Office of Inspector General 

Semiannual Report to Congress 

Covering the Period 

 

October 1, 2020 – March 31, 2021 

FEDERAL MARITIME COMMISSION 
FEDERAL MARITIME COMMISSION

Washington, DC 20573

April 28, 2021 

Office of Inspector General

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

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, 2020 to March 

31, 2021. 

During this reporting period, the OIG completed two audits, and initiated one new audit. 

Specifically, the OIG completed the fiscal year (FY) 2020 annual financial statement audit and 

audit of the FMC’s compliance with the Federal Information Security Modernization Act 

(FISMA). The OIG also initiated the third of three required audits of the Digital Accountability 

and Transparency Act of 2014 (DATA Act). These audits are discussed in more detail in the 

enclosed report. 

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

values demonstrated by FMC’s leadership and staff.

 Respectfully submitted, 

 Jon Hatfield 

 Inspector General

Enclosure 
Table of Contents

Transmittal Letter

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

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

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

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

Completed and In-Progress Audits ........................................................................................................................... 2

Other Oversight Work............................................................................................................................................... 4

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

Memorandum of Understanding.............................................................................................................................. 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........................................................................................................... 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: The Port of Virginia, Norfolk, Virginia

 
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, 2020 through March 31, 2021. 

During this reporting period, the OIG completed two audits, the fiscal year (FY) 2020 

Annual Financial Statement Audit (A21-01) and audit of the FMC’s compliance with the Federal 

Information Security Modernization Act, FY 2020 (A21-02). These audits and other oversight 

work are discussed in more detail later in this report. 

At the beginning of this period, there was one hotline complaint open. There were four 

new hotline complaints received during the period and five hotline complaints remained open at 

the end of the reporting period. There were no new investigations or matters referred to 

prosecutorial authorities during this period and no investigations open at the end of the 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 the majority of FMC personnel are located in Washington, D.C., the FMC also 

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

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

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

and investigatory services on behalf of the FMC. 

OFFICE OF INSPECTOR GENERAL

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

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

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

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

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

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

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

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

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

with an audit or investigation. 

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

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

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

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

independence of the OIG. 

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

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

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

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

OFFICE OF INSPECTOR GENERAL ACTIVITIES

Completed and In-Progress Audits 

Independent Auditors’ Report of the FMC’s FY 2020 Financial Statements, A21-01. 

The audit report was issued on November 16, 2020. 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 

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contractor. The audit objectives were to opine on whether the FMC’s FY 2020 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, 2020, 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.

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

(FISMA) FY 2020, A21-02. The audit report was issued on November 2, 2020. 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 objectives of this independent audit of the 

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

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

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

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

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

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

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

Organizations, Revision 4. The audit report contained two recommendations to address one audit 

finding. FMC management agreed with the two recommendations. In addition, the OIG concluded 

the FMC had effectively implemented the two prior year FISMA recommendations.

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

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

and transparent. The DATA Act, in part, requires Federal agencies to report financial and award 
data in accordance with the established Government-wide financial data standards. Additionally, 

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

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

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

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

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

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

Act audits. The final audit report is due by November 8, 2021. 

Other Oversight Work

Review of FMC’s Compliance with Executive Order 13950 on Combatting Race and Sex 

Stereotyping, December 2020. The OIG completed a review of the FMC’s compliance with 

Executive Order (EO) 13950. Although the EO was revoked on January 20, 2021 by the new 

administration, EO 13950 dated September 22, 2020 stated it shall be the policy of the United 

States not to promote race or sex stereotyping or scapegoating in the Federal workforce. The EO

also stated that agency heads shall request from their Inspector General a review of agency 

compliance with the requirements of the EO by the end of calendar year 2020. Based on the review 

performed, the OIG found the FMC complied with the requirements applicable to the agency. 

Improper Payments Compliance Report for Fiscal Year 2020. 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 is following

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

2020 PAR posted on the agency’s website for compliance with PIIA, as well as, the 

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PaymentAccuracy.gov Data Call, and the Office of Management and Budget (OMB) 2020 

Supplemental Data Call. The FMC concluded that the agency has not identified any program that 

in and of itself constitutes a high-risk for improper payments. As a result, the FMC assessed all its 

payments to be low-risk for improper payments. For FY 2020, the OIG concluded the FMC 

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

reporting. 

