FEDERAL MARITIME

COMMISSION

 An independent agency of the U.S. Government 

Chairman Daniel B. Maffei

November 2021
FISCAL YEAR 2021 | Performance and Accountability Report | i

Federal Maritime Commission

CONTENTS

Contents i

MESSAGE FROM CHAIRMAN MAFFEI ii

PART ONE MANAGEMENT’S DISCUSSION and ANALYSIS 1

Overview of the Commission ...................................................................................................... 2

Members of the Federal Maritime Commission......................................................................... 7

Regulatory Responsibility and Oversight .................................................................................... 8

Financial Statement Highlights.................................................................................................. 19

Analysis of Systems, Control, and Legal Compliance ................................................................ 21

Federal Managers’ Financial Integrity Act Statement of Assurance......................................... 24

PART TWO ANNUAL PERFORMANCE REPORT 25

Annual Performance Report ..................................................................................................... 26

PART THREE FINANCIAL INFORMATION 30

Message from the Chief Financial Officer / Director, ENTERPRISE SERVICES........................... 31

Principal Financial Statements.................................................................................................. 32

Independent Auditors' Report .................................................................................................. 36

PART FOUR OTHER INFORMATION 58

Inspector General’s Statement on Management and Performance Challenges...................... 59

Financial Statement Audit Summary......................................................................................... 64

Management Assurances Summary.......................................................................................... 64

Improper Payments Information Act........................................................................................ 65

Fraud Reduction Report............................................................................................................ 65

Civil Monetary Penalty Adjustment for Inflation ...................................................................... 66

Biennial Review of User Fees.................................................................................................... 66

This Report can be downloaded at https://www.fmc.gov/about-the-fmc/performance-andaccountability-reports/
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Federal Maritime Commission

MESSAGE FROM CHAIRMAN MAFFEI

Federal Maritime Commission

Washington, D.C. 20573-0001

Office of the Chairman

November 15, 2021

With this letter, I submit the Commission’s Performance and Accountability Report for Fiscal 

Year 2021 (FY 2021), including financial and program performance results. The performance 

and financial data contained in this report are reliable and complete. Prior to the preparation 

of this report, the Commission evaluated its management controls and financial management 

system pursuant to the Federal Managers’ Financial Integrity Act of 1982. No material 

weaknesses were identified, and the financial management system conforms to government 

financial system requirements. In accordance with OMB Circular A-123, Appendix C, no 

improper payments were made. This report contains the results of an independent audit of the 

Commission’s financial statements, internal controls, and management systems, which verified 

that they conform to generally accepted accounting principles, laws, regulations, and 

requirements. 

This report also provides highlights of the Commission’s work, guided by its Strategic Plan, in 

accomplishing its mission and meeting its strategic goals. I take pride that for the 18th 

consecutive year, the Commission's financial statements have earned an unmodified ("clean") 

opinion. The Commission remains committed to ensuring proper operational oversight, with 

safeguards in place to protect the agency and the public from financial risks, and provide

transparency and accountability to the American taxpayer. 

On behalf of the Federal Maritime Commission, I am pleased to provide this FY 2021 

Performance and Accountability Report to the Office of Management and Budget.

Sincerely, 

/s/

Daniel B. Maffei

Chairman
PART ONE 

MANAGEMENT’S DISCUSSION

AND ANALYSIS

Fiscal Year 2021
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Federal Maritime Commission

OVERVIEW OF THE COMMISSION

HISTORY

First constituted over 100 years ago as the U.S. Shipping Board in the Shipping Act of 1916, the 

Federal Maritime Commission (FMC or Commission) was authorized in its current form as an 

Executive Branch agency in 1961. The Commission is an independent, non-CFO Act agency that 

regulates the international ocean transportation supply system (vessel liner carriers, ocean 

transportation intermediaries, and marine terminal operators). From its beginning, the 

Commission has worked to further competition and integrity for America’s ocean supply chain. 

MISSION STATEMENT

Ensure a competitive and reliable international ocean transportation 

supply system that supports the U.S. economy and protects the public 

from unfair and deceptive practices.

The Commission achieves its mission by ensuring that the fundamental dynamics of a free, 

open, and competitive ocean transportation market drive economic outcomes. The FMC is 

committed to faithfully administering the Shipping Act, employing a minimum of government 

intervention and regulatory costs, and placing a greater reliance on the marketplace.

THE FMC TODAY

Moving more than $1 trillion in containerized exports and imports each year, international 

ocean shipping is a critical component that supports our Nation’s commerce.1 Over the last 

decade, the industry has continually adjusted and reacted to challenging market conditions, 

and, more recently, the global pandemic has put the vital importance of this industry into sharp 

focus. As the U.S. economy continues to recover from the pandemic, the ocean shipping 

industry is challenged by unprecedented surges in cargo volumes and supply chain congestion. 

The FMC timely and efficiently analyzes the competitive impact of proposed vessel-operating 

common carrier (VOCC) and marine terminal operator (MTO) agreements; monitors activities 

under filed agreements; detects and addresses unreasonable increases in transportation costs 

or decreases in transportation services enabled by filed agreements; and addresses other 

activities prohibited by the Shipping Act. Accordingly, the Commission imposed enhanced 

reporting requirements on the major carrier alliances to monitor more closely their response to 

the market conditions of demand surges, tight capacity, equipment shortages, and increasing 

freight rates in the trade lanes from Asia. 

The FMC works to ensure a competitive and reliable international ocean transportation supply 

system, in part, by balancing cost-containment strategies and cooperative working 

arrangements among ocean carriers or MTOs with the legitimate business needs of the Nation’s 

many exporters/importers to ensure their goods reach international markets efficiently and 

reliably. 

1 According to the U.S. Census Bureau: Economic Indicators Division USA Trade Online. Source: U.S. Import and

Export Merchandise trade statistics, U.S. container exports and imports totaled $1,031,799,889,658 in 2020.
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Federal Maritime Commission

As the industry continues to evolve and change, the FMC will focus upon competition and 

integrity for America’s ocean supply chain by:

• Analyzing and monitoring key U.S. trade lanes;

• Assessing the competitive effects of agreement parties’ activities, particularly focusing 

on issues of costs (freight rates), vessel capacity (supply) and equipment availability 

upon the business community; 

• Licensing our Nation’s non-vessel-operating common carriers (NVOCCs) and freight 

forwarders, (collectively ocean transportation intermediaries, or OTIs), registering 

foreign-based NVOCCs, and administering an effective surety bond program to ensure 

payment of judgments for damages by OTIs; and

• Monitoring changes taking place with respect to chassis for the inland movement of 

containerized goods, and the competitive effects of changing carrier alliance structures, 

particularly as they may affect concerted procurement of carrier services in U.S. ports.  

STATUTORY AUTHORITY

The principal statutes administered by the Commission, codified at 46 U.S.C. §§ 40101-44106 

and § 3503, are:

• The Shipping Act of 1984, as amended (Shipping Act);

• The Foreign Shipping Practices Act of 1988 (FSPA);

• Section 19 of the Merchant Marine Act, 1920 (1920 Act); 

• Sections 2 and 3 of Pub. L. No. 89-777, 80 Stat. 1350; and

• Section 834 of the Frank LoBiondo Coast Guard Authorization Act of 2018 (LoBiondo Act).

ORGANIZATION 

The FMC is composed of five Commissioners nominated by the President and confirmed by the 

Senate, each serving a staggered five-year term. The Commission is a bipartisan body; no more 

than three members of the Commission may be of the same political party. One Commissioner, 

designated by the President, serves as the Chairman, Chief Executive, and Chief Administrative 

Officer of the Commission. 

The Commission’s staff is mainly comprised of economists, attorneys, and experts in ocean 

transportation, and is located at its Washington, D.C. headquarters. The Commission also

maintains a presence in six major port locations nationwide, staffed by Area Representatives

(ARs). In addition to the Commissioners’ offices, the FMC is organized into ten bureaus and 

offices: 

Bureau of Certification and Licensing (BCL)

protects the public from financial harm 

through its OTI licensing, registration, and 

surety bonding programs. BCL also protects 

the public by requiring passenger vessel 

operators (PVOs) to maintain adequate 

financial coverage to reimburse cruise 

cancellations or to cover liability in the 

event of death or injury at sea. 

Bureau of Enforcement (BOE) is the 

prosecutorial arm of the Commission. 

Bureau attorneys serve as trial counsel in 

formal proceedings and protect the 

shipping public by working closely with the 

Commission’s ARs in investigations of 

potential violations of the Shipping Act and 

Commission regulations. BOE negotiates 

settlements and informal compromises of 
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Federal Maritime Commission

civil penalties and may act as investigative 

officers in formal fact-finding investigations.

Bureau of Trade Analysis (BTA) analyzes 

and monitors the concerted activities of 

vessel-operating common carriers (VOCCs 

or carriers) and MTOs to detect and guard 

against possible anticompetitive abuse of

authority contained in filed agreements 

which could result in substantial increases 

in transportation costs or decreases in 

transportation services. BTA also reviews 

and analyzes service contracts, monitors 

rates of foreign, government-owned 

controlled carriers; and reviews carrierpublished tariff systems under the 

accessibility and accuracy standards of the 

Shipping Act. 

Office of the Administrative Law Judges 

(OALJ) presides over administrative 

hearings and independently resolves cases 

involving alleged violations of the Shipping 

Act of 1984 initiated by private parties or by 

the Commission. Through trial hearings and 

the issuance of decisions, the OALJ ensures 

that the rights of all parties are preserved.

Office of Consumer Affairs and Dispute 

Resolution Services (CADRS) provides 

assistance to shippers, OTIs, cruise 

operators and passengers, truckers, MTOs, 

and carriers by providing alternative dispute 

resolution (ADR) services, ombuds 

assistance, mediation, and facilitation to 

resolve disputes involving cargo shipments, 

household goods shipments, and cruises.

Office of Equal Employment Opportunity 

(OEEO) advises and assists the Commission 

in carrying out its responsibilities relative to 

Titles VI and VII of the Civil Rights Act of 

1964 (as amended), other laws, executive 

orders, and regulatory guidelines 

implementing affirmative employment; and 

the processing of EEO complaints.

Office of the Inspector General (OIG) is an 

independent oversight office created within 

the FMC by the Inspector General Act of 

1978 (as amended) to conduct and 

supervise audits, inspections, and 

investigations relating to the FMC’s 

programs; to detect and prevent waste, 

fraud, and abuse; to promote economy, 

efficiency, and effectiveness; to keep the 

Chairman, Commissioners, and Congress 

fully informed of serious problems and 

deficiencies and recommend corrective 

actions; and, as appropriate, to report 

violations of law to the U.S. Attorney 

General.

Office of the General Counsel (OGC)

provides sound and timely legal services to 

the Commission and staff as it fulfills 

responsibilities, including preparing final 

decisions, orders, and regulations for 

Commission approval and issuance; 

represents the Commission in litigation 

before the courts; provides technical and 

policy assistance to other government 

agencies engaged in international 

negotiations or discussions on shipping 

matters; and provided legal opinions to the 

Commission, its staff, and the general public 

in appropriate instances. OGC also 

oversees the Commission’s international 

affairs activities. The General Counsel is the 

Commission’s Chief Legal Officer.

