Office of Inspector General 

Semiannual Report to Congress 

Covering the Period 

 

April 1, 2022 – September 30, 2022 

FEDERAL MARITIME COMMISSION 
FEDERAL MARITIME COMMISSION

Washington, DC 20573

October 31, 2022 

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 April 1, 2022 to September

30, 2022. 

During this reporting period, the OIG initiated two annual audits and completed two 

reviews. The OIG also completed an audit survey and a follow-up review on the status of 

outstanding audit recommendations. 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 

Katia Kroutil, Acting 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 Audits.......................................................................................................................................................... 5

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

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

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.................................................................................................... 8

TABLE III - Reports with Questioned Costs......................................................................................... 9

TABLE IV - Recommendations that Funds be Put to Better Use ........................................................10

Appendix A - Peer Review Activity ..................................................................................................11

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 April 1, 2022 through September 30, 2022. During this reporting period, the OIG initiated

two annual audits and completed two reviews. The OIG also completed an audit survey and a 

follow-up review on the status of outstanding audit recommendations. The details on these 

assignments can be found in subsequent sections of this report. 

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

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

and 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 FMC personnel are 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. However, during this reporting period, the agency announced plans 
2 

to reorganize its investigative and prosecution functions by consolidating them into a newly 

created Bureau of Enforcement, Investigations, and Compliance (BEIC). As part of the 

reorganization, the Commission is converting the positions of Area Representatives to 

Investigators, placing them in the Office of Investigations. Investigators will now focus 

exclusively on enforcement activity and the public outreach function formerly handled by the Area 

Representative role will be handled by the Commission’s Office of Consumer Affairs and Dispute 

Resolution Services as part of their broader public assistance work. 

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 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

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

completed an audit survey of the agency’s Area Representatives’ (AR) complaint process. The 

Commission’s Area Representatives investigate potential violations of the Shipping Act and 

Commission regulations and serve major shipping port areas. 

The objective of the OIG audit survey of the FMC’s AR complaint process was an 

educational process that involved gathering information, without detailed verification, to identify 

potential improvements to the agency’s AR process of handling complaints and decide whether a 

more detailed OIG audit would be beneficial. A survey is generally performed before deciding 

whether to commence an audit of an agency program. A survey can be an effective tool for 

applying scarce auditing resources where they will be the most beneficial for the agency. 

The results of the survey indicated that a detailed audit of the AR complaint process is not 

warranted at this time because the program is currently undergoing considerable change and no 

significant issues came to our attention during the audit survey that have not already been identified 

by management. While we made no recommendations because of the survey, throughout our 

survey, two themes became evident: the agency needs a new case management system that can be 

used by multiple FMC offices, and additional investigative policies and procedures are needed. 

Improper Payments Compliance Report for Fiscal Year 2021. The OIG completed 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 purpose of PIIA is to improve the Federal government’s efforts to reduce and recover 

improper payments. Each agency Inspector General is required to review improper payment 

reporting in their agency’s annual Performance and Accountability Report (PAR) or Agency 

Financial Report (AFR) and any accompanying materials to determine if the agency follows PIIA. 

The OIG reviewed the agency’s Improper Payments Information Act section of FMC’s FY 2021 

PAR posted on the agency’s website for compliance with PIIA, as well as, the FMC’s 
4 

PaymentAccuracy.gov Data Call submission. For FY 2021, the OIG concluded the FMC complied 

with all the requirements that are applicable to the agency for improper payment reporting. 

2022 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 Act requires 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 

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 2022. 

Audit Follow-Up. The OIG completed a follow-up of the OIG’s DATA Act Audit, 2019 

(A20-01) to determine whether the OIG’s recommendations had been implemented. The Digital 

Accountability and Transparency Act of 2014 (DATA Act) is a law that aims to make information 

on Federal expenditures more easily accessible and transparent. Among other requirements, the 

DATA Act requires the IG of each Federal agency to review spending data submitted by its Federal 

agency to the government website, USASpending.gov. The results of the OIG’s follow-up review 

determined that all recommendations from the 2019 DATA Act Audit have been resolved and are 

closed. 
5 

Open Audits 

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

(FISMA) FY 2022, A23-01. The objective of the independent audit of the FMC’s information 

security program is to identify improvements for the agency’s information technology security 

program. The audit will assess compliance with FISMA and related information security 

policies, procedures, and practices. The scope of this audit includes general controls of the FMC 

network and applications housing service contracts, tariff location filings, and FMC license 

applications. The OIG will evaluate potential system vulnerabilities and assess management 

actions to implement prior-year recommendations. The final audit report is expected to be issued 

in early October 2022. 

Independent Auditors’ Report of FMC’s FY 2022 Financial Statements, A23-02. The 

audit objectives are to opine on whether the FMC’s FY 2022 financial statements follow U.S. 

Generally Accepted Accounting Principles and present fairly the financial position of the agency. 

The audit will also review internal controls over financial reporting, and agency compliance with 

financial related laws and regulations. The statements to be audited are the Balance Sheet as of 

September 30, 2022, and the related Statement of Net Cost, Statement of Changes in Net Position, 

Statement of Budgetary Resources, and Statement of Custodial Activity. The final audit report 

will be issued by November 15, 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 public. 

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

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

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

period. 
6 

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. 

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

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

None

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 11, App. A

Section 5(a)(16) Peer review activity by FMC OIG on another OIG 11, 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

It is noteworthy for the agency to acknowledge there are no OIG reports with corrective actions 

outstanding for more than 6 months as of September 30, 2022. 

TABLE II - Listing of Reports Issued

Report Title Assignment 

Number

Issue 

Date 

Questioned 

Costs

Unsupported 

Costs

Funds 

Put to 

Better 

Use

N/A N/A N/A $0 $0 $0
9 

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
10 

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 
11 

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 the 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 an audit peer review of the Architect of the Capitol OIG 

during a 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.
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.