Federal Maritime

Commission

Audited Financial Statements

A10‐01

FY

2009

Audited Financial Statements

FEDERAL MARITIME COMMISSION

FY 2009
FEDERAL MARITIME COMMISSION 

FINANCIAL STATEMENTS 

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008 

TABLE OF CONTENTS 

INSPECTOR GENERAL TRANSMITTAL LETTER 

INDEPENDENT AUDITOR'S REPORT 

FINANCIAL SECTION 

 BALANCE SHEET..................................................................................................1 

 STATEMENT OF NET COST....................................................................................2 

 STATEMENT OF CHANGES IN NET POSITION...........................................................3 

 STATEMENT OF BUDGETARY RESOURCES.............................................................4 

 STATEMENT OF CUSTODIAL ACTIVITY..................................................................5 

 NOTES TO THE FINANCIAL STATEMENTS...............................................................6 
FEDERAL MARITIME COMMISSION

Office of Inspector General 

Washington, DC 20573-0001 

November 6, 2009 

 

Office of Inspector General 

 

The Honorable Richard A. Lidinsky, Jr. 

Chairman 

Federal Maritime Commission 

I am pleased to provide you with the attached audit report required by the Chief Financial 

Officers (CFO) Act of 1990, as amended, which presents an unqualified opinion on the 

Federal Maritime Commission’s (FMC) FY 2009 financial statements. The audit results 

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

preparation of reliable financial and performance information. We commend FMC for the 

noteworthy accomplishment of attaining an unqualified (clean) opinion for the 6th

consecutive year. 

The independent public accounting firm of Dembo Jones Healy Pennington & Marshall, 

P.C. (DJHPM) performed the audit of FMC’s financial statements for the fiscal year 

ended September 30, 2009. The contract required that the audit be done in accordance 

with U.S. generally accepted government auditing standards and OMB audit guidance. 

In its audit of the Federal Maritime Commission, DJMPM found: 

• the financial statements were fairly presented, in all material respects, in conformity 

with U.S. generally accepted accounting principles; 

• the FMC had effective internal control over financial reporting (including 

safeguarding assets) and compliance with laws and regulations; and 

• no reportable noncompliance with laws and regulations tested. 

To fulfill our responsibilities under the CFO Act and related legislation for ensuring the 

quality of the audit work performed, we monitored DJHPM’s audit of FMC’s FY 2009 

financial statements by: 

• reviewing DJHPM’s approach and planning of the audit; 

• evaluating the qualifications and independence of its auditors; 

• monitoring the progress of the audit at key points; 




FINANCIAL SECTION 
The accompanying notes are an integral part of these statements. 

1 

2009 2008

Assets:

Intragovernmental:

Fund Balance With Treasury (Note 2) 4,777,674 $ 4,062,134 $ 

Total Intragovernmental 4,777,674 4,062,134 

Accounts Receivable (Note 3) 70,222 64,579 

Property, Equipment, and Software, Net (Note 4) 202,500 2,112 

Total Assets 5,050,396 $ 4,128,825 $ 

Liabilities (Notes 5 and 6):

Intragovernmental:

Accounts Payable (Note 6) 309,177 $ 36,647 $ 

Employer Contributions and Payroll Taxes Payable 138,468 118,028 

Unfunded FECA Liability 1,968 1,968 

Custodial Liability 69,236 63,593 

Total Intragovernmental 518,849 220,236 

Accounts Payable (Note 6) 231,925 273,627 

Accrued Payroll and Leave 865,970 914,920 

Employer Contributions and Payroll Taxes Payable 17,568 12,124 

Unfunded Leave 1,075,533 1,030,319 

Actuarial FECA Liability 5,249 - 

Total Liabilities 2,715,094 $ 2,451,226 $ 

Net Position:

Unexpended Appropriations 3,214,566 $ 2,706,788 $ 

Cumulative Results of Operations (879,264) (1,029,189) 

Total Net Position 2,335,302 $ 1,677,599 $ 

Total Liabilities and Net Position 5,050,396 $ 4,128,825 $ 

FEDERAL MARITIME COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2009 AND 2008

(In Dollars)
The accompanying notes are an integral part of these statements. 