Office of the Managing Director (OMD) 

implements the administrative directives of 

the Chairman; the management and 

coordination of Commission program 

offices and bureaus; and oversees the 

agency’s ARs. The Managing Director is the 

Chief Operating Officer. OMD’s Director, 

Enterprise Services, also serves as the Chief 

Financial Officer, and has direct oversight of 

the administrative offices of the 

Commission, which include the Offices of 

Budget and Finance (OBF), Human 

Resources (OHR), Information Technology 

(OIT), and Management Services (OMS). 
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Federal Maritime Commission

Office of the Secretary (OS) serves as the 

office through which all filings are made in 

Commission proceedings, notices of 

proceedings are given, and from which all 

official actions are issued by the 

Commission. OS prepares and maintains 

agenda matters and actions taken by the 

Commission; maintains official files and 

records of formal proceedings; ensures 

compliance with the Freedom of 

Information, Government in the Sunshine, 

and Privacy Acts; responds to information 

requests from the public; issues 

publications and authenticates instruments 

and documents of the Commission; 

maintains a public reference/law library and 

a docket library; and oversees the 

organization and content of the 

Commission’s website.
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Federal Maritime Commission

Federal Maritime Commission

Organization Chart*
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Federal Maritime Commission

MEMBERS OF THE FEDERAL MARITIME COMMISSION

Chairman Daniel B. Maffei

Appointed 2016

Term Expires 2022

Commissioner Rebecca F. Dye

Appointed 2002

Term Expired 2020

Commissioner Michael A. Khouri

Appointed 2009

Term Expired 2021

Commissioner Louis E. Sola

Appointed 2019

Term Expires 2023

Commissioner Carl W. Bentzel

Appointed 2019

Term Expires 2024
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Federal Maritime Commission

REGULATORY RESPONSIBILITY AND OVERSIGHT

The FMC ensures a competitive and reliable ocean transportation supply system by:

• Reviewing and monitoring agreements among and between carriers and among and 

between MTOs serving the U.S. foreign oceanborne trades to ensure that they do not 

cause unreasonable increases in transportation costs or decreases in transportation 

services;

• Maintaining and reviewing confidentially filed service contracts to guard against 

detrimental effects to shipping;

• Providing a forum for exporters, importers, and other members of the shipping public to 

obtain relief from ocean shipping practices or disputes that impede the flow of 

commerce;

• Ensuring common carriers’ tariff rates and charges are published in private, automated 

tariff systems and publicly available;

• Acting to address unfavorable conditions caused by foreign government or foreign 

business practices in U.S. foreign shipping trades; and

• Monitoring rates, charges, and rules of government-owned or -controlled carriers to 

ensure they are just and reasonable.

The FMC protects the public from financial harm and contributes to the integrity and security of 

the Nation’s import and export supply chains and ocean transportation system. FMC activities 

include:

• Licensing and registering NVOCCs, and licensing U.S.-based freight forwarders, 

collectively OTIs; 

• Administering and enforcing a surety bond program to ensure payment of judgments for 

damages by OTIs;

• Investigating and prosecuting violations of the Shipping Act and related statutes;

• Helping resolve disputes involving the shipment of goods or the carriage of passengers;

• Adjudicating private party complaints alleging Shipping Act violations; 

• Ensuring that passenger vessel operators maintain proper financial coverage to 

reimburse cruise passengers in the event their cruise is cancelled or to cover liability in 

the event of death or injury at sea; and

• Registering and annually verifying VOCC status of ocean common carriers operating in 

U.S. trades.

AGREEMENTS

The FMC monitors key trade lanes and reviews and analyzes the competitive impact of 

agreements with particular emphasis on issues concerning carrier consolidation, adequate 

vessel capacity, and equipment availability. Worldwide economic conditions continue to drive 

changes among ocean carriers and MTOs, resulting in more complex or novel agreements filed 

with the Commission.

Fiscal years 2020 and 2021 saw a reduced number of agreement filings. Carriers and marine 

terminal operators continued to explore novel areas for cooperation through agreement filings 

at the Commission. 
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Federal Maritime Commission

During FY 2021, the Commission continued a comprehensive review of the status of MTOs and 

began working with those that are no longer active in providing MTO services to remove them 

from the Commission’s website. The Commission also reviewed all VOCC agreements on file 

and ensured that all filed agreements continue to reflect ongoing cooperation between 

agreement parties under the Shipping Act. In addition, for those MTOs that elected to make 

their MTO schedules publicly available, staff verified the internet location where those 

schedules are published and updated the FMC website accordingly to provide more current 

information to the shipping public to inform their business decisions.

As the industry responds to trade conditions and economic developments, the FMC will 

continue to analyze agreements for anticompetitive behavior and address unreasonable 

practices as necessary.

LICENSING 

Ocean transportation intermediaries are the middlemen for oceanborne cargo moving in the 

U.S.-foreign trades. Before the FMC grants licenses to OTIs, each applicant must establish that 

it employs a Qualifying Individual (QI) with the necessary character and a minimum of three 

years of experience in the U.S., as well as establish its financial responsibility by means of a 

bond, insurance, or other instrument, as mandated by the Shipping Act. 

The Commission continues to streamline its OTI licensing process, reducing time to process 

applications and render a decision, supporting the Commission’s goal of completing 75 percent 

of all OTI license applications within 60 days. These efforts directly benefit U.S. export shippers 

who rely on licensed OTIs to help get their goods to foreign markets. 

In September 2019, the Bureau of Certification and Licensing began an aggressive enforcement 

process to replace missing Qualifying Individuals. This process continues in coordination with 

the Bureau of Enforcement and has resulted in increased compliance and multiple license 

revocations.

PORT DEMURRAGE AND DETENTION PRACTICES 

The COVID-19 pandemic has highlighted the economic urgency of responsive port and terminal 

operations to the effectiveness of the United States’ international freight delivery system. 

Given its mandate to ensure an efficient and reliable transportation system for ocean 

commerce, the Commission has a clear and compelling responsibility to actively respond to 

current challenges impacting the global supply chain and the American economy. 

On March 31, 2020, the Commission initiated Fact Finding 29, International Ocean 

Transportation Supply Chain Engagement. This ongoing investigation convened supply chain 

innovation teams to address port and terminal operational challenges in the wake of the 

COVID-19 pandemic and will continue to make industry recommendations as warranted. 

By Order issued on November 19, 2020, this investigation was expanded to investigate whether 

alliances are employing practices or regulations in violation of 46 U.S.C. § 41102(c) including, 

but not limited to, practices and regulations related to demurrage and detention considering 46 

C.F.R. § 545.5, empty container return practices and regulations, and practices and regulations 

related to the carriage of U.S. exports. In February 2021, the Fact Finding Officer issued 

information demand orders to ocean carriers and marine terminal operators to determine if 
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Federal Maritime Commission

legal obligations related to detention and demurrage practices are being met. In August 2021, 

the Fact Finding Officer issued interim recommendations to the Commission aimed at 

minimizing barriers to private party action, clarifying Commission and industry processes, and

encouraging stakeholders to engage the Commission in enforcement actions and alternative 

dispute resolution.

In July 2021, the Commission established the VOCC Audit Program to address complaints from 

shippers and other stakeholders regarding VOCC detention and demurrage practices with 

respect to the handling, storing or delivery of equipment. The ongoing audit program seeks 

quarterly information from carriers regarding their internal and external detention and 

demurrage practices, as well as details of substantive changes to their detention and 

demurrage tariff rules. Further, the VOCCs were requested to provide documentation related 

to changes in internal review processes affecting payment timelines for those that have billing 

disputes with the carrier.

The VOCCs submitted initial responses at the end of August 2021, which included data and 

documents from the second quarter of CY 2020 through the second quarter of CY 2021. This 

data is being analyzed and the VOCCs will submit quarterly follow-up reports. This new audit 

program will require significant effort by Commission staff members to analyze and manage the 

information, data, and documents.

INTERNATIONAL AFFAIRS

The Commission’s international affairs program monitors foreign shipping laws and practices 

that may have an adverse effect on the industry and makes recommendations to the 

Commission for investigating and addressing such practices. The Commission has the authority 

to address restrictive foreign shipping practices under the 1920 Act and FSPA. 

The 1920 Act provides the Commission with authority to investigate and address discriminatory 

conditions caused by laws, rules, or regulations of foreign governments or the practices of 

foreign vessel operators. If the Commission finds that such actions result in conditions 

unfavorable to shipping in a U.S.-foreign trade, then the 1920 Act provides the FMC with 

several remedies that include: levying fines on foreign vessels calling at U.S. ports, prohibiting 

foreign vessel calls at U.S. ports, and restricting cargos that may be carried between the U.S. 

and the foreign country. 

On March 6, 2020, the Commission received a petition from the Lake Carriers’ Association, a 

trade association made up of owners and operators of vessels on the Great Lakes, alleging that 

proposed ballast water management regulations issued by Transport Canada, an agency of the 

Government of Canada, created unfavorable conditions to shipping in the United 

States/Canada trade, pursuant to Section 19 of the 1920 Act. On June 16, 2020, the 

Commission formally initiated its investigation of pending Canadian ballast water regulations 

and invited interested parties to supplement information collected by FMC staff as they 

investigate allegations that Canadian ballast water regulations are unfavorable and detrimental 

to U.S.-flag Laker vessels. FMC staff resources are dedicated to this investigation which is 

ongoing and expected to continue in FY 2022 and potentially FY 2023. 

The FSPA directs the Commission to address adverse conditions that affect U.S. carriers in the 

foreign trade and that do not exist for foreign carriers in the United States. The FMC will 
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Federal Maritime Commission

continue to participate, both formally and informally, in international agreement negotiations 

that could affect foreign-borne cargo shipments to the United States. The FMC also tracks

consumer and U.S.-flag vessel operator inquiries regarding possible foreign restrictive shipping 

practices. 

The Commission will continue its international outreach efforts to coordinate with foreign 

counterparts to end unlawful, unfair, and deceptive practices. On September 7, 2021, the 

Commission participated in the European Union (EU)-hosted 5th Global Regulatory Summit. 

The Summit is a biennial forum for competition officials from the U.S., People’s Republic of 

China, and the European Union to meet and discuss their respective approaches to the 

common goal of ensuring continued competition in ocean shipping. 

ENFORCEMENT, DISPUTE RESOLUTION, AND PUBLIC INFORMATION

The Commission’s statutory and regulatory mandate is designed to protect the shipping public 

and ensure industry adherence to U.S. shipping laws. Enforcement-based initiatives will 

continue to address any prohibited acts under the Shipping Act, including VOCCs and NVOCCs 

that engage in unfair service contracting practices, particularly those practices which permit 

unlicensed OTIs to compete unlawfully with carriers and OTIs operating in compliance with U.S. 

laws. 

The FMC uses database systems with other federal agencies to improve identification of 

entities providing and utilizing maritime transportation services. The FMC has an ongoing 

Memorandum of Understanding (MOU) with the U.S. Department of Homeland Security, 

Customs and Border Protection (CBP), to provide for information sharing with CBP’s Automated 

Commercial Environment (ACE). The FMC also has an active Inter-Agency Agreement with the 

Census Bureau at the U.S. Department of Commerce for access to the Census’ Automated 

Export System (AES) database. An MOU with the Department of Justice, Antitrust Division, was 

executed in July 2021 to increase cooperation and communication in each agency’s respective 

oversight and enforcement responsibilities of the ocean liner shipping industry. These 

affiliations facilitate access to confidential U.S. export shipment data, helping the FMC to 

accomplish its mission. 

The Commission provides information in many forms to educate regulated entities, 

stakeholders, and the public about resources, remedies, and regulatory requirements. The 

Commission’s website offers news releases, information on investigations, advice on topics 

such as FMC regulations, OTI licensing, household goods moves, use of ADR services to assist 

parties with resolving cruise- and cargo-related disputes, as well as brochures, how-to guides, 

forms and applications and reference libraries. The Commission regularly provides outreach 

and education to the shipping industry, stakeholders, and other government entities on the 

statutes it implements. Commissioners and staff address industry and stakeholder groups to 

provide information on the latest issues related to Commission activities and international 

commerce.

