Office of Inspector General 

Semiannual Report to Congress 

Covering the Period 

 

October 1, 2023 – March 31, 2024 

FEDERAL MARITIME COMMISSION 
FEDERAL MARITIME COMMISSION

Washington, DC 20573

April 30, 2024 

Office of Inspector General

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, 2023 to March

31, 2024. 

During this reporting period, the OIG completed one audit and two reviews, and initiated 

two new reviews. 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 

CC: Lucille L. Marvin, Managing Director 

Phillip Christopher Hughey, General Counsel 

Kathie L. Keys, Special Assistant to the Managing Director 
TABLE OF CONTENTS

Transmittal Letter

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

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

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

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

Completed Assignments ...................................................................................................................................... 3

Open Assignments ............................................................................................................................................... 4

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

Review of Legislation ........................................................................................................................................... 5

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

SUMMARY OF INSPECTOR GENERAL REPORTING REQUIREMENTS....................................................... 7

TABLE I - Summary of Reports with Corrective Actions Outstanding for More than 6 Months............. 8

TABLE II - Listing of Reports Issued.................................................................................................... 9

TABLE III - Reports with Questioned Costs.......................................................................................10

TABLE IV - Recommendations that Funds be Put to Better Use ........................................................11

Appendix A - Peer Review Activity ..................................................................................................12

Pictured: GCT New York Terminal, Staten Island, New York. 
1 

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, 2023 through March 31, 2024. During this reporting period, the OIG completed 

one audit and two reviews, and initiated two new reviews. The details on these assignments can 

be found in subsequent sections of this report. 

Three new hotline complaints were received, and four hotline complaints were closed 

during the reporting period. Three hotline complaints were open at the end of this reporting period. 

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

period. 

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 

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

Commissioners.

Although most agency personnel work at FMC headquarters in Washington, D.C., the 

FMC also has investigative staff located in major port and transportation centers. The 

Commission’s investigators focus on enforcement activity in one of the three regions: the 

Northeast and Midwest; Southeast and Gulf; and West Coast. 
2 

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. During this period, the OIG was pleased to welcome Mr. Caleb Ward, a 

part-time Pathways Program auditor trainee. Mr. Ward is enrolled at Liberty University and plans 

to graduate with a bachelor’s degree in accounting in May 2024. The OIG was also pleased to 

welcome Ms. Kaylie McGraw, a spring 2024 OIG student legal volunteer. Ms. McGraw is 

studying law at the Catholic University Columbus School of Law. 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 advice services to carry out the FMC OIG’s

responsibilities under the Inspector General Act. During this period, the FMC OIG also had an 

MOU with the Appalachian Regional Commission OIG to obtain investigative services, as needed. 
3 

OFFICE OF INSPECTOR GENERAL ACTIVITIES

Completed Assignments

Independent Auditors’ Report of the FMC’s FY 2023 Financial Statements, A24-01. 

The audit report was issued on November 15, 2023. 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 2023 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, 2023, 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. The auditors noted one non-reportable matter involving internal control and its 

operation that was communicated in a separate management letter to FMC management.

2024 Risk Assessment of the FMC’s Purchase Card Program. Executive agencies, 

including the FMC, use purchase cards to purchase needed goods and services for the agency. In 

accordance with the Government Charge Card Abuse Prevention Act of 2012 (Charge Card Act), 

Public Law 112‐194, Federal agencies are required to establish and maintain safeguards and 

internal controls for purchase and travel cards. The Charge Card Actrequires the Inspector General 

(IG) of each executive agency to conduct a periodic risk assessment of the agency’s purchase card 

program; and travel card program if annual charges are at least $10 million. Because the FMC’s 

travel card transactions are significantly below the $10 million threshold, the OIG is not required 

to conduct a risk assessment of the travel card program.

The objective was to assess the risk of illegal, improper, or erroneous use of the purchase 

card program to determine the scope, frequency, and number of future audits and reviews to be 

conducted by the OIG. The assessment was conducted using industry standard principles for risk 
4 

management and professional judgment. The OIG concluded the risk of illegal, improper, or 

erroneous use in the FMC’s purchase card program is “low.” As a result, an OIG audit or review 

of the agency’s purchase card program is not planned for 2024. 

Peer Review of the Equal Employment Opportunity Commission (EEOC) OIG. The 

Inspector General Act of 1978, as amended, requires OIGs to conduct audits in accordance with 

auditing standards issued by the Government Accountability Office. These auditing standards are 

generally accepted government auditing standards (GAGAS), also known as the Yellow Book. 

