Federal Maritime Commission

Performance and 

Accountability Report

Fiscal Year 2010
The United States

Federal Maritime Commission

Our Mission

__________________________________________

To foster a fair, efficient and reliable 

international ocean transportation system 

and to protect the public 

from unfair and deceptive practices
This Fiscal Year 2010 Performance and Accountability Report is 

published by the Federal Maritime Commission

An electronic version of this report can be found at 

http://www.fmc.gov/home/performanceaccountabilityreports.asp

Please refer any questions concerning this report to the

Federal Maritime Commission 

at (202) 523-5800

Published in Washington, DC

November 15, 2010
The Federal Maritime Commission’s Performance and Accountability Report provides program and 

financial information that enables the President, Congress, and the public to assess the performance of 

the agency relative to its mission and the resources entrusted to it. This PAR satisfies the following 

legislation:

• The Federal Manager’s Financial Integrity Act of 1982 requires continuous evaluations and reporting of the 

adequacy of the systems of internal accounting and administrative controls. The Act can be found at the 

following URL:

http://www.whitehouse.gov/omb/financial/fmfia1982.html

• The Chief Financial Officers Act of 1990 provides for the production and submission of complete, reliable, 

timely, and consistent financial information for the use of the Executive Branch of the government and the 

Congress in the financing, management and evaluation of Federal programs. The Act can be found at the 

following URL:

http://www.gao.gov/special.pubs/af12194.pdf

• The Reports Consolidation Act of 2000 authorizes agencies to consolidate several reports in order to provide 

performance, financial and other related information in a more useful manner. The Act can be found at the 

following URL:

http://www.cbo.gov/showdoc.cfm?index=2193&sequence=0

• The Inspector General Reform Act of 2008 amends the Inspector General Act of 1978 to enhance the 

independence of the Inspectors General, to create a Council of the Inspectors General on Integrity and 

Efficiency, and for other purposes. The Act can be found at the following URL:

http://www.oig.lsc.gov/legis/pl110-409.pdf

• The Government Performance and Results Act of 1993 requires an annual report that measures the 

performance results of the agency against the established agency goals. The Act can be found at the following 

URL:

http://govinfo.library.unt.edu/npr/library/misc/s20.html

• The Government Management Reform Act of 1994 requires the submission of audited financial statements. 

The Act can be found at the following URL:

http://govinfo.library.unt.edu/npr/library/misc/s2170.html

• The Improper Payments Act of 2002 provides for estimates and reports of improper payments by Federal 

agencies. The Act can be found at the following URL:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_public_laws&docid=f:publ300.107.pdf
TABLE OF CONTENTS

A Message from the Chairman

Chapter One: Management’s Discussion and Analysis 

Introduction ................................................................................................................ 1

Regulatory Responsibility ........................................................................................... 4

Future Challenges....................................................................................................... 6

Program Performance Overview ................................................................................ 6

President’s Management Agenda............................................................................... 7

Financial Performance Overview................................................................................ 9

Financial Statement Highlights................................................................................... 11

Systems, Controls, and Legal Compliance .................................................................. 14

Chairman’s FMFIA Statement of Assurance ............................................................... 17

Chapter Two: Program Performance

Annual Performance Report....................................................................................... 19

Performance Measure Summary Tables..................................................................... 20

Chapter Three: Auditor’s Report and Financial Statements

A Message from the Chief Financial Officer ............................................................... 30

Principal Statements - Limitations of the Financial Statements................................. 31

Independent Auditor’s Report ................................................................................... 32

Balance Sheet.............................................................................................................. 38

Statement of Net Cost ................................................................................................ 39

Statement of Changes in Net Position........................................................................ 40

Statement of Budgetary Resources ........................................................................... 41

Statement of Custodial Activity .................................................................................. 42

Notes to the Financial Statements.............................................................................. 43

Chapter Four: Other Accompanying Information

Inspector General-Identified Management and Performance Challenges................. 56

Comments on Management and Performance Challenges Identified 

by the Inspector General ............................................................................... 61

Improper Payments Information Act.......................................................................... 62

Summary of Financial Statement Audit ..................................................................... 64
A MESSAGE FROM THE CHAIRMAN

As the Chairman of the Federal Maritime Commission, I am pleased to 

submit this Performance and Accountability Report for Fiscal Year 

2010. It is the role of the FMC, through its regulatory authority, to 

assist all segments of our waterborne commerce, especially U.S. 

importers and exporters, in regaining their vitality and stimulating job

growth as the economy rebounds. The economic benefits and foreign 

trade impact of strong shipping lines, ports, support industries, onboard and dockside labor, truckers and railroads, cannot be overstated. 

The ocean transportation system is the lifeline of U.S. foreign trade, 

and the highway for transporting the nation’s foreign trade to and from 

other continents. During fiscal year 2010, the FMC continued to strive 

to maintain a viable ocean highway for efficiently transporting U.S. 

imports and exports. We continued to meet legislative mandates, overseeing dominant and emerging 

ocean shipping trades and monitoring the impact on the United States of actions by other nations in 

regulating their ocean carriers. We continued to ensure that shippers and regulated entities such as ocean 

common carriers, ocean transportation intermediaries, ports, and other participants involved in the entire 

maritime logistics chain were provided with an efficient and reliable ocean transportation system. 

The FMC has a twofold strategic focus, as reflected in our Strategic Plan for 2010-2015, in both 

maintaining an efficient and competitive international ocean transportation system and protecting the 

public from unlawful, unfair and deceptive ocean transportation practices. The accomplishment of these 

strategic goals is critical to the President’s goals to encourage economic growth, invest in the future, and 

responsibly govern the nation. The smooth flow of international commerce is vital to the national 

economy in both providing access to foreign markets for our exports and ensuring the availability of 

imported goods for domestic production and consumption. We especially are concerned that the ocean 

transportation system not impede achievement of the President’s National Export Initiative. 

The ocean transportation system faced significant difficulties in fiscal year 2010. Effective 

implementation of the Federal Maritime Commission’s (FMC) mission to foster a fair, efficient and 

reliable international ocean transportation system and protect the public from unfair and deceptive 

practices was uniquely important this fiscal year due to challenging trade and operational conditions. 

Particularly hard hit were U.S. importers and exporters that found it difficult during most of the year to 

ship their cargo because of insufficient vessel capacity or lack of available shipping containers. In 

addition, shippers faced rapidly increasing transportation costs, often unexpectedly and without sufficient 

advance warning. The highlighted actions provide an overview of agency activities in pursuit of its 

mission. Central to all of these actions was a reorganization of the Commission.

My January 2010 reorganization was an important first step towards a revitalized FMC. In close 

consultation with Congress and FMC staff, we took advantage of what worked best during the 

Commission’s forty-nine year history, while modernizing to keep pace with an ocean transportation 

industry that continues to grow in size and importance. The new organization reestablishes the 

Managing Director to ensure that the Commission’s major offices are cohesively directed toward 

achieving fair and efficient ocean transportation that helps improve the nation’s economy. Heightened 

priority was also given to the role of the newly independent Office of Consumer Affairs and Dispute 

Resolution Services to assist exporters and other consumers, and to work with the public and ocean 

transportation industry to resolve disputes quickly and with minimal costs to all parties. 
In 2010, the Commission initiated two major investigations into significant areas of concern affecting 

shipping industry consumers. Fact Finding Investigation No. 26, Vessel Capacity and Equipment 

Availability in the United States Export and Import Liner Trades, was initiated to ascertain existing 

conditions and practices in the U.S. liner trades that appeared to impede U.S. oceanborne imports and 

exports. Exporters especially were encountering difficulty shipping their products due to capacity and 

equipment constraints, coupled with alleged ocean carrier practices that were preventing many from 

reaching their markets. This was especially disconcerting in light of President Obama’s directive to use 

Federal resources to increase U.S. exports over the next five years. Fact Finding No. 27, Potentially 

Unlawful, Unfair or Deceptive Ocean Transportation Practices Related to the Movement of Household 

Goods or Personal Property in U.S.-Foreign Oceanborne Trades, seeks to develop a record of the nature, 

scope and frequency of potentially unlawful, unfair or deceptive ocean transportation practices in the 

shipment of household goods. This investigation will further the Commission's Strategic Goal to protect 

the public from unlawful, unfair or deceptive ocean transportation practices and resolve shipping disputes. 

This Report covers the Commission’s efforts in fiscal year 2010 to foster an equitable, secure, and 

market-driven ocean transportation industry. Fiscal year 2010 was the second year in which the FMC 

undertook quantitative measurement of performance goals, employing measures and targets. The 

Commission’s actual performance in fiscal year 2010 is compared with the targeted levels of performance 

established in the agency’s Strategic Plan for Fiscal Years 2010-2015. During the year, the agency 

focused on eleven performance goals, while continuing its various ongoing day-to-day activities.

The fiscal year 2010 independent financial audit resulted in the FMC’s seventh consecutive unqualified 

opinion. The independent auditors did not identify any material weaknesses, significant deficiencies, or 

instances of non-compliance with laws and regulations. In the Management Assurances section (see 

page 17), I provide my assurances that the FMC has no material weaknesses to report. I am also pleased 

to report that the FMC financial and performance data presented in this Report are complete, reliable, and 

accurate in keeping with the guidance from the Office of Management and Budget.

On August 12, 2011, the Commission will mark its 50th year anniversary of becoming an independent 

agency charged with administration of the regulatory provisions of the shipping laws. I look forward to 

working with our dedicated staff, fellow Commissioners and shippers, ocean transportation 

intermediaries, ocean carriers, terminals, and ports, as well as my government counterparts in other 

nations to ensure an efficient and reliable ocean transportation system that supports a sustained recovery 

in trade and the global economy. 

Sincerely,

Richard A. Lidinsky, Jr.

Chairman

November 15, 2010
FEDERAL MARITIME COMMISSION

Chapter One

MANAGEMENT’S DISCUSSION and ANALYSIS

Fiscal Year 2010
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

1

Introduction

This Performance and Accountability Report (Report or PAR) represents the completion of the 

Federal Maritime Commission’s program and financial management process for fiscal year (FY) 

2010, which began with mission and program planning, continued with the formulation and 

justification of FMC’s budget submission to the President and Congress, through budget 

execution, and ended with a report of our program performance and the use of resources. This 

report was prepared pursuant to the requirements of the Chief Financial Officers Act, as 

amended by the Reports Consolidation Act, and the Office of Management and Budget (OMB) 

Circular No. A-136, Financial Reporting Requirements (Revised September 29, 2010), and

covers the Commission’s activities from October 1, 2009 through September 30, 2010.

Chapter One provides an overview of the FMC. It consists of nine sections: Introduction

describes the agency, its mission and structure; Regulatory Responsibility describes its regulatory 

mandate; Future Challenges includes information about the changes in the maritime industry; 

Program Performance Overview reports on the FMC’s success in achieving its strategic goals; 

President’s Management Agenda describes activities related to the relevant initiatives; Financial 

Performance Overview discusses the FMC’s financial position and audit results; Financial 

Statement Highlights gives an overview of the major financial statements; Systems, Controls, and 

Legal Compliance discloses the FMC’s compliance with certain legal and regulatory 

requirements; and the Chairman’s FMFIA Statement of Assurance, which provides assurance 

that the FMC’s financial management system conforms to applicable financial systems 

requirements, and that no material weaknesses were found in the design or operation of internal 

controls.

About the FMC

The Federal Maritime Commission (FMC or agency) is an independent regulatory agency which 

administers the Shipping Act of 1984 (1984 Act or Shipping Act) as amended by the Ocean 

Shipping Reform Act of 1998 (OSRA); section 19 of the Merchant Marine Act, 1920 (1920 Act); 

the Foreign Shipping Practices Act of 1988 (FSPA); and sections 2 and 3 of Public Law (P.L.) 

89-777 (46 U.S.C. §§ 44102 and 44103) (passenger vessel certification). The Commission: 

monitors the activities of ocean common carriers, marine terminal operators (MTOs), 

conferences, ports and ocean transportation intermediaries (non-vessel-operating common 

carriers and ocean freight forwarders) who operate in the U.S. foreign commerce to ensure they 

maintain just and reasonable practices; maintains trade monitoring, enforcement and dispute 

resolution programs designed to assist regulated entities in achieving compliance and to detect 

and appropriately remedy malpractices and violations of the prohibited acts set forth in section 

10 of the 1984 Act; monitors the laws and practices of foreign governments which could have a 

discriminatory or otherwise adverse impact on shipping conditions in U.S. trades, and imposes 

remedial action, as appropriate, pursuant to section 19 of the 1920 Act or FSPA; enforces special 

regulatory requirements applicable to carriers owned or controlled by foreign governments; 

processes and reviews agreements, service contracts, and service arrangements pursuant to the 

1984 Act for compliance with statutory requirements; and reviews common carriers’ privately 

published tariff systems for accessibility, accuracy, and reasonable terms. The Commission also 
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

2

issues licenses to qualified ocean transportation intermediaries (OTIs) in the U.S., ensures that all 

OTIs are bonded or maintain other evidence of financial responsibility, and ensures that 

passenger vessel operators (PVOs) demonstrate adequate financial responsibility in case of 

nonperformance of voyages or passenger injury or death. 

