REPORT

November 2023
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Contents

Message from Chairman Maffei ..................................................................................................ii

Management’s Discussion and Analysis......................................................................................... 1

Commission Background............................................................................................................. 2

Recent Developments................................................................................................................. 5

FY 2023 Performance Highlights................................................................................................. 6

Organizational Management...................................................................................................... 9

Information Technology and Cybersecurity..........................................................................................9

Strengthening Federal Hiring ..............................................................................................................10

Program Performance Overview .............................................................................................. 10

Financial Performance Overview.............................................................................................. 11

Financial Statement Highlights................................................................................................. 14

Systems, Control, and Legal Compliance Analysis..............................................................................17

Management Assurances....................................................................................................................17

Treasury Assurance Statement – USA Spending Reconciliation.........................................................19

Limitations of the Financial Statements .............................................................................................19

Federal Managers’ Financial Integrity Act Statement of Assurance ........................................ 20

Annual Performance Report......................................................................................................... 21

Financial Information.................................................................................................................... 30

Message from the Acting Chief Financial Officer ..................................................................... 31

Principal Financial Statements.................................................................................................. 32

Financial Statements & Independent Auditor Report.............................................................. 33

Other Required Information......................................................................................................... 57

Inspector General’s Statement on Management and Performance Challenges...................... 58

Comments on Inspector General’s Statement....................................................................................62

Financial Statement Audit Summary ........................................................................................ 63

Management Assurances Summary ......................................................................................... 63

Improper Payments Information Act........................................................................................ 64

Fraud Reduction Report............................................................................................................ 64

Civil Monetary Penalty Adjustment for Inflation...................................................................... 64

Biennial Review of User Fees.................................................................................................... 65
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Federal Maritime Commission

Message from Chairman Maffei

Federal Maritime Commission

Office of the Chairman

Washington, D.C. 20573-0001

November 15, 2023

On behalf of the Federal Maritime Commission, I am pleased to provide the Fiscal Year 2023

(FY 2023) Performance and Accountability Report (PAR). The reported performance and 

financial data are complete, reliable, and provide a comprehensive representation of the 

Commission’s work over the past fiscal year. 

The Commission evaluated its management controls and financial management system 

pursuant to the Federal Managers’ Financial Integrity Act of 1982 prior to the preparation of 

this report. No material weaknesses were identified, and the financial management system 

used conforms to government financial system requirements. In accordance with OMB Circular 

A-123, Appendix C, no improper payments were made. 

This report contains the results of an independent audit of the Commission’s financial 

statements, internal controls, and management systems indicating they conform to Generally 

Accepted Accounting Principles, laws, regulations, and other requirements. The independent 

auditor’s report appears on page 35, and my statement of assurance appears on page 20. For 

the 20th consecutive year, the Commission's financial statements have earned an unmodified 

("clean") opinion. 

In addition, this report provides highlights of the Commission’s activities in FY 2023, guided by 

its Strategic Plan. The Commission is committed to a competitive and reliable international 

ocean transportation supply system, facilitating the Nation’s commerce, and protecting U.S. 

shippers. The Commission also continues to implement the Ocean Shipping Reform Act of 2022, 

Pub. L. No. 117-146 (OSRA 2022). In all its activities, the Commission strives to ensure proper 

operational oversight, transparency, and accountability to the American public while achieving 

its mission. You may also find this report online at: https://www.fmc.gov/about-thefmc/performance-and-accountability-reports/.

Sincerely, 

/s/

Daniel B. Maffei

Chairman
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MANAGEMENT’S DISCUSSION

AND ANALYSIS
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Federal Maritime Commission

Commission Background

First constituted as the U.S. Shipping Board over 100 years ago by the Shipping Act of 1916, the 

Federal Maritime Commission (FMC or Commission) was authorized in its current form as an 

Executive Branch agency in 1961. The Commission is an independent agency that ensures the 

activities of liner shipping groups and foreign governments do not impose unfair costs on 

American exporters and importers. It has sole jurisdiction in the U.S. over competition, 

practices, and service in the ocean shipping industry. The Commission works to promote

competition and integrity for America’s ocean supply chain and protect the public from 

unlawful ocean shipping practices.

Mission Statement

Ensure a competitive and reliable international ocean transportation supply system that 

supports the U.S. economy and protects the public from unfair and deceptive practices.

Statutory Authority

The FMC administers and enforces the Shipping Act and related laws. The principal statutes 

administered by the Commission, codified at 46 U.S.C. §§ 40101-44106 and 46 U.S.C. § 3503 

are:

• The Ocean Shipping Reform Act of 2022 (OSRA 2022);

• The Shipping Act of 1984, as amended (the Shipping Act);

• The Foreign Shipping Practices Act of 1988 (FSPA);

• Section 19 of the Merchant Marine Act, 1920 (1920 Act);

• Sections 2 and 3 of Pub. L. No. 89-777, 80 Stat. 1356; and

• Sections 701-714, and 834 of the Frank LoBiondo Coast Guard Authorization Act of 

2018 (LoBiondo Act).

Organizational Structure

The Commission is a bipartisan body composed of five Commissioners nominated by the 

President and confirmed by the Senate, each serving a staggered five-year term. No more than 

three members of the Commission may be of the same political party. One Commissioner, 

designated by the President, serves as the Chairman, Chief Executive, and Chief Administrative 

Officer of the Commission.

Staff is comprised mainly of economists, attorneys, investigators, and other experts in ocean 

transportation, and is primarily located at the Commission’s headquarters in Washington, D.C.
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Federal Maritime Commission

Organization Chart
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Federal Maritime Commission

Commission Bureaus and Offices

Bureau of Certification and Licensing (BCL)

protects the public from financial harm 

through its OTI licensing, registration, and 

surety bonding programs. BCL also protects 

the public by requiring passenger vessel 

operators (PVOs) to maintain adequate 

financial coverage to reimburse cruise 

cancellations or to cover liability in the event 

of death or injury at sea.

Bureau of Enforcement, Investigations, and 

Compliance (BEIC) is the Commission’s 

prosecutorial arm. Bureau attorneys serve as 

trial counsel in formal proceedings and protect 

the shipping public by working closely with 

investigators to examine potential violations of 

the Shipping Act and Commission regulations. 

BEIC negotiates settlements and informal 

compromises of civil penalties and may act as 

investigative officers in formal fact-finding 

investigations. Where appropriate, BEIC also 

works with regulated entities to come into 

compliance with shipping laws before 

prosecutorial actions are taken.

Bureau of Trade Analysis (BTA) analyzes and 

monitors the concerted activities of vesseloperating common carriers (VOCCs or carriers) 

and marine terminal operators (MTOs) to 

detect and guard against possible 

anticompetitive abuse of authority contained 

in filed agreements which could result in 

substantial increases in transportation costs or 

decreases in transportation services. BTA also 

reviews and analyzes service contracts, 

monitors rates of foreign, government-owned 

controlled carriers; and reviews carrierpublished tariff systems under the accessibility 

and accuracy standards of the Shipping Act. 

Office of the Administrative Law Judges 

(OALJ) independently presides over 

administrative hearings and resolves cases 

involving alleged violations of the Shipping Act 

of 1984 initiated by private parties or by the 

Commission. 

Office of Consumer Affairs and Dispute 

Resolution Services (CADRS) aids shippers, 

OTIs, cruise operators and passengers, 

truckers, MTOs, and carriers by providing 

alternative dispute resolution (ADR) services, 

ombuds assistance, mediation, and facilitation 

to resolve disputes involving cargo shipments, 

household goods shipments, and cruises.

Office of Equal Employment Opportunity 

(OEEO) advises and assists the Commission in 

carrying out its responsibilities relative to 

Titles VI and VII of the Civil Rights Act of 1964 

(as amended), other laws, executive orders, 

and regulatory guidelines implementing 

affirmative employment; and the processing of 

EEO complaints.

Office of the Inspector General (OIG) is an 

independent oversight office created within 

the FMC by the Inspector General Act of 1978 

(as amended) to conduct and supervise audits, 

reviews, and investigations relating to the 

FMC’s programs; to detect and prevent waste, 

fraud, and abuse; to promote economy, 

efficiency, and effectiveness; to keep the 

Chairman, Commissioners, and Congress fully 

informed of serious problems and deficiencies 

and recommend corrective actions; and, as 

appropriate, to report violations of law to the 

U.S. Attorney General.

Office of the General Counsel (OGC) provides 

legal services to the Commission and staff as it 

fulfills responsibilities, including preparing final 

decisions, orders, and regulations for 

Commission approval and issuance; represents 

the Commission in litigation before the courts; 

provides technical and policy assistance to 

other government agencies engaged in 

international negotiations or discussions on 

shipping matters; and provides legal opinions 
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Federal Maritime Commission

to the Commission, its staff, and the general 

public in appropriate instances. OGC also 

oversees the Commission’s international 

affairs activities. The General Counsel serves 

as the Chief Legal Officer.

Office of the Managing Director (OMD) 

implements the administrative directives of 

the Chairman, manages and coordinates 

program offices and bureaus, and oversees the

administrative offices, including the Offices of 

Budget and Finance (OBF), Human Resources 

(OHR), Information Technology (OIT), and 

Management Services (OMS). The Managing 

Director serves as the Chief Operating Officer. 

Office of the Secretary (OS) serves as the focal 

point through which all filings are made in 

Commission proceedings, notices of 

proceedings are given, and from which all 

official actions are issued. OS prepares and 

maintains agenda matters and actions taken 

by the Commission; maintains official files and 

records of formal proceedings; ensures 

compliance with the Freedom of Information, 

Government in the Sunshine, and Privacy Acts; 

responds to information requests from the 

public; issues publications and authenticates 

instruments and documents; maintains a 

public reference/law library and a docket 

library; and oversees the organization and 

content of the Commission’s website.

Recent Developments

The historically high demand for Commission services has continued beyond the global impact 

of the COVID-19-related supply chain congestion and the passage of OSRA 2022. Although

pandemic-related challenges are waning, the industry remains less predictable and subject to 

more disruptions due to world events. Fact Finding 29 (FF 29), International Ocean 

Transportation Supply Chain Engagement, led by Commissioner Rebecca F. Dye, contained 

several recommendations for agency action to address industry challenges. The Commission 

prioritized exports, enforcement, and consumer assistance to U.S. shippers and cruise 

passengers and adjusted its operational structure to align resources with these priorities. This 

shift in focus included the creation of the Vessel-Operating Common Carrier Audit program, 

providing enhanced resources for the Office of Consumer Affairs and Dispute Resolution 

Services (CADRS), and the realignment of enforcement and investigations under the Bureau of 

Enforcement, Investigations, and Compliance (BEIC) established in late FY 2022.

OSRA 2022 provided the Commission with enhanced regulatory authority and mandated 

several initiatives, including rulemakings, data collection, charge complaints, and web resources 

to serve the shipping public. The FMC contracted with the National Academies of Science to

study best practices for chassis pools and supporting activities of other agencies, including 

multiple studies underway at the U.S. Government Accountability Office. Further, the 

Commission has actively supported cross-agency initiatives related to OSRA 2022 and the 

maritime supply chain.

The Commission has undergone considerable organizational change in a short period of time. 

With a directed focus, increased funding, and additional regulatory authority, the Commission 

is a strengthened organization, better prepared to adapt to changes in the industry and the 

economy and to proactively meet its mission.
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Federal Maritime Commission

FY 2023 Performance Highlights

Ocean Shipping Reform Act of 2022

Implementing OSRA 2022 was a priority in FY 2023. Key work related to rulemakings in FY 2023 

included issuing a Notice of Proposed Rulemaking (NPRM) on detention and demurrage 

invoicing and billing; a Supplemental NPRM proposing a definition for unreasonable refusal to 

deal or negotiate with respect to vessel space; and a final rule updating Commission regulations 

providing the Commission the ability to order refunds in addition to or in lieu of civil penalties 

for violations of the law, Commission regulations, or Commission orders. 

Importantly, Section 10 of OSRA 2022 (46 U.S.C. § 41310) provided shippers with an entirely 

new “charge complaint” process for quickly and efficiently disputing illegal carrier charges and 

receive a refund or waiver for those charges. By July 14, 2022, the Commission expeditiously

created an interim process for charge complaint investigation and adjudication, along with an 

accompanying webinar to help the public understand the process. The Commission will review 

the interim procedure and draft a new rulemaking in FY 2024. 

In 2023, the FMC investigated 119 charge complaints. Seventy-two complaints were quickly 

resolved through voluntary refunds or waivers issued by carriers. As of September 30, 2023, 

over $1.7 million in charges had been waived or refunded through the charge complaint 

process.

In addition, the Commission actively pursued the data collection and studies required under 

OSRA 2022. These efforts began with passage of the law and continued throughout FY 2023. 

The requirement to collect and publish information from VOCCs on import tonnage and 

volumes, as well as empty container metrics, has progressed through the Paperwork Reduction 

Act process, and is an ongoing part of the Commission’s analytics work.

Priorities Reflecting Ocean Shipping Industry Conditions

The Commission focused on serving the ocean shipping industry in three areas: increased 

investigations and enforcement, informed compliance, and increased consumer assistance.

Increased Investigations and Enforcement 

The FMC protects the U.S. public through its investigatory and enforcement programs by 

identifying, deterring, and stopping unlawful activities of regulated entities – ocean carriers, 

marine terminal operators, and ocean transportation intermediaries. A reorganization in 

FY 2023 realigned and consolidated the Commission’s investigative and prosecutorial functions 

to enable more effective and efficient investigations, compliance reviews, and formal 

enforcement actions. Enforcement priorities focused on unlawful practices negatively 

impacting significant portions of the maritime industry or appearing to cause market distortion. 

As a result of these changes, the enforcement program was successful in legal actions,

collecting civil penalties for violations of the law totaling $2,896,810 as of September 30, 2023. 

Informed Compliance 

The scope of the Commission’s statutory and regulatory authority is broad and affects 

international waterborne commerce valued at trillions of dollars, as well as passenger vessel 
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Federal Maritime Commission

operations embarking at U.S. ports. As a small agency, it is imperative that the Commission’s 

program offices focus on vigilant oversight of industry activity, which includes compliance, in 

addition to investigations and enforcement. By working diligently to ensure regulated entities 

understand their legal requirements, and by focusing compliance resources to address 

noncompliance in the areas with the highest impact, the Commission proactively protected the 

public from unfair and deceptive practices. 

Increased Consumer Assistance – Helping Exporters and Importers 

The shipping public has faced numerous continuing challenges due to the shocks in the supply 

chain since the start of the COVID-19 pandemic. OSRA 2022 bolstered the FMC’s ability to 

respond to these challenges on numerous fronts to help consumers. Commission offices 

worked together to handle public inquiries, requests for alternative dispute resolution, or to file 

formal complaints to better support the shipping public and work with the industry to keep 

cargo moving.

Agreement Review

The FMC’s statutory authority and regulations require that agreements which allow 

collaboration among ocean common carriers or MTOs must be filed with the Commission. The 

FMC protects competition in U.S. ocean transportation, ensuring efficiency and reliability in the 

supply chain for U.S. exporters and importers by analyzing these agreements for potential 

anticompetitive effects and then continuously monitoring activity for those agreements that 

are competitively concerning. The limited antitrust immunity granted under an agreement filed 

with the Commission extends only to activities among agreement parties within the scope of 

the filed agreement. Conduct inconsistent with the terms of an agreement is illegal and exposes 

parties to criminal and civil prosecution. There are approximately 375 agreements on file, 

including VOCC agreements, MTO agreements, and assessment agreements. Of those, 

approximately 50 were monitored regularly due to competitive concerns. The majority of 

agreements on file with the Commission are VOCC agreements which allow straightforward 

space sharing. 

Service Contracts

In FY 2023, 345,841 original service contracts and 816,600 contract amendments were filed into 

the Commission’s SERVCON system. More than 8,700 publicly available tariff locations were

posted on the FMC’s website. Roughly 150 of these are VOCCs, 154 are MTOs, and the balance 

are non-vessel-operating common carriers (NVOCCs). 

Carrier Automated Tariffs

A Notice of Proposed Rulemaking (NPRM) was published in May 2022 seeking public comment 

on revisions to the Commission’s regulations on carrier automated tariffs to determine if 

changes are needed to existing regulations that help the public identify ocean carriers’ rates 

and rules. The work of Commission staff continued during FY 2023 and the Commission will 

determine next steps in early FY 2024.
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Federal Maritime Commission

Ocean Transportation Intermediary Licensing

Over 9,100 ocean transportation intermediaries (OTIs) are regulated by the Commission, 

including approximately 5,100 licensed entities based in the United States. More than 3,900

foreign-based NVOCCs are registered with the Commission. More than 650 new and amended 

OTI applications were received during the fiscal year, and approximately 1,500 OTI licenses 

were renewed, with most renewals reviewed and processed within 48 hours of submission.