The FMC assists with industry-driven solutions to ocean shipping issues. The Commission’s 

CADRS office receives time-sensitive requests for informational and dispute resolution 

assistance from shippers and carriers. Area Representatives, strategically located near six 

major maritime ports, operate as the Commission’s front line for information-gathering on

issues facing the industry. The Commission’s Office of the Secretary regularly updates the 
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Federal Maritime Commission

FMC’s website and social media, providing time-sensitive notifications and important 

information to the public. The FMC also responds to requests for information from the press 

and the public, delivering key information directly to potentially affected shippers and 

consumers. 

MISSION CHALLENGES

The Commission constantly monitors the issues and challenges facing the United States’ ocean 

transportation system and its stakeholders, and purposefully focuses its efforts to foster the 

Nation’s international trade and economic growth. Strategic goals are accomplished by 

continuing to improve staff efficiency and closely manage resources to enforce the 

Commission’s governing statutes and regulations to protect the shipping public. 

As financial resources permit, the FMC will continue to prioritize investments needed in 

information technology (IT) to improve information security, efficiency, and greater public 

access, while reducing costs. These planned IT improvements are critical to restraining future 

personnel growth and permitting options for the FMC to reallocate existing personnel to the 

strategic program needs of the future, consistent with OMB Memorandum M-17-22, Reforming 

the Federal Government and Reducing the Federal Workforce. 

REGULATORY REVIEW

The FMC expanded recently granted COVID-19-related relief in service contract filing 

requirements to allow the industry to quickly respond to changing conditions, and to provide 

limited and temporary relief to small U.S. passenger vessel operators whose operations and 

business were disrupted by the response to COVID-19. Docket No. 20-02, Service Contracts,

finalized in FY 2020, provided substantial regulatory relief to VOCCs by removing the 

requirement and associated costs to publish essential terms of each individual service contract 

filed with the Commission. To minimize COVID-19-related impacts to the Nation’s vital supply 

chain, the Commission provided temporary service contract filing relief on April 27, 2020 and 

extended it through June 1, 2021 (Docket No. 20-06). The Commission permanently amended

its regulations following the positive response of the industry to this relief. The resultant Final 

Rule in Docket No. 20-22 became effective on June 2, 2021, permitting ocean carriers to file 

original service contracts with the Commission up to 30 days after the contract becomes 

effective. Shippers and carriers now have more flexibility in meeting service contract filing 

requirements, which better reflects contemporary business practices. Commission regulations 

previously required the filing of initial service contracts before an ocean carrier was permitted 

to receive and move cargo under the terms of that contract. This extends to original service 

contracts the same delayed filing relief previously granted for service contract amendments 

under Docket No. 16-05.

PROGRAM PERFORMANCE OVERVIEW

The Commission provides a performance plan to Congress, pursuant to the Government 

Performance and Results Act (GPRA). The FMC’s Strategic Plan for Fiscal Years 2018-2022

(Strategic Plan) is posted on its website. The FY 2021 Annual Performance Report is presented

in Part Two of this Report.
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Federal Maritime Commission

ACHIEVING STRATEGIC GOAL RESULTS

The Commission’s Strategic Plan provides the foundation for planning and budgeting activities. 

The plan sets goals and objectives for each fiscal year, and contains targets and measures linked 

to objectives via strategies. These objectives, strategies, targets, and measures drive the 

agency’s budgetary process. Funding and Full-Time Equivalent (FTE) staffing levels are 

integrated into the Commission’s performance budget planning document by strategic goal to 

clearly identify the budgetary and staff resources committed to the performance of each goal. 

During FY 2021, the Commission exceeded seven of its eight performance targets.

STRATEGIC MANAGEMENT OF HUMAN CAPITAL

In 2021, the FMC continued to implement the strategic goals, objectives, and strategies 

outlined in its 2012-2017 Human Capital Plan and 2018-2022 Strategic Plan. The Commission 

continued to recruit and retain a talented staff while appropriately managing succession in the 

Commission’s relatively small workforce.

During 2021, the FMC continued its response to a global pandemic by successfully maintaining 

a virtual environment, while improving and streamlining automation of processes and 

procedures. The Office of Human Resources virtually onboarded all new hires and completed

hiring actions remotely. As a result, the Commission quickly backfilled vacancies to remain fully 

operational. Additionally, the FMC implemented subject matter expert reviews (SME) of 

applicant lists. The use of SME reviews has improved the quality of applicants issued to the 

hiring manager, catering to a talented workforce. To further aid in hiring top talent, the agency 

is implementing USA Hire assessments, which will allow the FMC to leverage technology to 

further assess general competencies and qualifications of applicants. 

Consistent with OMB’s April 17, 2017, guidance, Comprehensive Plan for Reforming the Federal 

Government and Reducing the Federal Civilian Workforce, the Commission finalized work on all 

objectives laid out in its 5-year Agency Reform and Long-Term Workforce Plan FY 2018–2022

and completed all goals ahead of deadlines, including:

• realigning and combining functions within the Commission; and

• continuing to emphasize the achievement of operational efficiencies and improvement 

of customer service through automation projects.

Strong leadership remains a critical asset. The Commission continues to engage in succession 

management and projecting its future needs to continue supporting mission requirements.

To support succession management, the FMC continued offering leadership opportunities 

under the agency’s Leadership Development Program and realigned and combined functions 

across the Commission to allow for greater career development opportunities. Continuous 

training and development in leadership competencies will prepare the next generation of 

leaders at the Commission.

COMPETITIVE SOURCING

The FMC submitted its FY 2021 Federal Activities Inventory Reform Act (FAIR Act) inventory to 

OMB in June 2021. The inventory identified 72 of the agency’s 128 positions as commercial 

activity positions. No challenges to its commercial inventories have ever been received.
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Federal Maritime Commission

IMPROVED FINANCIAL PERFORMANCE 

The FMC received an unmodified (“clean”) opinion on its FY 2021 financial statements and will 

continue efforts to improve operations and achieve unmodified audit opinions in the future.

EXPANDED E-GOVERNMENT

The FMC worked diligently to provide the public with exceptional customer service throughout 

the COVID-19 pandemic. Commission news, documents, and events continued to be posted in 

a timely fashion under maximum telework flexibility. The website and social media were

regularly updated, providing important information about the Commission’s activities to the 

public. 

Ongoing enhancement of the Commission’s IT systems brought efficiencies and process 

improvements across the agency. Public facing web applications allowed the Commission to 

remain fully operational under maximum telework flexibilities during the pandemic. The 

Commission’s Information Technology Strategic Plan covering FY 2018-2022 (IT Strategic Plan) 

delivers cost efficiencies and fiscal responsibility while planning and managing technology 

solutions and resource allocations for ongoing and future needs. The IT Strategic Plan leverages

digital transformation and initiatives for continuous improvement of customer services. It also 

identifies several overarching challenges including: consolidation and upgrade of legacy 

applications and infrastructure with relevant technologies; implementation of automation to 

streamline workflow processes and improve efficiency; and integration of security standards 

and frameworks to protect all agency-owned/issued assets and commercially sensitive data

from cybersecurity risks. Ongoing IT investments and activities strive to stay abreast of 

technology advances and evolving cybersecurity requirements.

The Commission continues to work with the U.S. Department of Homeland Security (DHS) in 

provisioning technology infrastructure to comply with Federal Risk and Authorization 

Management Program (FedRAMP) and DHS continuous monitoring requirements for network 

security. Internal security tools have been deployed to effectively monitor and address 

network operations, including file integrity; password sufficiency; and probing for open ports 

and other externally visible points of attack.

COVID-19 IMPACT AND ACTIONS

The COVID-19 pandemic significantly disrupted the global shipping and cruise industries. The 

Commission has been responsive to changes in industry conditions and needs as the pandemic 

continues. 

Providing Industry Regulatory Relief: Effective June 2, 2021, a new rule amended existing FMC 

regulations to enable ocean carriers to file original service contracts with the Commission up to 

30 days after they go into effect. This change was prompted by positive industry response to 

the temporary service contract filing relief provided during the pandemic to minimize COVID19-related impacts on the supply chain. The filing change provides consistent treatment of 

initial service contracts and amendments, as well as continued flexibility for carriers. In making 

its decision, the Commission carefully weighed the regulatory burden on regulated entities and 

the need for the FMC to carry out its mission concerning statutory oversight of service 

contracts.
FISCAL YEAR 2021 | Performance and Accountability Report | 15

Federal Maritime Commission

Addressing Supply Chain Challenges: The COVID-19 pandemic has highlighted the economic 

urgency of responsive port and terminal operations to the effectiveness of the United States’ 

international freight delivery system. Given its mandate to ensure an efficient and reliable 

transportation system for ocean commerce, the Commission has a clear and compelling 

responsibility to actively respond to current challenges impacting the global supply chain and 

the American economy. On March 31, 2020, the Commission initiated Fact Finding 29, 

International Ocean Transportation Supply Chain Engagement. This ongoing investigation 

convenes supply chain innovation teams to address port and terminal operational challenges in 

the wake of the COVID-19 pandemic and will continue to make industry recommendations as 

warranted. 

By Order issued on November 19, 2020, this investigation was expanded to investigate whether 

alliances are employing practices or regulations in violation of 46 U.S.C. § 41102(c) including, 

but not limited to, practices and regulations related to demurrage and detention considering 46 

C.F.R. § 545.5, empty container return practices and regulations, and practices and regulations 

related to the carriage of U.S. exports. In February 2021, the Fact Finding Officer issued 

information demand orders to ocean carriers and marine terminal operators to determine if 

legal obligations related to detention and demurrage practices are being met. In August 2021, 

the Fact Finding Officer issued interim recommendations to the Commission aimed at 

minimizing barriers to private party action, clarifying Commission and industry processes, and 

encouraging stakeholders to engage the Commission in enforcement actions and alternative 

dispute resolution.

Addressing Cruise Industry Challenges: COVID-19 severely impacted the cruise industry. 

Shortly after the pandemic began in early 2020 and cruise lines were issued No Sail Orders, the 

Commission initiated Fact Finding 30, COVID-19 Impact on Cruise Industry, to explore the 

challenges impacting the cruise industry and identify areas where the Commission might 

provide relief. 

Based on a recommendation from Fact Finding 30, the Commission provided limited and 

temporary relief to small U.S. PVOs whose operations and business had been disrupted by the 

response to COVID-19. 

In FY 2021, the Commission continued its efforts to assist with pandemic relief for the cruise 

industry. Fact Finding 30 issued interim reports on the impacts on Alaska, Washington, and 

Oregon; the Gulf Coast; California, Hawaii, and U.S. Pacific Territories; and U.S. territories in the 

Caribbean. These were followed by an additional report on impacts on the cruise ports located 

on the East Coast (excluding Florida). The Commission issued a proposed rule on August 25, 

2021, to amend its regulations governing non-performance by passenger vessel operators 

(PVO/cruise lines) and establish new requirements for when cruise passengers should be 

provided refunds for cancelled or delayed voyages. The comment period closed in October 

2021, and the comments are being evaluated. Investigative efforts will continue during the 

pandemic and recovery to assist with identifying commercial solutions to COVID-19-related 

issues that interfere with the operation of the cruise industry. 
FISCAL YEAR 2021 | Performance and Accountability Report | 16

Federal Maritime Commission

FINANCIAL PERFORMANCE OVERVIEW

The FMC’s financial condition as of September 30, 2021, is sound. Internal controls are in place 

to ensure that funds are used efficiently and effectively, and that its budget authority is not 

exceeded. The FMC’s accounting services provider, the Bureau of the Fiscal Service (BFS), 

prepared the financial statements as required by the Accountability of Tax Dollars Act of 2002. 