2 

2009 2008

Program Costs:

Office of Administration 6,237,122 $ 6,088,432 $ 

Office of Operations 10,304,424 9,540,047 

 Formal Proceedings 6,082,905 5,627,251 

 Office of Inspector General 529,935 597,799 

 Office of Equal Employment Opportunity 151,287 161,903 

Net Cost of Operations (Note 9) 23,305,673 $ 22,015,432 $ 

FEDERAL MARITIME COMMISSION

STATEMENT OF NET COST

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(In Dollars)
The accompanying notes are an integral part of these statements. 

3 

2009 2008

Cumulative Results of Operations:

Beginning Balances (1,029,189) $ (1,004,596) $ 

Budgetary Financing Sources:

Appropriations Used 22,258,507 20,906,472 

Other Financing Sources (Non-Exchange):

Imputed Financing Sources (Note 10) 1,197,091 1,084,367 

Total Financing Sources 23,455,598 21,990,839 

Net Cost of Operations (Note 9) 23,305,673 22,015,432 

Net Change 149,925 (24,593) 

Cumulative Results of Operations (879,264) $ (1,029,189) $ 

Unexpended Appropriations:

Beginning Balances 2,706,788 $ 1,596,624 $ 

Budgetary Financing Sources:

Appropriations Received 22,800,000 22,072,000 

Other Adjustments (33,715) (55,364) 

Appropriations Used (22,258,507) (20,906,472) 

Total Budgetary Financing Sources 507,778 1,110,164 

Total Unexpended Appropriations 3,214,566 $ 2,706,788 $ 

Net Position 2,335,302 $ 1,677,599 $ 

FEDERAL MARITIME COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(In Dollars)
The accompanying notes are an integral part of these statements. 

4 

2009 2008

Budgetary Resources:

Unobligated Balance Brought Forward, October 1 747,665 $ 210,894 $ 

Recoveries of Prior Year Unpaid Obligations 171,489 210,984 

Budget Authority

Appropriation 22,800,000 22,072,000 

Less: Permanently Not Available 33,715 55,364 

Total Budgetary Resources 23,685,439 $ 22,438,514 $ 

Status of Budgetary Resources:

Obligations Incurred

Direct (Note 12) 22,817,981 $ 21,690,849 $ 

Unobligated Balance

Apportioned 66,284 447,579 

Unobligated Balance Not Available 801,174 300,086 

Total Status of Budgetary Resources 23,685,439 $ 22,438,514 $ 

Change in Obligated Balance:

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 3,314,469 $ 2,632,375 $ 

Obligations Incurred Net 22,817,981 21,690,849 

Less: Gross Outlays 22,050,745 20,797,771 

Less: Recoveries of Prior Year Unpaid

Obligations, Actual 171,489 210,984 

Obligated Balance, Net, End of Period

Unpaid obligations 3,910,216 3,314,469 

Total, Unpaid Obligated Balance, Net, End of Period 3,910,216 $ 3,314,469 $ 

Net Outlays:

Gross Outlays 22,050,745 $ 20,797,771 $ 

Net Outlays 22,050,745 $ 20,797,771 $ 

FEDERAL MARITIME COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(In Dollars)
The accompanying notes are an integral part of these statements. 

5 

2009 2008

Revenue Activity:

Total Cash Collections (Note 14) 1,115,241 $ 478,250 $ 

Accrual Adjustments 5,643 (1,728) 

Total Custodial Revenue 1,120,884 476,522 

Disposition of Collections:

Transferred to Others (by Recipient) 1,115,241 478,250 

Increase/(Decrease) in Amounts Yet to be Transferred 5,643 (1,728) 

Total Disposition of Collections 1,120,884 476,522 

Net Custodial Activity $ - - $ 

(In Dollars)

FEDERAL MARITIME COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2009 AND 2008
FEDERAL MARITIME COMMISSION 

NOTES TO THE FINANCIAL STATEMENTS 

6 

NOTE 1. SUMMARY OF SIGNIFICANT 

ACCOUNTING POLICIES 

A. Reporting Entity 

The Federal Maritime Commission (FMC) was 

established as an independent regulatory 

agency on August 12, 1961. FMC is 

responsible for the regulation of ocean borne 

transportation in the foreign commerce of the 

United States (U.S.). The principal statutes or 

statutory provisions administered by the 

Commission are the Shipping Act of 1984, the 

Foreign Practices Act of 1988, and section 19 

of the Merchant Marine Act of 1920, and 

sections 2 and 3 of Public Law No. 89-777. 