Ocean Transportation Intermediary Financial Responsibility

The Commission provides oversight for approximately $1 billion in surety bonds, ensuring that 

OTIs have sufficient financial resources to operate responsibly. In FY 2023, this included 

processing of over 2,000 bond termination notices, 1,300 OTI bond riders, and 1,400 new or

replacement bonds. 

Passenger Vessel Operators

In FY 2023, the Commission’s Passenger Vessel Operator (PVO) program certified 278 cruise 

vessels and 50 cruise line operators, with aggregate evidence of financial responsibility 

coverage of over $880 million for non-performance and $773 million for casualty. As a direct 

reflection of the Commission’s final rule in Docket No. 20-15, which modified the definition of 

unearned passenger revenue (UPR), 52 percent of PVOs’ UPR exceeded pre-COVID amounts. In 

reference to the non-performance of transportation, no claims were reportedly filed against 

PVOs’ financial instruments.

Legal Proceedings before the FMC

Adjudicatory proceedings at the FMC have increased dramatically in the last few years. In 

FY 2023, the Commission received 927 litigation-related filings, a substantial increase in these 

filings from FY 2022. 

The Commission’s Office of Administrative Law Judges (OALJ) operates independently under 

the Administrative Procedure Act, 5 U.S.C. Subchapter II, to resolve cases involving alleged 

violations of the Shipping Act and other laws within the Commission’s jurisdiction. In FY 2023, 

OALJ received a total of 21 formal and 12 informal proceedings, and OALJ closed more cases 

than it has in any year since 2006. Information on specific proceedings can be searched in the 

FMC Reading Room on the FMC’s website.

Retaliation and Other Obstacles to Private Party Complaints

As recommended in the Fact Finding 29 Final Report, in FY 2022, policy statements were issued 

regarding the Commission’s position on potential retaliation, awarding of attorney fees, and 

representational complaints filed by associations on behalf of their members. These policy 

statements were intended to clarify uncertainties that were potentially inhibiting private 

parties from filing cases before the Commission. With the passage of OSRA 2022, the law now 

specifically prohibits retaliation against shippers who file complaints at the Commission. 

In FY 2023, the VOCC Audit Team probed the compliance levels of the largest carriers with 

OSRA’s prohibitions against retaliation. Specifically, the team looked at how companies are 

training personnel at all levels to act legally and how those same employees are being made 
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Federal Maritime Commission

aware of the consequences for violating the law. Instances of alleged retaliation will be swiftly 

investigated and fully prosecuted.

Alternative Dispute Resolution

With its responsibilities expanded and reinforced by OSRA 2022, the Office of Consumer Affairs 

and Dispute Resolution Services (CADRS) helps shippers resolve disputes without bringing 

formal legal actions. When an assistance request is received by CADRS staff, an experienced 

analyst or attorney contacts and works with parties to help work through issues and get the 

cargo moving whenever possible. For more complex issues, CADRS offers mediation services to 

resolve disputes. In FY 2023, CADRS handled 308 ombuds matters received by industry 

stakeholders and the public. Of that total, 199 involved commercial cargo shipments, 34 

involved household goods shipments, and 75 were passenger cruise vessel-related matters.

Organizational Management

The Commission recognizes the importance of effective, performance-oriented management 

and prudent employment of all allocated resources. The administrative support program 

required to effectuate the Commission’s mission includes information technology services, 

human resources support, budget and financial planning, and procurement of goods and 

services.

Information Technology and Cybersecurity

The FMC’s investments in its IT infrastructure, cloud tenant, and security posture allowed it to 

remain operational and to meet cybersecurity requirements under maximum telework 

flexibilities during the COVID-19 pandemic. The Commission continues to benefit from this 

experience and has used the lessons learned to continue to develop and improve hybrid work 

capability.

FMC Systems/Applications

During FY 2023, the Commission continued its assessment of IT modernization initiatives to 

establish a new baseline for future development. The assessment identified emerging business 

requirements from internal and external stakeholders due to the changing use of technology. 

Motivated by requirements to protect against cybersecurity threats and concerns for systems 

functionality, the Commission conducted a review of each system. This analysis will inform the 

decision either to continue with customized applications or to adopt other suitable commercial 

solutions. 

Website Enhancements

During FY 2023, the Commission continued the work of updating its website to improve 

interaction with the public and to comply with OSRA 2022 requirements. A new website 

redesign project, expected to be completed in FY 2025, will enhance public interaction with the 

FMC in a more secure environment, as well as provide new tools for the Commission to manage 

complaints and inquiries. When completed, the new website will better serve the shipping 

public by enhancing awareness of agency resources, remedies, and regulatory requirements 
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Federal Maritime Commission

and by making the FMC’s web content more interactive, easily searched and accessible. The 

agency also will ensure that its materials are compliant with Section 508 best practices. 

Strengthening Federal Hiring

The Commission successfully executed 41 hiring actions in FY 2023. While the Commission 

improved recruitment efforts in filling economist and attorney vacancies, it continued to

encounter challenges in attracting the requisite talent to fill vacancies for industry analysts. The 

Commission continued utilizing OPM’s automated USA Hire tool, which allows agencies to use 

skill and competency-based assessments to measure a candidate’s ability to perform the job.

The Commission is also reviewing areas that may improve recruitment and retention efforts.

The Commission continued its partnership with the U.S. Surface Transportation Board (STB) to 

collaborate on a shared Equal Employment Opportunity Manager. This arrangement, in place

since 2019, is beneficial for both organizations. 

To leverage talent, the Commission employed six interns through its Volunteer Service Program 

in FY 2023, which provided paid education-related work assignments for students. The agency 

also employed two part-time paid interns and continues to utilize options to bring students 

onboard.

Program Performance Overview

The Commission provides a performance plan to Congress, pursuant to the Government 

Performance and Results Act (GPRA). The FMC’s new Strategic Plan FY 2022-2026 (updated 

March 28, 2022) (Strategic Plan) is posted on fmc.gov. The FY 2023 Annual Performance Report 

is presented in section two of this Report.

Achieving Strategic Goal Results

The Commission’s Strategic Plan provides the foundation for planning and budgeting activities.

The plan sets goals and objectives for each fiscal year and contains targets and measures linked 

to objectives via strategies. These objectives, strategies, targets, and measures drive the 

agency’s budgetary process, and are discussed in detail in section two of this Report. During FY 

2023, the Commission met or exceeded ten of its eleven performance targets.

Strategic Management of Human Capital

The Commission rapidly increased the pace of hiring to execute its new priorities during the 

fiscal year, recognizing that its employees are critical to achieving its mission. In FY 2023, 

additional positions were created in response to the agency’s changing priorities and

implementation of OSRA 2022. By the end of FY 2023, 41 full-time positions had been filled in 

the agency. The agency also saw an increase in turnover. During the fiscal year, four employees 

retired, and fifteen employees left the agency (about 11%). This highlighted the need to 

continue strategic hiring and succession planning.

The FMC’s Office of Human Resources leveraged new job series for technical experts and 

utilized USA Hire to improve candidate assessment and Direct Hire authorities to quickly 

onboard staff in key positions. The Commission continued to promote various hiring authorities 

and flexibilities, including Direct Hire and Schedule A authorities, and expand the use of the 
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Federal Maritime Commission

Pathways Program (e.g., interns and Presidential Management Fellows) to attract new and 

diverse talent. 

To promote succession planning, the FMC maintained multiple leadership programs aimed at all 

levels of staff to better prepare internal candidates for increased responsibility and the 

leadership roles required under our new regulatory environment and organizational structure. 

As a result of the succession planning efforts, nearly 10% of the workforce (13 employees) were 

hired into higher-level or expanded roles within the agency.

To support and develop supervisors, the agency piloted and implemented a coaching and 

mentorship program and encouraged further leadership development to ensure supervisors 

had access to a myriad of resources to effectively lead their teams. Hiring managers were 

trained in performance management and the recruitment process to support them both in 

hiring and managing their staff. Additionally, training on Crucial Conversations was provided to 

all employees to enhance and improve communication across the agency.

Competitive Sourcing

The FMC submitted its FY 2022 Federal Activities Inventory Reform Act (FAIR Act) inventory to 

OMB in June 2023. The inventory identified 79 of the agency’s 150 positions as commercial 

activity positions. No challenges to the Commission’s commercial inventories were received. 

Expanded E-Government

The FMC worked diligently during the fiscal year to provide the public with exceptional 

customer service. Commission news, documents, and events were posted in a timely fashion, 

with sixty-five news items posted. In addition, the Commission posted approximately 140

combined tweets and LinkedIn posts. These website and social media posts provided important 

information about the Commission’s activities to the public.

During FY 2023, the Commission created its Information Technology Strategic Plan (IT Strategic 

Plan) to identify technology solutions and resource allocations for ongoing and future needs.

The updated IT Strategic Plan will be finalized in FY 2024 and will leverage digital 

transformation and initiatives for continuous improvement of public facing and internal 

systems, striving to stay abreast of technological advances and evolving cybersecurity 

requirements through investments in commercial solutions wherever possible.

The Commission continued to work with the U.S. Department of Homeland Security (DHS) in 

provisioning technology infrastructure to comply with the Federal Risk and Authorization 

Management Program (FedRAMP) and DHS’ continuous monitoring requirements for network 

security. Internal security tools have been deployed to effectively monitor and address network 

operations, including file integrity, password sufficiency, and probing for open ports and other 

externally visible points of attack.

Financial Performance Overview

The FMC received an unmodified (“clean”) opinion on its FY 2023 financial statements and will 

continue efforts to improve operations and achieve unmodified audit opinions in the future.
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Federal Maritime Commission

The Commission’s financial condition as of September 30, 2023, is sound. Internal controls are 

in place to ensure that funds are used efficiently and effectively, and that the budget authority 

is not exceeded. The FMC’s accounting services provider, the Department of Treasury’s Bureau 

of the Fiscal Service (BFS), prepared the financial statements as required by the Accountability 

of Tax Dollars Act of 2002. The statements have been prepared from, and are fully supported 

by, the books and records of the FMC in accordance with Federal Generally Accepted 

Accounting Principles (GAAP), standards approved by the Federal Accounting Standards 

Advisory Board (FASAB), and OMB Circular A-136, Financial Reporting Requirements.

The principal financial statements provided in this document are prepared to report the 

financial position and results of the operations of the FMC, pursuant to the requirements of 31 

U.S.C. § 3515(b). Reports used to monitor and control budgetary resources are prepared from 

the same books and records.

Source of Funds

The FMC has a single source of funding for salaries and expenses, provided by an annual 

appropriation available for commitments and obligations incurred during the fiscal year in 

which the authority was granted. Congress approved FY 2023 appropriations for the FMC in the 

amount of $38,260,000, of which $2,000,000 is multi-year funding through P.L. 117-328. This is 

an increase of $5,391,000 over the FY 2022 appropriation level. Additionally, the Commission 

received reimbursements of $111,774.50 for work performed by FMC’s employees supporting 

other government agencies and provided $40,500 to reimburse another government agency for 

resources to support implementation of requirements of OSRA 2022.

The FMC collects remittances for user fees and penalties; however, it is not authorized to offset 

any of its budget authority by using these funds. Collections are deposited directly into the U.S. 

Treasury General Fund. This information is captured in the Statement of Custodial Activity 

found in the Financial Information section of this report.
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Federal Maritime Commission

Appropriations History

Appropriations History

Fiscal Years 2014-2023 ($M)

Full-time Equivalent History

The FMC’s Full-time Equivalent (FTE) level is largely driven by its annual appropriation level. The 

FMC currently has its full complement of five statutorily authorized Commissioners on board.

The continued fast pace of retirements and separations in FY 2023 resulted in a lower than 

anticipated FTE level, at 129 FTEs, with 129 employees on board at the fiscal year’s end. The 

Commission endeavors to fill vacancies and develop the appropriate mix of staffing and other 

available resources to ensure effective accomplishment of its mission. 

Fiscal Years 2014-2023
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Federal Maritime Commission

Uses of Funds

During FY 2023, obligations against the FMC’s $38,260,000 appropriation totaled $38,028,000,

representing 99.4 percent of the appropriation. Salaries and benefits are the single largest 

expense category at $25.0 million, or 65.74 percent of the total budget. The second largest 

category is IT services and development expenses at $6,317,883.13, or 16.5 percent of the total 

budget. Other administrative expenses comprise the remaining 17.76 percent of the budget. 

The unexpended balance of $232,000, or 0.6 percent of the total budget, will be retained for 

allocation to legitimate increases to existing FY 2023 obligations.

Audit Results

The FMC again received an unmodified (“clean”) opinion on its FY 2023 financial statements 

from the auditing firm of Dembo Jones, P.C., under contract through the FMC’s Office of the 

Inspector General. Comparative statements may be found in the Financial Information section 

of this report.

Financial Statement Highlights

The financial statements were prepared to report the financial position and results of 

operations of the Commission pursuant to the requirements of 31 U.S.C. § 3515(b). The 

statements were prepared from the books and records of the Commission in accordance with 

the formats prescribed by OMB.

The FMC’s financial statements summarize the financial position and financial activity of the 

agency. The financial statements, footnotes, and the remainder of the required supplementary 

information appear in their entirety in the Financial Information section of this report. A brief 

analysis of the principal statements follows.

Summary of Assets

The FMC’s assets were $17,118,032 as of September 30, 2023. This represents an increase of 

$5,675,124 from FY 2022. The FMC’s assets reported on the balance sheet are summarized in 

the following table. 

The Fund Balance with 

Treasury of $17,037,360

represents the FMC’s largest 

asset and comprises 99.6 

percent of the agency’s total 

assets. The Fund Balance with 

Treasury is comprised only of 

annual appropriations 

maintained by the U.S. 

Department of the Treasury to 

address current liabilities. 

Summary of Assets as of

September 30, 2023

2023 2022

Fund Balance with Treasury $17,037,360 $11,361,461

Accounts Receivable $80,672 $81,447

Capital Assets $0 $0 

Other $0 $0 

Total Assets $17,118,032 $11,442,908
FISCAL YEAR 2023 | Performance and Accountability Report | 15

Federal Maritime Commission

Accounts Receivable, as of September 30, 2023, totaled $80,672 for outstanding receivables 

billed to both Federal and non-Federal entities. This accounts for 0.4 percent of the FMC’s 

assets. 

Capital Assets, also known as Property, Equipment, and Software, account for 0.0 percent of 

the FMC’s total assets as of September 30, 2023. The net value of $0 accounts for the 

depreciation of all assets and represents the current book value of those assets.

Summary of Liabilities

The FMC’s liabilities totaled $3,899,283 as of September 30, 2023, an increase of $422,461 from 

FY 2022. The FMC’s assets reported on the balance sheet are summarized in the table below. 

The FMC’s Accounts Payable, 

as of September 30, 2023, was 

$143,585. This represents the 

funds owed for goods and 

services received from vendors. 

The accrued liabilities of 

$1,496,818 represent future 

costs, such as accrued annual 

and sick leave balances and 

workers’ compensation that 

are not covered by current 

budgetary resources. 

Accumulated leave costs are 

recognized as they are taken, and workers’ compensation costs are recognized as they are paid 

out.

Analysis of Changes in Net Position Summary

The Changes in Net Position Summary is a summary of two factors, Unexpended Appropriations 

and Cumulative Results of Operations. The total net position for FY 2023 is the result of a 

$5,252,663 increase from FY 2022.

Unexpended Appropriations represent the amount of unobligated and unexpended budget 

authority for the 5-year period ending on September 30, 2023. Unobligated budget authority is 

the amount of appropriations or other authority remaining after deducting the cumulative 

Summary of Liabilities as of

September 30, 2023

2023 2022

Accounts Payable $143,585 $346,715 

Payroll Taxes $442,000 $369,431 

Federal Employee Benefits $1,816,880 $1,716,095

Custodial Liabilities $0 $0 

Accrued Liabilities $1,496,818 $1,044,581 

Total Liabilities $3,899,283 $3,476,822

Changes in Net Position Summary as of

September 30, 2023

2023 2022

Unexpended Appropriations $14,959,706 $9,608,620

Cumulative Results of Operations ($1,740,957) ($1,642,534)

Total Changes in Net Position $13,218,749 $7,966,086
FISCAL YEAR 2023 | Performance and Accountability Report | 16

Federal Maritime Commission

obligations from the amount available for obligation for the same period. The Cumulative 

Results of Operations (the cumulative excess of financing resources over expenses) is the net 

result of FMC’s operations for all active fiscal years.