GAGAS requires audit organizations to establish and maintain a system of quality control and 

obtain an external peer review at least once every three years. Peer reviews exist to determine the 

adequacy of the OIG’s quality control and to provide reasonable assurance that the OIG is correctly 

following applicable standards, policies, and procedures required by GAGAS, the OIG, and 

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

During this reporting period, the FMC OIG completed an audit peer review of the EEOC 

OIG and issued a modified peer review report on November 6, 2023. The FMC OIG concluded 

the established policies and procedures for the EEOC OIG audit function for the review period 

ending March 31, 2023, were current and consistent with applicable professional standards.

Open Assignments

Audit Survey of the FMC’s Procedures for the Collection of Civil Monetary Penalties. 

The objective of the OIG’s audit survey of the FMC’s procedures for the collection of civil 

monetary penalties is an educational process that involves gathering information, without detailed 

verification, to identify potential improvements to the FMC’s collection procedures and decide 

whether a more detailed OIG audit would be beneficial. As defined in the Commission’s regulation 

at 46 C.F.R. § 506.2(b), civil monetary penalty means any penalty, fine, or other sanction that:

(1)(i) is for a specific monetary amount as provided by Federal law; or (ii) has a maximum amount 

provided by Federal law; (2) is assessed or enforced by the Commission pursuant to Federal law; 

and (3) is assessed or enforced pursuant to an administrative proceeding or a civil action in the 

Federal Courts. 
5 

As part of this survey, the OIG has held discussions with agency management and staff 

involved in the enforcement and collection process and reviewed relevant documents. The OIG 

plans to complete the audit survey in the next reporting period. 

Improper Payments Compliance Review for Fiscal Year 2023. 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. The OIG anticipates completion of the assignment by 

May 2024. 

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 public. 

Three new hotline complaints were received, and four hotline complaints were closed 

during the reporting period. Three hotline complaints were open at the end of this reporting period. 

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

period. 

Review of Legislation

As required by the Inspector General Act of 1978, as amended, the OIG routinely 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. 
6 

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 Offices 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 OIG is a member of CIGIE, participates in the monthly CIGIE 

meetings, and periodically assists CIGIE on special projects. 

The IG continues to serve in the position of Chair of the CIGIE Audit Peer Review 

Subcommittee. 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. 
7 

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 recommendations on which corrective actions have not 

been completed

8

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

9

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 12, App. A

Section 5(a)(16) Peer review activity by FMC OIG on another OIG 4; and 12, 

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
8 

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

than 6 Months

Recommendations

Report Title Report 

Number

Issue 

Date Number Open Closed

Audit of the FMC’s Compliance 

with the Federal Information 

Security Modernization Act, FY 

2022

A23-01 10/7/22 2 1 * 1 

*In a memorandum dated April 22, 2024, the Managing Director informed the IG that the 

 the Chief Information Security Officer (CISO), working with the program support contractor, 

created a standalone supply chain policy to implement the NIST 800-53 Rev. 5 requirements. 

The OIG plans to follow-up on the audit recommendation to verify the actions taken by 

management have addressed the issue identified during the audit. The OIG plans to complete 

the follow-up review during the next audit to enable the OIG to close the recommendation.

Audit of the FMC’s Compliance 

with the Federal Information 

Security Modernization Act, FY 

2023

A23-03 7/28/23 3 3 ** 0 

**In a memorandum dated April 22, 2024, the Managing Director informed the IG that 

management has already addressed one of the three recommendations. Specifically, in the event 

of a security incident that meets the threshold for U.S. CERT reporting, these will be reported 

within one hour of this determination. For the other two recommendations, development of a 

log retention policy and risk assessment policy, management plans to complete these 

recommendations by the third quarter of fiscal year 2024. 

Information Technology 

Vulnerability Report A23-04 9/28/23 8 8 *** 0 

***In a memorandum dated April 22, 2024, the Managing Director informed the IG that 

management is making progress on the implementation of the audit recommendations. Further, 

management expects the recommendations to be implemented by the end of the third quarter of 

fiscal year 2024. 
9

TABLE II - Listing of Reports Issued

Report Title Assignment 

Number

Issue 

Date 

Questioned 

Costs

Unsupported 

Costs

Funds 

Put to 

Better 

Use

Independent Auditors’ 

Report of the FMC’s FY 

2023 Financial Statements

A24-01 11/15/23 $0 $0 $0

2024 Risk Assessment of 

the FMC’s Purchase Card 

Program

R24-01 3/27/24 $0 $0 $0
10

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
11

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
12

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 in a prior 

reporting period 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 a modified audit peer review of the Equal Employment 

Opportunity Commission (EEOC) OIG during the reporting period and issued a modified peer 

review report on November 6, 2023. The FMC OIG concluded the established policies and 

procedures for the EEOC OIG audit function for the review period ending March 31, 2023, were 

current and consistent with applicable professional standards.
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 1020

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.