They have been prepared from, and are fully supported by, the books and records of the FMC in 

accordance with Federal Generally Accepted Accounting Principles (GAAP), standards approved 

by the Federal Accounting Standards Advisory Board (FASAB), and OMB Circular A-136, 

Financial Reporting Requirements.

The principal financial statements provided in this document are prepared to report the 

financial position and results of the operations of the FMC, pursuant to the requirements of 31 

U.S.C. § 3515(b). Reports used to monitor and control budgetary resources are prepared from 

the same books and records. 

SOURCE OF FUNDS

The FMC has single-source funding, salaries and expenses, funded by an annual appropriation 

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

was granted. Congress approved FY 2021 appropriations for the FMC in the amount of 

$30,300,000 through P.L. 116-260. This is an increase of $2,300,000 over the FY 2020

appropriation level. Additionally, the Commission received reimbursements of $98,810 for 

work performed by FMC’s employees supporting other government agencies. 

The FMC collects remittances for user fees and penalties; however, it is not authorized to offset 

any of its budget authority by using these funds. Collections are deposited directly into the 

Treasury General Fund. This information is captured in the Statement of Custodial Activity 

found in the Financial Information section of this report.
FISCAL YEAR 2021 | Performance and Accountability Report | 17

Federal Maritime Commission

APPROPRIATIONS HISTORY

Appropriations History

Fiscal Years 2012-2021 ($M)

 $-

 $5.00

 $10.00

 $15.00

 $20.00

 $25.00

 $30.00

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
FISCAL YEAR 2021 | Performance and Accountability Report | 18

Federal Maritime Commission

Full-time Equivalent History

The FMC’s FTE level is largely driven by its annual appropriation level. The FMC currently has 

on board its full complement of five statutorily-authorized Commissioners.

The continued pace of retirements and separations in FY 2021 resulted in a lower than 

anticipated FTE level, at 116.1 FTEs, with 120 employees on board at the fiscal year’s end. The 

Commission endeavors to develop the appropriate mix of staffing and other available resources

to ensure effective accomplishment of its mission. 

Full-Time Equivalent History

Fiscal Years 2012-2021

USES OF FUNDS 

During FY 2021, obligations against the FMC’s appropriation totaled $30.1 million representing 

99.3 percent of the appropriation. Salaries and benefits are the single largest expense category 

at $20.8 million, or 68.6 percent of the total budget. The second largest category, rent and 

building security services, is approximately $4.2 million, or 13.8 percent of the total budget. 

Other administrative expenses equal 17.0 percent. The unexpended balance of $0.24 million, 

or 0.8 percent of the total budget, will be retained for allocation to legitimate increases to 

existing FY 2021 obligations.

AUDIT RESULTS

The FMC again received an unmodified (“clean”) opinion on its FY 2021 financial statements 

from the auditing firm of Dembo Jones, P.C., under contract through the FMC’s OIG. 

Comparative statements may be found in the Financial Information section of this report.

123 119 113 117 123 125 118 112 111 116

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
FISCAL YEAR 2021 | Performance and Accountability Report | 19

Federal Maritime Commission

FINANCIAL STATEMENT HIGHLIGHTS

The financial statements were prepared to report the financial position and results of 

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

statements were prepared from the books and records of the Commission in accordance with 

the formats prescribed by OMB. 

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 the Financial Information section of this report. A brief 

analysis of the principal statements follows.

SUMMARY OF ASSETS

The FMC’s assets were $8,492,975 as of September 30, 2021. This represents an increase from 

FY 2020 of $148,074. The FMC’s assets reported in the balance sheet are summarized in the 

table below. 

The Fund Balance with Treasury of 

$8,407,506 represents the FMC’s 

largest asset and comprises 99

percent of the agency’s total 

assets. 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, 2021, was $85,469 for outstanding receivables billed 

to both Federal and non-Federal entities. This accounts for 1.0 percent of the FMC’s assets. 

Capital Assets, also known as Property, Equipment and Software, accounts for 0 percent of the 

FMC’s total assets as of September 30, 2021. The net value of $0 accounts for the depreciation 

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

SUMMARY OF LIABILITIES

The FMC’s liabilities totaled

$3,731,914 as of September 30, 

2021, a decrease of $348,209 from 

FY 2020. A portion of the decrease

is due to a reduction in accounts 

payable.

The FMC’s Accounts Payable as of 

September 30, 2021, was 

$725,160. This represents the funds owed for goods and services received from vendors. The 

accrued liabilities of $2,670,864 represent future costs, such as accrued annual and sick leave 

balances and workman’s compensation that are not covered by current budgetary resources.

Summary of Assets as of

September 30, 2021

2021 2020

Fund Balance with Treasury $8,407,506 $8,239,096

Accounts Receivable $85,469 $85,609

Capital Assets $0 $5,612

Other $0 $14,584

Total Assets $8,492,975 $8,344,901

Summary of Liabilities as of

September 30, 2021

2021 2020

Accounts Payable $725,160 $1,230,801

Payroll Taxes $335,890 $298,355

Federal Employee Benefits $0

Custodial Liabilities $0

Accrued Liabilities $2,670,864 $2,550,967

Total Liabilities $3,731,914 $4,080,123
FISCAL YEAR 2021 | Performance and Accountability Report | 20

Federal Maritime Commission

Accumulated leave costs are recognized as they are taken, and Workman’s Compensation costs 

are recognized as they are paid out.

ANALYSIS OF CHANGES IN NET POSITION SUMMARY

The Changes in Net Position Summary is a summary of two factors, Unexpended Appropriations

and Cumulative Results of Operations. The total net position for FY 2021 is the result of a

$496,283 decrease from FY 2020.

Unexpended Appropriations 

represent the amount of 

unobligated and 

unexpended budget 

authority for the 5-year 

period ending on 

September 30, 2021. Unobligated balances are the amount of appropriations or other 

authority remaining after deducting the cumulative obligations from the amount available for 

obligation for the same period. The Cumulative Results of Operations (the cumulative excess of 

financing resources over expenses) is the net result of FMC’s operations for all active fiscal 

years. 

ANALYSIS OF NET COST SUMMARY

The analysis of Net Cost Summary presents the net cost of FMC’s Programs as identified in the 

Annual Report. The agency’s 

two programs are 

Operational and 

Administrative and Office of 

the Inspector General. 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 the Financial Information section of this 

report. This table reflects costs attributable to all active fiscal years (2017-2021).

ANALYSIS OF THE STATEMENT OF BUDGETARY RESOURCES

The Statement of 

Budgetary Resources (SBR) 

shows the source of the 

agency’s budgetary 

resources, the status of 

those resources at the end 

of the reporting period,

and the relationship 

between the two. Total budgetary resources should equal the status of budgetary resources at 

all times. A more detailed SBR can be found in the Financial Information section of this report. 

During FY 2021, the FMC had a total of $32,944,574 available, representing an increase of 

Changes in Net Position Summary as of

September 30, 2021

2021 2020

Unexpended Appropriations $6,410,608 $5,858,992

Cumulative Results of Operations ($1,649,547) ($1,594,214)

Total Changes in Net Position $4,761,061 $4,264,778

Net Cost Summary as of

September 30, 2021

2021 2020

Operational and Administrative $30,224,530 $28,680,366

Office of Inspector General $526,311 $580,585

Total Net Cost $30,750,841 $29,260,951

Statement of Budgetary Resources as of

September 30, 2021

2021 2020

Incurred $30,247,419 $27,584,164

Unobligated Balance Unavailable $2,458,280 $1,441,898

Unobligated Balance Available $238,875 $588,559

Total Budgetary Resources $32,944,574 $29,614,621
FISCAL YEAR 2021 | Performance and Accountability Report | 21

Federal Maritime Commission

$3,329,953 from FY 2020 in budgetary resources. The budgetary resources represent financial 

activity during the accounting period for the five active fiscal years (2017-2021).

ANALYSIS OF SYSTEMS, CONTROL, AND LEGAL COMPLIANCE

The Commission’s internal controls are fundamental to the systems and processes used to

manage its operations and achieve its strategic goals. The Chairman’s Statement of Assurance

in the following section notes that there are no material weaknesses or instances of

nonconformance to report for FY 2021. 

Additionally, in line with the requirements of OMB Circular A-123, Management’s Responsibility 

for Enterprise Risk Management and Internal Control, the Commission’s Enterprise Risk 

Management Committee identifies, measures, and assesses risk points across the agency. The 

Committee’s risk profile is used in conjunction with existing internal controls to improve the 

Commission’s accountability and effectiveness.

MANAGEMENT ASSURANCES

The Federal Managers’ Financial Integrity Act (FMFIA or Act) mandates that agencies establish 

controls that reasonably ensure that: 

• obligations and costs comply with applicable laws;

• assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and 

• revenues and expenditures are properly accounted for and recorded.

This Act encompasses program, operational, and administrative areas, as well as accounting 

and financial management. The FMFIA requires that the Chairman provide an assurance 

statement of the adequacy of management controls and conformance of financial systems with 

Government-wide standards; that the Commission’s managers are held accountable for 

efficient and effective performance of their duties in compliance with applicable laws and 

regulations; and for maintenance of the integrity of their activities through the use of controls. 

Chairman Maffei has provided his annual assurance statement in this report based on various 

sources, including knowledge of the daily operation of Commission programs and activities,

regular discussions with the Managing Director, the Director of Enterprise Services, the 

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

statements, and implementation of the Commission’s Strategic Plan. The Chairman also meets 

regularly with the Commission’s Senior Management Team and receives regularly-scheduled

reports from the FMC’s Inspector General and OEEO Director.

Any deficiencies identified in management control would be addressed at the Commission’s 

highest management levels. For example, corrective actions for significant deficiencies 

identified in the IT area would be 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. During FY 2021, management and the 

OIG reached agreement on all OIG audit recommendations. Management resolved or worked 

to address a number of recommendations from the OIG’s audits and reviews and will continue 

to work to address remaining open recommendations during FY 2022. 
FISCAL YEAR 2021 | Performance and Accountability Report | 22

Federal Maritime Commission

DEBT COLLECTION IMPROVEMENT ACT OF 1996

The Debt Collection Improvement Act (DCI) enhances the ability of the government to service 

and collect debts, as it centralized the collection of non-tax delinquent debt owed to the 

government. Federal agencies are required to refer delinquent accounts in excess of 180 days 

to Treasury for collection. Collection of the Commission’s delinquent debts is conducted by the 

Bureau of the Fiscal Service through the Cross-Servicing Program and Treasury Offset Program,

where the names and taxpayer identification numbers (TIN) of the delinquent entities are 

matched against the TINs of recipients of government payments. The balance owed to the 

government is deducted or offset from the payment to the entity to satisfy the debt. The goal 

is to minimize the amount of delinquent debt owed to the government. During FY 2021, the 

FMC effectively managed debt collection in accordance with the DCI and delinquent accounts 

were timely submitted to Treasury.

DIGITAL ACCOUNTABILITY AND TRANSPARENCY ACT OF 2014 (DATA ACT)

The DATA Act, an amendment to the Federal Funding Accountability and Transparency Act of 

2006 (Public Law No. 109-282), required the establishment of government-wide data standards 

for spending information that agencies report to Treasury, OMB, and the General Services

Administration (GSA). The Commission began reporting standardized spending information on 

May 9, 2017. Additionally, the DATA Act required Treasury and OMB to publish standardized

spending information for free access and download on the government’s USASpending.gov

website beginning on May 9, 2018.