Analysis of Net Cost Summary

The Net Cost Summary represents the net cost of FMC’s Programs as identified in the Annual 

Report. 

The agency’s two programs are Operational and Administrative and Office of the Inspector 

General. The Statement of Net Costs shows the net cost of operations for the agency as a whole 

and its sub-organizations. Net Costs compared to Budgetary Resources can be found in the

Financial Information section of this report. This table reflects costs attributable to all active 

fiscal years (2019-2023).

Analysis of the Statement of Budgetary Resources

The Statement of Budgetary Resources (SBR) shows the source of the agency’s budgetary 

resources, the status of those resources at the end of the reporting period, and the relationship 

between the two. Total budgetary resources should equal the status of budgetary resources at 

all times. A more detailed SBR can be found in the Financial Information section of this report. 

During FY 2023, the FMC had a total of $41,855,578 available, representing an increase in 

budgetary resources of $6,080,835 from FY 2022. The budgetary resources represent financial 

activity during the accounting period for the five currently active fiscal years (2019-2023).

Net Cost Summary as of

September 30, 2023

2023 2022

Operational and Administrative $31,130,306 $29,729,508

Office of Inspector General $575,605 $573,313

Multi-Year $1,835,561 $0

Total Net Cost $33,541,472 $30,302,821

Statement of Budgetary Resources as of

September 30, 2023

2023 2022

Incurred $38,585,901 $32,899,803

Unobligated Balance Unavailable $3,091,341 $2,390,486

Unobligated Balance Available $178,336 $484,454

Total Budgetary Resources $41,855,578 $35,774,743
FISCAL YEAR 2023 | Performance and Accountability Report | 17

Federal Maritime Commission

Systems, Control, and Legal Compliance Analysis

The Commission’s internal controls are fundamental to the systems and processes used to 

manage its operations and achieve its strategic goals. The Chairman’s Statement of Assurance in 

the following section notes that there are no material weaknesses or instances of 

nonconformance to report for FY 2023.

Additionally, in accordance with the requirements of OMB Circular A-123, Management’s 

Responsibility for Enterprise Risk Management and Internal Control, the Commission’s 

Enterprise Risk Management Committee meets regularly and identifies, measures, and assesses 

risk points across the agency. The Committee’s risk profile is used in conjunction with existing 

internal controls to improve the Commission’s accountability and effectiveness.

Management Assurances

The Federal Managers’ Financial Integrity Act (FMFIA or Act) mandates that agencies establish 

controls that reasonably ensure that: 

• obligations and costs comply with applicable laws, 

• assets are safeguarded against waste, loss, unauthorized use, or misappropriation, and 

• revenues and expenditures are properly accounted for and recorded.

This Act encompasses program, operational, and administrative areas, as well as accounting 

and financial management. FMFIA requires that the Chairman provide a statement assuring the 

adequacy of management controls and conformance of financial systems with Governmentwide standards; that the Commission’s managers are held accountable for efficient and 

effective performance of their duties in compliance with applicable laws and regulations; and 

that maintenance of the integrity of management activities is achieved through the use of 

controls.

Chairman Maffei has provided his annual assurance statement in this report based on various 

sources, including knowledge of the daily operation of Commission programs and activities; 

regular discussions with the Managing Director and the Deputy Managing Director, the 

Directors of the Offices of Budget and Finance and Management Services; audits of the financial 

statements; and implementation of the Commission’s Strategic Plan. The Chairman receives

recommendations from the Senior Executive Service Leadership Team and receives reports 

regularly from the Inspector General and the Equal Employment Opportunity Director. 

Deficiencies identified in management control would be addressed at the Commission’s highest 

management levels. 

The Office of the Inspector General (OIG) identified no significant deficiencies in FY 2023, and 

there were no significant management decisions made on which the OIG disagreed. 

Management and the OIG reached agreement on all audit recommendations. Management 

resolved or worked to address a number of recommendations during the year.

Debt Collection Improvement Act of 1996

The Debt Collection Improvement Act (DCI) enhanced the ability of the government to service 

and collect debts, as it centralized the collection of non-tax delinquent debt owed to the 

government. Federal agencies are required to refer delinquent accounts in excess of 180 days 
FISCAL YEAR 2023 | Performance and Accountability Report | 18

Federal Maritime Commission

to U.S. Department of the Treasury for collection. Collection of the Commission’s delinquent 

debts is conducted by the Bureau of the Fiscal Service through the Cross-Servicing Program and 

Treasury Offset Program, where the names and taxpayer identification numbers (TIN) of the 

delinquent entities are matched against the TINs of recipients of government payments. The 

balance owed to the government is deducted or offset from the payment to the entity to satisfy 

the debt. The goal is to minimize the amount of delinquent debt owed to the government. 

During FY 2023, the FMC effectively managed debt collection in accordance with the DCI and 

delinquent accounts were timely submitted to the U.S. Treasury.

Prompt Payment Act of 1982

The Prompt Payment Act requires agencies to make timely payments to vendors for supplies 

and services, to pay interest penalties when payments are made after the due date, and to take 

cash discounts when they are economically justified. In FY 2023, the FMC maintained a 

98.1 percent on-time payment rate and paid $248 in interest payments.

Performance Measure Summary

The Commission does not have an in-house financial accounting system and, therefore, does 

not receive a Performance Measure Summary from the U.S. Department of the Treasury. The 

Commission acquires travel, procurement, accounting, and financial services from the Bureau 

of the Fiscal Service and verifies and reconciles all financial statements and reports prior to 

submission.
FISCAL YEAR 2023 | Performance and Accountability Report | 19

Federal Maritime Commission

Inspector General Act and Inspector General Reform Act

Section 5(b) of the Inspector General Act of 1978 requires agencies to report on final actions 

taken on OIG audit recommendations. Action was taken to close all audit recommendations 

during the year. No significant deficiencies or material weaknesses were identified.

Inspector General-Issued Audits -- FY 2023

A23-01: Audit of the FMC’s Compliance with the Federal Information Security Modernization Act FY 2022

Date Issued Recommendations Remediated in FY 2023

October 2022 2 1

A23-02: Independent Auditor’s Report of the FMC’s FY 2022 Financial Statements

Date Issued Recommendations Remediated in FY 2023

November 2022 0 N/A

A23-03: Audit of the FMC’s Compliance with the Federal Information Security Modernization Act FY 2021 

Date Issued Recommendations Remediated in FY 2023

July 2023 3 0

A23-04: Information Technology Vulnerability Audit, 2023

Date Issued Recommendations Remediated in FY 2023

September 2023 8 0

Treasury Assurance Statement – USA Spending Reconciliation

The FMC has implemented its plan to ensure data completeness and accuracy on 

www.USASpending.gov by using control totals with financial statement data and comparing 

samples of financial data to actual award documents. The prime Federal award financial data 

reported on www.USASpending.gov is correct at the reported percentage of accuracy, and the 

FMC has adequate internal controls over the underlying spending.

Limitations of the Financial Statements

The principal financial statements are prepared to report the financial position and results of 

operations of the Commission, pursuant to the requirements of 31 U.S.C. § 3515(b). The 

statements are prepared from the books and records of the Commission in accordance with 

Federal GAAP and the formats prescribed by OMB. Reports used to monitor and control 

budgetary resources are prepared from the same books and records. The financial statements 

should be read with the understanding that they are for a component of the U.S. Government.
FISCAL YEAR 2023 | Performance and Accountability Report | 20

Federal Maritime Commission

Federal Managers’ Financial Integrity Act Statement of Assurance

The Federal Maritime Commission is responsible for managing risks 

and maintaining effective internal control and financial management 

systems to meet the objectives of Sections 2 and 4 of the Federal 

Managers’ Financial Integrity Act. This includes conducting assessments 

to determine the effectiveness of internal control and conformance 

with financial system requirements. The Commission conducted its 

annual assessments in accordance with OMB Circular No. A-123, 

Management’s Responsibility for Enterprise Risk Management and 

Internal Control. 

These assessments considered the effectiveness of internal control 

over operations, enterprise risk management, financial reporting, and 

compliance with applicable laws and regulations. The objectives are to ensure the effectiveness 

and efficiency of operations, the reliability of reporting for internal and external use, and 

compliance with applicable laws and regulations.

Based on the results of this assessment, I can provide reasonable assurance that the 

Commission’s internal control over operations, risk management, financial reporting, and 

compliance were operating effectively as of September 30, 2023. No material weaknesses were 

found in the design or operation of internal control over financial reporting. 

The Commission assessed its financial management systems’ conformance with financial 

system requirements, in accordance with the requirements of OMB Circular No. A-123, 

Appendix D. Based on this assessment, I can provide reasonable assurance that the FMC’s

financial management systems conform to these requirements and that no material nonconformances or instances of noncompliance were identified. 

/s/

Daniel B. Maffei

Chairman

November 15, 2023
FISCAL YEAR 2023 | Performance and Accountability Report | 21

Federal Maritime Commission

ANNUAL PERFORMANCE REPORT
FISCAL YEAR 2023 | Performance and Accountability Report | 22

Federal Maritime Commission

Introduction

The FMC’s performance management system includes specific strategic goals, performance 

measures, and targets. The goals outlined in the Strategic Plan covering fiscal years 2022-2026

represent the FMC’s mission and reflect the outcomes and objectives the agency strives to 

achieve. This report describes progress achieved in FY 2023 towards meeting performance 

targets in furtherance of the Commission’s mission to ensure a competitive and reliable 

international ocean transportation supply system that supports the U.S. economy and protects 

the public from unfair and deceptive practices.

The Commission plans to revise its Strategic Plan in FY 2024 to incorporate operational changes 

resulting from the implementation of OSRA 2022. The current strategic goals and objectives are 

as follows. 

Strategic Goal 1: Maintain a Competitive and Reliable International Ocean Transportation 

Supply System.

• Ensure no unreasonable increases in transportation costs or decreases in transportation 

service are attributed to anticompetitive practices under FMC-filed agreements.

• Ensure competition is preserved in the purchase of certain covered services (46 U.S.C. §

40102(5)) through 46 U.S.C. § 40307 authorities.

Strategic Goal 2: Protect the Public from Unlawful, Unfair, and Deceptive Ocean 

Transportation Practices.

• Identify and take action to end unlawful, unfair, and deceptive practices. 

• Prevent public harm through licensing and financial responsibility requirements.

• Enhance public awareness of agency resources, remedies, and regulatory requirements 

through education and outreach. 

• Impartially and timely resolve international shipping disputes through alternative 

dispute resolution and adjudication. 

Stewardship Objective: Advance the FMC’s Performance Through Excellence in Organizational 

Management.

• Strengthen infrastructure and effective resource management.

• Foster a high performing, engaged, and diverse workforce where staff understand how 

their efforts contribute to the goals of the Commission. 

Each measure, target, and actual result is reported in Table 1 and includes a description of the 

data used to measure performance and an explanation of the procedures in place to validate 

and ensure integrity of the reported result. Eleven performance measures in support of the 

strategic goals and seven stewardship objectives were quantitatively measured during the fiscal 

year. The Commission met or exceeded 10 of its 11 FY 2023 strategic goal targets and met or 

exceeded all of its stewardship goals. The second target under Strategic Goal 2 was not met. 

This measure will be adjusted when the Strategic Plan is reviewed in 2024 to align with shifted 

priorities due to recent industry developments as discussed in the previous section of this 

report. 
FISCAL YEAR 2023 | Performance and Accountability Report | 23

Federal Maritime Commission

Table 2 presents the Commission’s five-year performance trend data. The Commission’s 

commitment to continuously improve and streamline processes is evidenced in its year-overyear positive performance results.

Table 3 presents the second year of performance data for the Commission’s new stewardship 

objective. The Commission’s commitment to organizational excellence will guide its efforts and 

ensure that its mission is efficiently and effectively carried out, and that it serves the public. 

This Performance and Accountability Report (inclusive of this Annual Performance Report) has 

been forwarded to the President, OMB Director, appropriate Congressional committees, and 

others as dictated by OMB Circular A-136, Revised. Additionally, this report has been placed on 

the FMC’s public website to ensure that it is accessible to interested parties. All Commission 

employees have been advised to review this report.
FISCAL YEAR 2023 | Performance and Accountability Report | 24

Federal Maritime Commission

Table 1: Summary of Performance Measure Results – FY 2023

Strategic Goal No. 1:

Maintain a competitive and reliable international ocean transportation supply system.

Objectives, Performance Measures, and Validations FY 2023

Target

FY 2023

Actual

Objective 1.1: Ensure no unreasonable increases in transportation costs or decreases in transportation 

services are attributed to anticompetitive practices under FMC-filed agreements.

Measure: Percentage of newly filed vessel sharing agreements and amendments to 

agreements analyzed and presented to the Commission within 32 days.

Validation: This outcome goal is measured using data from the eAgreements electronic 

filing system and tracking the time elapsed between the agreement submission and 

review. 

85% 100%

Measure: Percentage of agreement monitoring reports reviewed within 30 days of 

receipt to detect actionable information, including market-distorting behavior.

Validation: This outcome goal is measured using data contained in the eMonitoring 

system used for the electronic filing of agreement monitoring submissions. Performance 

is measured by comparing the file receipt date to the date that the filing was reviewed by 

staff analyst. 

80% 97%

Objective 1.2: Ensure competition is preserved in the purchase of certain covered services (46 U.S.C. §

40102(5)) through 46 U.S.C. § 40307 authorities.

Measure: Percentage of alternative agreement reports indicating joint contracting/ 

procurement of covered services analyzed and escalated to regular monitoring status 

within 30 days of receipt to ensure systematic analysis of data for actionable information.

Validation: This outcome goal is measured using regulated entities’ data. Performance is 

measured by reviewing information received and identifying whether reports indicating 

covered services are moved from this system to the eMonitoring system within 30 days.

>98% 100%

Strategic Goal No. 2:

Protect the public from unlawful, unfair, and deceptive ocean transportation practices.

Objectives, Performance Measures, and Validations FY 2023

Target

FY 2023

Actual

Objective 2.1: Identify and take action to end unlawful, unfair, and deceptive practices.

Measure: Percentage of enforcement actions taken under the Shipping Act successfully 

resolved through compliance audits, judgments, settlements, compromise agreements, or 

issuance of default judgments, that are favorable to the FMC’s enforcement program.

Validation: This outcome goal is measured by examining enforcement case inventory and 

counting the number of cases resolved.

77.5% 100%

Measure: Percentage of contacted unlicensed OTIs that submit license applications within 

one year after pre-enforcement contact and education from an area representative.

Validation: This outcome goal is measured by correlating prior fiscal year area 

representatives’ approved pre-enforcement case inventories with the current fiscal year 

data and notices on the status of Ocean Transportation Intermediary licenses. This data is 

collected and maintained by the Bureau of Certification and Licensing on the Regulated 

Persons Index and the list of FMC Licensed & Bonded OTIs.

Explanation: This performance measure will be reviewed during the Commission’s 

ongoing FY 2024 strategic planning effort to reflect investigative program changes, 

including the conversion of Area Representative (AR) positions to Investigators. 

15% N/A
FISCAL YEAR 2023 | Performance and Accountability Report | 25

Federal Maritime Commission

Table 1: Summary of Performance Measure Results – FY 2023 (continued)

Objectives, Performance Measures, and Validations

FY 2023

Target

FY 2023

Actual

Objective 2.2: Prevent public harm through licensing and financial responsibility requirements.

Measure: Percentage of decisions on completed OTI license applications rendered within 

60 calendar days of receipt, facilitating lawful operation of OTIs with appropriate 

character and experience requirements. 

Validation: This outcome goal is measured by comparing the total number of OTI 

applications assigned to an analyst (X) and the number of applications completed by an 

analyst on or before the 60th calendar day following assignment (Y) during a specific time 

period. The outcome goal is calculated as (Y / X) x 100 = %.

75% 78%

Measure: Percentage of license renewals completed on or prior to the 3-year renewal 

deadlines to timely verify regulatory compliance.

Validation: The Completion Status Report, generated in the license renewal system, 

provides the total number of renewals completed (X) and the number of renewals 

completed on or before the renewal deadline (Y) during a specific time period. The 

outcome goal is calculated as (Y / X) x 100 = %.