Organization

The FMC is composed of five Commissioners appointed for five-year terms by the President 

with the advice and consent of the Senate. No more than three members of the FMC may belong 

to the same political party. The President designates one Commissioner to serve as Chairman, the 

Chief Executive and Administrative Officer of the agency. Chairman Lidinsky announced a 

reorganization of the FMC effective January 31, 2010. 

Under the reorganization, the FMC’s organizational units consist of: Offices of the 

Commissioners; Office of the General Counsel (OGC); Office of the Secretary (OS); Office of 

Consumer Affairs and Dispute Resolution Services (CADRS); Office of Administrative Law 

Judges (OALJ); Office of Equal Employment Opportunity (EEO); Office of the Inspector 

General (OIG); Office of the Managing Director (OMD); the Bureaus of Certification and 

Licensing (BCL), Enforcement (BOE), and Trade Analysis (BTA); the Offices of Budget and 

Finance (OBF), Human Resources (OHR), Information Technology (OIT), Management

Services (OMS), and Area Representatives (ARs). The majority of FMC personnel are located in 

Washington, D.C., with ARs stationed in New York, New Orleans, Los Angeles, Seattle, 

Houston and South Florida. 
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

3

COMMISSIONER 

DYE

COMMISSIONER 

BRENNAN

COMMISSIONER 

(VACANT) 

CHAIRMAN 

LIDINSKY

Office of the 

Inspector 

General

Office of Equal 

Employment 

Opportunity

Managing 

Director

COMMISSIONER 

KHOURI

Office of the 

General 

Counsel

Office of the 

Secretary

Office of 

Administrative 

Law Judges

Office of Consumer 

Affairs and Dispute 

Resolution Services

Office of 

Budget and 

Finance

Office of 

Human 

Resources

Office of 

Management 

Services

Office of 

Information 

Technology

Bureau of 

Certification 

and 

Licensing

Bureau of 

Enforcement

Bureau of 

Trade 

Analysis

Area Representatives 

Houston, TX 

Los Angeles, CA 

New Orleans, LA 

New York, NY 

Seattle, WA 

South Florida

FEDERAL MARITIME COMMISSION 

ORGANIZATION CHART 

as of 

SEPTEMBER 30, 2010

Administrative Direction

Technical Direction
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

4

Regulatory Responsibility

The Commission’s principal regulatory responsibilities include:

$ Reviewing agreements among ocean common carriers and marine terminal operators (MTOs) 

relating to service in the U.S. foreign oceanborne trades, to ensure that they do not cause 

substantial increases in transportation costs or decreases in transportation services.

$ Reviewing service contracts between ocean common carriers and shippers to guard against 

detrimental effects to shipping in the U.S. foreign trades.

$ Ensuring that common carriers’ tariff rates and charges are accessible to the shipping public 

in private, electronically accessible systems.

$ Regulating rates, charges, and rules of government-owned or -controlled carriers to ensure 

that they are just and reasonable.

$ Issuing passenger vessel certificates evidencing financial responsibility of vessel owners or 

charterers to pay judgments for personal injury or death, or to refund passenger fares for the 

nonperformance of a voyage or cruise.

$ Licensing OTIs in the U.S. to protect the public from unqualified, insolvent, or dishonest 

companies.

$ Ensuring that OTIs maintain sufficient financial responsibility to protect the shipping public 

from financial loss.

$ Protecting the shipping public against economic harm by investigating rates, charges, 

classifications, and practices of common carriers, MTOs, and OTIs operating in the foreign 

commerce of the U.S.

$ Taking action to address unfavorable conditions arising out of foreign government or 

business practices in the U.S. foreign shipping trades.

The FMC is authorized by the FSPA, the 1920 Act, and 1984 Act as amended by OSRA to take 

action to ensure that the foreign commerce of the U.S. is not burdened by non-market barriers to 

ocean shipping. The FMC may take countervailing action to correct unfavorable shipping 

conditions in U.S. foreign commerce and may impose penalties. The FMC may address actions 

by carriers or foreign governments that adversely affect shipping in the U.S. foreign oceanborne 

trades including the intermodal operations of carriers or the operations of OTIs, or that impair 

access of U.S.-flag vessels to ocean trade between foreign ports.
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

5

The 1984 Act is applicable to the operations of common carriers and other persons engaged in 

U.S. foreign commerce. It exempts agreements that have become effective under the 1984 Act 

from the U.S. antitrust laws, as contained in the Sherman and Clayton Acts. The FMC reviews 

and evaluates agreements to ensure that they do not exploit the grant of antitrust immunity, and 

to ensure that agreements do not otherwise violate the 1984 Act or result in an unreasonable 

increase in transportation cost or unreasonable reduction in service.

 

In addition to monitoring relationships among carriers, the FMC is also responsible for ensuring 

that individual carriers, as well as those permitted by agreement to act in concert, fairly treat 

shippers and other members of the shipping public in accordance with the 1984 Act’s prohibition 

against undue discrimination. The 1984 Act also requires all carriers to make their rates, charges 

and practices available in automated tariff systems that must be available electronically to the 

public. Non-vessel-operating common carriers (NVOCCs) may assess the rates and charges 

published in their tariffs or may offer service arrangements with shipping customers. Ocean 

common carriers are permitted to enter into service contracts with their shipper customers. Such 

contracts are filed electronically with the FMC in an Internet-based system, and are provided 

confidential treatment by the FMC as required by the Act. The FMC does not have the authority 

to approve or disapprove general rate increases (GRIs) or individual commodity rate levels in the 

U.S. foreign commerce, except with regard to certain foreign government-owned or -controlled 

carriers.

Sections 2 and 3 of Public Law 89-777 require the operators of passenger vessels with 50 or 

more berths who embark passengers at U.S. ports to establish financial coverage to indemnify 

passengers in cases of death, injury, or nonperformance of transportation. The FMC certifies 

such operators upon the submission of satisfactory evidence of financial responsibility. 

The FMC ensures that all OTIs operating in the foreign commerce of the U.S. have established 

sufficient financial responsibility to protect shippers from financial loss. Additionally, the FMC 

licenses all U.S. OTIs.

The FMC carries out its regulatory responsibilities in various ways. It conducts informal and 

formal investigations, holds hearings, considers evidence and renders decisions, and issues 

appropriate orders and implementing regulations. It carries out a vigorous enforcement program 

– assessing civil penalties for Shipping Act violations. The FMC also adjudicates and mediates 

disputes involving the regulated community, the general shipping public, and other affected 

individuals or interest groups.

All of the above are supported by the FMC’s management and support functions of information 

technology, financial management, human resources, and management services.

The FMC oversees more than 6,000 regulated persons (passenger vessel operators, vesselowning common carriers, marine terminal operators, conferences, OTIs, etc.).
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

6

Future Challenges

In 2009, the international ocean shipping industry experienced one of its worst years in recent 

history, and shipping rates plummeted. As a result, shipping lines took up to 575 vessels out of 

service worldwide, and shipping container production ceased. As the economy recovered in 

2010, demand for shipping and containers returned at an unexpected pace. Importers and 

exporters experienced service disruptions such as cancelled bookings and container shortages, 

along with unexpected and frequent rate increases, along with increased surcharges. The 

Commission has taken steps to understand the problems that led to these service disruptions, and 

will be working with the shipping lines and their customers on ways to avoid or address these 

problems going forward.

Future challenges for the Commission include: (1) ongoing review of regulatory requirements to 

reduce regulatory burdens while continuing to protect the shipping public; (2) the need for close 

scrutiny of the shipping lines’ rate discussion agreements and global alliances to ensure they do 

not restrict capacity or impede commerce; (3) working with shipping lines and their customers to 

help them resolve disputes and disruptions efficiently; and (4) protecting consumers who ship 

their household goods from unfair or illegal practices by shipping intermediaries. The 

Commission may also be required to respond and implement changes to its controlling 

legislation and statutory authority.

The Commission will continue to use information technology resources to enhance the efficiency 

and transparency of its operations and provide the public access to as much information as 

possible. The Commission also will continue to pursue cooperative working arrangements with 

other federal agencies to leverage its resources.

Program Performance Overview

The FMC, like other Federal agencies, provides an annual performance plan to Congress, 

pursuant to the Government Performance and Results Act (GPRA). The FMC has organized its 

performance goals to achieve its strategic goals. The FMC’s Strategic Plan Fiscal Years 2010-

2015 (Revised) is available on the FMC’s website. The complete FY 2010 Program Performance 

Report is contained in Chapter 2, Program Performance. In FY 2010, the Commission 

continued to refine the agency’s business practices, specifically on revising and updating internal 

procedures in line with the amendment of Commission regulations. This includes facilitating the 

use and dissemination of filed material in order to improve analysis of required filings and 

responsiveness to inquiries, and implementation of procedural changes to enhance the 

effectiveness of agency operations. We broadened our efforts to implement the President’s 

Management Agenda initiative to expand electronic government by increasing transparency and 

improving the management of information through the more effective use of available 

technologies. We also streamlined the delivery of services and information to regulated entities, 

other government agencies and the public, and further automated agency systems and enhanced 

the use of agency databases to allow staff to discharge program responsibilities more effectively.
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

7

Achieving Strategic Goal Results

The FMC has a distinct process for measuring performance. Performance goals are developed to 

promote each of the FMC’s strategic goals, and the processes or activities required to achieve the 

goals are identified. The agency then specifies the outcomes it believes will result from 

accomplishing each stated goal, and agrees on performance indicators as the quantifiers of 

performance. Fiscal year 2010 was the second year in which the FMC undertook to quantify and 

measure performance goals. The Commission’s actual performance in FY 2010 is compared 

with the targeted levels of performance established in the agency’s Strategic Plan Fiscal Years 

2010-2015 (Revised). Taken together, performance measures and targets under each strategic 

goal are designed to enhance and further those goals each fiscal year, bringing the agency closer 

to its ideal of full achievement of its strategic goals. Our first experience in establishing 2009

goals enabled us to set more realistic targets for fiscal year 2010 in the newly revised strategic 

plan.

President’s Management Agenda

The President’s Management Agenda (PMA) is intended to make Government more citizencentered, results-oriented, and market-based. The five initiatives are: (1) Strategic Management 

of Human Capital; (2) Competitive Sourcing; (3) Improved Financial Management; 

(4) Expanded E-Government; and (5) Budget and Performance Integration. The FMC has 

achieved some successes in its agenda to address these initiatives. Chapter Two, Program 

Performance, discusses our activities in these important areas in more detail.

A brief overview of the agency’s successes includes the following:

Strategic Management of Human Capital – The FMC continued to focus on workforce and 

succession planning during FY 2010. The Commission finalized its Human Capital Plan, 

Workforce Plan, and Accountability and Succession Management Plans in accordance with 

OPM’s Human Capital Assessment and Accountability Framework.

Over the last several surveys of employee satisfaction and engagement conducted by the U.S. 

Office of Personnel Management, the FMC has received overwhelmingly positive feedback. 

Based on results of the 2008 Federal Human Capital Survey, FMC was recognized as one of the 

Federal Government’s Best Places to Work and Most Improved Small Agency. However, 

employees noted some areas where continued management attention would be desired. Based on 

that feedback, the FMC expanded its offerings of information about Federal benefits and 

work/life programs, and worked to increase organizational awareness about telework as a 

valuable tool for effectiveness and a way to enhance work/life balance.

The 2010 Employee Viewpoint Survey (EVS) results also underscored the overall high level of 

satisfaction among FMC employees. Rankings for agencies on many of the dimensions related 

to employee satisfaction and engagement (such as Teamwork, Effective Leadership, Family 

Friendly Culture and Benefits, and Work/Life Balance) found FMC among the top 10 small 
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

8

agencies once again. However, again employees noted some areas where continued management 

attention would be desirable. Based on that feedback, the FMC expanded its offerings of 

information about Federal benefits and work/life programs.

• The Commission used its employee financial education plan to increase employee 

awareness about their benefits.

• The Commission offers three employee newsletters on an ongoing basis that target 

wellness and benefits information to employees at various career and life stages and it 

promotes the Feds Get Fit Challenge annually.

Over the last year, FMC also worked to increase organizational awareness about telework as a 

valuable tool for effectiveness and a way to enhance work/life balance by benchmarking best 

practices and adapting them to FMC’s mission and culture.

Competitive Sourcing - The FMC submitted its FY 2010 Federal Activities Inventory Reform 

Act (FAIR Act) Inventory to OMB in June 2010. The Inventory identified 78 of the agency’s 

132 FTEs as commercial activity FTEs. No challenges to its commercial inventories have ever 

been received.