Hotline and Investigations

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

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

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

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

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

At the beginning of this period, there was one hotline complaint open. There were four 

new hotline complaints received during the period and five hotline complaints remained open at 

the end of the reporting period. There were no new investigations or matters referred to 

prosecutorial authorities during this period and no investigations open at the end of the period. 

Memorandum of Understanding

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

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

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

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

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

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

Act.

Review of Legislation

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

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

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

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

abuse. 

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

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

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

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

agencies; and 

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

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

workforce in the Office of Inspectors General. 

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

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

operations. Specifically, the Inspector General (IG) is a member of CIGIE and the CIGIE Audit 

Committee, and the OIG participates in the monthly CIGIE meetings, and periodically assists 

CIGIE on special projects. 

During this reporting period, the IG accepted the position of Chair of the CIGIE Audit Peer 

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

requirements, professional standards, and established policies and procedures, a peer review of an 

OIG audit organization is required by generally accepted government auditing standards (GAGAS) 

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

is responsible for maintaining the CIGIE audit peer review schedule, managing requests for 

extensions and substitutions, coordinating amongst dispute resolution panels, as well as answering 

questions about conducting audit peer reviews. The subcommittee is composed of dedicated 

volunteers from the CIGIE oversight community. Parker Skaats, the OIG’s Auditor, is one of 

these dedicated volunteers and he serves on the subcommittee’s frequently asked questions 

workgroup. 
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SUMMARY OF INSPECTOR GENERAL REPORTING REQUIREMENTS

IG Act Reference Reporting Requirement Pages

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

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

abuses, or deficiencies

None

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

actions have not been completed

None

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

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

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

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

unsupported costs, and funds put to better use

9

Section 5(a)(7) Summary of each report 2-4

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

than 6 Months

Recommendations

Report Title Report 

Number

Issue 

Date Number Open Closed

Evaluation of the FMC’s 

Information Technology 

Inventory

A18-04 5/31/18 4 4 * 0 

*In a memorandum dated April 22, 2021, the Managing Director informed the IG that the 

agency has corrected the recommendations. The OIG plans to follow-up on the audit 

recommendations to verify the actions taken by management have addressed the issues 

identified during the evaluation. The OIG plans to complete the follow-up review during 

the next reporting period to enable the OIG to close the recommendations.

DATA Act Audit, 2019 A20-01 11/7/19 3 3 * 0 

*In a memorandum dated April 22, 2021, the Managing Director informed the IG that the 

agency has corrected the recommendations. The OIG has initiated the third of three required 

DATA Act audits during this reporting period, and the audit will include a follow-up of 

these recommendations.

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 

2020 Financial Statements

A21-01 11/16/20 $0 $0 $0

Audit of FMC’s 

Compliance with the 

Federal Information 

Security Modernization 

Act (FISMA) FY 2020 

A21-02 11/02/20 $0 $0 $0
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TABLE III - Reports with Questioned Costs

Number

of 

Reports

Questioned 

Costs

Unsupported 

Costs

A. For which no management decision has been 

made by the commencement of the reporting 

period. 

0 $0 $0

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

Subtotal (A + B) 0 $0 $0

C. For which a management decision was made 

during the reporting period. 

0 $0 $0

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

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

D. For which no management decision has been 

made by the end of the reporting period. 

0 $0 $0

E. Reports for which no management decision 

was made within six months of issuance. 

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

Number

of 

Reports Dollar Value

A. For which no management decision has been made 

by the commencement of the reporting period. 0 $0 

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

Subtotal (A + B) 0 $0

C. For which a management decision was made during 

the reporting period. 0 $0 

(i) dollar value of recommendations that were 

agreed to by management; and 

0 $0

(ii) dollar value of recommendations that were not 

agreed to by management. 

0 $0

D. For which no management decision has been made 

by the end of the reporting period. 0 $0 

E. Reports for which no management decision was 

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

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

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

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

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

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

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

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

2019 by the U.S. Equal Employment Opportunity Commission 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 U.S. Commodity Futures 

Trading Commission (CFTC) OIG during a prior reporting period and issued a peer review report 

on August 13, 2019. 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.

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