75% 92%

Measure: Percentage of PVOs examined during the year that have the full financial 

coverage required by regulation to protect against loss from nonperformance or casualty.

Validation: This outcome goal is measured by comparing reported financial coverage 

amounts against required coverage amounts. Operators covered by this program file 

semi-annual, monthly, and weekly unearned passenger revenue reports. This information 

is used to compare reported coverage against required coverage amounts.

95% 96%

Objective 2.3: Enhance public awareness of agency resources, remedies, and regulatory requirements 

through education and outreach.

Measure: Percentage of Commission issuances, orders, and reports available through the 

Commission’s website within 5 working days of receipt.

Validation: This outcome goal is measured by reviewing the workflow processes for 

posting documents to the Commission’s website docket activity logs. The date that each 

docket activity log is updated with new filings or issuances is compared to the date the 

document is filed with or issued by the Commission in a particular proceeding.

90% 96%

Objective 2.4: Impartially and timely resolve international shipping disputes through alternative dispute 

resolution and adjudication.

Measure: Percentage of dispute resolution matters closed within 6 months of request for 

assistance. 

Validation: This outcome goal is measured using data maintained by the Commission on 

each dispute resolution matter opened. Cases are opened upon the request of the public 

for assistance and are subject to the normal fluctuations in businesses and consumers 

seeking help from the Commission. Cases are closed upon resolution, voluntary 

termination by the parties, refusal to participate or failure to respond by a party, or when 

the CADRS mediator determines that particular issues prevent the possibility for 

successful resolution.

70% 100%

Measure: Percentage of formal complaints or Commission-initiated orders of 

investigation completed within 2 years of filing or Commission initiation. 

Validation: This outcome goal is measured by using docket activity logs maintained by the 

Commission and used for docket management, and monthly and annual reporting 

purposes.

72% 88%
FISCAL YEAR 2023 | Performance and Accountability Report | 26

Federal Maritime Commission

Table 1: Summary of Performance Measure Results – FY 2023 (continued)

Stewardship Objective – Advance the FMC’s performance through excellence in organizational management.

Objectives, Performance Measures, and Validations FY 2023

Target

FY 2023

Actual

Stewardship Sub-objective 1: Strengthen infrastructure and effective resource management. 

S.1.1 Manage risks and continue mission essential operations.

Measure: COOP activities, including annual training, notification exercises, and an 

annual COOP exercise are conducted throughout the year consistent with the FMC 

COOP Plan. 

Validation: Complete and document all activities between July 1 and June 30. Sources 

include annual training materials, sign-in sheets/confirmation emails, and after-action 

reports.

100% 100%

S.1.2 FMC’s financial management systems and practices demonstrate fiscal responsibility and proper 

accounting.

Measure: Achieve an unmodified (clean) opinion from the independent auditor on the 

Commission’s fiscal year end financial statements. (Data: Office of the Inspector 

General Independent Auditor’s Report.)

Validation: This outcome goal is an unmodified (clean) opinion by the Office of the 

Inspector General based on the findings from the independent auditor’s review of the 

FMC’s annual financial statements and internal controls over financial reporting. Each 

year, the independent auditor reviews approximately 75 processes, documents, 

procedures, checklists, transaction types, and reports that are all considered in the 

overall assessment.

100% 100%

S.1.3 Information Technology is optimized and IT systems are protected.

Measure: Percentage of overall cybersecurity compliance with mandates that are 

issued. 

Validation: This objective is measured through the report card from the Cybersecurity 

and Infrastructure Security Agency (CISA).

100% 100%

S.1.4 Maintain the Commission’s cloud-based website to allow industry access to FMC resources and 

applications.

Measure: FMC website uptime percentage. 

Validation: This objective is measured through the Commission’s Azure server uptime 

report.

99.5% 99.5%

Stewardship Sub-objective 2: Foster a high performing, engaged, and diverse workforce where staff 

understand how their efforts contribute to the goals of the Commission.

S.2.1 Management promotes a culture that is open, diverse, inclusive, and engaged.

Measure: Benchmarking EEI index is above the average for small agencies; no more 

than 10% drop from the prior year. 

Validation: Annual employee responses from the Federal Employee Viewpoint Survey 

(FEVS).

>-10% 5%

S.2.2 Management promotes a results-oriented performance culture.

Measure: Benchmarking FEVS results tied to results-oriented performance culture.

Validation: Annual employee responses from the FEVS. >75% 88%

Measure: Percent of staff with the majority of (3 or more expectations per 

performance element) performance goals rated as meeting the characteristics of a 

specific, measurable, achievable, realistic, and timely (SMART) goal. Targets are for 

non-SES/non-supervisory staff. SES and supervisor targets will exceed listed staff 

targets. 

Validation: Review of performance plans each performance year.

50% 62%
FISCAL YEAR 2023 | Performance and Accountability Report | 27

Federal Maritime Commission

Table 2: Performance Measure Trends, FY 2019-2023

Strategic Goal No. 1: Maintain a competitive and reliable international ocean transportation supply system.

Performance Measure FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Measure: Percentage of newly filed vessel sharing agreements and amendments to agreements analyzed and presented to the 

Commission within 32 days.

TARGET N/A N/A N/A 85% 85%

ACTUAL N/A N/A N/A 100% 100%

TARGET MET/UNMET N/A N/A N/A MET MET

Measure: Percentage of agreement monitoring reports reviewed within 30 days of receipt to detect actionable information, 

including market-distorting behavior.

TARGET 66% 67% 68% 80% 80%

ACTUAL 79% 91% 85% 100% 97%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of alternative agreement reports indicating joint contracting/procurement of covered services analyzed 

and escalated to regular monitoring status within 30 days of receipt to ensure systematic analysis of data for actionable 

information.

TARGET N/A N/A N/A >95% >98%

ACTUAL N/A N/A N/A 100% 100%

TARGET MET/UNMET N/A N/A N/A MET MET

Measure: Percentage of FMC-filed agreements reviewed at Commission level which are modified through negotiation to 

mitigate anticompetitive effects.*

TARGET 51% 52% 53% N/A N/A

ACTUAL 67% 60% 20% N/A N/A

TARGET MET/UNMET MET MET UNMET N/A N/A

Strategic Goal No. 2: Protect the public from unlawful, unfair and deceptive ocean transportation practices.

Measure: Percentage of enforcement actions taken under the Shipping Act successfully resolved through compliance audits, 

judgments, settlements, compromise agreements, or issuance of default judgments, that are favorable to the FMC’s 

enforcement program.

Performance Measure FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

TARGET N/A N/A N/A 77.5% 77.5%

ACTUAL N/A N/A N/A 77.8% 100%

TARGET MET/UNMET N/A N/A N/A MET MET

Measure: Percentage of contacted unlicensed OTIs that submit license applications within one year after pre-enforcement 

contact and education from an area representative.**

TARGET N/A N/A N/A 10% 15%

ACTUAL N/A N/A N/A 0% N/A

TARGET MET/UNMET N/A N/A N/A UNMET N/A

Measure: Percentage of decisions on completed OTI license applications rendered within 60 calendar days of receipt, 

facilitating lawful operation of OTIs with appropriate character and experience requirements.

TARGET 75% 75% 75% 75% 75%

ACTUAL 96% 88% 98.8% 96% 78%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of license renewals completed on or prior to the 3-year renewal deadlines to timely verify regulatory 

compliance.

TARGET N/A N/A N/A 75% 75%

ACTUAL N/A N/A N/A 87% 92%

TARGET MET/UNMET N/A N/A N/A MET MET

Measure: Percentage of PVOs examined during the year that have the full financial coverage required by regulation to protect 

against loss from nonperformance or casualty.

TARGET 95% 95% 95% 95% 95%

ACTUAL 96% 96% 97.9% 96% 96%

TARGET MET/UNMET MET MET MET MET MET
FISCAL YEAR 2023 | Performance and Accountability Report | 28

Federal Maritime Commission

Table 2: Performance Measure Trends, FY 2019-2023 continued

Performance Measure FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Measure: Percentage of Commission issuances, orders, and reports available through the Commission’s website within 5 

working days of receipt.

TARGET 84% 86% 88% 90% 90%

ACTUAL 99% 100% 99% 91% 96%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of dispute resolution matters closed within 6 months of request for assistance.

TARGET N/A N/A N/A 67% 70%

ACTUAL N/A N/A N/A 100% 100%

TARGET MET/UNMET N/A N/A N/A MET MET

Measure: Percentage of formal complaints or Commission-initiated orders of investigation completed within 2 years of filing or 

Commission initiation.

TARGET 66% 68% 70% 72% 72%

ACTUAL 43% 100% 75% 86% 88%

TARGET MET/UNMET UNMET MET MET MET MET

Measure: Percentage of enforcement actions taken under the Shipping Act successfully resolved through favorable judgment, 

settlement, issuance of default judgment, or compliance letter or notice.

TARGET 77.5% 77.5% 77.5% N/A N/A

ACTUAL 97% 93% 90.3% N/A N/A

TARGET MET/UNMET MET MET MET N/A N/A

Measure: Percentage of Ombuds and ADR matters closed within 6 months of request for assistance. 

TARGET 61% 63% 65% N/A N/A

ACTUAL 98% 99.59% 100% N/A N/A

TARGET MET/UNMET MET MET MET N/A N/A

* This measure was replaced by the first 2 new measures listed under Strategic Goal No. 1 in the Commission’s FY 2018-2022 

Strategic Plan. For additional historical data on this measure, see Commission PARs posted on its website.

**This measure is no longer applicable to the newly reorganized Bureau of Enforcement, Investigations, and Compliance. It will 

be adjusted to align with revised priorities and organizational changes when the Strategic Plan is reviewed in FY 2024.
FISCAL YEAR 2023 | Performance and Accountability Report | 29

Federal Maritime Commission

Table 3: Stewardship Objective Trends, 2022-2026

Stewardship Objective: Advance the FMC’s performance through excellence in organizational management.

Performance Measure FY 2022 FY 2023 FY 2024 FY 2025 FY 2026

Measure: COOP activities, including annual training, notification exercises, and an annual COOP exercise are conducted 

throughout the year consistent with the FMC COOP Plan.

TARGET 100% 100% 100% 100% 100% 

ACTUAL 100% 100%

TARGET MET/UNMET MET MET

Measure: Achieve an unmodified (clean) opinion from the independent auditor on the Commission’s fiscal year’s end financial 

statements. (Data: Office of the Inspector General Independent Auditor’s Report.)

TARGET 100% 100% 100% 100% 100% 

ACTUAL 100% 100%

TARGET MET/UNMET MET MET

Measure: Percentage of overall cybersecurity compliance with mandates that are issued.

TARGET 100% 100% 100% 100% 100% 

ACTUAL 100% 100%

TARGET MET/UNMET MET MET

Measure: FMC website uptime percentage.

TARGET 99.5% 99.5% 99.5% 99.5% 99.5% 

ACTUAL 99.5% 99.5%

TARGET MET/UNMET MET MET

Measure: Benchmarking EEI index is above the average for small agencies; no more than 10% drop from the prior year.

TARGET >-10% >-10% >-10% >-10% >-10%

ACTUAL 2% 5%

TARGET MET/UNMET MET MET

Measure: Benchmarking FEVS results tied to a results-oriented performance culture.

TARGET >75% >75% >75% >75% >75%

ACTUAL 93% 88%

TARGET MET/UNMET MET MET

Measure: Percent of staff with the majority of (3 or more expectations per performance element) performance goals rated as 

meeting the characteristics of a specific, measurable, achievable, realistic, and timely (SMART) goal. Targets are for nonSES/non-supervisory staff. SES and supervisor targets will exceed listed staff targets.

TARGET 25% 50% 98% 99% 99%

ACTUAL 30% 62%

TARGET MET/UNMET MET MET
FISCAL YEAR 2023 | Performance and Accountability Report | 30

Federal Maritime Commission

FINANCIAL INFORMATION
FISCAL YEAR 2023 | Performance and Accountability Report | 31

Federal Maritime Commission

Message from the Acting Chief Financial Officer

I am pleased to present the Federal Maritime Commission’s 

Financial Information for FY 2023, the 20th consecutive year that an 

independent auditor has rendered an unmodified opinion on the 

Commission’s financial statements. The auditor’s tests for 

compliance with selected provisions of applicable laws, regulations 

and contracts identified no deficiencies in internal control over 

financial reporting considered to be material weaknesses nor

disclosed any instances of noncompliance for FY 2023 reportable 

under U.S. generally accepted government auditing standards. This 

demonstrates the Commission’s long-held continuous record as a 

diligent steward of taxpayer dollars, maintaining high standards for 

the financial management of the resources entrusted to it.

The financial statements and related notes were prepared in conformity with accounting principles 

generally accepted in the U.S., and requirements of OMB Circular A-136, Financial Reporting 

Requirements, revised May 22, 2023, and fairly present the Commission’s financial position.

The FMC’s financial condition remains sound, and its internal controls are sufficient to ensure that 

its budget authority is not exceeded, and that funds are used efficiently and effectively. The 

following key accomplishments demonstrate the effectiveness and efficiency of the FMC’s 

acquisition and financial functions during FY 2023:

• A continuous record of no material weaknesses, significant control deficiencies, or 

nonconformance with the FMFIA and other applicable laws and regulations;

• Civil enforcement proceedings and user fees collections totaling $3,322,694;

• Continued focus on internal controls and risk management, as mandated by OMB Circular A123, providing budget information in concise, reliable, and understandable formats; 

• Accurate, timely issuance of financial statements as required by the Accountability of Tax 

Dollars Act of 2002, prepared from, and fully supported by, the books and records of the 

FMC in accordance with Generally Accepted Accounting Principles, standards approved by 

the Federal Accounting Standards Advisory Board, and OMB Circular A-136; and

• Successful implementation of the Digital Accountability and Transparency Act of 2014 (DATA 

Act), which provides detailed information on the FMC’s careful stewardship of resources on 

the USASpending.gov website.

I am proud of the Commission’s track record and confident that the excellent level of financial 

management at the Commission will continue into the future. We strive to enhance operational 

efficiency while protecting the interest of the American shipping public.

/s/

Cindy Hennigan

Acting Chief Financial Officer

November 15, 2023
FISCAL YEAR 2023 | Performance and Accountability Report | 32

Federal Maritime Commission

Principal Financial Statements

The principal financial statements presented include:

• Balance Sheet – Presents the combined amounts the agency had to use or distribute 

(assets) versus the amounts the agency owed (liabilities), and the difference between the 

two (net position);

• Statement of Net Cost – Presents the annual cost of agency operations determined by 

reducing gross cost by any offsetting revenue;

• Statement of Changes in Net Position – Presents the accounting activities that caused the 

change in net position during the reporting period;

• Statement of Budgetary Resources – Presents how budgetary resources were made 

available and the status of those resources at fiscal year-end; and

• Statement of Custodial Activity – Presents collections and their disposition by the agency on 

behalf of the Treasury General Fund. The FMC acts as custodian and does not have use of 

these funds.

Limitations of the Financial Statements

As stated in the previous section, the principal financial statements have been prepared to 

report the financial position and results of operations of the FMC, pursuant to the requirements 

of 31 U.S.C. § 3515(b). While the statements have been prepared from the books and records 

of the agency in accordance with GAAP for Federal entities and the formats prescribed by OMB, 

the statements are in addition to the financial reports used to monitor and control budgetary 

resources, which are prepared from the same books and records. The statements should be 

read with the understanding that they are for a component of the U.S. Government, a 

sovereign entity. Therefore, liabilities not covered by budgetary resources cannot be liquidated 

without the enactment of an appropriation, and the payment of all liabilities other than for 

contracts can be abrogated by the sovereign entity. Other limitations are included in the 

footnotes to the principal statements. The accompanying notes are an integral part of these 

statements. 

The Federal Maritime Commission’s financial statements were audited by Dembo Jones, P.C., 

under contract to the FMC’s Office of the Inspector General.
FISCAL YEAR 2023 | Performance and Accountability Report | 33

Federal Maritime Commission

Financial Statements & Independent Auditor Report

FEDERAL MARITIME COMMISSION

Washington, DC 20573

 November 15, 2023

Office of Inspector General

Dear Chairman Maffei and Commissioners Dye, Sola, Bentzel, and Vekich:

I am pleased to provide the attached audit report required by the Accountability for Tax

Dollars Act of 2002 (ATDA), which presents an unmodified (clean) opinion on the Federal

Maritime Commission’s (FMC) fiscal year (FY) 2023 and 2022 financial statements. The audit 

results indicate that the FMC has established an internal control structure that facilitates the 

preparation of reliable financial and performance information. The Office of Inspector General 

(OIG) commends the FMC for the noteworthy accomplishment of attaining an unmodified 

opinion.