Financial Performance - For the seventh straight year, the FMC received an unqualified 

opinion on its financial statements in FY 2010. The FMC will continue to strive to achieve 

unqualified audit opinions.

Expanded E-Government - The FMC continues to expand electronic government (egovernment). During FY 2010, the FMC completed a large-volume document scanning project, 

and now the entire body of historical Commission decisions is available on the FMC website, a 

useful and cost effective resource. During FY 2010, the Commission continued work to 

modernize and expand its Regulated Persons Index (RPI), a database containing up-to-date 

records of licensed OTIs, ocean common carriers and other entities, and work continued on an 

enterprise content management project to integrate FMC databases, address business workflow 

and document and records management needs.

Senior managers are aware of the requirements and benefits of e-government, and continue to 

plan and initiate program changes to expand the use of e-government in daily activities. 

Employees are required to complete on-line information technology security refresher training 

on an annual basis. In anticipation of launching a new website during fiscal year 2011, the FMC 

began work to upgrade its website operating platform to make more information proactively 

available to the public in support of the Administration’s initiative for a more open and 

transparent government. The agency is committed to continuing its integration of information 

technology policies and procedures, and to expand opportunities for e-government activities. 
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

9

Budget and Performance Integration – The Strategic Plan and Annual Performance Plan 

continue to represent the fundamental framework for the agency’s planning and budgeting 

activities. Funding and Full Time Equivalent (FTE) levels are integrated into the agency’s 

performance planning document by strategic goal, to identify clearly the budgetary and staff 

resources that are committed to each goal.

Financial Performance Overview

The FMC’s financial condition as of September 30, 2010, is sound, and the Commission has 

sufficient internal controls in place to ensure its budget authority is not exceeded and that funds 

are utilized efficiently and effectively. The FMC’s accounting services provider, the Bureau of 

the Public Debt (BPD), prepared the agency’s financial statements in accordance with 

accounting standards codified in the Statements of Federal Financial Accounting Standards and 

OMB Circular A-136. 

Source of Funds 

The FMC has a single source of funds, Salaries and Expenses, funded by an annual appropriation 

that is available for commitments and obligations incurred during the fiscal year in which the 

authority was granted. The FMC’s appropriation level for FY 2010 was $24,135,000. This 

represents a net increase in appropriation level of $1,335,000 over FY 2009. Additionally, the 

Commission had reimbursable budget authority of $122,029 for work performed by FMC staff 

for other government entities. 

Although the FMC collects remittances for user fees and penalties, the agency is not authorized 

to offset any of its budget authority by utilizing these funds. The collections are deposited 

directly into the Treasury General Fund, and captured in the Statement of Custodial Activity 

which can be found in Chapter Three, Auditor’s Reports and Financial Statements.
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

10

Appropriation History

Full-time Equivalent History

The FMC’s Full-time Equivalent (FTE) level is largely driven by our annual appropriation level, 

however, for the past several years, unanticipated vacancies in the Offices of the Commissioners 

have remained unfilled. The FMC experienced modest growth in its FTE level from 2001 

through 2004, followed by an annual decline through 2008. The level increased in 2009 and in 

2010, our FTE level returned to its 2002 level. The agency has endeavored to develop the 

appropriate mix of staffing and other available means to ensure effective accomplishment of our 

mission. 

15,466 16,477 16,591

18,362 19,340 20,294 20,427

22,072 22,800 24,135

0

5,000

10,000

15,000

20,000

25,000

30,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FISCAL YEAR

APPROPRIATION HISTORY 

FISCAL YEARS 2001 - 2010

121 127 129 129 124 121 119 115 120 127

0

75

150

225

300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Fiscal Year

FULL-TIME EQUIVALENT HISTORY 

FISCAL YEARS 2001 - 2010
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

11

Uses of Funds by Expense Category

Congress approved FY 2010 appropriations for the FMC in the amount of $24,135,000 through 

P.L. 111-117. This represented a $1.335 million increase over the FY 2009 appropriation level 

of $22,800,000. During FY 2010, obligations against the appropriation totaled $24,124,727,

representing 99.96% of the approved funding level. The Commission spent $24.125 million as 

follows: 70.57% for salaries and benefits, 1.18% for official travel expenses, and 28.25% for 

administrative expenses (e.g., rent, government and commercial contracts, furniture, printing, 

and equipment maintenance). The un-obligated balance of $10,273 will remain available in case 

of legitimate increases to existing obligations. 

Audit Results

The FMC again received an unqualified opinion on its FY 2010 financial statements from the 

auditing firm of Dembo, Jones, Healy, Pennington & Marshall, P.C. under contract through the 

FMC’s OIG. Comparative statements are located in Chapter Three, Auditor’s Reports and 

Financial Statements.

Financial Statement Highlights

The financial statements have been prepared to report the financial position and results of 

operations of the Commission pursuant to the requirements of 31 U.S.C. 3515(b). While the 

statements have been prepared from the books and records of the Commission in accordance 

with the formats prescribed by OMB, the statements are in addition to the financial reports used 

to monitor and control budgetary resources which are prepared from the same books and records. 

The statements should be read with the realization that they are for a component of the U.S. 

Government, a sovereign entity. One implication of this is that liabilities cannot be liquidated 

without legislation that provides resources to do so. 

17,025

286

6,814

15,415

212

7,106

$0

$5,000

$10,000

$15,000

$20,000

FY 2010 FY 2009

Salaries & Expenses Travel Administrative

Utilization of Funds by Expense Categories

($000s)
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

12

The FMC’s financial statements summarize the financial position and financial activity of the 

agency. The financial statements, footnotes, and the remainder of the required supplementary 

information appear in their entirety in Chapter Three, Auditor’s Report and Financial 

Statements. A brief analysis of the principal statements follows.

Analysis of the Balance Sheet

The FMC’s assets in FY 2010 were 

$5,493,579 as of September 30, 2010. This 

represents an increase over FY 2009 of 

$443,183. The FMC’s assets reported in 

the balance sheet are summarized in the 

accompanying table. 

The Fund Balance with Treasury of 

$4,862,018 represents the FMC’s largest asset as of September 30, 2010 and represents 88.50% 

of the agency’s total assets. This is an increase of $84,344 or 1.77% over FY 2009. The Fund 

Balance with Treasury is comprised only of annual appropriations maintained by the Department 

of the Treasury to address current liabilities.

Accounts Receivable as of September 30, 2010 was $114 for a receivable billed to a non-federal 

source. This accounts for less than 1% of the FMC’s total assets and is a 99.84% decrease from 

FY 2009. The reduction is due mainly to one receivable that was resolved through a settlement 

agreement that resulted in a portion of the debt being written off. Payment for the settlement was 

received in FY 2010.

Capital Assets, also known as Property, Equipment and Software, accounts for 11.5% of the 

FMC’s total assets as of September 30, 2010. The net value of $629,719 accounts for the 

depreciation of all assets and represents the current book value of those assets.

The FMC’s Liabilities totaled $3,446,619 as of 

September 30, 2010. The accompanying table 

depicts an increase of $731,525 total liabilities 

from FY 2009. Accounts Payable represents 

the total goods and services received by the 

FMC as of September 30, 2010. The FMC has 

not yet received invoices from the numerous 

vendors as of the close of FY 2010. Federal 

Employee Benefits represents accrued salaries 

and liabilities that are not funded by budgetary 

resources. These liabilities represent future workers’ compensation and accrued annual leave that 

remains on the books. The Federal budget process does not recognize future benefits for today’s 

employees; however, these liabilities will be recognized in future budget cycles as they are paid. 

FY 2010 FY 2009

Fund Balance with Treasury $4,862,018 $4,777,674

Accounts Receivable $114 $70,222

Capital Assets $629,719 $202,500

Other $1,728 $0

Total Assets $5,493,579 $5,050,396

Summary of Assets as of 

September 30, 2010

FY 2010 FY 2009

Accounts Payable $960,639 $541,102

Payroll Taxes $204,092 $156,036

Federal Employee Benefits $13,562 $7,217

Custodial Liabilities $114 $69,236

Accrued Liabilities $2,268,212 $1,941,503

Total Liabilities $3,446,619 $2,715,094

Summary of Liabilities as of 

September 30, 2010
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

13

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 

are the net result of FMC’s operations since 

inception.

Analysis of the Statement of Changes in Net Position

The Statement of Changes in Net Position reports the change in the agency’s net position during 

the reporting period. The statement is a summary of two factors, Unexpended Appropriations 

and Cumulative Results in Operations. The total net position for FY 2010 is a decrease of 

$288,342 from FY 2009. Unexpended Appropriations represents the total authority granted by 

Congress that the FMC has not expended as of September 30, 2010. Cumulative Results of 

Operations represents the net results of all operations of the FMC.

Analysis of Net Cost

The analysis of Net Cost presents the net

cost of FMC’s Programs as identified in the 

Annual Report. The four agency pro-grams 

are Formal Proceedings, Inspector General, 

Equal Employment Opportunity, and 

Operational and Administrative. The 

Operations program was abolished during an 

FMC re-organization in January 2010. The 

individual Operations and Administration 

programs were merged into a single program 

at that time. The Statement of Net Costs 

shows the net cost of operations for the 

agency as a whole and its sub-organizations 

and/or programs. Net Costs compared to 

Budgetary Resources can be found in 

Chapter Three, Auditor’s Report and 

Financial Statements. 

FY 2010 FY 2009

Unexpended Appropriations $2,647,804 $3,214,566

Cumulative Results ($600,844) ($879,264)

Total Net Position $2,046,960 $2,335,302

Net Position Summary as of 

September 30, 2010

FY 2010 FY 2009

Operational and Adminstrative $17,931,656 $0

Office of Administration $0 $6,237,122

Office of Operations $0 $10,304,424

Formal Proceedings $7,109,228 $6,082,905

Office of Inspector General $675,785 $529,935

Office of Equal Employment 

Opportunity $206,652 $151,287

Net Cost of Program Services $25,923,321 $23,305,673

Summary of the Statement of 

Net Cost as of September 30, 2010
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

14

Analysis of the Statement of Budgetary Resources

The Statement of Budgetary 

Resources (SBR) shows the 

source of the agency’s 

budgetary resources and the 

status of those resources at the 

end of the reporting period. The 

statement also shows the 

relationship between budgetary 

resources and the status of 

those resources. The total 

budgetary resources must be equal to the status of budgetary resources at all times. A more 

detailed SBR can be found in Chapter Three, Auditor’s Report and Financial Statements. For 

FY 2010, the FMC had total budgetary resources available of $25,631,554. This represents an

increase of $1,946,115 or 8.2% over FY 2009 budgetary resources. The FMC incurred total 

obligations of $24,327,627 in FY 2010. 

Systems, Controls, and Legal Compliance

This section provides information on FMC’s compliance with the:

Federal Managers’ Financial Integrity Act

Prompt Payment Act

Debt Collection Improvement Act

Biennial Review of User Fees

Performance Measure Summary

Inspector General Act

 

Federal Managers’ Financial Integrity Act

The Federal Managers’ Financial Integrity Act (FMFIA) requires that agencies establish controls 

that reasonably ensure that obligations and costs comply with applicable law; assets are 

safeguarded against waste, loss, unauthorized use, or misappropriation; and revenues and 

expenditures are properly recorded and accounted for. It requires the agency head to provide an 

assurance statement of the adequacy of management controls and conformance of financial 

systems with Government standards.

The Chairman has provided his annual assurance statement on the following page. This 

statement was based on various sources and included management knowledge gained from the 

daily operation of agency programs and reviews, discussions with the Managing Director and the 

Directors of the Office of Budget and Finance and Management Services, audits of financial 

statements, annual performance plans, and OIG reports, among other sources. Additionally, the 

Chairman meets regularly with, and receives regular reports from, the FMC’s OIG. 

FY 2010 FY 2009

Total Budgetary Resources $25,631,554 $23,685,439

Obligations Incurred $24,327,627 $22,817,981

Unobligated Balance Not Available $1,293,654 $801,174

Unobligated Balance $10,273 $66,284

Total Status of Budgetary Resources $25,631,554 $23,685,439

Statement of Budgetary Resources as of

September 30, 2010
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

15

Management control deficiencies, when identified, are addressed at the highest management 

levels within the agency. For instance, corrective actions for significant deficiencies identified in 

the agency’s information technology area are overseen directly by the agency’s Chief 

Information Officer (CIO).

During the fiscal year, the IG identified no significant deficiencies and there were no significant 

management decisions made on which the IG disagreed. Management and the OIG reached 

agreement on all recommendations made. At the conclusion of the fiscal year, management and 

the OIG agreed as to the actions that management needs to take on 19 recommendations from 

2010 and prior years, but management has not yet taken the action to close the recommendations.