The Commission uses the infrastructure and financial system maintained by its Federal Shared 

Service Provider, the Administrative Resource Center (ARC), Bureau of the Fiscal Service. The 

Commission continued to work closely with ARC during the fiscal year to ensure that it was on 

target with DATA Act requirements. 

Fiscal year 2021 was the fourth year of DATA Act implementation. Working with ARC, the FMC 

complied with all requirements and timely submitted all DATA Act certifications. In November 

2019, the OIG completed its second required audit of the Commission’s compliance with the 

DATA Act. Several recommendations for enhancing policies and procedures were incorporated 

into the Commission’s Data Quality Plan and were reviewed by the OIG during the required 

audit in 2021, which will be completed in November 2021.

PROMPT PAYMENT ACT OF 1982

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 2021, the FMC maintained a 100

percent on-time payment rate.

In FY 2021, the FMC paid $0 in interest payments.
FISCAL YEAR 2021 | Performance and Accountability Report | 23

Federal Maritime Commission

PERFORMANCE MEASURE SUMMARY

The Commission does not have an in-house financial accounting system and does not receive a 

Performance Measure Summary from the Department of the Treasury. The Commission

acquires travel, procurement, accounting, and financial services from Treasury’s BFS, and 

verifies and reconciles all financial statements and reports prior to submission.

INSPECTOR GENERAL ACT OF 1978, AS AMENDED IN 1988, AND THE INSPECTOR GENERAL 

REFORM ACT OF 2008

Section 5(b) of the Inspector General Act of 1978 requires agencies to report on final actions 

taken on OIG audit recommendations. Action was taken to close all audit recommendations 

during the year. No significant deficiencies or material weaknesses were identified during FY 

2021.

Inspector General-Issued Audits, Reports, and Evaluations -- FY 2021

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

Date Issued Recommendations Issued Remediated in FY 2021

November 2020 0 N/A

A21-02: Audit of the FMC’s Compliance with the Federal Information Security 

Modernization Act FY 2020

Date Issued Recommendations Issued Remediated in FY 2021

October 2020 2 1*

*Management continues its work to remediate one recommendation. 

TREASURY ASSURANCE STATEMENT – USA SPENDING RECONCILIATION

The FMC has implemented its plan to ensure data completeness and accuracy on 

www.USASpending.gov by using control totals with financial statement data and comparing 

samples of financial data to actual award documents. The prime Federal award financial data 

reported on www.USASpending.gov is correct at the reported percentage of accuracy, and the

FMC has adequate internal controls over the underlying spending.

LIMITATIONS OF THE FINANCIAL STATEMENTS

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

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

statements are prepared from the books and records of the Commission in accordance with 

Federal GAAP and the formats prescribed by OMB. Reports used to monitor and control 

budgetary resources are prepared from the same books and records. The financial statements 

should be read with the understanding that they are for a component of the U.S. Government.
FISCAL YEAR 2021 | Performance and Accountability Report | 24

Federal Maritime Commission

FEDERAL MANAGERS’ FINANCIAL INTEGRITY ACT STATEMENT 

OF ASSURANCE

The Federal Maritime Commission is responsible for managing risks 

and maintaining effective internal control and financial management 

systems that meet the objectives of Sections 2 and 4 of the Federal 

Managers’ Financial Integrity Act. This includes conducting 

assessments to determine the effectiveness of internal control and 

conformance with financial system requirements. The Commission

conducted its assessments in accordance with OMB Circular No. A-123, 

Management’s Responsibility for Enterprise Risk Management and 

Internal Control. 

The Commission's assessments considered the effectiveness of internal 

control over operations, financial reporting, and compliance with 

applicable laws and regulations. The objectives are to ensure the 

effectiveness and efficiency of operations, the reliability of reporting for internal and external 

use, and compliance with applicable laws and regulations.

Based on the results of this assessment, the Commission can provide reasonable assurance that 

its internal control over operations, financial reporting, and compliance were operating 

effectively as of September 30, 2021. No material weaknesses were found in the design or 

operation of internal control over financial reporting. 

The Commission also assessed its financial management systems’ conformance with financial 

system requirements, in accordance with the requirements of OMB Circular No. A-123,

Appendix D. Based on this assessment, the FMC can provide reasonable assurance that its 

financial management systems conform to these requirements and no material nonconformances or instances of noncompliance were identified. 

/s/

Daniel B. Maffei

Chairman

November 15, 2021
PART TWO 

ANNUAL PERFORMANCE REPORT

Fiscal Year 2021
FMC FISCAL YEAR 2021 Performance and Accountability Report  26

Federal Maritime Commission

ANNUAL PERFORMANCE REPORT

INTRODUCTION

The FMC’s performance management system includes specific strategic goals, performance 

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

outcomes and objectives the agency strives to achieve. This report describes progress towards 

performance targets in 2021 in furtherance of the Commission’s mission to ensure a 

competitive and reliable international ocean transportation supply system that supports the 

U.S. economy and protects the public from unfair and deceptive practices. The FMC’s current 

strategic goals and objectives are:

Strategic Goal 1: Maintain a Competitive and Reliable International Ocean Transportation 

Supply System.

• Ensure that actions under filed agreements do not result in unreasonable increases in 

transportation costs and/or unreasonable decreases in transportation services.

Strategic Goal 2: Protect the Public from Unlawful, Unfair, and Deceptive Ocean 

Transportation Practices.

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

• Prevent public harm through licensing and financial responsibility requirements.

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

through education and outreach. 

• Impartially resolve international shipping disputes through alternative dispute resolution 

and adjudication. 

Each measure, target, and actual result is reported in Table 1 and includes a description of the 

data used to measure performance, and an explanation of the procedures in place to validate 

and ensure integrity of the reported result. Eight performance measures in support of the 

Commission’s strategic goals were quantitatively measured during the fiscal year. Despite 

adjustments made to some business processes in reaction to the COVID-19 pandemic and the 

Commission’s continuing posture of maximum telework, the Commission exceeded seven of its 

FY 2021 targets. The first target under Strategic Goal 1 was not met as the majority of 

agreement filings received in FY 2021 became effective upon filing, and very few agreements 

filed during the year posed competitive concerns. Few agreements were sent to the 

Commission for review, and it did not take action to modify any agreements through 

negotiation to mitigate anticompetitive effects, therefore, the target was unmet. 

Table 2 presents the Commission’s five-year performance trend data. The Commission’s 

commitment to continuously improve and streamline processes is evidenced in its year-overyear positive performance results.

This Performance and Accountability Report (inclusive of this Annual Performance Report) has 

been forwarded to the President, OMB Director, appropriate Congressional committees, and 

others as dictated by OMB Circular A-136, Revised. Additionally, this report has been placed on 

the FMC’s public website to ensure that it is accessible to interested parties. All Commission 

employees have been advised to review this report. 
FMC FISCAL YEAR 2021 Performance and Accountability Report  27

Federal Maritime Commission

Table 1: Summary of Performance Measure Results – FY 2021

Targeted performance compared to actual results.

Strategic Goal No. 1:

Maintain a competitive and reliable international ocean transportation supply system.

Performance Measure FY 2021

Target

FY 2021

Actual

Measure: Percentage of FMC-filed agreements reviewed at Commission level which 

are modified through negotiation to mitigate anticompetitive effects.

Validation: This outcome goal is measured using data derived from the eAgreements 

electronic filing system which identifies agreements requiring Commission-level 

review. Each of those filings is then examined to determine whether any changes 

were made to the originally filed agreement that mitigated anticompetitive effects of 

the agreement. This measure is tracked on an ongoing basis.

53% 20%

Measure: Percentage of agreement monitoring reports reviewed within 30 days of 

receipt to detect actionable information including market-distorting behavior.

Validation: This outcome goal is measured using data contained in the eMonitoring 

system used for the electronic filing of agreement monitoring submissions. 

Performance is measured by comparing the file receipt date to the date that the 

filing was reviewed by staff analysts. The data is constantly under review and 

frequently updated.

68% 85%

Strategic Goal No. 2:

Protect the public from unlawful, unfair and deceptive ocean transportation practices.

Performance Measure FY 2021 

Target

FY 2021

Actual

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.

Validation: This outcome goal is measured by examining enforcement case inventory 

and physically counting the number of cases resolved. The inventory is maintained 

for case load management, and monthly and quarterly reporting purposes. The data 

is constantly under review and frequently updated.

77.5% 90.3%

Measure: Percentage of decisions on completed OTI license applications rendered 

within 60 calendar days of receipt, facilitating lawful operation of OTIs with the 

appropriate character and experience requirements.

Validation: This outcome goal is measured by comparing data fields in an internal 

database that contains, among other data points, the date the OTI license 

application is accepted for processing and the date a licensing determination is made 

or the application process has been completed. The difference between these two 

dates is the length of time to render a decision on an OTI application accepted for 

processing. The database is maintained for daily case load management, and 

monthly and quarterly reporting purposes. The data is constantly under review and 

frequently updated.

75% 98.8%

Measure: Percentage of PVOs examined during the year that have the full financial 

coverage required by regulation to protect against loss from non-performance or 

casualty.

Validation: This outcome goal is measured by comparing reported financial coverage 

amounts against required coverage amounts. Approximately 200 cruise vessels are 

registered in and monitored by the Commission’s Passenger Vessel (Cruise) Operator 

program. Operators covered by this program file semi-annual, monthly, and weekly 

unearned passenger revenue reports. This information is used to compare reported 

coverage against required coverage amounts.

95% 97.9%
FMC FISCAL YEAR 2021 Performance and Accountability Report  28

Federal Maritime Commission

Measure: Percentage of key Commission issuances, orders and reports are available 

through the Commission’s website within 5 working days of receipt.

Validation: This outcome goal is measured by reviewing the workflow processes for 

posting documents to the Commission’s website docket activity logs. The date that 

each docket activity log is updated with new filings or issuances is compared to the 

date the document is filed with or issued by the Commission in a particular 

proceeding. The case logs are used on a daily basis by agency staff and by the public, 

and as such, any discrepancies are discovered and remedied quickly.

88% 99%

Measure: Percentage of ombuds matters and ADR services provided by the Office of 

Consumer Affairs and Dispute Resolution Services (CADRS) closed within six months.

Validation: This outcome goal is measured using data maintained by the 

Commission on each ombuds and ADR matter opened. Cases are opened upon the 

request of the public for assistance and are subject to the normal fluctuations in 

businesses and consumers seeking help from the Commission. Cases are closed 

upon resolution, voluntary termination by the parties, or when the CADRS mediator 

determines that particular issues prevent the possibility for successful negotiation.

65% 100%

Measure: Percentage of formal complaints or Commission-initiated orders of 

investigation completed within two years of filing or Commission initiation.

Validation: This outcome goal is measured by using docket activity logs maintained 

by the Commission and used for docket management, and monthly and annual 

reporting purposes. The docket logs are used on a daily basis by agency staff and by 

the public, and as such, any discrepancies are discovered and remedied quickly.

70% 75%
FMC FISCAL YEAR 2021 Performance and Accountability Report  29

Federal Maritime Commission

Table 2: Performance Measure Trends, FY 2017-2021

Strategic Goal No. 1: Maintain a competitive and reliable international ocean transportation supply system.

Performance Measure FY2017 FY 2018 FY 2019 FY 2020 FY 2021

Measure: Percentage of FMC-filed agreements reviewed at Commission level which are modified through negotiation to 

mitigate anticompetitive effects.