Most of these statutes were modified by the 

passage of the Ocean Shipping Reform Act of 

1998, which took effect in 1999. 

FMC monitors the activities of ocean common 

carriers, marine terminal operators, 

conferences, ports and ocean transportation 

intermediaries (OTIs) (non-vessel-operating 

common carriers and ocean freight forwarders) 

who operate in the foreign commerce of the 

U.S. to ensure they maintain just and 

reasonable practices. FMC maintains a trade 

monitoring and enforcement program designed 

to detect and appropriately remedy 

malpractices and violations. FMC monitors 

the laws and practices of foreign governments, 

which could be potentially restrictive and 

identifies carriers owned or controlled by 

foreign governments; processes and reviews 

agreements and service contracts for 

compliance with statutory requirements; and 

reviews common carriers’ privately published 

tariff systems for accessibility and accuracy as 

required by the Ocean Shipping Reform Act of 

1998. FMC also issues licenses to qualified 

OTIs in the U.S., ensures that all OTIs are 

bonded or maintain other evidence of financial 

responsibility, and ensures that passenger 

vessel operators demonstrate adequate 

financial responsibility for casualty and 

nonperformance. 

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 also the chief 

executive and administrative officer of FMC. 

Congress enacts appropriations to permit FMC 

to incur obligations for authorized purposes. 

In fiscal years 2009 and 2008, FMC was 

accountable for General Fund appropriations. 

FMC recognizes budgetary resources as assets 

when cash (funds held by the U.S. Treasury) is 

made available through the Department of 

Treasury General Fund warrants. 

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 nonrecurring activity, such as fines, penalties, fees 

and other miscellaneous receipts for services 

and benefits. 

FMC makes custodial collections and holds 

custodial receivables that are non-entity assets 

and are transferred to Treasury at fiscal year 

end. 

B. Basis of Presentation 

The financial statements have been prepared to 

report the financial position, net cost of 

operations, changes in net position, and the 

status and availability of budgetary resources 

of the FMC. The statements are a requirement 

of the Accountability of Tax Dollars Act of 
7 

2002. 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 approved 

by the principals of the Federal Accounting 

Standards Advisory Board (FASAB), OMB 

Circular A-136, Financial Reporting 

Requirements 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 statements consist of the Balance Sheet, 

Statement of Net Cost, Statement of Changes 

in Net Position, Statement of Budgetary 

Resources, and the Statement of Custodial 

Activity. In accordance with OMB Circular 

A-136, the financial statements and associated 

notes are presented on a comparative basis. 

Unless specified otherwise, all amounts are 

presented in dollars. 

C. Budgets and Budgetary Accounting 

Congress usually enacts appropriations to 

permit FMC to incur obligations for specified 

purposes. In fiscal years 2009 and 2008, the 

FMC was accountable for General Fund 

appropriations. The agency recognizes 

budgetary resources as assets when cash (funds 

held by the U.S. Treasury) is made available 

through the Department of Treasury General 

Fund warrants. 

D. 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. 

Balances on these statements may therefore 

differ from those on financial reports prepared 

pursuant to other OMB directives that are 

primarily used to monitor and control FMC's 

use of budgetary resources. 

E. Revenues & Other Financing Sources 

Congress enacts annual appropriations to be 

used, within statutory limits, for operating and 

capital expenditures. Additional revenues are 

obtained from service fees and reimbursements 

from other government entities and the public, 

but these revenues are not available to the 

agency to fund operating expenses. 

Appropriations are recognized as a financing 

source when expended. Revenues from 

service fees associated with reimbursable 

agreements are recognized concurrently with 

the recognition of accrued expenditures for 

performing the services. Appropriations 

expended for capitalized property and 

equipment are recognized as expenses when an 

asset is consumed in operations. 

FMC recognizes as an imputed financing 

source, the amount of accrued pension and 

post-retirement benefit expenses for current 

employees paid on its behalf by the Office of 

Personnel Management (OPM). 

F. Taxes 

FMC, as a Federal entity, is not subject to 

federal, state, or local income taxes, and, 

accordingly, no provision for income taxes has 

been recorded in the accompanying financial 

statements. 