Debt Collection Improvement Act

The Debt Collection Improvement Act enhances the ability of the Government to service and 

collect debts. The Act centralized the collection of non-tax delinquent debt owed to the 

Government. The collection of delinquent debts is conducted by the Financial Management 

Service through the Treasury Offset Program where the names and taxpayer identification 

numbers (TIN) are matched against the TINs of recipients of Government payments. The balance 

owed the Government is deducted or offset from the payment to the entity to satisfy the debt. All 

Office of Personnel Management (OPM) retirement, vendor, Internal Revenue Service refunds, 

Social Security Benefits, and some Federal salary payments are being offset. Federal agencies 

are required to refer delinquent accounts in excess of 180 days to Treasury for collection. The 

goal of the FMC is to minimize the amount of delinquent debt owed to the agency. 

Prompt Payment Act

The Prompt Payment Act requires agencies to make timely payments to vendors for supplies and 

services, to pay interest penalties when payments are made after the due date, and to take cash 

discounts when they are economically justified. In FY 2010, the FMC maintained a percentage 

of on-time payments of over 95%. The FMC paid seventeen invoices totaling $56,058 late due to 

certification delays from the COTRs. Interest payments totaling $45 were paid on eight of the 

invoices. The FMC will continue to strive towards 100% on-time payments in future years. The 

FMC has maintained a 100% on-time electronic/credit-card payment to its vendors. 

Biennial Review of User Fees

The Chief Financial Officers Act requires that agencies conduct a biennial review of fees and

other charges imposed by agencies, and to make revisions to cover program and administrative 

costs incurred. During FY 2008, the Commission completed its biennial review of user fees, and 

the OIG subsequently conducted a review of the methodology used to calculate the updated user 

fees. During the review, the OIG determined that the agency followed a process which 

incorrectly set user fees for various mission-related services, resulting in user fees that 

understated the agency’s costs to provide these services. The new fee structure was not 

implemented during FY 2009.
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

16

A revised methodology for calculating user fees was developed in FY 2010. A new User Fee 

Working Group has been established and revised fees will be calculated based upon final 2010 

costs. It is expected that the new user fees structure will be implemented in early 2011. 

Performance Measure Summary

The FMC does not have an in-house financial accounting system, and as a small agency does not 

receive a Performance Measure Summary from the Department of the Treasury. The agency 

receives travel, procurement, accounting and financial services from BPD located in 

Parkersburg, WV. The Commission verifies and reconciles all financial statements and reports 

prior to submission, and has remained in compliance with all reporting thresholds including 

FACTS I (Federal Agencies’ Centralized Trial-Balance System) reporting, timely reporting, and 

reconciliation of any financial statement differences. 

Inspector General Act

The FMC continues to have a very good record in resolving and implementing audit 

recommendations presented in its OIG reports. Section 5(b) of the Inspector General Act 

requires agencies to report on final actions taken on OIG audit recommendations. 

Briefly, during FY 2010, the Inspector General completed the following audits and reviews:

FY 2009 Audited Financial Statements

Management Letter to the FY 2009 Audited Financial Statements

FY 2009 Implementation of FISMA

Oversight of Document Scanning Services

Review of Contract Monitoring in the Office of Information Technology

Best Practices for Time and Attendance Implementation

Review of FMC’s User Fee Calculations

User Satisfaction Survey of the Office of Information Technology Helpdesk

The Inspector General’s reviews disclosed no instances of questioned costs. The agency 

addressed a number of recommendations from these reviews, and it is expected that the 

remaining open recommendations will be resolved during FY 2011. 

During FY 2010, no significant deficiencies were identified. 
Chapter One MANAGEMENT’S DISCUSSION and ANALYSIS

17
Chapter Two

Program Performance
Chapter Two PROGRAM PERFORMANCE 

19

Annual Performance Report

Introduction

The FMC’s performance management system includes both strategic goals and performance 

measures and targets. The strategic goals represent the FMC’s mission and reflect the overall 

outcomes the agency is working to achieve. This progress report describes progress towards 

performance targets in 2010 in furtherance of the Commission’s mission to foster a fair, efficient 

and reliable international ocean transportation system and to protect the public from unfair and 

deceptive practices. The FMC’s strategic goals and objectives are as follows:

• Maintain an Efficient and Competitive International Ocean Transportation System

o Identify and take action to address substantially anti-competitive conduct or 

unfavorable conditions in U.S. trades.

• Protect the Public from Unlawful, Unfair and Deceptive Ocean Transportation 

Practices and Resolve Shipping Disputes

o Identify and take action to end unlawful, unfair and deceptive practices.

o Prevent public harm through licensing and financial responsibility requirements.

o Enhance public awareness of agency resources, remedies and regulatory requirements 

through education and outreach.

o Impartially resolve international shipping disputes through alternative dispute 

resolution and adjudication.

• Advance Agency Objectives Through High-Performance Leadership and Efficient 

Stewardship of Resources

o Ensure performance of agency programs through performance-oriented management 

and planning.

o Allocate technological, financial and human resources efficiently and effectively 

toward support of agency programs.

The FMC undertook quantitative measurement of eleven performance goals this fiscal year. 

Seven of these measures reached 2010 targets, and of those, five measures exceeded targets. The 

agency’s most significant improvement from FY 2009, as reflected in this report, was seen in the 

Ocean Transportation Intermediary licensing process. During FY 2010, the Commission 

exceeded by 10% its target to complete processing of 55% of license applications in 90 business 

days. This improvement came as a result of streamlining processes and assisting applicants in 

submitting more complete applications on a well defined timeline.
Chapter Two PROGRAM PERFORMANCE 

20

Following the report on measures and targets for FY 2010 is a status update on the agency’s 

progress on unmet targets in FY 2009. Since the 2009 report, nearly all measures and targets 

that fell short of target goals have been addressed and show marked improvement in FY 2010. 

The agency continues to refine and create more aggressive and relevant performance measures 

and targets which reflect the Commission’s various day-to-day activities and impact on the 

public.

The agency has forwarded this report to the President, with a copy to the Director, OMB, and 

appropriate Congressional committees. Additionally, this report has been placed on the FMC’s 

Internet web site to ensure that it is accessible to interested parties. All Commission employees 

have been advised to review it. Finally, it should be noted that the Commission does not 

participate in OMB’s Program Assessment Rating Tool (PART) program. Accordingly, no 

PART program evaluations were conducted during FY 2010.

Performance Measure Summary Tables

Targeted Performance Compared to Actual Results

Performance Measures 2009 – 2010

Strategic Goal No. 1: Maintain An Efficient Competitive International Ocean 

Transportation System (2010)

Outcome Goals (Performance Measures)

Performance Measure FY 2010

Target

FY 2010

Actual

Measure: Percentage share of total U.S. international ocean borne trade 

moved by containership as an indicator of liner shipping efficiency.

2010 Target: 18%

2010 Target Unmet: The following results are based on cargo weight: 

(U.S. exports – 19.2%); (U.S. imports – 16.3%) The slightly lower than 

expected target for total U.S. international oceanborne trade probably 

occurred because the global recession affected consumer-related goods 

(usually transported by containership) more so than raw materials and 

semi-finished products (most often carried in other types of ships). This 

also explains the slightly better result for U.S. exports compared to imports 

as the former are weighted less towards consumer-related products. It is 

anticipated the containership sector will regain lost share as the global 

economy recovers. (Note

18%

: The result above is based on fiscal year data 

through August 2010; September data is not yet available.)

17.4%
Chapter Two PROGRAM PERFORMANCE 

21

Strategic Goal No. 2: Protect the public from unlawful, unfair and deceptive ocean 

transportation practices and resolve shipping disputes (2010)

Outcome Goals (Performance Measures)

Measure: Percentage of enforcement actions taken under the Shipping 

Act of 1984 successfully resolved through favorable judgment, settlement, 

issuance of default judgment, or compliance letter or notice.

2010 Target: 70%

70% 72.9%

Measure: Percentage of decisions on completed OTI license applications 

rendered within 90 business days, facilitating lawful operation of OTIs 

with the appropriate character and experience requirements.

2010 Target: 55%

55% 65%

Measure: Percentage of cruise line operators examined during the year 

that have the full financial coverage required by regulation to protect 

against loss from non-performance or casualty.

2010 Target: 90%

90% 90%

Measure: Percentage of attendees at agency sponsored outreach 

presentations that rate the program as “Useful” or “Extremely Useful” in 

their compliance efforts.

2010 Target: 70%

Measure: Percentage of key Commission issuances, orders and reports 

that are available through the Commission’s website within 5 working 

days of receipt.

2010 Target: 70%

70%

70%

N/A1

77.1%

 1 FMC staff was invited to a number of venues where, in panel discussions or solo presentations, 

compliance with FMC regulations was a topic among other topics. These venues included the National 

Customs Brokers and Forwarders Association of America, WESCCON, the Washington State Customs 

Brokers and Freight Forwarders Association, the Florida Customs Brokers and Forwarders Association, 

the West Gulf Maritime Association, the Houston Brokers and Freight Forwarders Association, and 

various private companies. The feedback received from the hosts of these events was positive across the 

board. Most of these venues are events and groups to which staff is invited to address on an annual or 

other frequent basis. Because FMC staff members were invitees as opposed to sponsors, surveying did 

not take place.
Chapter Two PROGRAM PERFORMANCE 

22

Measure: Number of cases opened and closed each fiscal year using 

ombuds and ADR services assisting consumers to recover goods or funds.

2010 Target: 550

Measure: Percentage of formal complaints or Commission initiated 

orders of investigation will be completed within two years of filing or 

Commission initiation.

2010 Target: 50%

550

50%

556

56%

Strategic Goal No. 3: Advance Agency Objectives Through High-Performance Leadership 

and Efficient Stewardship of Resources (2010)

Outcome Goals (Performance Measures)

Performance Measure FY 2010

Target

FY 2010

Actual

Measure: Attain an “unqualified” audit opinion on financial and 

performance monitoring systems through FY 2015.

2010 Target: Unqualified Audit Opinion

2010 Target Met: For FY 2010, the audit was completed November 10, 

2010.

Unqualified 

Audit 

Opinion

Yes

Measure: Improve information technology infrastructure to increase to 

80 percent forms, applications and payments received electronically by 

regulated concerns versus receipt of paper driven processes.

2010 Target: 30%

2010 Target Unmet: For FY 2010, the FMC was engaged in

implementing a new enterprise content management system for document 

and records management to address objectives outlined in the measure. 

Amid this infrastructure transition, 89% of forms used for business with 

the Bureau of Certification and Licensing are received electronically to 

date.

Measure: Percentage of all recruitment actions for GS positions 

completed within OPM’s 45 day hiring model and within 30 days for SES 

positions.

30%

60%

N/A

N/A
Chapter Two PROGRAM PERFORMANCE 

23

2010 Target: 60%

2010 Target Unmet: OPM’s 45-day hiring model was eliminated and 

we now use the “End-to-End” (E2E) model that applies to the competitive 

examination process. As part of the hiring reform initiative, the agency 

completed a ‘mapping’ process which reflects total time spent in 

completing actions required to fill a position. Based on that process, our 

goal is to fill positions in 102 days or less, with a goal of reducing the 

time to hire in future fiscals years to no more than 80 days. During the 

reporting period, three positions were filled. Time-to-hire for the first 

position was 99 days, 102 days for the second position, and 91 days for 

the third position. Based on these statistics, the 60% goal was met and 

exceeded (100% of all positions were filled in line with our mapped time 

to hire).

Status of 2009 Unmet Targets

Performance Measure FY 2009

Target

FY 2009

Actual

Strategic Goal 1: Efficient Regulatory Process (2009)

Outcome Goals (Performance Measures)

Measure: Percentage of complaints or investigations completed within 

two years of filing or Commission initiation beginning with cases filed or 

initiated in FY 2007.

Target Unmet in 2009: A total of 9 such proceedings were initiated in 

2007, 5 of those were completed within two years. The pace of 

complaints and investigations is impacted by the ALJ’s and the 

Commission’s caseload, and the timeliness of submissions from outside 

parties.

Status Update: This measure was also tracked in FY 2010 and exceeded 

the target of 50% with an actual result of 56%. See FY 2010 report 

above.

60% 55%

Measure: Percentage of Active Electronic Docket Logs updated within 

72 hours of receipt of key documents issued or filed in Commission 

proceedings.

85% 55%
Chapter Two PROGRAM PERFORMANCE 

24

Target Unmet in 2009: This process was not tracked prior to FY 2009. 

Through tracking, inefficiencies on the front end of the current process 

were discovered. Modifications are underway to expedite the process.

Status Update: This measure was also tracked in FY2010. The revised 

target of 70% was exceeded with an actual result of 77.1%. See FY 2010 

report above. 

Strategic Goal 2: Compliance (2009)

Outcome Goals (Performance Measures)

Measure: Percentage of minutes and monitoring reports received within 

regulatory deadlines or formal extension.

Target Unmet in 2009: Three different reporting requirements are 

encompassed in this measure and do not lend themselves to averaging as 

a collective unit. Of passenger vessel monitoring reports, 91% were filed 

on time. Follow-up with filers was impeded by staffing shortages in that 

office. For agreement minutes, 83% were received on time. 72% of 

quarterly monitoring reports for agreements were received timely. 