TARGET N/A 50% 51% 52% 53%

ACTUAL N/A 100% 67% 60% 20%

TARGET MET/UNMET N/A MET MET MET UNMET

Measure: Percentage of agreement monitoring reports reviewed within 30 days of receipt to detect actionable information 

including market-distorting behavior.

TARGET N/A 65% 66% 67% 68%

ACTUAL N/A 89% 79% 91% 85%

TARGET MET/UNMET N/A MET MET MET MET

Measure: Percentage share of U.S. containerized cargo moving on other agreement parties’ vessels in major U.S. trades.*

TARGET 41% N/A N/A N/A N/A

ACTUAL 51% N/A N/A N/A N/A

TARGET MET/UNMET MET N/A N/A N/A N/A

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

Measure: Percentage of enforcement actions taken under the Shipping Act successfully resolved through favorable judgment, 

settlement, issuance of default judgment, or compliance letter or notice.

TARGET 77.5% 77.5% 77.5% 77.5% 77.5%

ACTUAL 82.8% 85.8% 97% 93% 90.3%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of decisions on completed OTI license applications rendered within 60 calendar days of receipt, 

facilitating lawful operation of OTIs with the appropriate character and experience requirements.

TARGET 75% 75% 75% 75% 75%

ACTUAL 95% 97% 96% 88% 98.8%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of PVOs examined during the year that have the full financial coverage required by regulation to protect 

against loss from non-performance or casualty.

TARGET 95% 95% 95% 95% 95%

ACTUAL 100% 99% 96% 96% 97.9%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of key Commission issuances, orders and reports that are available through the Commission’s website 

within 5 working days of receipt.

TARGET 82% 84% 84% 86% 88%

ACTUAL 95% 97% 99% 100% 99%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of Ombuds and ADR matters closed within 6 months of request for assistance. 

TARGET 60%* 60.5%* 61% 63% 65%

ACTUAL 99% 97% 98% 99.59% 100%

TARGET MET/UNMET MET MET MET MET MET

Measure: Percentage of formal complaints or Commission initiated orders of investigation completed within two years of filing 

or Commission initiation.

TARGET 62% 64% 66% 68% 70%

ACTUAL 79% 38% 43% 100% 75%

TARGET MET/UNMET MET UNMET UNMET MET MET

Measure: Number of cases opened and closed each fiscal year using Ombuds and ADR services assisting consumers to recover 

goods or funds.**

TARGET N/A N/A N/A N/A N/A

ACTUAL N/A N/A N/A N/A N/A

TARGET MET/UNMET N/A N/A N/A N/A N/A

* This measure was replaced by the first 2 new measures listed under Strategic Goal No. 1 in the Commission’s FY 2018-2022 

Strategic Plan. For additional historical data on this measure, see Commission PARs posted on its website. **To more accurately reflect the FMC’s performance in this area, this measure was replaced in FY 2017. For additional historical 

data on this measure, see Commission PARs posted on its website.
PART THREE 

FINANCIAL INFORMATION

Fiscal Year 2021
MESSAGE FROM THE CHIEF FINANCIAL OFFICER / DIRECTOR, 

ENTERPRISE SERVICES

I am pleased to present this Financial Information section for Fiscal Year 

2021, and to report that, for the 18th consecutive year, an independent 

auditor has rendered an unmodified opinion on the FMC’s financial 

statements, identifying no deficiencies in internal control over financial 

reporting considered to be material weaknesses. The auditor’s tests for 

compliance with selected provisions of applicable laws, regulations and 

contracts disclosed no instances of noncompliance for FY 2021

reportable under U.S. generally accepted government auditing 

standards. This demonstrates the Commission’s continued record of 

cost-effective stewardship on behalf of the American people and its 

commitment to maintaining high standards for the financial 

management of resources entrusted to it. 

The financial statements and related notes were prepared in conformity with accounting principles 

generally accepted in the U.S., and requirements of OMB Circular A-136, Financial Reporting 

Requirements, revised August 10, 2021, and fairly present the Commission’s financial position. 

The FMC’s financial condition is sound, and its internal controls are sufficient to ensure that its 

budget authority is not exceeded, and that funds are used efficiently and effectively. The following 

key accomplishments demonstrate the effectiveness and efficiency of the FMC’s acquisition and 

financial functions during Fiscal Year 2021:

• A continuous record of no material weaknesses, significant control deficiencies, or 

nonconformance with the FMFIA and other applicable laws and regulations;

• Collecting, in civil enforcement proceedings and user fees, $216,240;

• Continued focus on internal controls and risk management, as mandated by OMB Circular A123, providing budget information in concise, reliable, and understandable formats;

• Accurate, timely issuance of financial statements as required by the Accountability of Tax 

Dollars Act of 2002, prepared from, and fully supported by, the books and records of the 

FMC in accordance with Generally Accepted Accounting Principles (GAAP), standards 

approved by the Federal Accounting Standards Advisory Board (FASAB), and OMB Circular A136; and

• Successful implementation of the Digital Accountability and Transparency Act of 2014 (DATA 

Act), which provides detailed information on the FMC’s careful stewardship of resources on 

the USASpending.gov website.

The FMC strives for exemplary financial management of its resources and will continue to enhance 

operational efficiency while protecting the interest of the American shipping public. I remain

confident that the high level of quality financial management at the Commission will continue in the 

coming fiscal years. 

/s/

Patrick M. Moore

Chief Financial Officer/Director, Enterprise Services

November 15, 2021
FMC FISCAL YEAR 2021 Performance and Accountability Report  32

PRINCIPAL FINANCIAL STATEMENTS

The principal financial statements presented include:

• Balance Sheet – Presents the combined amounts the agency had to use or distribute 

(assets) versus the amounts the agency owed (liabilities), and the difference between the 

two (net position);

• Statement of Net Cost – Presents the annual cost of agency operations. The gross cost less 

any offsetting revenue is used to determine the net cost;

• Statement of Changes in Net Position – Reports the accounting activities that caused the 

change in net position during the reporting period;

• Statement of Budgetary Resources – Reports how budgetary resources were made available 

and the status of those resources at fiscal year-end; and

• Statement of Custodial Activity – Reports collections and their disposition by the agency on 

behalf of the Treasury General Fund. The FMC acts as custodian and does not have use of 

these funds. 

LIMITATIONS OF THE FINANCIAL STATEMENTS

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

results of operations of the FMC, pursuant to the requirements of 31 U.S.C. § 3515(b). While 

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

with GAAP for Federal entities and 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 

understanding that they are for a component of the U.S. Government, a sovereign entity. 

Therefore, 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, P.C.,

under contract to the FMC’s Office of the Inspector General.
REPORT ON THE FINANCIAL STATEMENTS 

AUDIT OF THE FEDERAL MARITIME COMMISSION

FOR THE FISCAL YEARS ENDED SEPTEMBER 30, 2021 AND 2020
FMC FISCAL YEAR 2021| Performance and Accountability Report| 34

 FEDERAL MARITIME COMMISSION

Washington, DC 20573

November 15, 2021

Office of Inspector General

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

I am pleased to provide the attached audit report required by the Accountability for Tax

Dollars Act of 2002 (ATDA), which presents an unmodified (clean) opinion on the Federal

Maritime Commission’s (FMC) fiscal year (FY) 2021 and 2020 financial statements. The audit 

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

preparation of reliable financial and performance information. The Office of Inspector General 

(OIG) commends the FMC for the noteworthy accomplishment of attaining an unmodified 

opinion.

The OIG contracted with the independent certified public accounting firm Dembo Jones, 

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

30, 2021 and 2020; consider internal control over financial reporting; and test the agency’s

compliance with certain provisions of applicable laws, regulations, and contracts that could have

a direct and material effect on the financial statements. The OIG contract required that the audit

be performed in accordance with U.S. Generally Accepted Government Auditing Standards and 

Office of Management and Budget (OMB) audit guidance.

In its audit of the FMC, Dembo Jones found: the financial statements were fairly 

presented, in all material respects, in conformity with U.S. Generally Accepted Accounting 

Principles; there were no material weaknesses or significant deficiencies in internal control

over financial reporting; and no reportable noncompliance issues with the laws and regulations 

tested.

In connection with the OIG’s contract, the OIG reviewed Dembo Jones’ report and related 

documentation and inquired of its representatives. Our review, as differentiated from an audit in 

accordance with U.S. Generally Accepted Government Auditing Standards, was not intended to 

enable the OIG to express, and we do not express, opinions on FMC's financial statements or 

internal control; or conclusions on compliance with laws and regulations. Dembo Jones is 

responsible for the attached auditors' report dated November 15, 2021 and the conclusions 

expressed in the report. However, our review disclosed no instances where Dembo Jones did not 

comply, in all material respects, with Generally Accepted Government Auditing Standards.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 35

The OIG would like to thank FMC staff; especially the Office of Budget and Finance, for 

their assistance in helping Dembo Jones and the OIG meet the audit objectives.

Respectfully submitted,

/s/

Jon Hatfield

Inspector General

Attachment

cc: Office of the Managing Director 

Office of the General Counsel

Office of Budget and Finance
FMC FISCAL YEAR 2019| Performance and Accountability Report| 36

INDEPENDENT AUDITORS' REPORT

Independent Auditor’s Report

To Chairman Daniel B. Maffei

Federal Maritime Commission

In our audits of the fiscal years 2021 and 2020 financial statements of Federal Maritime 

Commission (FMC) we found:

a) FMC’s financial statements as of and for the fiscal years ended September 30, 2021 and 

2020, are presented fairly, in all material respects, in accordance with U.S. generally 

accepted accounting principles;

b) no material weaknesses in internal control over financial reporting based on the limited 

procedures we performed; and 

c) no reportable noncompliance for fiscal year 2021 with provisions of applicable laws, 

regulations and contracts we tested. 

The following sections discuss in more detail (1) our report on the financial statements, which 

includes required supplementary information (RSI), such as “Management’s Discussion and 

Analysis”; (2) our report on internal control over financial reporting; (3) our report on compliance 

with laws, regulations and contracts; and (4) agency comments. 

Report on the Financial Statements 

In accordance with Generally Accepted Government Auditing Standards (GAGAS) and Office of 

Management and Budget (OMB) Bulletin No. 21-04, Audit Requirements for Federal Financial 

Statements, we have audited FMC’s financial statements. FMC’s financial statements comprise 

the balance sheets as of September 30, 2021, and 2020; the related statements of net cost, changes 

in net position, budgetary resources and custodial activity for the fiscal years then ended; and the 

related notes to the financial statements. 

We conducted our audits in accordance with U.S. generally accepted government auditing 

standards. We believe that the audit evidence we obtained is sufficient and appropriate to provide 

a basis for our audit opinions. 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 37

Dembo Jones, P.C.

Management’s Responsibility for the Financial Statements

FMC’s management is responsible for (1) the preparation and fair presentation of these financial 

statements in accordance with U.S. generally accepted accounting principles; (2) preparing, 

measuring, and presenting the RSI in accordance with U.S. generally accepted accounting 

principles; (3) preparing and presenting other information included in documents containing the 

audited financial statements and auditor’s report, and ensuring the consistency of that information 

with the audited financial statements and the RSI; and (4) maintaining effective internal control 

over financial reporting, including the design, implementation, and maintenance of internal control 

relevant to the preparation and fair presentation of financial statements that are free from material 

misstatement, whether due to fraud or error.