G. Fund Balance with Treasury 

The U.S. Treasury processes cash receipts and 

disbursements. Funds held at the Treasury are 

available to pay agency liabilities. FMC does 

not maintain cash in commercial bank 

accounts or foreign currency balances. 

H. Accounts Receivable 

Accounts receivable consists of amounts owed 

to FMC by other Federal agencies, its 

employees and the general public. Accounts 
8 

receivable in the Salaries and Expense Fund 

represent employee-related receivables. An 

allowance for uncollectible accounts 

receivable from the public is established when, 

based upon a review of outstanding accounts, 

management determines that collection is 

unlikely to occur considering the debtor’s 

ability to pay. Debts six months or more past 

due are referred to the Department of Treasury 

for follow-up collection efforts in keeping with 

the Debt Collection Improvement Act of 1996 

(DCIA). Treasury’s Debt Management 

Services (DMS) administers the program and 

deducts 18 percent from amounts ultimately 

collected for its fee. Collections, net of fees, 

are returned to the FMC for remittance to the 

general fund of the Treasury. 

I. Property, Equipment, and Software 

Property, equipment and software represent 

furniture, fixtures, equipment, and information 

technology (IT) 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, except wherein the tenant 

improvement allowance specified in lease 

agreements covers the costs of certain 

renovations. Maintenance and repair costs are 

expensed as incurred. FMC's capitalization 

threshold is $25,000 for individual purchases. 

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 

IT Software 5 

J. Advances and Prepaid Charges 

Advance payments are generally prohibited by 

law. There are exceptions, such as some 

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. 

K. Liabilities

Liabilities represent the amount of monies or 

other resources likely to be paid by the FMC as 

a result of transactions or events that have 

already occurred. No liability can be paid, 

however, absent an appropriation or other 

funding. Liabilities covered by budgetary or 

other resources are those liabilities for which 

Congress has appropriated funds or funding is 

otherwise available to pay amounts due. 

Liabilities for which an appropriation has not 

been enacted or other funds received are, 

therefore, classified as not covered by 

budgetary resources. The liquidation of 

liabilities not covered by budgetary or other 

resources is dependent on future congressional 

appropriations or other funding. There is no 

certainty that the appropriation will be enacted. 

Intragovernmental liabilities are claims against 

FMC by other federal agencies. Liabilities not 

covered by budgetary resources on the Balance 

Sheet are equivalent to amounts reported as 

components requiring or generating resources 

on the Reconciliation of Net Cost to Budget. 

Additionally, the government, acting in its 

sovereign capacity, can abrogate liabilities. 

L. Accounts Payable 

Accounts payable consists primarily of 

amounts owed to other Federal agencies and 

the public for contracts for goods or services, 

such as leases, utilities, telecommunications 

and consulting and support services. 
9 

M. 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. 

Nonvested leave is expensed when used. Any 

liability for unused 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 upon the retirement of that 

individual. No credit is given for sick leave 

balances upon the retirement of Federal 

Employee’s Retirement System (FERS)-

covered employees. 

N. Accrued and Actuarial Workers’ 

Compensation 

The Federal Employees' Compensation Act 

(FECA) administered by the U.S. Department 

of Labor (DOL) addresses all claims brought 

by FMC employees for on-the-job injuries. A 

liability is recorded for actual and estimated 

future payments to be made for workers' 

compensation pursuant to the FECA. The 

DOL bills each agency annually as its claims 

are paid, and the actual costs incurred are 

reflected as a liability to the agency. 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. 

O. Retirement Plans 

FMC employees participate in either the Civil 

Service Retirement System (CSRS) or the 

Federal Employees' Retirement System 

(FERS). The employees who participate in 

CSRS are beneficiaries of FMC's contribution, 

equal to seven percent of pay, distributed to 

their annuity account in the Civil Service 

Retirement and Disability Fund. 

FERS went into effect on January 1, 1987. 

FERS and Social Security automatically cover 

most employees hired after December 31, 

1983. Employees hired prior to January 1, 

1984 elected to join either FERS and Social 

Security, or remain in CSRS. All employees 

are eligible to contribute to the Thrift Savings 

Plan (TSP). For those employees participating 

in the FERS, a TSP account is automatically 

established and FMC makes a mandatory one 

percent contribution to this account. In 

addition, FMC makes matching contributions, 

ranging from one to four percent, for FERS 

eligible employees who contribute to their TSP 

accounts. Matching contributions are not 

made to the TSP accounts established by 

CSRS employees. For FERS participants, 

FMC also remits the employer's share of the 

required contribution. 