Increasing use of electronic submission rates should increase the rate of 

timeliness for minutes, as e-filed minutes were received more timely. 

However for quarterly monitoring reports, filers rely on a commercial 

data source that often publishes late.

Status Update: This measure was not directly tracked in 2010 and will 

be closed out.

Measure: Percentage of new and amended OTI applications that are 

processed with 45 days.

Target Unmet in 2009: In FY 2009, 401 OTI licenses were issued by the 

Commission. The target of 45 days was an ambitious target based on 

program aspirations including anticipating the implementation of an 

automated application that would have significantly decreased processing 

time. Also, the target was set without historical benchmark data. In fact, 

in the agency’s Strategic Plan for Fiscal Years 2010-2015, this target was 

revised from 45 days to 90 days. The 45 day target was also based on 

several assumptions including a modest increase in the number of 

applications received, completion of an automated license application 

form that would build efficiencies for the applicant and the staff analyst 

both, and minimal staff turn-over. While application growth was indeed 

modest from FY 2008 to 2009, the number of applications received each 

year has increased from about 520 in FY 2004 to 759 in FY 2009. 

Staffing obstacles in FY 2008 and 2009 were significant with turnover at 

95%

80%

72-91%

5%
Chapter Two PROGRAM PERFORMANCE 

25

the office chief level and departures of senior staff. Also significant, since 

FY 2005, the Bureau has incrementally modified its licensing review 

procedures, deepening the examination of the qualifications of license 

applicants. In FY 2009, difficulties encountered in implementing a new 

automated application process forced us to suspend its development in 

favor of developing a new agency-wide enterprise content management 

system. The licensing program is currently under review at the staff level 

with an aim of streamlining and reducing its back log.

Status Update: This measure was revised for FY 2010 and revised again 

for 2011 – 2015. In FY 2010, the target was to make decisions on 55% of 

completed OTI applications in 90 business days. This target was exceeded 

by 10%. BCL is now tracking OTI licensing process performance with a 

FY2011 target of 60% of decisions made within 60 calendar days of a 

completed application.

Measure: Number of investigations opened to address alleged harm to 

the public as a result of Shipping Act violations.

Target Unmet: 34 investigations were opened by the Commission’s 

Area Representatives to investigate alleged violations. Often when a 

potential violation is alleged or discovered, the potential respondent is 

compelled to come in to compliance with the law without the need to 

open an official investigation. The Bureau of Enforcement’s audit 

program as well as the OTI licensing program has been successful in 

identifying potential violations and allowing entities to adjust their 

processes to come in to compliance without the need for investigation.

Status Update: This measure was not tracked in FY 2010 and will be 

closed out.

50 34
Chapter Two PROGRAM PERFORMANCE 

26

Strategic Goal 4: Technological Efficiencies (2009)

Outcome Goals (Performance Measures)

Measure: The number of technology solutions that are designed and 

implemented and used by the Commission to facilitate process 

improvement through the use of databases and record keeping systems.

Target Unmet in 2009: During FY 2009, the decision was made to 

change the technology underlying our application development. A 

contract was recently awarded for enterprise content management and 

three new applications under development to facilitate process 

improvements are anticipated in FY 2010, with others phased in over 

coming years.

Status Update: For FY 2010 a related measure was tracked (Measure: 

Improve information technology infrastructure to increase to 80 percent 

forms, applications and payments received electronically by regulated 

concerns versus receipt of paper driven processes) however that target 

was unmet because of continuing work on implementation of an 

enterprise content management system.

Measure: Cumulative number of technology solutions that are designed 

and implemented and used by the Commission to facilitate process 

improvement through the use of databases and record keeping systems 

since FY 2007 (including current fiscal year).

Target Unmet in 2009: During FY 2009, the decision was made to 

change the technology underlying our application development. A 

contract was recently awarded for enterprise content management and 

three new applications under development to facilitate process 

improvements are anticipated in FY 2010, with others phased in over 

coming years.

Status Update: For FY 2010 a related measure was tracked (Measure: 

Improve information technology infrastructure to increase to 80 percent 

forms, applications and payments received electronically by regulated 

concerns versus receipt of paper driven processes) however that target 

was unmet because of continuing work on implementation of an 

enterprise content management system.

6

12

0

0
Chapter Two PROGRAM PERFORMANCE 

27

Measure: Number of technology-related programs and systems 

developed or implemented that achieve full compliance with Federal 

information security mandates.

Target Unmet in 2009: Relationship with contractor awarded project 

severed after work requested was becoming costly and not helpful to the 

agency’s target goal. 

Status Update: For FY 2010 a related measure was tracked (Measure: 

Improve information technology infrastructure to increase to 80 percent 

forms, applications and payments received electronically by regulated 

concerns versus receipt of paper driven processes) however that target 

was unmet because of continuing work on implementation of an 

enterprise content management system.

12 2

Strategic Goal 5: Management Capabilities (2009)

Outcome Goals (Performance Measures)

Measure: Number of awareness, recruitment, training, new-employee 

orientation, workforce development, and quality of life initiatives offered 

to agency employees.

Target Unmet in 2009: Fewer offerings than anticipated.

Status Update: This measure was not tracked in FY2010 and will be 

closed out. 

250 216

Measure: Percent of payments (user fees, penalties, etc.) received 

electronically via Pay.gov versus older technologies (e.g., checks).

Target Unmet in 2009: Pay.gov program was not implemented during 

FY2009. The vendor representative was available to inform about the 

benefits of Pay.gov but the designers and builders of the project were 

unavailable due to a large volume of existing contracts with other 

agencies. FMC has been placed on the project waiting list.

Status Update: FMC has been placed on the project waiting list, and 

hopes to obtain Pay.gov during FY 2011. 

25% 0
Chapter Two PROGRAM PERFORMANCE 

28

Measure: Received “unqualified opinion” from financial statement 

auditors with respect to the current fiscal year.

Target Unmet in 2009: For FY 2009, the audit will not be complete 

until November 2009.

Status Update: FY 2009, the audit was complete in November 2009 and 

received “unqualified audit opinion.” (See FY 2010 report above, 

Measure: Attain an “unqualified” audit opinion on financial and 

performance monitoring systems through FY 2015).

Yes Not available
Chapter Three

Auditor’s Reports and Financial Statements
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

30

Message from the Chief Financial Officer

I am pleased to present the Federal Maritime Commission’s 

consolidated financial statements for the fiscal year 2010 

Performance and Accountability Report. I am proud to report that an 

independent auditor has rendered an unqualified opinion on the 

FMC’s financial statements, which highlights for the President, the 

Congress and the American people the continuing commitment of the 

Federal Maritime Commission to maintain sound financial 

management of the resources entrusted to us. The FMC now has 

received an unqualified opinion in each of the seven years in which 

independent financial audits have been conducted, attesting to the 

FMC’s commitment to high quality financial management.

The FMC’s financial condition is sound, and the Commission has sufficient internal controls in 

place to ensure its budget authority is not exceeded and that funds are utilized efficiently and 

effectively. 

During FY 2010, the FMC continued its focus on internal controls, as mandated by OMB 

Circular A-123. Our financial management staff is to be commended for consistently finding 

ways to provide budget information in concise, reliable, and understandable formats. In 2010, 

we completed corrective actions on a number of audit recommendations. Quarterly financial 

statements were issued 15 days after the end of each quarter, and our FY 2010 PAR is being 

published on November 15, 2010.

I wish to acknowledge our staff and financial service provider for their dedication to the FMC’s 

mission and their diligent efforts in maintaining the unqualified opinion on our financial 

statements. Even as financial oversight and accountability requirements grow more complex and 

challenging, the FMC is steadfastly committed to improving financial management and 

producing accurate and reliable financial statements. We will focus in fiscal year 2011 on 

maintaining an unqualified audit opinion and will continue to use timely, reliable, and 

comprehensive financial information when making agency decisions. I anticipate that the FMC 

will continue its high level of quality financial management.

Sincerely,

Ronald D. Murphy

Chief Financial Officer

November 15, 2010
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

31

PRINCIPAL STATEMENTS

LIMITATIONS OF THE FINANCIAL STATEMENTS

The principal statements have been prepared to report the financial position and results of 

operations of the FMC, pursuant to the requirements of the Chief Financial Officers Act of 1990, 

as amended by the Government Management Reform Act of 1994. These statements have been 

prepared from the books and records of the FMC in accordance with the formats prescribed by 

the Office of Management and Budget. However, these statements differ from the financial 

reports used to monitor and control budgetary resources that are prepared from the same books 

and records. The principal statements should be read with the realization they are for a 

component of the U.S. Government, a sovereign entity. Liabilities not covered by budgetary 

resources cannot be liquidated without the enactment of an appropriation, and the payment of all 

liabilities other than for contracts can be abrogated by the sovereign entity. Other limitations are 

included in the footnotes to the principal statements. The accompanying notes are an integral 

part of these statements.

The Federal Maritime Commission’s financial statements were audited by Dembo, Jones, 

Pennington, Healy & Marshall, P.C., under contract to the FMC’s Office of the Inspector 

General.
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

32
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

33
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

34

Chairman Lidinsky:

We have audited the accompanying balance sheet of the Federal Maritime Commission (FMC) 

as of September 30, 2010 and 2009, and the related statements of net cost, changes in net 

position, budgetary resources, and custodial activity for the years then ended. In our audits of 

the Federal Maritime Commission for the fiscal years September 30, 2010 and 2009, we found

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

U.S. generally accepted accounting principles,

• no material weaknesses or significant deficiencies in internal control over financial 

reporting (including safeguarding assets),

• no reportable noncompliance with laws and regulations we tested.

The following sections discuss in more detail (1) these conclusions, (2) our conclusions on 

Management's Discussion and Analysis (MD&A) and other accompanying information, and (3) 

our audit objectives, scope, and methodology.

Opinion on Financial Statements

In our opinion, the financial statements including the accompanying notes present fairly, in all 

material respects, in conformity with U.S. generally accepted accounting principles, the Federal 

Maritime Commission's assets, liabilities, and net position as of September 30, 2010 and 2009; 

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

then ended.
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

35

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 would not necessarily identify all deficiencies in 

internal control over financial reporting that might be significant deficiencies or material 

weaknesses.

A control deficiency 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 

misstatements on a timely basis. A significant deficiency is a control deficiency, or combination 

of control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, 

process, or report financial data reliably in accordance with generally accepted accounting 

principles such that there is more than a remote likelihood that a misstatement of the entity’s 

financial statements that is more than inconsequential will not be prevented or detected by the 

entity’s internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that 

results in more than a remote likelihood that a material misstatement of the financial statements 

will not be prevented or detected by the entity’s internal control.

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

described in the first paragraph of this section and would not necessarily disclose all deficiencies 

in the internal control that might be material weaknesses or significant deficiencies. We did not 

identify any deficiencies in internal control over financial reporting that we consider to be 

material weaknesses or significant deficiencies, as defined above.

We noted other non-reportable matters involving internal control and its operation that we will 

communicate in a separate management letter to FMC management.

Compliance With Laws and Regulations

Our tests of the Federal Maritime Commission's compliance with selected provisions of laws and 

regulations for fiscal year 2010 disclosed no instances of noncompliance that would be 

reportable under U.S. generally accepted government auditing standards or OMB audit guidance. 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

36

However, the objective of our audit was not to provide an opinion on overall compliance with 

laws and regulations. Accordingly, we do not express such an opinion.

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 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.

Objectives, Scope, and Methodology

The Federal Maritime Commission's management is responsible for (1) preparing the financial 

statements in conformity with U.S. generally accepted accounting principles, (2) establishing, 

maintaining, and assessing internal control to provide reasonable assurance that the broad control 

objectives of the Federal Managers' Financial Integrity Act are met, and (3) complying with 

applicable laws and regulations.

We are responsible for obtaining reasonable assurance about whether the financial statements are 

presented fairly, in all material respects, in conformity with U.S. generally accepted accounting 

principles. We are also responsible for (1) obtaining a sufficient understanding of internal 

control over financial reporting and compliance to plan the audit, (2) testing compliance with 

selected provisions of laws and regulations that have a direct and material effect on the financial 

statements and laws for which OMB audit guidance requires testing, and (3) performing limited 

procedures with respect to certain other information appearing with the Annual Financial 

Statements.

In order to fulfill these responsibilities, we

• examined, on a test basis, evidence supporting the amounts and disclosures in the 

financial statements;

• assessed the accounting principles used and significant estimates made by management;

• evaluated the overall presentation of the financial statements;
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

37

• obtained an understanding of the FMC and its operations, including its internal control 

related to financial reporting (including safeguarding assets), and compliance with laws 

and regulations (including execution of transactions in accordance with budget authority);

• tested relevant internal controls over financial reporting and compliance, and evaluated 

the design and operating effectiveness of internal control;

• considered the design of the process for evaluating and reporting on internal control and 

financial management systems under the Federal Managers' Financial Integrity Act; and

• tested compliance with selected provisions of laws and regulations.