Auditor’s Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. U.S. 

generally accepted government auditing standards require that we plan and perform the audit to 

obtain reasonable assurance about whether the financial statements are free from material 

misstatement. We are also responsible for applying certain limited procedures to RSI and other 

information included with the financial statements. 

An audit of financial statements involves performing procedures to obtain audit evidence about 

the amounts and disclosures in the financial statements. The procedures selected depend on the 

auditor’s judgment, including the auditor’s assessment of the risks of material misstatement of the 

financial statements, whether due to fraud or error. In making those risk assessments, the auditor 

considers internal control relevant to the entity’s preparation and fair presentation of the financial 

statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. 

Accordingly, we express no such opinion. An audit of financial statements also involves evaluating 

the appropriateness of the accounting policies used and the reasonableness of significant 

accounting estimates made by management, as well as evaluating the overall presentation of the 

financial statements. Our audits also included performing such other procedures as we considered 

necessary in the circumstances. 

Opinion on Financial Statements

In our opinion, FMC’s financial statements present fairly, in all material respects, FMC’s financial 

position as of September 30, 2021 and 2020, and its net costs of operations, changes in net position, 

budgetary resources and custodial activity for the fiscal years then ended in accordance with U.S. 

generally accepted accounting principles.

Other Matters

Required Supplementary Information 

U.S. generally accepted accounting principles issued by the Federal Accounting Standards 

Advisory Board (FASAB) require that the RSI be presented to supplement the financial 

statements. Although the RSI is not a part of the financial statements, FASAB considers

this information to be an essential part of financial reporting for placing the financial 

statements in appropriate operational, economic, or historical context. We have applied 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 38

Dembo Jones, P.C.

certain limited procedures to the RSI in accordance with U.S. generally accepted 

government auditing standards, which consisted of inquiries of management about the 

methods of preparing the RSI and comparing the information for consistency with 

management’s responses to the auditor’s inquiries, the financial statements, and other 

knowledge we obtained during the audit of the financial statements, in order to report 

omissions or material departures from FASAB guidelines, if any, identified by these 

limited procedures. We did not audit and we do not express an opinion or provide any 

assurance on the RSI because the limited procedures we applied do not provide sufficient 

evidence to express an opinion or provide any assurance. 

Other Information 

FMC’s other information contains a wide range of information, some of which is not 

directly related to the financial statements. This information is presented for purposes of 

additional analysis and is not a required part of the financial statements or the RSI. We read 

the other information included with the financial statements in order to identify material 

inconsistencies, if any, with the audited financial statements. Our audit was conducted for 

the purpose of forming an opinion on FMC’s financial statements. We did not audit and do 

not express an opinion or provide any assurance on the other information.

Report on Internal Control over Financial Reporting 

In connection with our audits of the FMC’s financial statements, we considered the FMC’s internal 

control over financial reporting, consistent with our auditor’s responsibility discussed below. We 

performed our procedures related to the FMC’s internal control over financial reporting in 

accordance with U.S. generally accepted government auditing standards. 

Management’s Responsibility

FMC management is responsible for maintaining effective internal control over financial 

reporting, including the design, implementation, and maintenance of internal control relevant to 

the preparation and fair presentation of financial statements that are free from material 

misstatement, whether due to fraud or error. 

Auditor’s Responsibility 

In planning and performing our audit of FMC’s financial statements as of and for the year ended 

September 30, 2021, in accordance with U.S. generally accepted government auditing standards, 

we considered the FMC’s internal control over financial reporting as a basis for designing audit 

procedures that are appropriate in the circumstances for the purpose of expressing our opinion on 

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

the FMC’s internal control over financial reporting. Accordingly, we do not express an opinion on 

the FMC’s internal control over financial reporting. We are required to report all deficiencies that 

are considered significant deficiencies or material weaknesses. We did not consider all internal 

controls relevant to operating objectives, such as those controls relevant to preparing performance 

information and ensuring efficient operations. 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 39

Dembo Jones, P.C.

Definition and Inherent Limitations of Internal Control over Financial Reporting 

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, the objectives of which are to provide reasonable 

assurance that (1) transactions are properly recorded, processed, and summarized to permit the 

preparation of financial statements in accordance with U.S. generally accepted accounting 

principles, and assets are safeguarded against loss from unauthorized acquisition, use, or 

disposition, and (2) transactions are executed in accordance with provisions of applicable laws, 

including those governing the use of budget authority, regulations and contracts, noncompliance 

with which could have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements due to fraud or error. 

Results of Our Consideration of Internal Control over Financial Reporting 

Our consideration of internal control was for the limited purpose described above, and was not 

designed to identify all deficiencies in internal control that might be material weaknesses and 

significant deficiencies or to express an opinion on the effectiveness of the FMC’s internal control 

over financial reporting. Given these limitations, during our audit, we did not identify any 

deficiencies in internal control over financial reporting that we consider to be material weaknesses. 

However, material weaknesses may exist that have not been identified. 

Intended Purpose of Report on Internal Control over Financial Reporting 

The purpose of this report is solely to describe the scope of our consideration of the FMC’s internal 

control over financial reporting and the results of our procedures, and not to provide an opinion on

the effectiveness of the FMC’s internal control over financial reporting. This report is an integral 

part of an audit performed in accordance with U.S. generally accepted government auditing 

standards in considering internal control over financial reporting. Accordingly, this report on 

internal control over financial reporting is not suitable for any other purpose. 

Report on Compliance with Laws, Regulations and Contracts

In connection with our audits of FMC’s financial statements, we tested compliance with selected 

provisions of applicable laws, regulations and contracts, consistent with our auditor’s 

responsibility discussed below. We caution that noncompliance may occur and not be detected by 

these tests. We performed our tests of compliance in accordance with U.S. generally accepted 

government auditing standards.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 40

Dembo Jones, P.C.

Management’s Responsibility

FMC management is responsible for complying with laws, regulations and contracts applicable to 

FMC. 

Auditor’s Responsibility 

Our responsibility is to test compliance with selected provisions of applicable laws, regulations 

and contracts applicable to FMC that have a direct effect on the determination of material amounts 

and disclosures in FMC’s financial statements, and perform certain other limited procedures. 

Accordingly, we did not test compliance with all laws, regulations and contracts applicable to 

FMC. 

Results of Our Tests for Compliance with Laws, Regulations and Contracts 

Our tests for compliance with selected provisions of applicable laws, regulations and contracts 

disclosed no instances of noncompliance for fiscal year 2021 that would be reportable under U.S. 

generally accepted government auditing standards. However, the objective of our tests was not to 

provide an opinion on compliance with laws, regulations and contracts applicable to FMC. 

Accordingly, we do not express such an opinion. 

Intended Purpose of Report on Compliance with Laws, Regulations and Contracts 

The purpose of this report is solely to describe the scope of our testing of compliance with selected 

provisions of applicable laws, regulations and contracts, and the results of that testing, and not to 

provide an opinion on compliance. This report is an integral part of an audit performed in 

accordance with U.S. generally accepted government auditing standards in considering 

compliance. Accordingly, this report on compliance with laws, regulations and contracts is not 

suitable for any other purpose.

Rockville, Maryland

November 15, 2021
FMC FISCAL YEAR 2021| Performance and Accountability Report| 41

APPENDIX A

FEDERAL MARITIME COMMISSION COMMENTS ON AUDIT REPORT

Federal Maritime Commission

Washington, DC 20573

 Office of the 

Managing Director

November 15, 2021

Donald K. Marshall, CPA

Dembo Jones, P.C.

6116 Executive Boulevard, Suite 500

North Bethesda, MD 20852

Dear Mr. Marshall:

I have reviewed the financial statements audit report for the Federal Maritime Commission for 

fiscal year 2021. I concur with the audit report’s findings that the financial statements fairly 

present the Commission’s financial position during the fiscal year ending September 30, 2021, 

and that the financial statements are in conformity with U.S. Generally Accepted Accounting 

Principles; that the FMC has maintained, in all material respects, effective internal control over 

financial reporting; and that there were no instances of reportable noncompliance with laws 

and regulations tested by the auditors. 

The Commission appreciates Dembo Jones’ work over the past fiscal year.

Sincerely,

/s/

Patrick M. Moore

Chief Financial Officer / Director, Enterprise Services
FMC FISCAL YEAR 2021| Performance and Accountability Report| 42

APPENDIX B

FEDERAL MARITIME COMMISSION FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

Table of Contents

Balance Sheet............................................................................................ 43

Statement of Net Cost .............................................................................. 44

Statement of Changes in Net Position...................................................... 44

Statement of Budgetary Resources.......................................................... 45

Statement of Custodial Activity ................................................................ 45

Notes to the Financial Statements ........................................................... 46

The accompanying notes are an integral part of these financial statements.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 43

BALANCE SHEET

AS OF SEPTEMBER 30, 2021 AND 2020

(In Dollars)

2021 2020

Assets:

Intragovernmental:

Fund Balance with Treasury (Note 2) $ 8,407,506 $ 8,239,096 

Advances and Prepayments - 14,584 

Total Intragovernmental 8,407,506 8,253,680 

With the Public:

Accounts Receivable, Net (Note 3) 85,469 85,609 

General Property, Plant, and Equipment, Net (Note 4)

 

-

 

5,612 

Total With the Public

 

85,469 

 

91,221 

Total Assets $ 8,492,975 $ 8,344,901 

Liabilities (Note 5):

Intragovernmental:

Accounts Payable $ 56,034 $ 77,636 

Other Liabilities (Note 6) 335,890 298,355 

Other Liabilities (Without Reciprocals) (Note 6) 67,962 64,925 

Liability to the General Fund of the U.S. Government for Custodial and Other 

Non-Entity Assets (Note 6) 77,760 79,490 

Benefit Program Contributions Payable (Note 6) 190,168 153,940 

Total Intragovernmental 391,924 375,991 

With the Public:

Accounts Payable 669,126 1,153,165 

Federal Employee Benefits Payable 1,719,295 1,635,794 

Other Liabilities (Note 6) 951,569 915,173 

Total With the Public 3,339,990 3,704,132 

Total Liabilities $ 3,731,914 $ 4,080,123 

Net Position:

Unexpended Appropriations - Funds from Other than Dedicated Collections $ 6,410,608 $ 5,858,992 

Cumulative Results of Operations - Funds from Other than Dedicated 

Collections (1,649,547) (1,594,214)

Total Net Position 4,761,061 4,264,778 

Total Liabilities and Net Position $ 8,492,975 $ 8,344,901 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 44

FEDERAL MARITIME COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)

2021 2020

Gross Program Costs:

Operational and Administrative:

Gross Costs $ 30,319,630 $ 28,769,515 

Less: Earned Revenue (95,100) (89,149)

Net Program Costs $ 30,224,530 $ 28,680,366 

Office of Inspector General:

Gross Costs $ 527,021 $ 580,585 

Less: Earned Revenue (710) -

Net Program Costs $ 526,311 $ 580,585 

Net Cost of Operations $ 30,750,841 $ 29,260,951 

FEDERAL MARITIME COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)

2021 2020

Unexpended Appropriations:

Beginning Balances $ 5,858,992 $ 6,130,844 

Appropriations Received 30,300,000 28,000,000 

Other Adjustments (233,423) (229,916)

Appropriations Used (29,514,961) (28,041,936)

Net Change in Unexpended Appropriations 551,616 (271,852)

Total Unexpended Appropriations - Ending $ 6,410,608 $ 5,858,992 

Cumulative Results of Operations:

Beginning Balances $ (1,594,214) $ (1,401,765)

Appropriations Used 29,514,961 28,041,936 

Transfers In/Out Without Reimbursement 26,715 -

Imputed Financing (Note 9) 1,153,832 1,026,536 

Other - 30 

Net Cost of Operations (30,750,841) (29,260,951)

