Office of Inspector General 

Semiannual Report to Congress 

Covering the Period 

October 1, 2021 – March 31, 2022 

FEDERAL MARITIME COMMISSION 
Office of Inspector General

FEDERAL MARITIME COMMISSION

Washington, DC 20573

April 29, 2022 

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

The following report is submitted in accordance with Section 5 of the Inspector General 

Act of 1978, as amended. This report summarizes the activities of the Federal Maritime 

Commission (FMC) Office of Inspector General (OIG) for the period October 1, 2021 to March

31, 2022. 

During this reporting period, the OIG completed three audits and initiated an audit survey of 

the FMC’s Area Representatives’ Complaint Process. Two hotline complaints were closed during the 

period, and the FMC OIG received a pass rating on its external audit peer review. Additional details 

on these assignments can be found in the enclosed report. 

The OIG continues to appreciate the cooperation and commitment to integrity and ethical 

values demonstrated by FMC’s leadership and staff.

 Respectfully submitted,

 Jon Hatfield 

 Inspector General

Enclosure 
Table of Contents

Transmittal Letter

EXECUTIVE SUMMARY............................................................................................................................ 1

FEDERAL MARITIME COMMISSION ......................................................................................................... 1

OFFICE OF INSPECTOR GENERAL ............................................................................................................. 2

OFFICE OF INSPECTOR GENERAL ACTIVITIES ............................................................................................ 3

Completed Audits ..................................................................................................................................................... 3

Other Oversight Work In-Progress .......................................................................................................................... 5

Hotline and Investigations........................................................................................................................................ 5

Counsel to the Inspector General ............................................................................................................................. 6

Review of Legislation ................................................................................................................................................ 6

Council of the Inspectors General on Integrity and Efficiency (CIGIE) Activities ...................................................... 6

SUMMARY OF INSPECTOR GENERAL REPORTING REQUIREMENTS ........................................................... 8

TABLE I - Summary of Reports with Corrective Actions Outstanding for More than 6 Months ................. 9

TABLE II - Listing of Reports Issued ......................................................................................................10

TABLE III - Reports with Questioned Costs...........................................................................................11

TABLE IV - Recommendations that Funds be Put to Better Use............................................................. 12

Appendix A - Peer Review Activity.......................................................................................................13

Pier Container Terminals, the Port of Los Angeles, San Pedro, California

Picture source: The Port of Los Angeles
EXECUTIVE SUMMARY

This semiannual report summarizes the activities and accomplishments of the Federal 

Maritime Commission (FMC), Office of Inspector General (OIG) for the six-month reporting 

period October 1, 2021 through March 31, 2022. 

During this reporting period, the OIG completed three audits: an audit of the Digital 

Accountability and Transparency Act of 2014 (DATA Act) (A22-01); an audit of the FMC’s 

compliance with the Federal Information Security Modernization Act, fiscal year (FY) 2021 (A22-

02); and the FY 2021 Annual Financial Statement Audit (A22-03). The OIG also initiated an audit 

survey of the FMC’s Area Representatives’ Complaint Process. These audits and other oversight 

work are discussed in more detail later in this report. 

One new hotline complaint was received during this reporting period and two hotline 

complaints were closed. Three hotline complaints remained open at the end of this reporting 

period. There were no open investigations or matters referred to prosecutorial authorities during 

this period. 

An external peer review of the FMC OIG audit office was completed during the period by 

the Corporation for Public Broadcasting OIG and a pass rating was issued and there were no 

recommendations for improvement. Please see appendix A for additional information. 

FEDERAL MARITIME COMMISSION

The FMC is an independent Federal agency responsible for ensuring a competitive and 

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

from unfair and deceptive practices. The agency regulates the international ocean transportation 

supply system (vessel liner carriers, ocean transportation intermediaries, and marine terminal 

operators). 

The FMC is composed of five Commissioners nominated by the President and confirmed 

by the Senate, each serving a staggered five-year term. The Commission is a bipartisan body; 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 

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Administrative Officer of the Commission. The Inspector General reports to all five 

Commissioners.

Although most of the FMC’s personnel are located in Washington, D.C., the FMC also 

maintains a presence in Los Angeles, Seattle, New York, New Orleans, Houston, and South Florida 

through Area Representatives. These Area Representatives serve the major ports and 

transportation centers within their respective geographic areas, and provide information, liaison,

and investigatory services on behalf of the FMC. 