We did not evaluate all internal controls relevant to operating objectives as broadly defined by 

the Federal Managers' Financial Integrity Act, such as those controls relevant to preparing 

statistical reports and ensuring efficient operations. We limited our internal control testing to 

controls over financial reporting and compliance. Because of inherent limitations in internal 

control, misstatements due to error or fraud, losses, or noncompliance may nevertheless occur 

and not be detected. We also caution that projecting our evaluation to future periods is subject to 

the risk that controls may become inadequate because of changes in conditions or that the degree 

of compliance with controls may deteriorate. In addition, we caution that our internal control 

testing may not be sufficient for other purposes. 

We did not test compliance with all laws and regulations applicable to the Federal Maritime

Commission. We limited our tests of compliance to selected provisions of laws and regulations 

that have a direct and material effect on the financial statements and those required by OMB 

audit guidance that we deemed applicable to the Federal Maritime Commission's financial 

statements for the fiscal year ended September 30, 2010. We caution that noncompliance may 

occur and not be detected by these tests and that such testing may not be sufficient for other 

purposes.

We performed our audit in accordance auditing standards generally accepted in the United 

States; the standards applicable to the financial audits contained in Government Auditing

Standards, issued by the Comptroller General of the United States; and OMB guidance.

Rockville, Maryland

November 10, 2010
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

38

FEDERAL MARITIME COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2010 AND 2009

(In Dollars)

2010 2009

Assets:

Intragovernmental

Fund Balance With Treasury (Note 2) $ 4,862,018 $ 4,777,674 

Total Intragovernmental 4,862,018 4,777,674 

Accounts Receivable, Net (Note 3) 114 70,222 

Property, Equipment, and Software, Net (Note 4) 629,719 202,500 

Other (Note 5) 1,728 -

Total Assets $ 5,493,579 $ 5,050,396 

Liabilities:

Intragovernmental

Accounts Payable (Note 6) $ 687,333 $ 309,177 

Employer Contributions and Payroll Taxes Payable 181,479 138,468 

Unfunded FECA Liability (Note 7) 1,741 1,968 

Custodial Liability 114 69,236 

Total Intragovernmental 870,667 518,849 

Accounts Payable (Note 6) 273,306 231,925 

Accrued Payroll and Leave 1,051,210 865,970 

Employer Contributions and Payroll Taxes Payable 22,613 17,568 

Unfunded Leave (Note 7) 1,217,002 1,075,533 

Actuarial FECA Liability (Note 7) 11,821 5,249 

Total Liabilities $ 3,446,619 $ 2,715,094 

Net Position:

Unexpended Appropriations $ 2,647,804 $ 3,214,566 

Cumulative Results of Operations (600,844) (879,264)

Total Net Position $ 2,046,960 $ 2,335,302 

Total Liabilities and Net Position $ 5,493,579 $ 5,050,396 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

39

FEDERAL MARITIME COMMISSION

STATEMENT OF NET COST

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

2010 2009

Program Costs:

Operational and Administrative (Note 10)

Gross Costs $ 17,931,656 $ 16,541,546 

Net Program Costs $ 17,931,656 $ 16,541,546 

Formal Proceedings (Note 10)

Gross Costs $ 7,227,972 $ 6,082,905 

Less: Earned Revenue (118,744) -

Net Program Costs $ 7,109,228 $ 6,082,905 

Office of Inspector General (Note 10)

Gross Costs $ 679,070 $ 529,935 

Less: Earned Revenue (3,285) -

Net Program Costs $ 675,785 $ 529,935 

Office of Equal Employment Opportunity (Note 10)

Gross Costs $ 206,652 $ 151,287 

Net Program Costs $ 206,652 $ 151,287 

Net Cost of Operations $ 25,923,321 $ 23,305,673 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

40

FEDERAL MARITIME COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

2010 2009

Cumulative Results of Operations:

Beginning Balances $ (879,264) $ (1,029,189)

Budgetary Financing Sources:

Appropriations Used 24,626,223 22,258,507 

Other Financing Sources (Non-Exchange):

Imputed Financing Sources (Note 11) 1,575,518 1,197,091 

Total Financing Sources 26,201,741 23,455,598 

Net Cost of Operations (25,923,321) (23,305,673)

Net Change 278,420 149,925 

Cumulative Results of Operations $ (600,844) $ (879,264)

Unexpended Appropriations:

Beginning Balances $ 3,214,566 $ 2,706,788 

Budgetary Financing Sources:

Appropriations Received 24,135,000 22,800,000 

Other Adjustments (75,539) (33,715)

Appropriations Used (24,626,223) (22,258,507)

Total Budgetary Financing Sources (566,762) 507,778 

Total Unexpended Appropriations $ 2,647,804 $ 3,214,566 

Net Position $ 2,046,960 $ 2,335,302 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

41

FEDERAL MARITIME COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

2010 2009

Budgetary Resources:

Unobligated Balance Brought Forward, October 1 $ 867,458 $ 747,665 

Recoveries of Prior Year Unpaid Obligations 582,606 171,489 

Budget Authority

Appropriation 24,135,000 22,800,000 

Spending Authority From Offsetting Collections

Earned

Collected 122,029 -

Subtotal 24,257,029 22,800,000 

Permanently Not Available (75,539) (33,715)

Total Budgetary Resources $ 25,631,554 $ 23,685,439 

Status of Budgetary Resources:

Obligations Incurred (Note 13)

Direct $ 24,205,598 $ 22,817,981 

Reimbursable 122,029 -

Subtotal 24,327,627 22,817,981 

Unobligated Balance

Apportioned 10,273 66,284 

Unobligated Balance Not Available 1,293,654 801,174 

Total Status of Budgetary Resources $ 25,631,554 $ 23,685,439 

Change in Obligated Balance:

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 $ 3,910,216 $ 3,314,469 

Obligations Incurred Net 24,327,627 22,817,981 

Gross Outlays (24,097,146) (22,050,745)

Recoveries of Prior Year Unpaid

Obligations, Actual (582,606) (171,489)

Total, Unpaid Obligated Balance, Net, End of Period $ 3,558,091 $ 3,910,216 

Net Outlays:

Gross Outlays $ 24,097,146 $ 22,050,745 

Offsetting Collections (122,029) -

Net Outlays $ 23,975,117 $ 22,050,745 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

42

FEDERAL MARITIME COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

2010 2009

Revenue Activity:

Sources of Cash Collections:

Miscellaneous $ 1,250,668 $ 1,115,241 

Total Cash Collections (Note 15) 1,250,668 1,115,241 

Accrual Adjustments (69,122) 5,643 

Total Custodial Revenue 1,181,546 1,120,884 

Disposition of Collections:

Transferred to Others 1,250,668 1,115,241 

Increase/(Decrease) in Amounts Yet to be Transferred (69,122) 5,643 

Total Disposition of Collections 1,181,546 1,120,884 

Net Custodial Activity $ - $ -
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

43

FEDERAL MARITIME COMMISSION

NOTES TO THE FINANCIAL STATEMENTS

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 (46 

U.S.C. §§ 44102 and 44103). Most of these 

statutes were modified by the passage of the 

Ocean Shipping Reform Act of 1998, which 

took effect in 1999. 

The Commission: monitors the activities of 

ocean common carriers, marine terminal 

operators (MTOs), conferences, ports and 

ocean transportation intermediaries (nonvessel-operating common carriers and ocean 

freight forwarders) who operate in the U.S. 

foreign commerce to ensure they maintain just 

and reasonable practices; maintains trade 

monitoring, enforcement and dispute 

resolution programs designed to assist 

regulated entities in achieving compliance and 

to detect and appropriately remedy 

malpractices and violations of the prohibited 

acts set forth in section 10 of the 1984 Act; 

monitors the laws and practices of foreign 

governments which could have a 

discriminatory or otherwise adverse impact on 

shipping conditions in U.S. trades, and 

imposes remedial action, as appropriate, 

pursuant to section 19 of the 1920 Act or 

FSPA; enforces special regulatory 

requirements applicable to carriers owned or 

controlled by foreign governments; processes 

and reviews agreements, service contracts, and 

service arrangements pursuant to the 1984 Act 

for compliance with statutory requirements; 

and reviews common carriers’ privately 

published tariff systems for accessibility and 

accuracy, as required by OSRA. The 

Commission also issues licenses to qualified 

ocean transportation intermediaries (OTIs) in 

the U.S., ensures that all OTIs are bonded or 

maintain other evidence of financial 

responsibility, and ensures that passenger 

vessel operators (PVOs) demonstrate adequate 

financial responsibility in case of 

nonperformance of voyages or injury to 

passengers.

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.

The FMC reporting entity is comprised of 

General Funds and General Miscellaneous 

Receipts.

General Funds are accounts used to record 

financial transactions arising under 

Congressional appropriations or other 

authorizations to spend general revenues.
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

44

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 

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 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 2010 and 2009, 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).
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

45

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 

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. Additionally, 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

46

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.

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 OPM upon the retirement of 

that individual. Credit is given for sick leave 

balances in the computation of annuities upon 

the retirement of Federal Employees 

Retirement System (FERS)-covered employees 

effective at 50% beginning FY2010 and 100% 

in 2014.

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. 

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 CSRS 

or the 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.

Prior to December 31, 1983, all employees 

were covered under the CSRS program. From 

January 1, 1984 through December 31, 1986, 

employees had the option of remaining under 

CSRS or joining FERS and Social Security. 

Employees hired as of January 1, 1987 are

automatically covered by the FERS program. 

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 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

47

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 

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. Other Post-Employment Benefits

FMC employees eligible to participate in the 

Federal Employees Health Benefits Plan 

(FEHBP) and the Federal Employees Group 

Life Insurance Program (FEGLIP) may 

continue to participate in these programs after 

their retirement. The OPM has provided FMC 

with certain cost factors that estimate the true 

cost of providing the post-retirement benefit to 

current employees. FMC recognizes a current 

cost for these and Other Retirement Benefits 

(ORB) at the time the employee's services are 

rendered. The ORB expense is financed by 

OPM, and offset by FMC through the 

recognition of an imputed financing source. 

Q. 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. 

R. 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 are the net 

result of FMC’s operations since inception.

S. 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 2010 and 2009 to the 

extent directed by OMB.

T. 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 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

48

recorded as an “Other Financing Source” when 

made. 

U. 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.

NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2010 and 2009 were as follows:

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.

2010 2009

Fund Balances:

Appropriated Funds $ 4,862,018 $ 4,777,674 

Total $ 4,862,018 $ 4,777,674 

Status of Fund Balance with Treasury:

Unobligated Balance

 Available $ 10,273 $ 66,284 

 Unavailable 1,293,654 801,174 

Obligated Balance Not Yet Disbursed 3,558,091 3,910,216 

Total $ 4,862,018 $ 4,777,674 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

49

NOTE 3. ACCOUNTS RECEIVABLE

Accounts receivable balances as of September 30, 2010 and 2009 were as follows:

FMC has one receivable from a non-federal source remaining at fiscal year end that represents an 

amount due for administrative research.

NOTE 4. PROPERTY, EQUIPMENT, AND SOFTWARE

Schedule of Property, Equipment, and Software as of September 30, 2010

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

NOTE 5. OTHER ASSETS

Other assets account balances as of September 30, 2010 and 2009, were as follows:

FMC has two travel-related advances remaining at fiscal year end.

2010 2009

With the Public

Accounts Receivable $ 114 $ 70,222

Total Accounts Receivable $ 114 $ 70,222

Major Class

Acquisition 

Cost

Accumulated 

Amortization/ 

Depreciation

Net Book 

Value

Leasehold Improvements $ 225,000 $ 67,500 $ 157,500

Furniture & Equipment 520,566 228,926 291,640

Software-in-Development 180,579 N/A 180,579

Total $ 926,145 $ 296,426 $ 629,719

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

2010 2009

With the Public

Advances and Prepayments $ 1,728 $ -

Total Public Assets $ 1,728 $ -
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

50

NOTE 6. ACCOUNTS PAYABLE

Liabilities include both intragovernmental accounts payable and other accounts payable. 

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

other agencies. In FY10, intragovernmental accounts payable also includes liabilities incurred for 

leasehold improvements made to FMC offices, a video conferencing system, and a telephone system. For 

the fiscal years ending September 30, 2010 and 2009, intragovernmental accounts payable totals $687,333 

and $309,177, respectively. Other accounts payable are owed to non-federal sources or to the general 

public, and includes liabilities for general supplies, training, studies, analysis, and/or evaluations, 

miscellaneous services, and operation and maintenance of equipment. For the fiscal years ending 

September 30, 2010 and 2009, the non-federal accounts payable totals $273,306 and $231,925, 

respectively.

NOTE 7. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for FMC as of September 30, 2010 and 2009, 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. 