The OIG contracted with the independent certified public accounting firm Dembo Jones, 

P.C. to: perform the audit of the FMC’s financial statements for the fiscal years ending September 

30, 2023 and 2022; consider internal control over financial reporting; and test the agency’s

compliance with certain provisions of applicable laws, regulations, and contracts that could have

a direct and material effect on the financial statements. The OIG contract required that the audit

be performed in accordance with U.S. Generally Accepted Government Auditing Standards and 

Office of Management and Budget (OMB) audit guidance.

In its audit of the FMC, Dembo Jones found: the financial statements were fairly 

presented, in all material respects, in conformity with U.S. Generally Accepted Accounting 

Principles; there were no material weaknesses or significant deficiencies in internal control

over financial reporting; and no reportable noncompliance issues with the laws and regulations 

tested.

In connection with the OIG’s contract, the OIG reviewed Dembo Jones’ report and related 

documentation and inquired of its representatives. Our review, as differentiated from an audit in 

accordance with U.S. Generally Accepted Government Auditing Standards, was not intended to 

enable the OIG to express, and we do not express, opinions on FMC's financial statements or 

internal control; or conclusions on compliance with laws and regulations. Dembo Jones is 

responsible for the attached auditors' report dated November 15, 2023 and the conclusions 

expressed in the report. However, our review disclosed no instances where Dembo Jones did not 

comply, in all material respects, with Generally Accepted Government Auditing Standards.
FISCAL YEAR 2023 | Performance and Accountability Report | 34

Federal Maritime Commission

The OIG would like to thank FMC staff; especially the Office of Budget and Finance, for 

their assistance in helping Dembo Jones and the OIG meet the audit objectives.

Respectfully submitted,

/s/

Jon Hatfield

Inspector General

Attachment

cc: Office of the Managing Director 

Office of the General Counsel

Office of Budget and Finance
FISCAL YEAR 2023 | Performance and Accountability Report | 35

Federal Maritime Commission

Independent Auditor’s Report

Independent Auditor’s Report

To Chairman Daniel B. Maffei 

Federal Maritime Commission

In our audits of the fiscal years 2023 and 2022 financial statements of the Federal Maritime 

Commission (the Commission) we found:

• The Commission’s financial statements as of and for the fiscal years ended September

30, 2023, and 2022, are presented fairly, in all material respects, in accordance with 

U.S. generally accepted accounting principles;

• no material weaknesses in internal control over financial reporting based on the

limited procedures we performed;1 and

• no reportable noncompliance for fiscal year 2023 with provisions of applicable

laws, regulations, and contracts we tested.

The following sections discuss in more detail (1) our report on the financial statements, which 

includes required supplementary information (RSI)2 and other information included with the 

financial statements3

; (2) our report on internal control over financial reporting; (3) our report on 

compliance with laws, regulations, and contracts; and (4) agency comments.

---------------------------------

1

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such 

that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be 

prevented, or detected and corrected, on a timely basis. A deficiency in internal control exists when the design or 

operation of a control does not allow management or employees, in the normal course of performing their assigned 

functions, to prevent, or detect and correct, misstatements on a timely basis.

2 The RSI consists of “Management’s Discussion and Analysis”, which is included with the financial statements.

3 Other information consists of information included with the financial statements, other than the RSI and the auditor’s

report.

6116 Executive Blvd • Suite 500 

North Bethesda, MD 20852

eport. P 301.770.5100 • F 301.770.5202

Dembo Jones, P.C.

A Member of Allinial Global

www.dembojones.com

8830 Stanford Blvd • Suite 290

Columbia, MD 21045

P 410.290.0770 • F 410.290.0774
FISCAL YEAR 2023 | Performance and Accountability Report | 36

Federal Maritime Commission

Report on the Financial Statements

Opinion

In accordance with U.S. generally accepted government auditing standards, Office of Management 

and Budget (OMB) Bulletin No. 24-01, Audit Requirements for Federal Financial Statements, and 

additional requirements of OMB, such as Circular No. A-136, Financial Reporting Requirements, 

we have audited the Commission’s financial statements. The Commission’s financial statements 

comprise the balance sheets as of September 30, 2023, and 2022; the related statements of net cost, 

changes in net position, and budgetary resources for the fiscal years then ended; and the related 

notes to the financial statements. In our opinion, the Commission’s financial statements present 

fairly, in all material respects, the Commission’s financial position as of September 30, 2023, and 

2022, and its net cost of operations, changes in net position, and budgetary resources for the fiscal 

years then ended in accordance with U.S. generally accepted accounting principles.

Basis for Opinion

We conducted our audits in accordance with U.S. generally accepted government auditing 

standards. Our responsibilities under those standards are further described in the Auditor’s 

Responsibilities for the Audit of the Financial Statements section of our report. We are required to 

be independent of the Commission and to meet our other ethical responsibilities, in accordance 

with the relevant ethical requirements relating to our audit. We believe that the audit evidence we 

have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements 

The Commission management is responsible for

• the preparation and fair presentation of these financial statements in accordance with U.S. 

generally accepted accounting principles; 

• preparing, measuring, and presenting the RSI in accordance with U.S. generally accepted 

accounting principles; 

• preparing and presenting other information included in the Commission’s Performance and 

Accountability Report (PAR), and ensuring the consistency of that information with the 

audited financial statements and the RSI; and 

• designing, implementing, and maintaining effective internal control relevant to the preparation 

and fair presentation of financial statements that are free from material misstatement, whether 

due to fraud or error. 

In preparing the financial statements, management is required to evaluate whether there are 

conditions or events, considered in the aggregate, that raise substantial doubt about the 

Commission’s ability to continue as a going concern for a reasonable period of time.

Dembo Jones, P.C.
FISCAL YEAR 2023 | Performance and Accountability Report | 37

Federal Maritime Commission

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to (1) obtain reasonable assurance about whether the financial statements as a 

whole are free from material misstatement, whether due to fraud or error, and (2) issue an auditor’s 

report that includes our opinion. Reasonable assurance is a high level of assurance but is not 

absolute assurance and therefore is not a guarantee that an audit of the financial statements 

conducted in accordance with U.S. generally accepted government auditing standards will always 

detect a material misstatement or a material weakness when it exists. The risk of not detecting a 

material misstatement resulting from fraud is higher than for one resulting from error, as fraud 

may involve collusion, forgery, intentional omissions, misrepresentations, or the override of 

internal control. Misstatements, including omissions, are considered to be material if there is a 

substantial likelihood that, individually or in the aggregate, they would influence the judgment 

made by a reasonable user based on the financial statements. 

In performing an audit in accordance with U.S. generally accepted government auditing standards, 

we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the financial statements, whether due 

to fraud or error, and design and perform audit procedures responsive to those risks. Such 

procedures include examining, on a test basis, evidence regarding the amounts and disclosures 

in the financial statements.

• Obtain an understanding of internal control relevant to our audit of the financial statements in 

order to design audit procedures that are appropriate in the circumstances, but not for the 

purpose of expressing an opinion on the effectiveness of the Commission’s internal control 

over financial reporting. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant 

accounting estimates made by management, as well as evaluate the overall presentation of the 

financial statements.

• Perform other procedures we consider necessary in the circumstances.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, 

that raise substantial doubt about the Commission’s ability to continue as a going concern for 

a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control–related matters that we identified during the financial statement audit.

Required Supplementary Information

U.S. generally accepted accounting principles issued by the Federal Accounting Standards 

Advisory Board (FASAB) require that the RSI be presented to supplement the financial 

Dembo Jones, P.C.
FISCAL YEAR 2023 | Performance and Accountability Report | 38

Federal Maritime Commission

statements. Such information is the responsibility of management and, although not a part of the 

financial statements, is required by FASAB, which considers it to be an essential part of financial 

reporting for placing the financial statements in appropriate operational, economic, or historical 

context. 

We have applied certain limited procedures to the RSI in accordance with U.S. generally accepted 

government auditing standards. These procedures consisted of (1) inquiring of management about 

the methods of preparing the RSI and (2) comparing the RSI for consistency with management’s 

responses to our inquiries, the financial statements, and other knowledge we obtained during the 

audit of the financial statements, in order to report omissions or material departures from FASAB 

guidelines, if any, identified by these limited procedures. We did not audit and we do not express 

an opinion or provide any assurance on the RSI because the limited procedures we applied do not 

provide sufficient evidence to express an opinion or provide any assurance.

Other Information 

The Commission’s other information contains a wide range of information, some of which is not 

directly related to the financial statements. This information is presented for purposes of additional 

analysis and is not a required part of the financial statements or the RSI. Management is 

responsible for the other information included in the Commission’s PAR. The other information 

comprises the financial statement audit summary but does not include the financial statements and 

our auditor’s report thereon. Our opinion on the financial statements does not cover the other 

information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other 

information and consider whether a material inconsistency exists between the other information 

and the financial statements, or the other information otherwise appears to be materially misstated. 

If, based on the work performed, we conclude that an uncorrected material misstatement of the 

other information exists, we are required to describe it in our report.

Report on Internal Control over Financial Reporting

In connection with our audits of the Commission’s financial statements, we considered the 

Commission’s internal control over financial reporting, consistent with our auditor’s 

responsibilities discussed below. 

Results of Our Consideration of Internal Control over Financial Reporting

Our consideration of internal control was for the limited purpose described below, and was not 

designed to identify all deficiencies in internal control that might be material weaknesses or 

Dembo Jones, P.C.
FISCAL YEAR 2023 | Performance and Accountability Report | 39

Federal Maritime Commission

significant deficiencies1 or to express an opinion on the effectiveness of the Commission’s internal 

control over financial reporting. Given these limitations, during our 2023 audit, we did not identify 

any deficiencies in internal control over financial reporting that we consider to be material 

weaknesses. However, material weaknesses or significant deficiencies may exist that have not 

been identified. 

We noted one non-reportable matter involving internal control and its operation that we will 

communicate in a separate management letter to FMC management.

Basis for Results of Our Consideration of Internal Control over Financial Reporting

We performed our procedures related to the Commission’s internal control over financial reporting 

in accordance with U.S. generally accepted government auditing standards and Office of 

Management and Budget audit guidance. 2

Responsibilities of Management for Internal Control over Financial Reporting

The Commission management is responsible for designing, implementing, and maintaining 

effective internal control over financial reporting relevant to the preparation and fair presentation 

of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibilities for Internal Control over Financial Reporting 

In planning and performing our audit of the Commission’s financial statements as of and for the 

fiscal year ended September 30, 2023, in accordance with U.S. generally accepted government 

auditing standards, we considered the Commission’s internal control relevant to the financial 

statement audit in order to design audit procedures that are appropriate in the circumstances, but 

not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal 

control over financial reporting. Accordingly, we do not express an opinion on the Commission’s 

internal control over financial reporting. We are required to report all deficiencies that are 

considered to be significant deficiencies or material weaknesses. We did not consider all internal 

1A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is 

less severe than a material weakness, yet important enough to merit attention by those charged with governance.

2Office of Management and Budget (OMB) Bulletin No. 24-01, Audit Requirements for Federal Financial Statements, issued 

on October 19, 2023. According to the guidance, for those controls that have been suitably designed and implemented, the 

auditor should perform sufficient tests of such controls to conclude on whether the controls are operating effectively (i.e.,

sufficient tests of controls to support a low level of assessed control risk). OMB audit guidance does not require the auditor 

to express an opinion on the effectiveness of internal control.

Dembo Jones, P.C.
FISCAL YEAR 2023 | Performance and Accountability Report | 40

Federal Maritime Commission

controls relevant to operating objectives, such as those controls relevant to preparing performance 

information and ensuring efficient operations. 

Definition and Inherent Limitations of Internal Control over Financial Reporting 

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, the objectives of which are to provide reasonable 

assurance that 

• transactions are properly recorded, processed, and summarized to permit the preparation of 

financial statements in accordance with U.S. generally accepted accounting principles, and 

assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and 

• transactions are executed in accordance with provisions of applicable laws, including those 

governing the use of budget authority, regulations, and contracts, noncompliance with which

could have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements due to fraud or error. 

Intended Purpose of Report on Internal Control over Financial Reporting 

The purpose of this report is solely to describe the scope of our consideration of the 

Commission’s internal control over financial reporting and the results of our procedures, and 

not to provide an opinion on the effectiveness of the Commission’s internal control over 

financial reporting. This report is an integral part of an audit performed in accordance with U.S. 

generally accepted government auditing standards in considering internal control over financial 

reporting. Accordingly, this report on internal control over financial reporting is not suitable for 

any other purpose.

Report on Compliance with Laws, Regulations, and Contracts

In connection with our audits of the Commission’s financial statements, we tested compliance 

with selected provisions of applicable laws, regulations, and contracts consistent with our 

auditor’s responsibilities discussed below.

Results of Our Tests for Compliance with Laws, Regulations, and Contracts

Our tests for compliance with selected provisions of applicable laws, regulations, and contracts 

disclosed no instances of noncompliance for fiscal year 2023 that would be reportable under U.S. 

generally accepted government auditing standards. However, the objective of our tests was not to 

provide an opinion on compliance with laws, regulations, and contracts applicable to the 

Commission. Accordingly, we do not express such an opinion. 

Dembo Jones, P.C.
FISCAL YEAR 2023 | Performance and Accountability Report | 41

Federal Maritime Commission

Basis for Results of Our Tests for Compliance with Laws, Regulations, and Contracts

We performed our tests of compliance in accordance with U.S. generally accepted government 

auditing standards. 

Responsibilities of Management for Compliance with Laws, Regulations, and Contracts

The Commission management is responsible for complying with laws, regulations, and contracts 

applicable to the Commission.

Auditor’s Responsibilities for Tests of Compliance with Laws, Regulations, and Contracts

Our responsibility is to test compliance with selected provisions of applicable laws, regulations, 

and contracts applicable to the Commission that have a direct effect on the determination of 

material amounts and disclosures in the Commission’s financial statements, and to perform 

certain other limited procedures. Accordingly, we did not test compliance with all laws, 

regulations, and contracts applicable to the Commission. We caution that noncompliance may 

occur and not be detected by these tests.

Intended Purpose of Report on Compliance with Laws, Regulations, and Contracts 

The purpose of this report is solely to describe the scope of our testing of compliance with selected 

provisions of applicable laws, regulations, and contracts, and the results of that testing, and not to 

provide an opinion on compliance. This report is an integral part of an audit performed in 

accordance with U.S. generally accepted government auditing standards in considering 

compliance. Accordingly, this report on compliance with laws, regulations, and contracts is not 

suitable for any other purpose.

North Bethesda, Maryland

November 15, 2023

Dembo Jones, P.C.
FISCAL YEAR 2023 | Performance and Accountability Report | 42

Federal Maritime Commission

Comments on Audit Report

Federal Maritime Commission

Washington, DC 20573

 Office of the 

Managing Director

November 15, 2023

Donald K. Marshall, CPA

Dembo Jones, P.C.

6116 Executive Boulevard, Suite 500

North Bethesda, MD 20852

Dear Mr. Marshall:

I have reviewed the financial statements audit report for the Federal Maritime Commission for 

FY 2023. I concur with the audit report’s findings that the financial statements fairly present the 

Commission’s financial position during the fiscal year ending September 30, 2023, and that the 

financial statements are in conformity with U.S. Generally Accepted Accounting Principles; that 

the FMC has maintained, in all material respects, effective internal control over financial 

reporting; and that there were no instances of reportable noncompliance with laws and 

regulations tested by the auditors. 

The Commission appreciates Dembo Jones’ work over the past fiscal year.

Sincerely,

/s/

Cindy Hennigan

Acting Chief Financial Officer
FISCAL YEAR 2023 | Performance and Accountability Report | 43

Federal Maritime Commission

Financial Statements 

FEDERAL MARITIME COMMISSION

FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022 

TABLE OF CONTENTS

Balance Sheet................................................................................................................... 44

Statement of Net Cost.................................................................................................... 45

Statement of Changes in Net Position......................................................................... 45

Statement of Budgetary Resources.............................................................................. 46

Statement of Custodial Activity..................................................................................... 46

Notes to the Financial Statements................................................................................ 47
FISCAL YEAR 2023 | Performance and Accountability Report | 44

Federal Maritime Commission

The accompanying notes are an integral part of these financial statements.