OFFICE OF INSPECTOR GENERAL

The OIG was established in 1989 by the Inspector General (IG) Act of 1978, as amended 

(5 U.S.C. app.). The OIG is an independent audit and investigative unit headed by an IG who 

reports to the FMC Commissioners and Congress. The OIG is responsible for conducting audits 

and investigations relating to the programs and operations of the FMC. Audits are conducted for 

the purpose of detecting and preventing fraud, waste, and abuse, and promoting economy, 

efficiency, and effectiveness within the agency. The OIG investigations seek out facts related to 

allegations of wrongdoing on the part of FMC employees and individuals, or entities contracting 

with, or obtaining benefits from, the agency. The IG Act provides that the OIG shall have access 

to all agency records and may subpoena records from entities outside of the agency in connection 

with an audit or investigation. 

The IG is required by law to prepare this report summarizing OIG audits and investigations 

during the immediately preceding six-month period. The report is sent to the FMC 

Commissioners, the President of the Senate, the Speaker of the House and FMC’s Congressional 

appropriating and authorizing committees. This dual reporting requirement helps to ensure the 

independence of the OIG. 

To aid the FMC in accomplishing its mission, the OIG is provided two full-time positions, 

the IG and an auditor. In addition, the OIG has a memorandum of understanding (MOU) with the 

Treasury Inspector General for Tax Administration for the FMC OIG to obtain legal services to 

carry out its responsibilities under the Inspector General Act. During this period, the FMC OIG 

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established a MOU with the Appalachian Regional Commission OIG to obtain investigative 

services, as needed. 

OFFICE OF INSPECTOR GENERAL ACTIVITIES

Completed Audits

DATA Act Audit, 2021, A22-01. The Digital Accountability and Transparency Act of 2014 

(DATA Act) is a law that aims to make information on Federal spending more easily accessible 

and transparent. The DATA Act, in part, requires Federal agencies to report financial and award 

data in accordance with the established Government-wide financial data standards. Additionally, 

in May 2017, the U.S. Department of the Treasury began displaying Federal agencies’ spending 

data on USAspending.gov, a publicly available resource for taxpayers and policy makers. 

The DATA Act also requires the IG of each Federal agency to audit a statistically valid 

sample of the spending data submitted by its Federal agency and to submit to Congress a publicly 

available report assessing the completeness, accuracy, timeliness, and quality of the data sampled. 

During this semiannual reporting period, the OIG completed the third of the three required DATA 

Act audits. 

The OIG audited 35 unique procurement transactions to be reported on USAspending.gov 

for the fourth quarter of fiscal year (FY) 2020. These transactions were tested for completeness, 

accuracy, and timeliness. Based on the results of our audit testing of procurement transactions, 

FMC scored 97.80 points, which is a quality rating of Excellent. The OIG also reviewed the 

FMC’s implementation of the three recommendations from the 2019 DATA Act audit. The OIG 

determined that the FMC implemented corrective action for one of the three recommendations and 

considers it closed. The OIG audit determined that the FMC did not fully implement two of the 

three recommendations. FMC management reported in April 2022 that the two recommendations 

have been implemented. 

Audit of FMC’s Compliance with the Federal Information Security Modernization Act 

(FISMA) FY 2021, A21-02. The audit report was issued on October 28, 2021. The OIG 

contracted with Dembo Jones, P.C. to perform the audit and the OIG actively monitored and 
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reviewed the work and results of the contractor. The objectives of this independent audit of the 

FMC’s information security program were to evaluate its security posture by assessing compliance 

with the FISMA and related information security policies, procedures, standards, and guidelines. 

The scope of the testing focused on the FMC General Support Systems (GSS) and major 

applications. Audit testing included inquiry of FMC personnel, observation of activities, inspection 

of relevant documentation, and the performance of technical security testing. More specifically, 

testing covered a sample of controls as listed in National Institute of Standards and Technology’s 

(NIST) 800-53, Recommended Security Controls for Federal Information Systems and 

Organizations, Revision 4. The results of the OIG’s FISMA audit found the FMC resolved one of 

the prior year audit recommendations and made progress towards implementing the other audit 

recommendation. In addition, the audit included one new audit recommendation for a weakness 

that existed during FY 2021. FMC management reported the weakness had been addressed as of 

October 27, 2021. 