FERS employees and certain CSRS 

reinstatement employees are eligible to 

participate in the Social Security program after 

retirement. 

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 
10 

sources to the extent these expenses will be 

paid by OPM. 

FMC does not report on its financial 

statements 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. 

P. 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 and liabilities and disclosure of 

contingent assets and liabilities at the date of 

the financial statements and the reported 

amounts of revenues and expenses during the 

reporting period. Actual results could differ 

from those estimates. 

Q. Net Position 

Net position is the residual difference between 

assets and liabilities and is comprised of 

unexpended appropriations and cumulative 

results of operations. Unexpended 

appropriations represent the amount of 

unobligated and unexpended budget authority. 

Unobligated balances are the amount of 

appropriations or other authority remaining 

after deducting the cumulative obligations 

from the amount available for obligation. The 

cumulative results of operations is the net 

result of FMC’s operations since inception. 

R. Imputed Costs/Financing Sources 

Federal Government entities often receive 

goods and services from other Federal 

Government entities without reimbursing the 

providing entity for all the related costs. In 

addition, Federal Government entities also 

incur costs that are paid in total or in part by 

other entities. An imputed financing source is 

recognized by the receiving entity for costs 

that are paid by other entities. FMC 

recognized imputed costs and financing 

sources in fiscal years 2009 and 2008 to the 

extent directed by OMB. 

S. 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. 

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. 

T. Expired Accounts and Cancelled 

Authority 

Unless otherwise specified by law, annual 

authority expires for incurring new obligations 

at the beginning of the subsequent fiscal year. 

The account in which the annual authority is 

placed is called the expired account. For five 

fiscal years, the expired account is available 

for expenditure to liquidate valid obligations 

incurred during the unexpired period. 

Adjustments are allowed to increase or 

decrease valid obligations incurred during the 

unexpired period but not previously reported. 

At the end of the fifth expired year, the expired 

account is cancelled. 
11 

NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2009 and 2008 were as 

follows: 

Fund Balances: 

2009 2008

Appropriated Funds $ 4,777,674 $ 4,062,134 

Total $ 4,777,674 $ 4,062,134 

Status of Fund Balance with Treasury: 

2009 2008

Unobligated Balance

 Available $ 66,284 $ 447,579 

 Unavailable 801,174 300,086 

Obligated Balance Not Yet Disbursed 3,910,216 3,314,469 

Total $ 4,777,674 $ 4,062,134 

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 

cash balance on hand. (see also Note 13) 

NOTE 3. ACCOUNTS RECEIVABLE 

Accounts receivable balances as of September 30, 2009 and 2008 were as follows: 

2009 2008

With the Public

Contractor/Vendor Related Receivables 56,515 $ 56,421 $ 

Interest Receivable 5,085 2,796

Penalties, Fines, and Administrative Fees Receivable 7,636 4,204

Employee-Related Receivable(s) 1,158 986 

Total Accounts Receivable $ 64,579 70,222 $ 

The accounts receivable is primarily made up of a balance from one non-federal vendor for 

$56,421 that represents an amount due from a contractor for unsupported claims that were paid by 

the agency. 
12 

NOTE 4. PROPERTY, EQUIPMENT, AND SOFTWARE 

Property, equipment, and software account balances as of September 30, 2009 and 2008 were as 

follows: 

Schedule of Property, Equipment, and Software as of September 30, 2009 

Major Class

Acquisition 

Cost

Accumulated 

Amortization/ 

Depreciation

Net Book 

Value

Leasehold Improvements 225,000 $ 22,500 $ 202,500 $ 

Furniture & Equipment 291,938 291,938 - 

Total 516,938 $ 314,438 $ 202,500 $ 

Schedule of Property, Equipment, and Software as of September 30, 2008 

Major Class

Acquisition 

Cost

Accumulated 

Amortization/ 

Depreciation

Net Book 

Value

Furniture & Equipment 291,938 $ 289,826 $ 2,112 $ 

Total 291,938 $ 289,826 $ 2,112 $ 

NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

The liabilities on the FMC's Balance Sheet as of September 30, 2009 and 2008, 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. 