FECA liability represents the unfunded liability for actual workers compensation claims paid on FMC's 

behalf and payable to DOL. FMC also records an actuarial liability for future workers compensation 

claims based on the liability to benefits paid (LBP) ratio provided by DOL and multiplied by the average 

of benefits paid over three years.

Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The balance in 

the accrued annual leave account is reviewed quarterly and adjusted as needed to accurately reflect the 

liability at current pay rates and leave balances. Accrued annual leave is paid from future funding sources

and, accordingly, is reflected as a liability not covered by budgetary resources. Sick and other leave is 

expensed as taken.

2010 2009

Intragovernmental – FECA $ 1,741 $ 1,968

Unfunded Leave 1,217,002 1,075,533

Actuarial FECA 11,821 5,249

Total Liabilities Not Covered by Budgetary Resources $ 1,230,564 $ 1,082,750

Total Liabilities Covered by Budgetary Resources 2,216,055 1,632,344

Total Liabilities $ 3,446,619 $ 2,715,094
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

51

NOTE 8. 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: 

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:

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

Real estate taxes included in the Washington DC lease may escalate depending on the market during the 

year they are due. 

NOTE 9. 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, 2010.

NOTE 10. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE

Intragovernmental costs and exchange revenue represent goods and services exchange transactions made 

between two reporting entities within the Federal government, and are in contrast to those with nonfederal entities (the public). Intragovernmental costs include payments to federal vendors for personnel 

Location Term Lease Expiration Date

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

Tacoma, WA 10 years 6/30/2019

Hollywood, FL 10 years 5/31/2020

Fiscal Year Totals

2011 $ 2,943,374

2012 2,959,243

2013 336,514

2014 60,130

2015 61,099

Thereafter 261,136

Total Future Payments $ 6,621,496
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

52

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:

NOTE 11. IMPUTED FINANCING SOURCES

FMC recognizes as imputed financing 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, OPM. For the fiscal 

years ended September 30, 2010 and 2009, respectively, imputed financing was as follows:

2010 2009

Operational and Administrative

 Intragovernmental Costs $ 6,782,806 $ 6,379,667

 Public Costs 11,148,850 10,161,879

 Net Program Costs 17,931,656 16,541,546

Formal Proceedings

 Intragovernmental Costs 2,145,204 1,961,167

 Public Costs 5,082,768 4,121,738

 Total Program Costs 7,227,972 6,082,905

 Intragovernmental Earned Revenue (118,744) -

 Net Program Costs 7,109,228 6,082,905

Office of Inspector General

 Intragovernmental Costs 185,426 150,600

 Public Costs 493,644 379,335

 Total Program Costs 679,070 529,935

 Intragovernmental Earned Revenue (3,285) -

 Net Program Costs 675,785 529,935

Office of Equal Employment Opportunity

 Intragovernmental Costs 55,943 43,579

 Public Costs 150,709 107,708

 Net Program Costs 206,652 151,287

Total Intragovernmental costs 9,169,379 8,535,013

Total Public costs 16,875,971 14,770,660

 Total Costs 26,045,350 23,305,673

 Total Intragovernmental Earned Revenue (122,029) -

Total Net Cost $ 25,923,321 $ 23,305,673

2010 2009

Office of Personnel Management $ 1,575,518 $ 1,197,091 

Total Imputed Financing Sources $ 1,575,518 $ 1,197,091 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

53

NOTE 12. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE UNITED 

STATES GOVERNMENT

The President’s Budget that will include FY10 actual budgetary execution information has not yet been 

published. The President’s Budget is scheduled for publication in February 2011 and can be found at the 

OMB Web site: http://www.whitehouse.gov/omb/. The 2011 Budget of the United States Government, 

with the "Actual" column completed for 2009, has been reconciled to the Statement of Budgetary 

Resources and there were no material differences. 

NOTE 13. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED

Obligations incurred and reported in the Statement of Budgetary Resources as of September 30, 2010 and 

2009 consisted of the following:

Category A apportionments distribute budgetary resources by fiscal quarters. 

NOTE 14. 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, 2010 and 2009, respectively, undelivered orders 

amounted to the following: 

NOTE 15. 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 in the U.S. A 

small portion of amounts collected is for interest on past due fines, petitions, status changes and special 

permission fees. 

2010 2009

Direct Obligations, Category A $ 24,205,598 $ 22,817,981

Reimbursable Obligations, Category A 122,029 -

Total Obligations Incurred $ 24,327,627 $ 22,817,981

2010 2009

Undelivered Orders $ 1,343,878 $ 2,347,107 

Total Undelivered Orders $ 1,343,878 $ 2,347,107 
Chapter Three AUDITOR’S REPORT and FINANCIAL STATEMENTS

54

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

NOTE 16. 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.

Fund 2010 2009

Fines, Penalties and Forfeitures $ 1,041,250 $ 843,000 

General Fund Proprietary Receipts (user fees) 213,492 273,218 

Refund of User Fees (4,074) (977)

Total Custodial Collections $ 1,250,668 $ 1,115,241 

2010 2009

Resources Used to Finance Activities:

Budgetary Resources Obligated

Obligations Incurred $ 24,327,627 $ 22,817,981

Spending Authority From Offsetting Collections and Recoveries (704,635) (171,489)

Obligations Net of Offsetting Collections and Recoveries 23,622,992 22,646,492

Offsetting Receipts - -

Net Obligations 23,622,992 22,646,492

Other Resources

Imputed Financing From Costs Absorbed By Others 1,575,518 1,197,091

Net Other Resources Used to Finance Activities 1,575,518 1,197,091

Total Resources Used to Finance Activities 25,198,510 23,843,583

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 1,003,229 (387,985)

Resources That Fund Expenses Recognized In Prior Periods 759 -

Resources That Finance the Acquisition of Assets (479,066) (225,000)

Total Resources Used to Finance Items Not Part of Net Cost of Operations 524,922 (612,985)

Total Resources Used to Finance the Net Cost of Operations 25,723,432 23,230,598

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 141,469 45,214

Other 6,572 5,249

Total Components of Net Cost of Operations That Will Require or

Generate Resources In Future Periods 148,041 50,463

Components Not Requiring or Generating Resources

Depreciation and Amortization 51,848 24,612

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

Generate Resources 51,848 24,612

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

Generate Resources In The Current Period 199,889 75,075

Net Cost of Operations $ 25,923,321 $ 23,305,673
Chapter FOUR

Other Accompanying Information
Chapter Four OTHER ACCOMPANYING INFORMATION

56

FEDERAL MARITIME COMMISSION

800 North Capitol Street, N.W.

Washington, DC 20573 

October 27, 2010 

Office of Inspector General 

TO: Richard A. Lidinsky, Jr. 

 Chairman

FROM: Adam R. Trzeciak

 Inspector General

SUBJECT: Inspector General’s Statement on the Federal Maritime Commission’s 

Management and Performance Challenges

On November 22, 2000, the President signed the Reports Consolidation Act of 2000 (Public Law 

106-531), an amendment to the Chief Financial Officers (CFO) Act of 1990. The Reports 

Consolidation Act requires inspectors general to provide a summary and assessment of the most 

serious management and performance challenges facing Federal agencies and their progress in 

addressing these challenges. The attached document responds to the requirements and provides 

the annual statement on Commission challenges to be included in the Federal Maritime 

Commission’s (FMC) Performance and Accountability Report (PAR) for Fiscal Year 2010. 

 

This year, the Office of Inspector General (OIG) has identified three management and 

performance challenges for inclusion in the FMC’s FY 2010 PAR. These assessments are based 

on information derived from a combination of sources, including OIG audit and inspection work, 

Commission reports, and a general knowledge of the Commission’s programs. In most 

instances, the agency has taken steps to address the challenges.

The Reports Consolidation Act of 2000 permits agency comment on the inspector general’s 

statements. Agency comments, if applicable, are to be included in the final version of the PAR 

that is due on November 15, 2010. 

Attachment 
Chapter Four OTHER ACCOMPANYING INFORMATION

57

The Management Challenge: Develop a user fee system that reflects total costs of providing an 

activity, consistent with Generally Accepted Accounting Principles. 

Agency Progress in Addressing the Challenge: The Office of Management and Budget (OMB) 

requires agencies to charge a fee reflecting total costs for agency activities that convey special 

benefits to recipients beyond those accruing to the general public. These costs include, but are 

not limited to, an appropriate share of: (i) direct and indirect personnel costs, including salaries 

and fringe benefits, such as medical insurance and retirement; and (ii) physical overhead, 

consulting and other indirect costs including material and supply costs, utilities, insurance, travel 

and rents or imputed rents on land, buildings or equipment. Every two years, the FMC updated 

its user fees to reflect what it considered the true costs of providing various services, such as 

license fees, service contract filing fees and Freedom of Information Act document requests. 

In 2006, the Office of Inspector General (OIG) initiated a review of various aspects of the 

agency’s process to establish user fees. During the initial weeks of the audit, the OIG determined 

that the agency followed a process that incorrectly set its user fees for various services, resulting 

in user fees that understated the agency’s costs to provide these services. The OIG reported the 

finding to management which then took steps to reexamine its calculations in light of our 

finding. We suspended further audit steps while the agency amended its fee-setting formulas. 

In early FY 2010, a new chairman was appointed by the President who, shortly thereafter, made 

changes to the organizational structure of the agency. Based on fee computation discussions 

between the managing director and the inspector general, the OIG’s analysis was revisited and a 

final report issued. In its response to the audit, management agreed that a re-evaluation of 

existing user fees should be made, and according to management’s response, initiated a process 

to determine the full cost of services for which the agency assesses user fees, in accordance with 

the OMB requirements and applicable Federal financial accounting standards. Once those costs 

are determined, a proposed rule will be recommended to the Commission, with the goal of 

issuing a final rule by December 31, 2010.

The Challenge Ahead: Complying with OMB requirements to recover full costs in line with 

cost accounting standards would likely increase the fees the agency charges for select services. 

As higher fees could have the unintended effect of thwarting policy goals (e.g., to have all Ocean 

Transportation Intermediaries licensed by minimizing license fees) the agency should consider 

alternative strategies to comply with OMB directives. One solution would be to petition OMB to 

allow the agency to maintain fees at artificially low levels – an exemption from the full cost rule. 

The agency should also consider requesting OMB permission to eliminate fees altogether in 

those instances where collection amounts are small (e.g., less than $1,000 per year). 

Management and Performance Challenge: To ensure information integrity, accessibility and 

confidentiality for data and information residing on the agency’s information systems. 
Chapter Four OTHER ACCOMPANYING INFORMATION

58

Agency Progress in Addressing the Challenge: In the past three years, the FMC has taken 

concrete steps to protect the agency’s systems – the most important being the accreditation of its 

Network and SERVCON applications - and has made progress in mitigating weaknesses which 

led to prior years’ significant deficiencies concerning IT risk and recovery planning. The agency 

now has documented policies and procedures for many of its IT processes, and its annual 

security training program has been revamped to include protection of personally-identifiable 

information (PII) and other privacy-related issues. Participation in this on-line training module is 

mandatory, and employees are required to pass a written test at the completion of the training 

session or risk losing network access privileges. The agency installed scan software, enabling 

security staff to scan the FMC network for harmful activities and vulnerabilities and initiated 

planning for security control implementation at its continuity of operations (COOP) site. The 

agency’s firewall is secure; OIG attempts to penetrate firewall defenses from a remote location 

have been unsuccessful. 

Although progress has been noted, there are other areas where improvement is possible. The 

agency needs to certify and accredit all systems currently in production. Security certification 

and accreditation (C&A) comprise activities that support a risk management process and are an 

integral part of an agency’s information security program. Security accreditation is the official 

management decision given by a senior agency official to authorize operation of an information 

system and to explicitly accept the risk to agency operations, agency assets, or individuals based 

on the implementation of an agreed-upon set of security controls. 

C&A’s are generally performed prior to placing systems into production, as they help managers 

to recognize, accept and/or mitigate risks to information systems. In our FY 2007 review of IT 

security, the OIG opined that the lack of a certification and accreditation (C&A) process was a 

significant deficiency in the agency’s IT security program. Beginning in FY 2008 and extending 

through FY 2009, the agency enhanced its security posture, calumniating in certifying and 

accrediting two of four major systems. However, two major systems in production remain 

unaccredited. Without certification and accreditation, there is no guarantee that the agency 

knows the risks to these systems and has accepted the risks or has taken steps to mitigate them.

In addition to C&A requirements, the FMC still lacks (i) a comprehensive configuration 

management program and technical privacy controls required by OMB, (ii) an adequate 

contingency planning program, to include policies, procedures, testing and documentation of 

testing, and (iii) an official system inventory. 