Independent Auditors’ Report of the FMC’s FY 2021 Financial Statements, A22-03. 

The audit report was issued on November 15, 2021. The OIG contracted with Dembo Jones, P.C. 

to perform the audit and the OIG actively monitored and reviewed the work and results of the 

contractor. The audit objectives were to opine on whether the FMC’s FY 2021 financial statements 

followed U.S. Generally Accepted Accounting Principles (GAAP) and presented fairly the 

financial position of the agency. The auditors also reviewed internal controls over financial 

reporting and agency compliance with laws and regulations. The statements audited were the 

balance sheet as of September 30, 2021, and the related statements of net cost, changes in net 

position, budgetary resources and custodial activity for the year then ended. 

The independent auditor opined that the FMC’s financial statements were fairly presented, 

in all material respects, in conformity with GAAP; there were no material weaknesses in internal 

control over financial reporting (including safeguarding assets); and no reportable noncompliance 

with laws and regulations tested. Therefore, there were no findings or recommendations in the 

audit report. 
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Other Oversight Work In-Progress 

Audit Survey of the Area Representatives’ Complaint Process. The objective of the OIG 

complaint process audit survey is an educational process that will involve gathering information, 

without detailed verification, to identify potential improvements to the agency’s Area 

Representatives’ process of handling complaints and decide whether a more detailed OIG audit 

would be beneficial. The audit survey will serve to obtain information on the FMC’s process of 

receiving, handling, and disposition of complaints. As part of this survey, the OIG will hold 

discussions with agency management and staff involved in the Area Representatives’ complaint 

process and review relevant documents. 

Improper Payments Compliance Report for Fiscal Year 2021. The OIG initiated the 

annual review of the FMC’s compliance with reporting and performance requirements regarding 

improper payments required by the Payment Integrity Information Act of 2019 (PIIA) (Public Law 

116-117). PIIA sets forth improper payment reporting requirements, including an annual 

compliance report by inspectors general. This review will be completed by June 2022. 

Hotline and Investigations

The Inspector General Act of 1978, as amended, provides that the IG may receive and 

investigate complaints or information concerning possible allegations of fraud, waste, and abuse 

occurring within FMC programs and operations by employees or contractors. Matters of possible 

wrongdoing are referred to the OIG in the form of allegations or complaints from a variety of 

sources, including FMC employees, other government agencies and the general public. 

One new hotline complaint was received during this reporting period and two hotline 

complaints were closed. Three hotline complaints remained open at the end of this reporting 

period. There were no open investigations or matters referred to prosecutorial authorities during 

this period. 

During this period, the FMC OIG established a memorandum of understanding (MOU)

with the Appalachian Regional Commission OIG for investigative services. The MOU is effective 
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through the end of fiscal year 2022 and will provide the FMC OIG with investigative services, as 

needed. 

Counsel to the Inspector General

In accordance with Section 6 of the Inspector General Reform Act of 2008, each Inspector 

General shall have his or her own legal counsel, or obtain the services of a counsel appointed by 

and directly reporting to another Inspector General or the Council of the Inspectors General on 

Integrity and Efficiency (CIGIE) on a reimbursable basis. The OIG has a memorandum of 

understanding (MOU) with the Treasury Inspector General for Tax Administration for the FMC 

OIG to obtain legal services to carry out its responsibilities under the Inspector General Act.

Review of Legislation

As required by the Inspector General Act of 1978, as amended, the OIG reviews proposed 

legislation and regulations. The purpose of these reviews is to assess whether the proposed 

legislation or regulation: (1) impacts the economy and efficiency of FMC programs and 

operations; and (2) contains adequate internal controls to prevent and detect fraud, waste, and 

abuse. 

Council of the Inspectors General on Integrity and Efficiency (CIGIE) Activities

The CIGIE was established by law as an independent entity by the Inspector General 

Reform Act of 2008 (P.L. 110-409) to: 

• address integrity, economy and effectiveness issues that transcend individual government 

agencies; and 

• increase the professionalism and effectiveness of personnel by developing policies, 

standards, and approaches to aid in the establishment of a well-trained and highly skilled 

workforce in the Office of Inspectors General. 