2009 2008

Intragovernmental – FECA 1,968 $ 1,968 $ 

Unfunded Leave 1,075,533 1,030,319 

Actuarial FECA 5,249 - 

Total Liabilities Not Covered by Budgetary Resources 1,082,750 $ 1,032,287 $ 

The Federal Maritime Commission records a liability for future worker's compensation claims 

based on data provided from the Department of Labor. The FMC also records a liability for 

actual claims paid on its behalf by the DOL.

NOTE 6. ACCOUNTS PAYABLE 

Liabilities include both Intragovernmental Accounts Payable and Other Accounts Payable. 

Intragovernmental payables are owed to other federal entities for rent, printing costs, and services 

of other agencies. In FY09, approximately $225,000 of the Intragovernmental payable of 

$309,177 was owed to the General Services Administration for leasehold improvements made to 

FMC offices. Other Payables (formerly categorized as "With the Public") are owed to nonfederal sources or to the general public, and include liabilities for general supplies, training, 
13 

studies, analysis, and/or evaluations, miscellaneous services, and operation and maintenance of 

ADP equipment. For fiscal year ending September 30, 2009, the non-federal accounts payable 

totals to $231,925. 

NOTE 7. LEASES 

Operating Leases

FMC occupies office space in seven locations, of which only six of the lease agreements are 

required to be accounted for as operating leases. Lease payments are increased annually based on 

the adjustments for operating cost and real estate tax escalations. The lease locations and terms 

are listed below: 

Location Term Lease Expiration Date

Hollywood, FL 23 months 5/31/2010

San Pedro, CA 5 years 9/30/2011

Washington DC 10 years 10/31/2012

Jamaica, NY 5 years 7/1/2013

Houston, TX 10 years 9/14/2018

Seattle, WA 10 years 6/30/2019

The lease amounts vary from year to year depending on the specific lease. The schedule of future 

payments for the term of the leases is as follows: 

Fiscal Year Totals

2010 2,905,584 $ 

2011 2,910,491 

2012 2,925,935 

2013 302,768 

2014 25,933 

Thereafter 114,638 

Total Future Payments 9,185,349 $ 

The operating lease amount does not include estimated payments for leases with annual renewal 

options. 

NOTE 8. CONTINGENCIES 

There are legal actions pending against FMC in which claims have been asserted that may be 

based on action taken by FMC. Management intends to vigorously contest all such claims. 

Management believes, based on information provided by legal counsel, that losses, if any, for 

these cases would not have a material impact on the Financial Statements. No loss accrual has 

been made for these cases outstanding at September 30, 2009. 
14 

NOTE 9. INTRAGOVERNMENTAL COSTS 

Intragovernmental costs represent goods and services exchange transactions made between two 

reporting entities within the Federal government, and are in contrast to those with non-federal 

entities (the public). Intragovernmental costs include payments to federal vendors for personnel 

benefits, rent, utilities, and other services. Payments made to non-federal entities (the public) are 

comprised primarily of employee salaries and other services. Such costs are summarized as 

follows: 

2009 2008

Office of Administration

 Intragovernmental Costs 3,050,365 $ 2,844,453 $ 

 Public Costs 3,186,757 3,243,979 

 Total Program Costs 6,237,122 6,088,432 

Office of Operations

 Intragovernmental Costs 3,329,302 3,005,774 

 Public Costs 6,975,122 6,534,273 

 Total Program Costs 10,304,424 9,540,047 

Formal Proceedings

 Intragovernmental Costs 1,961,167 1,785,954 

 Public Costs 4,121,738 3,841,297 

 Total Program Costs 6,082,905 5,627,251 

Office of Inspector General

 Intragovernmental Costs 150,600 165,737 

 Public Costs 379,335 432,062 

 Total Program Costs 529,935 597,799 

Office of Equal Employment Opportunity

 Intragovernmental Costs 43,579 71,152 

 Public Costs 107,708 90,751 

 Total Program Costs 151,287 161,903 

Total Intragovernmental costs 8,535,013 7,873,070 

Total Public costs 14,770,660 14,142,362 

 Total Costs 23,305,673 22,015,432 

 Total Net Cost 23,305,673 $ 22,015,432 $ 
15 

NOTE 10. IMPUTED FINANCING SOURCES 

Imputed financing recognizes the costs of future benefits which include health benefits, life 

insurance, pension and post-retirement benefit expenses for current employees. The assets and 

liabilities associated with such benefits are the responsibility of the administering agency, the 

Office of Personnel Management (OPM). For the fiscal years ended September 30, 2009 and 

2008, respectively, imputed financing was as follows. 