2023 2022

Assets:

Intragovernmental Assets:

Fund Balance with Treasury (Note 2) $ 17,037,360 $ 11,361,461

Accounts Receivable, Net (Note 3) 9,638 -

Total Intragovernmental Assets 17,046,998 11,361,461

Other than Intragovernmental Assets:

Accounts Receivable, Net (Notes 3) 71,034 81,447

Total Other than Intragovernmental Assets 71,034 81,447

Total Assets $ 17,118,032 $ 11,442,908

Liabilities: (Note 4)

Intragovernmental Liabilities:

Accounts Payable $ 24,015 $ 54,832

Other Liabilities (Note 5) 442,000 369,431

Other Liabilities (Without Reciprocals) (Note 5) 109,715 75,739

Liability to the General Fund of the U.S. Government for Custodial and Other Non-Entity Assets (Note 4 and 5) 71,034 75,328

Other Current Liabilities - Benefit Contributions Payable (Note 5) 261,251 218,364

Total Intragovernmental Liabilities 466,015 424,263

Other than Intragovernmental Liabilities:

Accounts Payable 119,570 291,883

Federal Employee Benefits Payable 1,816,880 1,716,095

Other Liabilities (Notes 5) 1,496,818 1,044,581

Total Other than Intragovernmental Liabilities 3,433,268 3,052,559

Total Liabilities $ 3,899,283 $ 3,476,822

Net Position:

Unexpended Appropriations - Funds from Other than Dedicated Collections $ 14,959,706 $ 9,608,620

Cumulative Results of Operations - Funds from Other than Dedicated Collections (1,740,957) (1,642,534)

Total Net Position 13,218,749 7,966,086

Total Liabilities and Net Position $ 17,118,032 $ 11,442,908

FEDERAL MARITIME COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2023 AND 2022

(In Dollars)
FISCAL YEAR 2023 | Performance and Accountability Report | 45

Federal Maritime Commission

The accompanying notes are an integral part of these financial statements.

2023 2022

Gross Program Costs:

Operational and Administrative:

Gross Costs $ 31,285,488 $ 29,912,979

Less: Earned Revenue (155,182) (183,471)

Net Program Costs $ 31,130,306 $ 29,729,508

Office of Inspector General:

Gross Costs $ 575,605 $ 573,313

Net Program Costs $ 575,605 $ 573,313

Multi Year Operational and Administrative:

Gross Costs $ 1,835,561 $ -

Net Program Costs $ 1,835,561 $ -

Net Cost of Operations $ 33,541,472 $ 30,302,821

FEDERAL MARITIME COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

(In Dollars)

2023 2022

Unexpended Appropriations:

Beginning Balance $ 9,608,620 $ 6,410,608

Appropriations Received 38,260,000 32,869,000

Other Adjustments (1,118,430) (484,169)

Appropriations Used (31,790,484) (29,186,819)

Net Change in Unexpended Appropriations 5,351,086 3,198,012

Total Unexpended Appropriations $ 14,959,706 $ 9,608,620

Cumulative Results of Operations:

Beginning Balance $ (1,642,534) $ (1,649,547)

Appropriations Used 31,790,484 29,186,819

Imputed Financing (Note 8) 1,652,565 1,123,005

Other - 10

Net Cost of Operations (33,541,472) (30,302,821)

Net Change in Cumulative Results of Operations (98,423) 7,013

Total Cumulative Results of Operations $ (1,740,957) $ (1,642,534)

Net Position $ 13,218,749 $ 7,966,086

FEDERAL MARITIME COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

(In Dollars)
FISCAL YEAR 2023 | Performance and Accountability Report | 46

Federal Maritime Commission

The accompanying notes are an integral part of these financial statements.

2023 2022

Budgetary Resources:

Unobligated Balance from Prior Year Budget Authority, Net $ 3,440,396 $ 2,722,262

Appropriations 38,260,000 32,869,000

Spending Authority from Offsetting Collections 155,182 183,481

Total Budgetary Resources $ 41,855,578 $ 35,774,743

Status of Budgetary Resources:

New Obligations and Upward Adjustments (total) $ 38,585,901 $ 32,899,803

Unexpired Unobligated Balance, End of Year 178,336 484,454

Expired Unobligated Balance, End of Year 3,091,341 2,390,486

Unobligated Balance, End of Year (total) 3,269,677 2,874,940

Total Budgetary Resources $ 41,855,578 $ 35,774,743

Outlays, Net and Disbursements, Net:

Outlays, Net (total) $ 31,465,671 $ 29,430,876

Distributed Offsetting Receipts (426,141) (253,715)

Agency Outlays, Net $ 31,039,530 $ 29,177,161

FEDERAL MARITIME COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022

(In Dollars)

2023 2022

Total Custodial Revenue:

Sources of Cash Collections:

Miscellaneous $ 3,322,694 $ 2,335,235

Total Cash Collections (Note 11) 3,322,694 2,335,235

Accrual Adjustments (4,243) (2,422)

Total Custodial Revenue 3,318,451 2,332,813

Disposition of Collections:

Transferred to Others (by Recipient) 3,322,694 2,335,235

(Increase)/Decrease in Amounts Yet to be Transferred (4,243) (2,422)

Total Disposition of Collections 3,318,451 2,332,813

Custodial Revenue Less Disposition of Collections $ - $ -

(In Dollars)

FEDERAL MARITIME COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND 2022
FISCAL YEAR 2023 | Performance and Accountability Report | 47

Federal Maritime Commission

FEDERAL MARITIME COMMISSION

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The Federal Maritime Commission (FMC or 

Commission) was established as an independent 

regulatory agency on August 12, 1961. The FMC is 

responsible for the regulation of oceanborne 

transportation in the foreign commerce of the United 

States. The principal statutes or statutory provisions 

administered by the Commission are the Shipping Act of 

1984, as amended by the Ocean Shipping Reform Act of 

1998, the Foreign Shipping Practices Act of 1988 

(FSPA), section 19 of the Merchant Marine Act of 1920, 

and sections 2 and 3 of Public Law No. 89-777.

The Commission monitors the activities of ocean 

common carriers, marine terminal operators (MTOs), 

agreements among ocean common carriers and/or MTOs, 

ports and ocean transportation intermediaries (nonvessel-operating common carriers and ocean freight 

forwarders) operating in the U.S. foreign commerce to 

ensure they maintain just and reasonable practices; 

maintains trade monitoring, enforcement and dispute 

resolution programs designed to assist regulated entities 

in achieving compliance and to detect and remedy 

malpractices and violations of the 1984 Act; monitors the 

laws and practices of foreign governments which could 

have a discriminatory or otherwise adverse impact on 

shipping conditions in U.S. trades, and imposes remedial 

action, as appropriate, pursuant to section 19 of the 1920 

Act or FSPA; enforces special regulatory requirements 

applicable to carriers owned or controlled by foreign 

governments; processes and reviews agreements, service 

contracts, and service arrangements pursuant to the 1984 

Act for compliance with statutory requirements; and 

reviews common carriers’ privately published tariff 

systems for accessibility and accuracy, as required by 

OSRA.

The FMC also issues licenses to qualified ocean 

transportation intermediaries (OTIs) in the U.S., ensures 

that all OTIs are bonded or maintain other evidence of 

financial responsibility, and ensures that passenger vessel 

operators (PVOs) demonstrate adequate financial 

responsibility in case of nonperformance of voyages or 

death or injury occurring to passengers.

The FMC is composed of five Commissioners appointed 

for five-year terms by the President with the advice and 

consent of the Senate. The President designates one of 

the Commissioners to serve as Chairman, who is the chief 

executive and administrative officer of the FMC.

The FMC reporting entity is comprised of General Funds 

and General Miscellaneous Receipts. General Funds are 

accounts used to record financial transactions arising 

under congressional appropriations or other 

authorizations to spend general revenues. General Fund 

Miscellaneous Receipts are accounts established for 

receipts of non-recurring activity, such as fines, penalties, 

fees and other miscellaneous receipts for services and 

benefits.

The FMC makes custodial collections and holds 

custodial receivables that are non-entity assets and are 

transferred to Treasury at fiscal year-end. The FMC has 

rights and ownership of all assets reported in these 

financial statements. FMC does not possess any nonentity assets.

B. Basis of Presentation

The financial statements have been prepared to report the 

financial position and results of operations of FMC. The 

Balance Sheet presents the financial position of the 

Commission. The Statement of Net Cost presents the 

Commission’s operating results; the Statement of 

Changes in Net Position displays the changes in the 

Commission’s equity accounts. The Statement of 

Budgetary Resources presents the sources, status, and 

uses of the Commission’s resources and follows the rules 

for the Budget of the United States Government.

The statements are a requirement of the Chief Financial 

Officers Act of 1990 and the Government Management 
FISCAL YEAR 2023 | Performance and Accountability Report | 48

Federal Maritime Commission

Reform Act of 1994. They have been prepared from, and 

are fully supported by, the books and records of FMC in 

accordance with the hierarchy of accounting principles 

generally accepted in the United States of America, 

standards issued by the Federal Accounting Standards 

Advisory Board (FASAB), Office of Management and 

Budget (OMB) Circular A-136, Financial Reporting 

Requirements, as amended, and FMC accounting policies 

which are summarized in this note. These statements, 

with the exception of the Statement of Budgetary 

Resources, are different from financial management 

reports, which are also prepared pursuant to OMB 

directives that are used to monitor and control FMC’s use 

of budgetary resources. The financial statements and 

associated notes are presented on a comparative basis. 

Unless specified otherwise, all amounts are presented in 

dollars.

C. Basis of Accounting

Transactions are recorded on both an accrual accounting 

basis and a budgetary basis. Under the accrual method, 

revenues are recognized when earned, and expenses are 

recognized when a liability is incurred, without regard to 

receipt or payment of cash. Budgetary accounting 

facilitates compliance with legal requirements on the use 

of federal funds.

D. Fund Balance with Treasury

FBWT is an asset of a reporting entity and a liability of the 

General Fund. It is the aggregate amount of the FMC’s 

funds with Treasury in expenditure, receipt, revolving, 

and deposit fund accounts. Appropriated funds recorded 

in expenditure accounts are available to pay current 

liabilities and finance authorized purchases. 

The FMC does not maintain bank accounts of its own, 

has no disbursing authority, and does not maintain cash 

held outside of Treasury. When the reporting entity seeks 

to use FBWT or investments in Government securities to 

liquidate budgetary obligations, Treasury will finance the 

disbursements in the same way it finances all other 

disbursements, which is to borrow from the public if there

is a budget deficit (and to use current receipts if there is a 

budget surplus). Funds are disbursed for the agency on 

demand.

E. Accounts Receivable

Accounts receivable consists of amounts owed to FMC 

by other Federal agencies and the general public. 

Amounts due from Federal agencies are considered fully 

collectible. An allowance for uncollectible accounts 

receivable from the public is established when, based 

upon a review of outstanding accounts and the failure of 

all collection efforts, management determines that 

collection is unlikely to occur considering the debtor’s 

ability to pay.

F. Property, Equipment, and Software

Property, equipment, and software represent furniture, 

fixtures, equipment, and information technology 

hardware and software which are recorded at original 

acquisition cost and are depreciated or amortized using 

the straight-line method over their estimated useful lives. 

Major alterations and renovations are capitalized, while 

maintenance and repair costs are expensed as incurred. 

FMC’s capitalization threshold is $25,000 for individual 

purchases. Property, equipment, and software 

acquisitions that do not meet the capitalization criteria are 

expensed upon receipt. Applicable standard 

governmental guidelines regulate the disposal and 

convertibility of agency property, equipment, and 

software. The useful life classifications for capitalized 

assets are as follows:

Description Useful Life (years)

Leasehold Improvements 5

Office Furniture 5

Computer Equipment 5

Office Equipment 5

Software 5

G. Advances and Prepaid Charges

Advance payments are generally prohibited by law. 

There are some exceptions, such as reimbursable 

agreements, subscriptions and payments to contractors 

and employees. Payments made in advance of the receipt 

of goods and services are recorded as advances or prepaid 

charges at the time of prepayment and recognized as 

expenses when the related goods and services are 

received.

H. Liabilities

Liabilities represent the amount of funds likely to be paid 

by the FMC as a result of transactions or events that have 

already occurred.

The FMC reports its liabilities under two categories, 

Intragovernmental and With the Public. 

Intragovernmental liabilities represent funds owed to 

another government agency. Liabilities with the Public 

represent funds owed to any entity or person that is not a 

federal agency, including private sector firms and federal 

employees. Each of these categories may include 

liabilities that are covered by budgetary resources and 

liabilities not covered by budgetary resources.

Liabilities covered by budgetary resources are liabilities 

funded by a current appropriation or other funding 

source. These consist of accounts payable and accrued 

payroll and benefits. Accounts payable represent 

amounts owed to another entity for goods ordered and 

received and for services rendered except for employees. 

Accrued payroll and benefits represent payroll costs 
FISCAL YEAR 2023 | Performance and Accountability Report | 49

Federal Maritime Commission

earned by employees during the fiscal year which are not 

paid until the next fiscal year.

 

Liabilities not covered by budgetary resources are 

liabilities that are not funded by any current appropriation 

or other funding source. These liabilities consist of 

accrued annual leave, actuarial Federal Employees’ 

Compensation Act (FECA), and the amounts due to 

Treasury for collection and accounts receivable of civil 

penalties and FOIA request fees.

I. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual is 

reduced as leave is taken. The balance in the accrued 

leave account is adjusted to reflect current pay rates. 

Liabilities associated with other types of vested leave, 

including compensatory, restored leave, and sick leave in 

certain circumstances, are accrued at year-end, based on 

latest pay rates and unused hours of leave. Funding will 

be obtained from future financing sources to the extent 

that current or prior year appropriations are not available 

to fund annual and other types of vested leave earned but 

not taken. Non-vested leave is expensed when used. Any 

liability for sick leave that is accrued but not taken by a 

Civil Service Retirement System (CSRS)-covered 

employee is transferred to the Office of Personnel 

Management (OPM) upon the retirement of that 

individual. Credit is given for sick leave balances in the 

computation of annuities upon the retirement of Federal 

Employees Retirement System (FERS)-covered 

employees.

J. Accrued and Actuarial Workers’ Compensation

The FECA administered by the U.S. Department of 

Labor (DOL) addresses all claims brought by the FMC 

employees for on-the-job injuries. The DOL bills each 

agency annually as its claims are paid, but payment of 

these bills is deferred for two years to allow for funding 

through the budget process. Similarly, employees that the 

FMC terminates without cause may receive 

unemployment compensation benefits under the 

unemployment insurance program also administered by 

the DOL, which bills each agency quarterly for paid 

claims. Future appropriations will be used for the 

reimbursement to DOL. The liability consists of (1) the 

net present value of estimated future payments calculated 

by the DOL, and (2) the unreimbursed cost paid by DOL 

for compensation to recipients under the FECA.

K. Retirement Plans

FMC employees participate in either the CSRS or the 

FERS. The employees who participate in CSRS are 

beneficiaries of FMC matching contribution, equal to 7% 

of pay, distributed to their annuity account in the Civil 

Service Retirement and Disability Fund.

Prior to December 31, 1983, all employees were covered 

under the CSRS program. From January 1, 1984 through 

December 31, 1986, employees had the option of 

remaining under CSRS or joining FERS and Social 

Security. Employees hired as of January 1, 1987 are 

automatically covered by the FERS program. Both CSRS 

and FERS employees may participate in the federal Thrift

Savings Plan (TSP). FERS employees receive an 

automatic agency contribution equal to 1% of pay and 

FMC matches any employee contribution up to an 

additional 4% percent of pay. For FERS participants, 

FMC also contributes the employer’s matching share of 

Social Security.

FERS employees and certain CSRS reinstatement 

employees are eligible to participate in the Social 

Security program after retirement. In these instances, 

FMC remits the employer’s share of the required 

contribution.

The FMC recognizes the imputed cost of pension and 

other retirement benefits during the employees’ active 

years of service. OPM actuaries determine pension cost 

factors by calculating the value of pension benefits 

expected to be paid in the future and communicate these 

factors to FMC for current period expense reporting. 

OPM also provides information regarding the full cost of 

health and life insurance benefits. FMC recognized the 

offsetting revenue as imputed financing sources to the 

extent these expenses will be paid by OPM.

FMC does not report on its financial statement’s 

information pertaining to the retirement plans covering 

its employees. Reporting amounts such as plan assets, 

accumulated plan benefits, and related unfunded 

liabilities, if any, is the responsibility of the OPM, as the 

administrator.