The CIGIE is comprised of all inspectors general that are Presidentially-appointed / Senate 

confirmed and those that are appointed by agency heads. The FMC OIG remains active in CIGIE 

operations. Specifically, the Inspector General (IG) is a member of CIGIE and the CIGIE Audit 
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Committee, and the OIG participates in the monthly CIGIE meetings, and periodically assists 

CIGIE on special projects. 

During this reporting period, the IG continued to serve as the Chair of the CIGIE Audit 

Peer Review Subcommittee. To help auditors fulfill their oversight roles and comply with 

statutory requirements, professional standards, and established policies and procedures, a peer 

review of an OIG audit organization is required by generally accepted government auditing 

standards (GAGAS) and the Council of the Inspectors General on Integrity and Efficiency 

(CIGIE). The subcommittee is responsible for maintaining the CIGIE audit peer review schedule, 

managing requests for extensions and substitutions, coordinating amongst dispute resolution 

panels, as well as answering questions about conducting audit peer reviews. The subcommittee is 

composed of dedicated volunteers from the CIGIE oversight community. Parker Skaats, the OIG’s 

Auditor, is one of these dedicated volunteers and he serves on the subcommittee’s frequently asked 

questions workgroup. 
SUMMARY OF INSPECTOR GENERAL REPORTING REQUIREMENTS

IG Act Reference Reporting Requirement Pages 

Section 5(a)(1) Significant problems, abuses and deficiencies None

Section 5(a)(2) Recommendations with respect to significant problems, 

abuses, or deficiencies

None

Section 5(a)(3) Prior significant recommendations on which corrective 

actions have not been completed

None

Section 5(a)(4) Matters referred to prosecutorial authorities and results None

Section 5(a)(5) Summary of instances where information was refused None

Section 5(a)(6) List of audit, inspection, and evaluation reports by subject 

matter, and where applicable, the value of questioned costs, 

unsupported costs, and funds put to better use

10

Section 5(a)(7) Summary of each report 3-4

Section 5(a)(8) Audit, inspection, and evaluation reports with questioned 

and unsupported costs

None

Section 5(a)(9) Audit, inspection, and evaluation report recommendations 

that funds be put to better use

None

Section 5(a)(10) Summary of each audit, inspection, and evaluation report

issued before the commencement of this reporting period for 

which no management decision was made by the end of the 

reporting period; for which comments were not returned 

within 60 days of report issuance; and for which there are 

any outstanding unimplemented recommendations

None

Section 5(a)(11) Description and explanation of significant revised 

management decisions

None

Section 5(a)(12) Significant management decisions with which the inspector 

general disagrees

None

Section 5(a)(13) Information under Section 804(b) of the Federal Financial 

Management Improvement Act (FFMIA) of 1996

None

Section 5(a)(14)(15) Peer review activity on FMC OIG 13, App. A

Section 5(a)(16) Peer review activity by FMC OIG on another OIG 13, App. A

Section 5(a)(17) Statistical tables on investigative activities None

Section 5(a)(18) Description of metrics used for developing the data for the 

statistical table under Section 5(a)(17)

None

Section 5(a)(19) Report on each investigation involving a senior Government 

employee where allegations of misconduct were 

substantiated

None

Section 5(a)(20) Description of whistleblower retaliation None

Section 5(a)(21) Description of any attempt by the establishment to interfere 

with the independence of the OIG

None

Section 5(a)(22) Description of particular circumstances of each inspection, 

evaluation, and audit conducted that is closed and was not 

disclosed to the public; and investigation conducted by the 

OIG involving a senior Government employee that is closed 

and was not disclosed to the public

None

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TABLE I - Summary of Reports with Corrective Actions Outstanding for More 

than 6 Months

Recommendations

Report Title Report 

Number

Issue 

Date Number Open Closed

DATA Act Audit, 2019 A20-01 11/7/19 3 2 * 1 

*In a memorandum dated April 26, 2022, the Managing Director informed the IG that the 

agency has corrected the recommendations. The OIG plans to review the effectiveness of 

the new policies and procedures implemented by the agency by the end of fiscal year 2022.