2009 2008

Office of Personnel Management $ 1,197,091 $ 1,084,367 

Total Imputed Financing Sources $ 1,197,091 $ 1,084,367 

NOTE 11. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE 

UNITED STATES GOVERNMENT 

The President’s Budget that will include FY09 actual budgetary execution information has not yet 

been published. The President’s Budget is scheduled for publication in February 2010 and can be 

found at the OMB Web site: http://www.whitehouse.gov/omb/. The 2010 Budget of the United 

States Government, with the "Actual" column completed for 2008, has been reconciled to the 

Statement of Budgetary Resources and there were no material differences. 

NOTE 12. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED 

Obligations incurred and reported in the Statement of Budgetary Resources as of September 30, 

2009 and 2008 consisted of the following: 

2009 2008

Direct Obligations, Category A 22,817,981 $ 21,690,849 $ 

Total Obligations Incurred 22,817,981 $ 21,690,849 $ 

Category A apportionments distribute budgetary resources by fiscal quarters. 

NOTE 13. UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other 

Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, states that 

the amount of budgetary resources obligated for undelivered orders at the end of the period 

should be disclosed. For the fiscal years ended September 30, 2009 and 2008, respectively, 

undelivered orders amounted to the following: 

2009 2008

Undelivered Orders 2,347,107 $ 1,959,123 $ 

Total Undelivered Orders 2,347,107 $ 1,959,123 $ 
16 

NOTE 14. CUSTODIAL ACTIVITY 

FMC is an administrative agency collecting for the General Fund. As a collecting entity, FMC 

measures and reports cash collections and refunds as custodial activity on the Statement of 

Custodial Activity. Cash collections result primarily from FMC regulatory activities to include 

the assessment of fines and penalties and the payment of license fees by qualified ocean 

transportation intermediaries (OTIs) in the U.S. A small portion of amounts collected is for 

interest on past due fines, petitions, status changes and special permission fees. 

Custodial receipts are broken out in the following general receipt funds: 

Fund 2009 2008

Fines, Penalties and Forfeitures $ 843,000 $ 182,513 

General Fund Proprietary Receipts (user fees) 273,218 299,947 

Refund of User Fees (977) (4,210)

Total Custodial Collections $ 1,115,241 $ 478,250 
17 

NOTE 15. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

FMC has reconciled its budgetary obligations and non-budgetary resources available to its net 

cost of operations. 

2009 2008

Resources Used to Finance Activities:

Budgetary Resources Obligated

Obligations Incurred 22,817,981 $ 21,690,849 $ 

Less: Spending Authority From Offsetting Collections and Recoveries 171,489 210,984 

Obligations Net of Offsetting Collections and Recoveries 22,646,492 21,479,865 

Other Resources

Imputed Financing From Costs Absorbed By Others 1,197,091 1,084,367 

Net Other Resources Used to Finance Activities 1,197,091 1,084,367 

Total Resources Used to Finance Activities 23,843,583 22,564,232 

Resources Used to Finance Items Not Part of the Net Cost of Operations

Change In Budgetary Resources Obligated For Goods,

Services and Benefits Ordered But Not Yet Provided 387,985 573,393 

Resources That Finance the Acquisition of Assets 225,000 - 

Total Resources Used to Finance Items Not Part of Net Cost of Operations 612,985 573,393 

Total Resources Used to Finance the Net Cost of Operations 23,230,598 21,990,839 

Components of the Net Cost of Operations That Will Not Require or

Generate Resources in the Current Period

Components Requiring or Generating Resources in Future Periods

Increase In Annual Leave Liability 45,214 17,799 

Other 5,249 1,968 

Total Components of Net Cost of Operations That Will Require or

Generate Resources In Future Periods 50,463 19,767 

Components Not Requiring or Generating Resources:

Depreciation and Amortization 24,612 4,989 

Other (163) - 

Total Components of Net Cost of Operations That Will Not Require or

Generate Resources 24,612 4,826 

Total Components of Net Cost of Operations That Will Not Require or

Generate Resources In The Current Period 75,075 24,593 

Net Cost of Operations 23,305,673 $ 22,015,432 $