L. Other Post-Employment Benefits

FMC employees eligible to participate in the Federal 

Employees' Health Benefits Plan (FEHBP) and the 

Federal Employees' Group Life Insurance Program 

(FEGLIP) may continue to participate in these programs 

after their retirement. The OPM has provided the FMC

with certain cost factors that estimate the true cost of 

providing the post-retirement benefit to current 

employees. The FMC recognizes a current cost for these 

and Other Retirement Benefits (ORB) at the time the 

employee's services are rendered. The ORB expense is

financed by OPM and offset by the FMC through the 

recognition of an imputed financing source. 

M. Use of Estimates

The preparation of the accompanying financial 

statements in accordance with generally accepted 

accounting principles requires management to make 

certain estimates and assumptions that affect the reported 

amounts of assets, liabilities, revenues, and expenses. 

Actual results could differ from those estimates. 
FISCAL YEAR 2023 | Performance and Accountability Report | 50

Federal Maritime Commission

N. Contingencies

Liabilities are deemed contingent when the existence or 

amount of the liability cannot be determined with 

certainty pending the outcome of future events. FMC 

recognizes contingent liabilities in the accompanying 

balance sheet and statement of net cost when it is both 

probable and can be reasonably estimated. The FMC 

discloses contingent liabilities in the notes to the financial 

statements when the conditions for liability recognition 

are not met or when a loss from the outcome of future 

events is more than remote. In some cases, once losses 

are certain, payments may be made from the Judgment 

Fund maintained by the U.S. Treasury rather than from 

the amounts appropriated to FMC for agency operations. 

Payments from the Judgment Fund are recorded as an 

“Other Financing Source” when made.

O. Classified Activities

Accounting standards require all reporting entities to 

disclose that accounting standards allow certain 

presentations and disclosures to be modified, if needed, 

to prevent the disclosure of classified information. 

NOTE 2. FUND BALANCE WITH TREASURY

Fund Balance with Treasury account balances as of September 30, 2023 and 2022, were as follows:

No discrepancies exist between the Fund Balance reflected on the Balance Sheet and the balances in the 

Treasury accounts.

The available unobligated fund balances represent the current-period amount available for obligation or 

commitment. At the start of the next fiscal year, this amount will become part of the unavailable balance as 

described in the following paragraph.

The unavailable unobligated fund balances represent the amount of appropriations for which the period of 

availability for obligation has expired. These balances are available for upward adjustments of obligations 

incurred only during the period for which the appropriation was available for obligation or for paying claims 

attributable to the appropriations.

The obligated balance not yet disbursed includes accounts payable, accrued expenses, and undelivered 

orders that have reduced unexpended appropriations but have not yet decreased the fund balance on hand 

(see also Note 9).

2023 2022

Status of Fund Balance with Treasury:

Unobligated Balance

 Available $ 178,336 $ 484,453 

 Unavailable 3,091,341 2,390,486 

Obligated Balance Not Yet Disbursed 13,767,683 8,486,522 

Total $ 17,037,360 $ 11,361,461 
FISCAL YEAR 2023 | Performance and Accountability Report | 51

Federal Maritime Commission

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable balances as of September 30, 2023 and 2022, were as follows:

The accounts receivable is primarily made up of services provided to the public. Historical experience has 

indicated that the majority of the receivables are collectible. There are no material uncollectible accounts 

as of September 30, 2023 and 2022.

NOTE 4. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for FMC as of September 30, 2023 and 2022, include liabilities not covered by budgetary 

resources. Congressional action is needed before budgetary resources can be provided. Although future 

appropriations to fund these liabilities are likely and anticipated, it is not certain that appropriations will be 

enacted to fund these liabilities. 

FECA and the Unemployment Insurance liabilities represent the unfunded liability for actual workers 

compensation claims and unemployment benefits paid on the FMC behalf and payable to the DOL. The 

FMC also records an actuarial liability for future workers compensation claims based on the liability to 

benefits paid (LBP) ratio provided by DOL and multiplied by the average of benefits paid over three years. 

Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The balance in 

the accrued annual leave account is reviewed quarterly and adjusted as needed to accurately reflect the 

liability at current pay rates and leave balances. Accrued annual leave is paid from future funding sources 

and, accordingly, is reflected as a liability not covered by budgetary resources. Sick and other leave is 

expensed as taken. 

2023 2022

Intragovernmental

Accounts Receivable $ 9,638 $ -

Total Intragovernmental Accounts Receivable $ 9,638 $ -

Other than Intergovernmental

Miscellaneous Accounts Receivable $ 71,034 $ 80,198

Interest Receivable - 315

Penalty and Fines Receivable - 934

Total Other than Intragovernmental Accounts Receivable $ 71,034 $ 81,447

Total Accounts Receivable $ 80,672 $ 81,447

2023 2022

Intragovernmental – FECA $ 296 $ -

Unfunded Leave 1,766,058 1,675,369

Actuarial FECA 1,318 -

Total Liabilities Not Covered by Budgetary Resources $ 1,767,672 $ 1,675,369

Total Liabilities Covered by Budgetary Resources 2,060,577 1,726,125

Total Liabilities Not Requiring Budgetary Resources 71,034 75,328

Total Liabilities $ 3,899,283 $ 3,476,822
FISCAL YEAR 2023 | Performance and Accountability Report | 52

Federal Maritime Commission

NOTE 5. OTHER LIABILITIES

Other liabilities account balances as of September 30, 2023 were as follows:

Other liabilities account balances as of September 30, 2022 were as follows:

Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable (without reciprocals) $ 109,715 $ 109,715

Custodial Liability (to the General Fund) 71,034 71,034

Employer Contributions and Payroll Taxes Payable 260,955 260,955

Unfunded FECA Liability 296 296

Total Intragovernmental Other Liabilities $ 442,000 $ 442,000

Other than Intragovernmental

Accrued Funded Payroll and Leave $ 1,496,818 $ 1,496,818

Total Other than Intragovernmental Other Liabilities $ 1,496,818 $ 1,496,818

Total Other Liabilities $ 1,938,818 $ 1,938,818

Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable (without reciprocals) $ 75,739 $ 75,739

Custodial Liability (to the General Fund) 75,278 75,278

Liability for Non-Entity Assets Not Reported on the Statement of Custodial Activity 

(other than the General Fund) 50 50

Employer Contributions and Payroll Taxes Payable 218,364 218,364

Total Intragovernmental Other Liabilities $ 369,431 $ 369,431

Other than Intragovernmental

Accrued Funded Payroll and Leave $ 1,044,581 $ 1,044,581

Total Other than Intragovernmental Other Liabilities $ 1,044,581 $ 1,044,581

Total Other Liabilities $ 1,414,012 $ 1,414,012
FISCAL YEAR 2023 | Performance and Accountability Report | 53

Federal Maritime Commission

NOTE 6. OPERATING LEASES

FMC occupies office space in four locations, of which all four of the lease agreements are required to be 

accounted for as operating leases. Three of the locations are being relinquished early from their original 

lease expirations dates due to an increase in exclusive remote work. The total operating lease expense for 

the periods ended September 30, 2023 and 2022, respectively were $439,622 and $3,200,121, respectively. 

The lease locations and terms are listed below:

The operating lease amount does not include estimated payments for leases with annual renewal options. 

The schedule of future payments for the term of the leases is as follows:

NOTE 7. COMMITMENTS AND CONTINGENCIES

FMC records commitments and contingent liabilities for legal cases in which payment has been deemed 

probable, and for which the amount of potential liability has been estimated, including certain judgments 

that have been issued against the agency. The FMC has no knowledge of any lawsuits/investigations in 

which payment is deemed probable.

NOTE 8. INTER-ENTITY COSTS

FMC recognizes certain inter-entity costs for goods and services that are received from other federal entities 

at no cost or at a cost less than the full cost. Certain costs of the providing entity that are not fully reimbursed 

are recognized as imputed cost and are offset by imputed revenue. Such imputed costs and revenues relate 

to employee benefits and claims to be settled by the Treasury Judgement Fund. FMC recognizes as interentity costs the amount of accrued pension and post-retirement benefit expenses for current employees. The 

assets and liabilities associated with such benefits are the responsibility of the administering agency, OPM. 

For the periods ended September 30, 2023 and 2022, respectively, inter-entity costs were as follows:

Location Term Lease Expiration Date

Iselin, NJ 10 years 7/26/2023

Houston, TX 15 years 10/26/2023

Tacoma, WA 10 years 10/31/2024

Washington, DC 15 years 10/31/2037

Fiscal Year Totals

2024 $ 1,914,704 

2025 3,239,328 

2026 3,274,602 

2027 3,395,357 

2028 3,444,641 

Thereafter 33,542,886 

Total Future Minimum Payments $ 48,811,518 

2023 2022

Office of Personnel Management $ 1,652,565 $ 1,123,005 

Total Imputed Financing Sources $ 1,652,565 $ 1,123,005 
FISCAL YEAR 2023 | Performance and Accountability Report | 54

Federal Maritime Commission

NOTE 9. UNDELIVERED ORDERS AT THE END OF THE PERIOD

As of September 30, 2023, budgetary resources obligated for undelivered orders were as follows:

As of September 30, 2022, budgetary resources obligated for undelivered orders were as follows:

NOTE 10. EXPLANATION OF DIFFERENCES BETWEEN THE SBR AND THE BUDGET OF 

THE U.S. GOVERNMENT

The President’s Budget that will include fiscal year 2023 actual budgetary execution information has not 

yet been published. The President’s Budget is scheduled for publication in February 2024 and can be found 

at the OMB Web site: http://www.whitehouse.gov/omb/. The 2024 Budget of the United States Government, 

with the "Actual" column completed for 2022, has been reconciled to the Statement of Budgetary Resources 

and there were no material differences. 

In Millions

Federal Non-Federal Total

Unpaid Undelivered Orders $ 5,934,800 $ 5,781,944 $ 11,716,744

Total Undelivered Orders $ 5,934,800 $ 5,781,944 $ 11,716,744

Federal Non-Federal Total

Unpaid Undelivered Orders $ 1,503,986 $ 5,256,410 $ 6,760,396

Total Undelivered Orders $ 1,503,986 $ 5,256,410 $ 6,760,396

New Obligations

Budgetary & Upward Net

Resources Adjustments (Total) Outlays

Combined Statement of Budgetary Resources $ 36 $ 33 $ 29

Unobligated Balance Not Available (2)

Difference - Due to Rounding (1)

Budget of the U.S. Government $ 33 $ 33 $ 29
FISCAL YEAR 2023 | Performance and Accountability Report | 55

Federal Maritime Commission

NOTE 11. CUSTODIAL ACTIVITY

FMC is an administrative agency, collecting for another entity or the General Fund of the U.S. Treasury. 

As a collecting entity, FMC measures and reports cash collections and refunds. These collections are 

reported as custodial revenue on the Statement of Custodial Activity. The type of cash collected is for fines, 

penalties, and administrative fees. A small portion is for interest on the past due fines. Another component 

of the custodial revenue is general proprietary receipts (User Fees) for the application of licenses issued to 

qualified Ocean Transportation Intermediaries (OTI’s) in the U.S., FMC reviews petitions, status changes 

and special permission fees. FMC believes that all fines, penalties, administrative fees, and user fees will 

be collected in full. There are no material uncollectible accounts as of September 30, 2023 and 2022.

Custodial collections are reported on the Statement of Custodial Activity. The miscellaneous receipts are 

broken out in the general receipt funds as follows:

2023 2022

Fines, Penalties, and Forfeitures $ 2,896,852 $ 2,082,000

General Fund Proprietary Receipts (User fees) 425,994 253,715

Refunds of Proprietary Receipts (User fees) (250) (480)

Interest 98 -

Total Custodial Collections $ 3,322,694 $ 2,335,235
FISCAL YEAR 2023 | Performance and Accountability Report | 56

Federal Maritime Commission

NOTE 12. RECONCILIATION OF NET COST TO NET OUTLAYS 

The reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an accrual 

basis, provides an explanation of the relationship between budgetary and financial accounting information. 

Reconciliation of Net Cost Outlays as of September 30, 2023:

Reconciliation of Net Cost Outlays as of September 30, 2022:

 Intragovernmental 

 Other than 

Intragovernmental Total 

$ 9,404,323 $ 24,137,149 $ 33,541,472

Increase/(Decrease) in Assets:

Accounts Receivable, Net 9,638 (6,169) 3,469

(Increase)/Decrease in Liabilities:

Accounts Payable 30,817 172,313 203,130

Federal Employee [and Veteran] Benefits Payable - (100,785) (100,785)

Other Liabilities (76,863) (452,237) (529,100)

Financing Sources:

Imputed Cost (1,652,565) - (1,652,565)

$ (1,688,973) $ (386,878) $ (2,075,851)

Distributed Offsetting Receipts (SBR 4200) $ (426,141) $ - $ (426,141)

Custodial/Non-Exchange Revenue 3,318,450 (3,318,450) -

Non-Entity Activity 50 - 50

$ 2,892,359 $ (3,318,450) $ (426,091)

$ 10,607,709 $ 20,431,821 $ 31,039,530

Budgetary Agency Outlays, Net $ 31,039,530

Misc Items

Total Other Reconciling Items

Components of Net Cost Not Part of the Budgetary Outlays

Total Net Outlays (Calculated Total) 

Net Operating Cost (SNC)

Total Components of Net Operating Cost Not Part of the Budgetary Outlays

Components of the Budget Outlays That Are Not Part of Net Operating Cost

Budgetary Agency Outlays, Net (SBR 4210)

 Intragovernmental 

 Other than 

Intragovernmental Total 

$ 10,704,946 $ 19,597,875 $ 30,302,821

Increase/(Decrease) in Assets:

Accounts Receivable, Net - (1,600) (1,600)

(Increase)/Decrease in Liabilities:

Accounts Payable 1,202 377,243 378,445

Federal Employee [and Veteran] Benefits Payable - 3,200 3,200

Other Liabilities (35,973) (93,012) (128,985)

Financing Sources:

Imputed Cost (1,123,005) - (1,123,005)

$ (1,157,776) $ 285,831 $ (871,945)

Distributed Offsetting Receipts (SBR 4200) $ (253,715) $ - $ (253,715)

Custodial/Non-Exchange Revenue 2,332,813 (2,332,813) -

$ 2,079,098 $ (2,332,813) $ (253,715)

$ 11,626,268 $ 17,550,893 $ 29,177,161

Budgetary Agency Outlays, Net $ 29,177,161

Components of Net Cost Not Part of the Budgetary Outlays

Total Components of Net Operating Cost Not Part of the Budgetary Outlays

Components of the Budget Outlays That Are Not Part of Net Operating Cost

Budgetary Agency Outlays, Net (SBR 4210)

Misc Items

Total Other Reconciling Items

Total Net Outlays (Calculated Total) 
FMC FISCAL YEAR 2023 Performance and Accountability Report  57

FMC FISCAL YEAR 2019| e and Accountability Report| 57

OTHER REQUIRED INFORMATION
FISCAL YEAR 2023 | Performance and Accountability Report | 58

58

Inspector General’s Statement on Management and Performance 

Challenges FEDERAL MARITIME COMMISSION

Washington, DC 20573

October 16, 2023

Office of Inspector General

TO: Chairman Maffei

Commissioner Dye

Commissioner Sola

Commissioner Bentzel

Commissioner Vekich

FROM: Inspector General 

SUBJECT: Inspector General’s Statement on the Federal Maritime Commission’s Management 

and Performance Challenges

The Reports Consolidation Act of 2000 (Public Law 106-531) requires inspectors general to 

provide a summary and assessment of the most serious management and performance challenges 

facing Federal agencies, and their progress in addressing these challenges. The attached document 

responds to the requirements and provides the annual statement to be included in the Federal Maritime 

Commission’s (FMC) Performance and Accountability Report (PAR) for fiscal year (FY) 2023. 

This year, the Office of Inspector General (OIG) has identified two management and 

performance challenges, information technology (IT) security and organizational changes. This 

assessment is based on information derived from a combination of sources, including OIG evaluation 

work; Commission reports; Federal government reports; and a general knowledge of the 

Commission’s programs. 

The Reports Consolidation Act of 2000 permits agency comment on the inspector general’s 

statements. Agency comments, if applicable, are to be included in the final version of the FMC PAR 

that is due by November 15, 2023. 

