Office of Inspector General

Independent Auditors’ Report of the

FMC’s FY 2017 Financial Statements

A18-01

November 2017

FEDERAL MARITIME COMMISSION
 FEDERAL MARITIME COMMISSION

Washington, DC 20573

November 7, 2017

Office of Inspector General

Dear Acting Chairman Khouri and Commissioners Dye, Doyle, and Maffei:

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) 2017 and 2016 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 of Dembo 

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

September 30, 2017 and 2016; 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 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, 2017 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.
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,

Jon Hatfield

Inspector General

Attachment

cc: Office of the Managing Director

Office of the General Counsel

Office of Budget and Finance
6010 Executive Blvd • Suite 900 Dembo Jones, P.C. 8850 Stanford Blvd • Suite 2000

Rockville, MD 20852 A Member of Allinial Global Columbia, MD 21045

P 301.770.5100 • F 301.770.5202 www.dembojones.com P 410.290.0770 • F 410.290.0774

Report of Independent Auditors

To Acting Chairman Khouri

Federal Maritime Commission 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Federal Maritime Commission 

(FMC), which comprise the balance sheet as of September 30, 2017 and 2016, and the related 

statements of net cost, changes in net position, budgetary resources, and custodial activity for the 

years then ended. 

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements 

in accordance with U.S. generally accepted accounting principles; this includes the design, 

implementation, and maintenance of internal control relevant to the preparation and fair 

presentation of the financial statements that are free from material misstatement, whether due to 

fraud or error.

Auditor’s Responsibility 

Our responsibility is to express an opinion on the financial statements based on our audits. We 

conducted our audits in accordance with auditing standards generally accepted in the United States 

of America; the standards applicable to financial audits contained in the U.S. Government Auditing 

Standards, issued by the Comptroller General of the United States; and Office of Management and 

Budget (OMB) Bulletin No. 17-03, Audit Requirements for Federal Financial Statements. Those 

standards and OMB Bulletin No. 17-03 require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and 

disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, 

including the assessment of the risks of material misstatement of the financial statements, whether 

due to fraud or error. In making those risk assessments, the auditor considers internal control 

relevant to the agency’s preparation and fair presentation 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 agency’s internal control. Accordingly, we do 

not express such an opinion. An audit also includes evaluating the appropriateness of accounting 

policies used and the reasonableness of significant estimates made by management, as well as 

evaluating the overall presentation of the financial statements. We believe that the audit evidence 

we have obtained is sufficient and appropriate to provide a basis for our opinion.
Dembo Jones, P.C.

Opinion on Financial Statements

In our opinion, the financial statements referred to above present fairly, in all material respects, 

the financial position of the Federal Maritime Commission as of September 30, 2017 and 2016 

and its net costs; changes in net position; budgetary resources; and custodial activity for the years

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

Consideration of Internal Control

In planning and performing our audit, we considered the Federal Maritime Commission’s internal 

control over financial reporting as a basis for designing our auditing procedures and to comply 

with the Office of Management and Budget (OMB) audit guidance for the purpose of expressing 

our opinion on the financial statements, but not for the purpose of expressing an opinion on internal 

control and compliance or on management’s assertion on internal control included in MD&A. 

Accordingly, we do not express an opinion on internal control over financial reporting and 

compliance or on management's assertion on the effectiveness of the entity’s internal control over 

financial reporting or on management’s assertion on internal control included in the MD&A.

Our consideration of internal control over financial reporting was for the limited purpose described 

in the preceding paragraph and was not designed to identify all deficiencies in internal control that 

might be material weaknesses or significant deficiencies and therefore, material weaknesses or 

significant deficiencies may exist that were not identified. We did not identify any deficiencies in 

internal control over financial reporting that we consider to be material weaknesses or significant 

deficiencies, as defined below.

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. A material weakness is a deficiency, or a 

combination of deficiencies, in internal control, 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 significant deficiency is a deficiency, or combination of deficiencies, in internal control that is 

less severe than a material weakness yet important enough to merit the attention of those charged 

with governance. 

Compliance With Laws and Regulations 

As part of obtaining reasonable assurance about whether the Federal Maritime Commission 

financial statements are free from material misstatement, we also performed tests of its compliance 

with certain provisions of laws and regulations for fiscal year 2017. However, providing an 

opinion on compliance with those provisions was not an objective of our audit, and accordingly, 

we do not express such an opinion. The results of our tests of compliance disclosed no instances 

of noncompliance or other matters that are required to be reported under Government Auditing 

Standards.
Dembo Jones, P.C.

Consistency of Other Information

The information in the Management's Discussion and Analysis is not a required part of the 

financial statements, but is supplementary information required by U.S. generally accepted 

accounting principles. We have applied certain limited procedures, which consisted principally of 

inquiries of management regarding the methods of measurement and presentation of this 

information. However, we did not audit this information and, accordingly, we express no opinion 

on it.

The information in the Acting Chairman’s Message, Performance Section, and Other 

Accompanying Information is presented for purposes of additional analysis and is not required as 

part of the financial statements. This information has not been subjected to auditing procedures 

and, accordingly, we express no opinion on it.

Rockville, Maryland

November 15, 2017