The Challenge Ahead: IT threats are changing daily. Vulnerabilities arise overnight. Attacks 

are made on the IT resources of government organizations hourly, many by “thrill seekers” with 

little or no need or desire for data. Other attacks are more subtle – individuals with the means 

and knowledge from inside the organization can access data without authorization. Systems are 

compromised and data is often lost or destroyed in such cases. Fortunately the FMC has not 

fallen victim to “hackers.” However, the agency must not become complacent enough for 

“hackers” to compromise an entire network.
Chapter Four OTHER ACCOMPANYING INFORMATION

59

As the agency continues to move toward electronic databases and applications with a 

corresponding increase in internet activity, the agency must remain diligent. The investment 

needed to bring agency systems into compliance with Federal requirements is substantial. For 

too many years, emphasis was placed on production (i.e., faster servers, more powerful desktops, 

enhanced software, etc.) rather than on security. Now the agency has fallen behind and must 

spend liberally. Moving forward, it is essential that security receives the attention (i.e., 

resources) it needs to protect agency assets, and the assets of the organizations connected to 

FMC systems, from being compromised or destroyed.

It is important to remember that all Federal agencies have some risks and vulnerabilities. OMB 

recognizes this and asks agencies to implement a security program that identifies them and lays 

out a plan to address (reduce, eliminate or accept) them based on what the agency considers to be 

acceptable levels of risk. It does not expect a clean slate when it comes to information security 

(i.e., no risks or vulnerabilities). This would be unachievable for an agency of any size. On the 

other hand, mitigating known risks to an acceptable level is a goal achievable for all, including 

the FMC.

Management and Performance Challenge: To ensure that the agency has the people with the 

right skills, in the right place, at the right time to help guide the management of the Commission 

and contribute to financially sound and reliable systems that serve the public interest.

Agency Progress in Addressing the Challenge: The challenge stated above appears in the 

FMC’s Human Capital Plan (HCP) for fiscal years 2009 through 2013 and is a quote from the 

agency’s recently-appointed Chairman. The HCP describes the major challenges the agency 

currently faces and the steps it must take to attract, retain and support an effective and motivated 

workforce.

The FMC’s new Chairman has implemented an agency reorganization, set new goals for the 

agency as a whole and identified particular programs for expansion and added responsibilities. 

In effecting the reorganization, existing leaders were shuffled into new positions to challenge 

their skill set. This would be an appropriate time to revisit and, if necessary, revise the agency’s 

Human Capital Plan, including its stated elements, human capital challenges, and the human 

capital drivers, to reflect the Chairman’s vision for the agency. Areas for reevaluation are 

apparent in the agency - identified workforce, knowledge and communication gaps. 

Although the HCP correctly notes that the agency’s representation of African-Americans is very 

strong, there are no African-Americans in the Senior Executive ranks. Further, only one of eight

Senior Executives is a minority. While the agency has begun to take steps to reverse this trend, 

e.g., the last senior executive service candidate development program consisted of three women 

and one male: two of the four candidates are minorities, the HCP also notes that of 14 employees 

at the GS-15 level, none are African-American females. During the last year, there has been at 

least one rehire and several promotions to the GS-15 grade level. None of those promotions 

included a minority female.
Chapter Four OTHER ACCOMPANYING INFORMATION

60

Retirement significantly impacts the expertise needed at the agency to meet its mission 

objectives. For example, almost 50 percent of FMC employees have reached or will reach 

retirement age in the next few years. Traditionally, the agency has sought to hire attorneys, 

transportation specialists and industry analysts with ocean shipping backgrounds or specialties. 

However, missing in the plan is recognition of the need to hire individuals that have knowledge 

and/or experience that cross transportation lines, e.g., trucking and rail transportation, as the 

movement of goods from one point to another rely on numerous transportation modes. Ideally, 

the agency should seek to hire employees with shipping expertise and an understanding of other 

transportation sectors who can contribute to policy discussions regarding the agency’s regulatory 

role in a changing transportation industry. 

Although the OIG does not receive a large number of internal complaints about waste, fraud or 

abuse, it occasionally hears concerns from staff about internal communication. A third key area 

for reassessment is leadership and knowledge management, specifically, the human capital goal 

of communication. The HCP acknowledges the importance of communication and states that the 

FMC will increase the level of communication by initiating “standardized and consistent avenues 

of communication” throughout the Commission. Although the agency’s Workforce Plan 

acknowledges this topic in two different places, concrete details concerning how this goal will be 

met are lacking. For example, the agency concedes that issues regarding communication 

between managers and employees surfaced during interviews with managers, and the agency 

notes: “Ensuring that employees know what is taking place in both the short-term and long-term 

helps engage their support in making those plans come to fruition. Achievement of FMC goals 

is dependent on a well-informed organization, which we are striving to attain.” However, no 

further information is provided to clarify the specific steps to be taken to attain this goal.

Similarly, in the “Strategies and Solutions” section, the agency notes: An “open communication 

culture within an agency, especially from senior leadership, is essential to employees’ sense of 

added value and satisfaction. Employees need to be involved in the decision-making processes 

and to feel empowered to share their ideas and concerns with supervisors and other management 

officials. Studies indicate that employees look to their immediate supervisor to get the key 

information they need about their jobs, changes that may be taking place in the organization, and 

the way these changes may affect them. Steps can be taken to improve communication flow to 

ensure that pertinent, necessary information is free flowing to the appropriate levels within the 

Commission. The FMC will explore and implement strategies to improve communication, as 

appropriate.” Again, this statement lacks detail to as how this goal will be achieved.

The Challenge Ahead: The agency has taken a positive first step in implementing a succession 

plan by developing a human capital plan. However, the goal should now be to refine the plan to 

take into account the recent reorganization and select one or two key areas of the plan upon 

which to focus for goal achievement. The agency also needs to identify specific strategies to 

measure its progress in these areas.
Chapter Four OTHER ACCOMPANYING INFORMATION

61

Comments on IG-Identified Management and Performance Challenges

The Inspector General identifies three management and performance challenges facing the FMC, as 

outlined below:

I. Develop a user fee system that reflects total costs of providing an activity, consistent with Generally 

Accepted Accounting Principles. 

Management is aware that the current user fees are in need of updating. We plan to update fees in a 

manner that complies with statutory and OMB requirements. A proposed rule will be issued in the 

near future to implement new fees. 

II. To ensure information integrity, accessibility and confidentiality for data and information residing on 

the agency’s information systems. 

As the Inspector General notes, the Commission has made progress in complying with Federal 

Information Security Management Act of 2002 (FISMA) requirements. Management is well aware of 

increasing cybersecurity threats and concurs with the need to ensure that the security program is in 

line with OMB mandates. Work has begun to replace two major applications with new enterprise 

content management technology, which will be deployed in accordance with OMB mandates and 

HIST guidelines to ensure that FISMA requirements will be met. 

III. To ensure that the agency has the people with the right skills, in the right place, at the right time to 

help guide the management of the Commission and contribute to financially sound and reliable 

systems that serve the public interest.

Within our resource constraints, the Commission is working diligently to ensure that it has personnel 

with needed skills in the right positions. Our recent reorganization was the first step in that direction, 

and was designed to ensure that the Commission optimize assignments of its current leadership team 

in light of their skills. Existing leaders were not “shuffled,” but rather reassigned after careful 

consideration of their skills and the Commission’s needs. Even so, it was recognized at the time that 

further “tweaking” might be needed as the Commission becomes more experienced with its new 

structure. The Commission does have a Human Capital Plan that contains significant goals and 

implementation plans in many areas, including succession planning. In accordance with that plan, the 

Commission recently selected SES Candidates for training and development. Next, we will turn 

attention to development of leadership skills among mid-level managers. We also have implemented 

significant training efforts to develop skills of attorneys in understanding bills of lading and dispute 

resolution skills of Commission employees throughout the Commission. Much more will be done as 

we move forward. 

In December 2009, OPM audited the Commission’s Human Resources Program, including our 

Human Capital Plan. Among other things, the report addressed communication and minority 

employment. Details on accomplishing the goals and objectives outlined in the Human Capital Plan 

are contained in the Commission’s Human Capital Solutions Implementation Plan (Appendix B of the 

Human Capital Plan), which spells out specific solution activities, measures and time frames for their 

achievement. The Human Capital Plan is currently in the process of being revised to align with the 

Commission’s recently revised Strategic Plan. 
Chapter Four OTHER ACCOMPANYING INFORMATION

62

Improper Payments Information Act

Narrative Summary of Implementation Efforts for FY 2010

I. The Federal Maritime Commission has not identified any program that in and of itself constitutes a 

high-risk for improper payments. Therefore, the FMC considers all of its payments to fall within the 

realm of low-risk. As such, the FMC has instituted a separation of duties concerning payments that 

has been very successful in curtailing any improper payments. The National Finance Center (NFC) 

became the agency’s payroll provider in 2002 and is responsible for monitoring and reporting on any 

payroll-related payments. Any overpayments made to an FMC employee by the NFC on behalf of 

the FMC would be offset by NFC. In FY 2010, the FMC had no overpayments. The FMC did not 

identify any improper collections through Intergovernmental Payments and Collections (IPAC) 

collections. 

II. The FMC did not use a statistical sample to conduct its improper payment rate. The sample contains 

one hundred percent of all disbursements made by the FMC. This was the case for all programs.

III. The FMC will continue to monitor all payments to maintain a zero dollar improper payment figure. 

To this end, the FMC will ensure that there is sufficient segregation of duties pertaining to payments 

concomitantly with closer scrutiny of all IPAC collections made against the Commission. The FMC 

will continue to monitor all disbursements made on its behalf to ensure payments are valid and 

proper.

IV. The table below represents the improper payments made by the FMC in FY 2010 with percentage 

forecasts through FY 2013. 

Improper Payments Information Act Reduction Outlook FY 2010 - 2013

(millions)

Program FY 10 

Outlays

FY10 

IP %

FY10 

IP $

FY11 

% FY12 % FY13 %

Formal Proceedings $0.00 0.00 $0.00 0.00 0.00 0.00 

Inspector General $0.00 0.00 $0.00 0.00 0.00 0.00 

Equal Employment Opportunity $0.00 0.00 $0.00 0.00 0.00 0.00 

Operations and Administrative $0.00 0.00 $0.00 0.00 0.00 0.00 

Totals $0.00 0.00 $0.00 0.00 0.00 0.00 

V. The FMC has in place a segregation of duties to ensure that all invoices processed for payment are 

legitimate expenses of the agency. As of October 1, 2006, original accounts payable invoices have 

been received by BPD and forwarded to OBF via electronic media for internal processing and 

payment authorization. When an invoice is received, it is first verified as a valid invoice belonging to 

the agency. OBF matches the invoice to documentation provided by the COTR indicating that 

goods/services have been received by the Commission and approves the invoice for payment. BPD 
Chapter Four OTHER ACCOMPANYING INFORMATION

63

is advised of the purchase order the invoice is being paid against and the payment amount. OBF also 

ensures that sufficient funds have been obligated to make the payment and provides BPD with the 

period of performance. Once the payment authorization has been processed by OBF, the payment 

information is verified by a second member of OBF. At that point, the invoice is electronically 

returned to BPD for processing. When the payment is loaded into the Oracle database, a final funds 

availability check is made by the financial system against the fund controls set for the FMC and a 

third OBF individual audits the payment information posted in the financial system. 

The receipt of an invalid IPAC collection must be processed as a payment, as the funds have already 

been moved from the Treasury General Fund as a disbursement against the FMC’s Agency Location 

Code (ALC). Invalid IPACs are then charged back to the billing agency to reverse the transaction. 

The internal controls in place remain unchanged, with a close scrutiny paid to all invoices and 

subsequent payments. 

VI. The Chairman, as the Chief Administrative Officer of the FMC, is ultimately responsible for the 

efficient and effective utilization of the authority granted the agency by Congress. The Chairman is 

responsible for designating a Chief Financial Officer and has delegated financial responsibility to the 

Director, OBF. The Director of OBF has the responsibility to ensure that all disbursements made by 

BPD on behalf of the FMC are legitimate expenses of the agency and that there are sufficient funds 

available to pay the agency’s expenses. The OBF is responsible for reducing and recovering 

improper payments, and keeps senior agency officials apprised of all relevant activities.

VII. a. The FMC does not have an in-house information system to help reduce improper payments. The 

agency utilizes the infrastructure and financial system maintained in Parkersburg, WV by BPD.

b. In FY 2010, the FMC requested funding to maintain the contract between the FMC and BPD for 

financial support and platform access to the Oracle database through Oracle’s Discoverer portal. 

VII. There are no statutory or regulatory barriers that limit the agency’s ability to take corrective actions 

to address any improper payments.

VIII.The current IPAC system does not allow an agency to refuse a collection against its ALC through 

the General Fund it deems improper. The end result is a requirement to make the payments during 

the accounting period in which the collection was made and reverse the collection at a later date. The 

ability to challenge the collection would reduce the number of improper collections made against the 

agency. 
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64

Summary of Financial Statement Audit

Table 1.

Summary of Financial Statement Audit

Audit opinion Unqualified

Restatement No

Material Weakness Beginning Balance New Resolved Consolidated Ending Balance

None $0.00 $0.00