/s/

Jon Hatfield

Attachment

Cc: Office of the Managing Director

Office of the General Counsel

Office of Information Technology

Office of Human Resources
FMC FISCAL YEAR 2023 Performance and Accountability Report  59

FMC FISCAL YEAR 2019| e and Accountability Report| 59

Office of Inspector General (OIG)

Fiscal Year 2023 Management Challenges

The Management Challenge - Information Technology (IT) Security

Government-wide, the Government Accountability Office (GAO) has designated 

information security as a high-risk area since 1997. In 2003, GAO expanded this area to include 

computerized systems supporting the nation’s critical infrastructure and, in 2015, GAO further 

expanded this area to include protecting the privacy of personally identifiable information. A 2021 

GAO report3 recognized that IT systems supporting Federal agencies and our nation’s critical 

infrastructures are inherently at risk. These systems are highly complex and dynamic, 

technologically diverse, and often geographically dispersed. This complexity increases the 

difficulty in identifying, managing, and protecting the numerous operating systems, applications, 

and devices comprising the systems and networks. Compounding the risk, systems and networks 

used by Federal agencies and our nation’s critical infrastructure are also often interconnected with 

other internal and external systems and networks, including the internet.

The 2021 GAO report recognizes with this greater connectivity, threat actors are 

increasingly willing and capable of conducting a cyberattack on the Federal government’s critical 

infrastructure that could be disruptive and destructive. Common cyber adversaries include 

criminal groups, hackers, insiders, nations, and terrorists. More specifically, hackers break into 

networks sometimes for the challenge, and insiders are individuals (e.g., employees, contractors, 

or vendors) with authorized access to an information system or enterprise who have the potential 

to cause harm, wittingly or unwittingly, through destruction, disclosure, modification of date, or 

through denial of service. 

Further, GAO reported that to facilitate their efforts, cyber adversaries use a variety of 

tactics and techniques, often beginning by performing reconnaissance (e.g., scanning for 

vulnerabilities in target hosts or applications) and establishing resources that can be used to support 

their operations (e.g., develop malicious software). Attackers will seek to gain initial access to a 

target network using methods such as targeted spear phishing emails or exploiting weaknesses on 

public-facing webservers. After gaining an initial foothold, attackers will often use a variety of 

tactics and techniques to achieve their objectives, such as trying to run malicious code, attempting 

to steal account names and passwords, and gain higher-level permissions, and moving throughout 

a network to find and gain access to their target.

Agency Progress in Addressing the Challenge

The Federal Information Security Modernization Act (FISMA) requires an agency’s 

inspector general (IG), or an independent external auditor, to conduct an annual independent 

evaluation to determine the effectiveness of the agency’s information security program and 

3 GAO, HIGH-RISK SERIES: Federal Government Needs to Urgently Pursue Critical Actions to Address Major Cybersecurity 

Challenges, GAO-21-288 (Washington, D.C.: March 2021). 
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practices. Each year, these independent assessments are based on metrics (IG FISMA Metrics) 

developed by the Council of the Inspectors General on Integrity and Efficiency (CIGIE) in 

coordination with the Office of Management and Budget (OMB), the Department of Homeland 

Security (DHS), the Federal Chief Information Officers (CIO) Council, and other stakeholders. 

In the OIG’s Audit of the FMC’s Compliance with the Federal Information Security 

Modernization Act (FISMA) FY 2023, the OIG found the FMC resolved one of the prior year’s 

FISMA audit recommendations and made progress towards implementing the other audit 

recommendation. In addition, the FY 2023 audit included three new audit recommendations for 

weaknesses that existed during FY 2023. Specifically, the FMC experienced a security incident 

on January 11, 2023, however this incident was not reported to the United States Computer 

Emergency Readiness Team (US-CERT) until March 29, 2023. As a result, the OIG recommended 

all security incidents should be reported to the US-CERT within one hour of an incident being 

discovered. In addition, the OIG audit found the FMC does not currently have an approved Log 

Retention Policy specifying records of the events occurring within the FMC systems and networks 

and the duration those logs will be retained. OIG recommended the FMC develop, document, and 

approve a Log Retention Policy. Lastly, the OIG recommended the agency revise the agency’s 

risk assessment policy. FMC management agreed with all three of the OIG’s recommendations.

In addition to the FY 2023 FISMA audit, the OIG also conducted an information 

technology vulnerability audit (ITVA) in FY 2023. The objectives of this audit were to evaluate 

the FMC external and internal network segments, systems, and applications to assess the FMC’s 

IT vulnerability assessment program and identify critical security IT weaknesses. The scope of 

the ITVA included multiple FMC network targets within the external and internal network 

environments. 

The ITVA audit testing team simulated an outside attacker, gathered publicly available 

information about the target environment, and attempted to gain unauthorized access to FMC 

systems within the scope of testing. The simulated external attack scenario did not lead to 

unauthorized access within the testing timeframe. The audit did identify multiple vulnerabilities 

in FMC IT systems and applications. Eight recommendations were provided to FMC management 

to address four findings. The findings involved: insufficient software management; default 

authentication credentials are utilized; insufficient configuration management; and flaws in 

custom-developed application functionality. FMC management agreed with all four audit 

findings. 

The OIG has increased oversight of IT security due to the ongoing management challenge 

and security incidents at the FMC. Over the last several years and continuing in FY 2023, the OIG 

has found the FMC to be focused on maintaining an effective IT security program. However, 

outdated technology at the FMC increases cybersecurity risks. Therefore, there is an even greater 

importance on effective IT strategic planning to ensure that investments are cost-beneficial and 

meet mission needs and that the most appropriate development or acquisition approach is chosen. 

The FMC’s most recent IT strategic plan is dated December 2018 for FYs 2018 through 2022. 

The Office of Information Technology is working on a new IT strategic plan to be finalized by the 

agency. 
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The Management Challenge – Organizational Changes

Over the last several years, the relatively small FMC agency has experienced significant 

organizational changes that continue to be a challenge. These changes include the high turnover 

in senior and staff positions, and the coronavirus pandemic (Covid-19), during a time the agency 

is responsible for the implementation of the Ocean Shipping Reform Act of 2022 (OSRA). 

Although the public health emergency related to the Covid-19 pandemic officially ended in May 

2023, the impact and changes to the FMC workplace have been substantial at a time when the 

agency is responsible for implementation of significant legislation. 

On June 16, 2022, President Joseph R. Biden Jr. signed into law the Ocean Shipping 

Reform Act of 2022 (OSRA), enacted as Public Law 116-146. The FMC is charged with ensuring 

a competitive and reliable international ocean transportation supply system that supports the U.S. 

economy and protects the public from unfair and deceptive practices. The OSRA intends to level 

the playing field for American exporters and importers by providing the FMC the tools it needs 

for effective oversight of international ocean carriers. These oversight and enforcement tools will 

help the FMC eliminate unfair charges, prevent unreasonable denial of American exports, and 

crack down on other unfair practices harming American businesses and consumers. In a prior 

year, the Inspector General (IG) identified the implementation of OSRA as one of the management 

and performance challenges facing the FMC because of the importance and magnitude of the 

legislation’s requirements. The number of new requirements, timeframes, and resources required 

are substantial, and are in addition to the agency’s existing mission requirements. 

The most important requirement for successful implementation and execution of OSRA is 

to ensure the agency has the necessary staff resources. A prior year’s IG report identified high 

turnover in senior positions as one of the management challenges facing the agency and this 

continues to be a challenge. In the last five years, as of October 2023, except for two, all FMC 

offices/bureaus experienced turnover in the most senior position. The high turnover in senior 

positions is particularly challenging for a small organization like the FMC because bureaus and 

offices lack multiple management layers to draw upon when senior leadership turnover occurs. 

The turnover of many talented and very experienced senior leaders has resulted in the loss of 

institutional knowledge and expertise that required many years to develop. In addition to the high 

turnover, another significant organizational change that has occurred recently is the agency’s 

transition to a hybrid work environment. The number of eligible staff teleworking three or more 

days in a 2-week period was approximately ten (10) percent in FY 2019, and increased to 

approximately 64 percent in FY 2022. The hybrid environment, a mix of in-office, telework, and 

remote work, is challenging at a time when the agency is experiencing a substantial change in 

staffing and mission. 

Agency Progress in Addressing the Challenge

The agency was authorized to have 164 employees for FY 2023. However, at the end of 

FY 2023, the agency had 129 staff on board, a shortcoming of 35 employees authorized. While 

the Office of Human Resources (OHR) was successful onboarding 28 new hires during FY 2023, 

19 employees separated from the agency during the same time. Although OHR reported no 

difficulty in FY 2023 for the recruitment of specific job series or positions (i.e., economists, 

attorneys, etc.), OHR did cite some challenges with hiring, to include some instances with the 
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quality of candidates requiring reannouncements, low number of applicants, and selected 

applicants declining the position. An important development is the decision for the OHR to hire 

an additional staffing specialist to assist on the recruitment and onboarding staffing goals of the 

agency. 

The agency has reported that substantial progress had been made in implementing many of 

the requirements established by OSRA. The Commission’s actions taken to comply with 

requirements established by the enacted legislation are updated and catalogued on the FMC’s 

website. Commissioners were briefed on September 21, 2023, by agency management and staff 

that substantive progress is being made in completing three of the rulemakings mandated by 

OSRA. In addition, the agency is working to establish a webpage on the Commission’s website 

where the public can easily submit comments, complaints, concerns, reports of non-compliance, 

requests for investigations, and requests for alternative dispute resolution services.

Comments on Inspector General’s Statement

The Commission appreciates the Inspector General’s assessment of the serious management 

and performance challenges facing the Commission and the Federal government in general. The 

OIG’s findings and recommendations in both the annual FISMA audit and the Information 

Technology Vulnerability Audit performed in FY 2023 will assist the Commission in

strengthening its IT security controls, maintaining an effective IT security program, and 

protecting its valuable resources. The Commission continued its efforts during FY 2023 to add 

appropriate resources and staff to meet its mission and the challenges of implementing the 

Ocean Shipping Reform Act of 2022. 
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Financial Statement Audit Summary

Table 1 is a summary of the results of the independent audit of the FMC’s financial statements 

by the agency’s auditors in connection with the FY 2023 audit.

Management Assurances Summary

Table 2 is a summary of management assurances related to the effectiveness of internal control 

over the FMC’s financial reporting and operations and its conformance with financial 

management system requirements under Sections 2 and 4, respectively, of the Federal 

Financial Management Improvement Act (FFMIA). This table also summarizes compliance with 

the FFMIA, which is not applicable to the Commission.

Table 1. Summary of Financial Statement Audit

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning balance New Resolved Consolidated Ending Balance

None n/a n/a n/a n/a n/a

Total Material Weaknesses None None n/a n/a None

Table 2. Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

Total Material Weaknesses None n/a n/a n/a n/a None

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

[name of weakness] None n/a n/a n/a n/a None

Total Material Weaknesses None n/a n/a n/a n/a None

Compliance with Federal Financial Management System Requirements (FMFIA § 4)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

[name of noncompliance] None n/a n/a n/a n/a None

Total noncompliance None n/a n/a n/a n/a None

Compliance with Section 803(a) of the Federal Financial Management Improvement Act (FFMIA)

Agency Auditor

1. Federal Financial Management System Requirements FFMIA does not apply to the FMC n/a

2. Applicable Federal Accounting Standards FFMIA does not apply to the FMC n/a

3. USSGL at Transaction Level FFMIA does not apply to the FMC n/a
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Improper Payments Information Act

The FMC reports its compliance with the Payment Integrity Information Act of 2019 through 

OMB’s annual data call on payment integrity. The FMC’s information is provided at 

www.paymentaccuracy.gov.

Fraud Reduction Report

The FMC has a low appetite for fraud. The FMC complies with the Fraud Risk and Data Analytics 

Act of 2015 and follows the Standards for Internal Control in the Government through its 

enterprise risk management program and financial accounting practices. The FMC’s Risk 

Committee, tasked with managing risk enterprise-wide, considers fraud risks on a regular basis.

Financial stewardship is an important part of the FMC’s risk management strategy. Internal 

controls and financial and accounting data are subject to multiple levels of monthly or annual 

review performed internally by the FMC and externally by the BFS. The most recent OIG risk 

assessment of the purchase card program, completed in 2022, considered several factors, 

including: effectiveness of internal controls; training requirements; policies and procedures; any 

prior problems with the program; and previous audits and reviews. The OIG concluded the risk 

of illegal, improper, or erroneous use in the FMC’s purchase card program is “low,” and as a 

result, the OIG anticipates performing another risk assessment of the purchase card program in 

2024.

The Commission has financial and administrative controls in place, including an internal 

controls policy that provides management and internal control processes for identifying and 

addressing major performance and management challenges and areas at greatest risk of fraud, 

waste, abuse, and mismanagement. In 2019, the FMC’s OIG, with the assistance of independent 

financial auditors, completed a review of the Commission’s administrative control of funds. The 

Management Letter on Administrative Control of Funds, A-20-02a, determined that the 

Commission has an internal control system in place for its funds control and recommended 

additional opportunities to further strengthen the agency’s controls. The Commission’s 

administrative control of funds policy is currently being updated in preparation for submission

to the Office of Management and Budget for review.

The Commission’s acquisitions policy protects the integrity of the contracting process and 

includes ethical requirements and standards of conduct in accordance with the Procurement 

Integrity Act and Federal Acquisition Regulations.

The FMC does not oversee or have responsibility for any credit, grant, or loan programs. No 

new programs were initiated in FY 2023, and no current programs are at high risk for fraud, 

abuse, or exposure to waste.

Civil Monetary Penalty Adjustment for Inflation

The Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 104-410, as amended by the 

Debt Collection Improvement Act of 1996, Pub. L. 104-134, and the Federal Civil Penalties 
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Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74, requires agencies to make 

regular and consistent inflationary adjustments of civil monetary penalties to maintain their 

deterrent effect. 

The following table shows the civil penalties that the FMC may impose, authority for imposing 

the penalty, dates of inflation adjustments, and current penalty levels. The Federal Register 

notice (88 FR 1517) may be viewed at: Federal Register: Inflation Adjustment of Civil Monetary 

Penalties

Penalty Statutory 

Authority

Date of Previous 

Adjustment

Date of Current 

Adjustment

Maximum 

Penalty

Adverse impact on U.S. carriers by foreign 

shipping practices 46 U.S.C. 42304 January 15, 2022 January 15, 2023 $2,479,282 

Knowing and Willful violation / Shipping 

Act of 1984, or Commission regulation or 

order

46 U.S.C. 41107(a) January 15, 2022 January 15, 2023 $70,752 

Violation of Shipping Act of 1984, 

Commission regulation or order, not 

knowing and willful

46 U.S.C. 41107(b) January 15, 2022 January 15, 2023 $14,149 

Operating in foreign commerce after tariff 

suspension 46 U.S.C. 41108(b) January 15, 2022 January 15, 2023 $141,506 

Failure to provide required reports, etc. / 

Merchant Marine Act of 1920 46 U.S.C. 42104 January 15, 2022 January 15, 2023 $11,161 

Adverse shipping conditions / Merchant 

Marine Act of 1920 46 U.S.C. 42106 January 15, 2022 January 15, 2023 $2,232,281 

Operating after tariff or service contract 

suspension / Merchant Marine Act of 1920 46 U.S.C. 42108 January 15, 2022 January 15, 2023 $111,614 

Failure to establish financial responsibility 

for non-performance of transportation* 46 U.S.C. 44102 January 15, 2022 January 15, 2023 $28,194$941

Failure to establish financial responsibility 

for death or injury* 46 U.S.C. 44103 January 15, 2022 January 15, 2023 $28,194$941

Program Fraud Civil Remedies Act / makes 

false claim

31 U.S.C. 

3802(a)(1) January 15, 2022 January 15, 2023 $13,508 

Program Fraud Civil Remedies Act / giving 

false statement

31 U.S.C. 

3802(a)(2) January 15, 2022 January 15, 2023 $13,508 

*These amounts are based on the penalties established in § 44104 for violations of §§ 44102 and 44103: $5,000, 

plus $200 for each passage sold. These penalties were established in 1966 and, applying the statutory inflation 

adjustment formula, amount to $28,194, plus $941 for each passage sold, in current dollars. 

Biennial Review of User Fees

Agencies are required by the Chief Financial Officers Act of 1990 to conduct biennial reviews of 

fees and other charges that they impose and to revise these fees and charges to cover program 

and administrative costs incurred, as necessary. The Commission last updated its user fees in a 

direct final rule effective January 15, 2023. User fee rates will next be examined in calendar 

year 2024. 
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