Audit of the FMC’s Compliance 

with the Federal Information 

Security Modernization Act 

(FISMA), FY 2020

A21-02 10/30/20 2 1* 1 

*In a memorandum dated April 26, 2022, the Managing Director informed the IG that the 

agency has corrected one of the two recommendations and made progress on implementing 

the one open recommendation. The OIG plans to review the effectiveness of the new 

policies and procedures implemented by the agency by the end of fiscal year 2022. 
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TABLE II - Listing of Reports Issued

Report Title Assignment 

Number

Issue 

Date 

Questioned 

Costs

Unsupported 

Costs

Funds 

Put to 

Better 

Use

DATA Act Audit, 2021 A22-01 11/05/21 $0 $0 $0

Audit of FMC’s 

Compliance with the 

Federal Information 

Security Modernization 

Act (FISMA) FY 2021 

A22-02 10/29/21 $0 $0 $0

Independent Auditors’ 

Report of the FMC’s FY 

2021 Financial 

Statements

A22-03 11/15/21 $0 $0 $0
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TABLE III - Reports with Questioned Costs

Number

of 

Reports

Questioned 

Costs

Unsupported 

Costs

A. For which no management decision has been 

made by the commencement of the reporting 

period. 

0 $0 $0

B. Which were issued during the reporting period. 0 $0 $0

Subtotal (A + B) 0 $0 $0

C. For which a management decision was made 

during the reporting period. 

0 $0 $0

(i) dollar value of disallowed costs; and 0 $0 $0

(ii) dollar value of costs not disallowed. 0 $0 $0

D. For which no management decision has been 

made by the end of the reporting period. 

0 $0 $0

E. Reports for which no management decision 

was made within six months of issuance. 

0 $0 $0
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TABLE IV - Recommendations that Funds be Put to Better Use

Number

of 

Reports Dollar Value

A. For which no management decision has been made 

by the commencement of the reporting period. 0 $0 

B. Which were issued during the reporting period. 0 $0

Subtotal (A + B) 0 $0

C. For which a management decision was made during 

the reporting period. 0 $0 

(i) dollar value of recommendations that were 

agreed to by management; and

0 $0

(ii) dollar value of recommendations that were not 

agreed to by management. 

0 $0

D. For which no management decision has been made 

by the end of the reporting period. 0 $0 

E. Reports for which no management decision was 

made within six months of issuance. 0 $0 
Appendix A - Peer Review Activity

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 

2010 (Section 989C of P.L. 111-203), which amended Section 5 of the Inspector General Act of 

1978, OIGs are required to include in their semiannual reports (SAR) to Congress the results of 

peer reviews of their offices, as well as outstanding and not fully implemented recommendations 

from peer reviews the OIG received from another OIG, and outstanding and not fully implemented 

recommendations the OIG made in any peer review it performed for another OIG.

An external audit peer review of the FMC OIG audit office was completed on March 23, 

2022, by the Corporation for Public Broadcasting OIG. A pass rating was issued and there were 

no recommendations contained in the system review report. 

In addition, the OIG completed an audit peer review of the Architect of the Capitol OIG 

during the prior reporting period and issued the peer review report on September 1, 2021. The

FMC OIG issued a pass rating and there were no recommendations contained in the system review 

report.

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HOTLINE COMPLAINTS

The success of the OIG mission to prevent fraud, waste and abuse 

depends on the cooperation of FMC employees and the public. 

Employees and the public are encouraged to contact the OIG regarding 

any incidents of possible waste, fraud or abuse occurring within FMC 

programs and operations.

A COMPLAINT CAN BE REPORTED BY CALLING OUR 24-HR DIRECT LINE:

(202) 523-5865

ONLINE COMPLAINT FORM:

https://www2.fmc.gov/oigcomplaints/

TO PLACE A COMPLAINT IN WRITING PLEASE MAIL TO:

Federal Maritime Commission

Office of Inspector General

Suite 1054

800 North Capitol Street, NW

Washington, DC 20573

To Be Opened By the IG Only

THE INFORMATION YOU PROVIDE IS CONFIDENTIAL. YOU CAN CHOOSE TO REMAIN 

ANONYMOUS; HOWEVER, INDIVIDUALS ARE ENCOURAGED TO ASSIST THE INSPECTOR 

GENERAL BY SUPPLYING INFORMATION AS TO HOW THEY MAY BE CONTACTED FOR 

ADDITIONAL INFORMATION.