Net Change in Cumulative Results of Operations (55,333) (192,449)

Cumulative Results of Operations - Ending $ (1,649,547) # $ (1,594,214)

Net Position $ 4,761,061 $ 4,264,778 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 45

FEDERAL MARITIME COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)

2021 2020

Budgetary Resources:

Unobligated balance from prior year budget authority, net $ 2,522,049 $ 1,525,442 

Appropriations 30,300,000 28,000,000 

Spending authority from offsetting collections 122,525 89,179 

Total Budgetary Resources $ 32,944,574 $ 29,614,621 

Status of Budgetary Resources:

New obligations and upward adjustments (total) $ 30,247,419 $ 27,584,164 

Unexpired unobligated balance, end of year 238,875 588,559 

Expired unobligated balance, end of year 2,458,280 1,441,898 

Unobligated balance, end of year (total) 2,697,155 2,030,457 

Total Budgetary Resources $ 32,944,574 $ 29,614,621 

Outlays, Net and Disbursements, Net:

Outlays, net (total) 29,898,167 26,781,791 

Distributed Offsetting Receipts (216,490) (191,075)

Agency outlays, net $ 29,681,677 $ 26,590,716 

FEDERAL MARITIME COMMISSION

STATEMENT OF CUSTODIAL ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

(In Dollars)

2021 2020

Total Custodial Revenue:

Sources of Cash Collections:

Miscellaneous $ 216,240 $ 188,693 

Total Cash Collections (Note 12) 216,240 188,693 

Accrual Adjustments (1,731) 77,637 

Total Custodial Revenue 214,509 266,330 

Disposition of Collections:

Transferred to Others (by Recipient) 216,240 188,693 

Increase/(Decrease) in Amounts Yet to be Transferred (1,731) 77,631 

Retained by the Reporting Entity - 6 

Total Disposition of Collections 214,509 266,330 

Net Custodial Activity $ - $ -
FMC FISCAL YEAR 2021| Performance and Accountability Report| 46

FEDERAL MARITIME COMMISSION

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The Federal Maritime Commission (FMC or 

Commission) was established as an independent 

regulatory agency on August 12, 1961. The FMC is 

responsible for the regulation of oceanborne 

transportation in the foreign commerce of the United 

States. The principal statutes or statutory provisions 

administered by the Commission are the Shipping Act 

of 1984, as amended by the Ocean Shipping Reform 

Act of 1998, the Foreign Shipping Practices Act of 

1988 (FSPA), section 19 of the Merchant Marine Act 

of 1920, and sections 2 and 3 of Public Law No. 89-

777.

The Commission monitors the activities of ocean 

common carriers, marine terminal operators (MTOs), 

agreements among ocean common carriers and/or 

MTOs, ports and ocean transportation intermediaries 

(non-vessel-operating common carriers and ocean 

freight forwarders) operating 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 remedy malpractices and violations 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 FMC 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 death or injury 

occurring to passengers.

The 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 the chief executive and 

administrative officer of the 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. General Fund Miscellaneous Receipts are 

accounts established for receipts of non-recurring 

activity, such as fines, penalties, fees and other 

miscellaneous receipts for services and benefits.

The FMC makes custodial collections and holds 

custodial receivables that are non-entity assets and are 

transferred to Treasury at fiscal year-end. The FMC 

has rights and ownership of all assets reported in these 

financial statements. FMC does not possess any nonentity assets.

B. Basis of Presentation

The financial statements have been prepared to report 

the financial position and results of operations of 

FMC. The Balance Sheet presents the financial 

position of the Commission. The Statement of Net 

Cost presents the Commission’s operating results; the 

Statement of Changes in Net Position displays the 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 47

changes in the Commission’s equity accounts. The 

Statement of Budgetary Resources presents the 

sources, status, and uses of the Commission’s 

resources and follows the rules for the Budget of the 

United States Government.

The statements are a requirement of the Chief 

Financial Officers Act of 1990 and the Government 

Management Reform Act of 1994. 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 issued by the 

Federal Accounting Standards Advisory Board 

(FASAB), Office of Management and Budget (OMB) 

Circular A-136, Financial Reporting Requirements, as 

amended, 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 financial statements and 

associated notes are presented on a comparative basis. 

Unless specified otherwise, all amounts are presented 

in dollars.

C. 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.

D. Fund Balance with Treasury

FBWT is an asset of a reporting entity and a liability of 

the General Fund. It is the aggregate amount of the 

FMC’s funds with Treasury in expenditure, receipt, 

revolving, and deposit fund accounts. Appropriated 

funds recorded in expenditure accounts are available 

to pay current liabilities and finance authorized 

purchases. 

The FMC does not maintain bank accounts of its own, 

has no disbursing authority, and does not maintain 

cash held outside of Treasury. When the reporting 

entity seeks to use FBWT or investments in 

Government securities to liquidate budgetary 

obligations, Treasury will finance the disbursements in 

the same way it finances all other disbursements, which 

is to borrow from the public if there is a budget deficit 

(and to use current receipts if there is a budget surplus). 

Funds are disbursed for the agency on demand.

E. Accounts Receivable

Accounts receivable consists of amounts owed to 

FMC by other Federal agencies and the general public. 

Amounts due from Federal agencies are considered 

fully collectible. An allowance for uncollectible 

accounts receivable from the public is established 

when, based upon a review of outstanding accounts 

and the failure of all collection efforts, management 

determines that collection is unlikely to occur 

considering the debtor’s ability to pay.

F. Property, Equipment, and Software

Property, equipment and software represent furniture, 

fixtures, equipment, and information technology 

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, while maintenance and repair costs are 

expensed as incurred. FMC’s capitalization threshold 

is $25,000 for individual purchases. Property, 

equipment, and software acquisitions that do not meet 

the capitalization criteria are expensed upon receipt. 

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

Software 5

G. Advances and Prepaid Charges

Advance payments are generally prohibited by law. 

There are some exceptions, such as 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.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 48

H. Liabilities

Liabilities represent the amount of funds likely to be 

paid by the FMC as a result of transactions or events 

that have already occurred.

The FMC reports its liabilities under two categories, 

Intragovernmental and With the Public. 

Intragovernmental liabilities represent funds owed to 

another government agency. Liabilities with the 

Public represent funds owed to any entity or person 

that is not a federal agency, including private sector 

firms and federal employees. Each of these categories 

may include liabilities that are covered by budgetary 

resources and liabilities not covered by budgetary 

resources.

Liabilities covered by budgetary resources are 

liabilities funded by a current appropriation or other 

funding source. These consist of accounts payable and 

accrued payroll and benefits. Accounts payable 

represent amounts owed to another entity for goods 

ordered and received and for services rendered except 

for employees. Accrued payroll and benefits represent 

payroll costs earned by employees during the fiscal 

year which are not paid until the next fiscal year.

 

Liabilities not covered by budgetary resources are 

liabilities that are not funded by any current 

appropriation or other funding source. These 

liabilities consist of accrued annual leave, actuarial 

Federal Employees’ Compensation Act (FECA), and 

the amounts due to Treasury for collection and 

accounts receivable of civil penalties and FOIA 

request fees.

I. 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. 

Non-vested leave is expensed when used. Any 

liability for sick leave that is accrued but not taken by 

a Civil Service Retirement System (CSRS)-covered 

employee is transferred to the Office of Personnel 

Management (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.

J. Accrued and Actuarial Workers’ 

Compensation

The FECA administered by the U.S. Department of 

Labor (DOL) addresses all claims brought by the FMC 

employees for on-the-job injuries. The DOL bills each 

agency annually as its claims are paid, but 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.

K. Retirement Plans

FMC employees participate in either the CSRS or the 

FERS. The employees who participate in CSRS are 

beneficiaries of FMC matching 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. 

Both CSRS and FERS employees may participate in 

the federal Thrift Savings Plan (TSP). FERS 

employees receive an automatic agency contribution 

equal to one percent of pay and FMC matches any 

employee contribution up to an additional four percent 

of pay. For FERS participants, FMC also contributes 

the employer’s matching share of Social Security.

FERS employees and certain CSRS reinstatement 

employees are eligible to participate in the Social 

Security program after retirement. In these instances, 

FMC remits the employer’s share of the required 

contribution.

The FMC recognizes the imputed cost of pension and 

other retirement benefits during the employees’ active 

years of service. OPM actuaries determine pension 

cost factors by calculating the value of pension 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 49

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 statement’s 

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, as the administrator.

L. 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 the FMC with certain cost factors that 

estimate the true cost of providing the post-retirement 

benefit to current employees. The 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 the FMC through the recognition of an 

imputed financing source. 

M. 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, liabilities, revenues, and 

expenses. Actual results could differ from those 

estimates. 

N. 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. The FMC 

discloses contingent liabilities in the notes to the 

financial statements when the conditions for liability 

recognition are not met or when a loss from the 

outcome of future events is more than remote. In some 

cases, once losses are certain, payments may be made 

from the Judgment Fund maintained by the U.S. 

Treasury rather than from the amounts appropriated to 

FMC for agency operations. Payments from the 

Judgment Fund are recorded as an “Other Financing 

Source” when made.

O. Reclassification

Certain fiscal year 2020 balances have been 

reclassified, retitled, or combined with other financial 

statement line items for consistency with the current 

year presentation. 

P. Classified Activities

Accounting standards require all reporting entities to 

disclose that accounting standards allow certain 

presentations and disclosures to be modified, if 

needed, to prevent the disclosure of classified 

information. 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 50

NOTE 2. FUND BALANCE WITH TREASURY

Fund Balance with Treasury account balances as of September 30, 2021 and 2020, were as follows:

No discrepancies exist between the Fund Balance reflected on the Balance Sheet and the balances in the 

Treasury accounts.

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 fund balance on hand 

(see also Note 10).

NOTE 3. ACCOUNTS RECEIVABLE, NET

Accounts receivable balances as of September 30, 2021 and 2020, were as follows:

The accounts receivable is primarily made up of services provided to the public. Historical experience has 

indicated that the majority of the receivables are collectible. There are no material uncollectible accounts 

as of September 30, 2021 and 2020.

2021 2020

Status of Fund Balance with Treasury:

Unobligated Balance

 Available $ 238,875 $ 588,559 

 Unavailable 2,458,280 1,441,898 

Obligated Balance Not Yet Disbursed 5,710,351 6,208,639 

Total $ 8,407,506 $ 8,239,096 

2021 2020

With the Public

Miscellaneous Accounts Receivable $ 84,664 $ 85,306

Interest Receivable 195 70

Penalties and Fines Receivable 610 233

Total Accounts Receivable $ 85,469 $ 85,609 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 51

NOTE 4. GENERAL PROPERTY, PLANT AND EQUIPMENT, NET

Schedule of General Property, Plant and Equipment, Net as of September 30, 2021:

Schedule of General Property, Plant and Equipment, Net as of September 30, 2020:

NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for FMC as of September 30, 2021 and 2020, 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. 

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. 

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation

Net Book 

Value

Leasehold Improvements $ 225,000 $ 225,000 -

Furniture & Equipment 316,289 316,289 -

Total $ 541,289 $ 541,289 $ -

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation

Net Book 

Value

Leasehold Improvements $ 225,000 $ 225,000 -

Furniture & Equipment 316,289 310,677 5,612

Total $ 541,289 $ 535,677 $ 5,612

2021 2020

Unfunded Leave $ 1,683,770 $ 1,605,943

Total Liabilities Not Covered by Budgetary Resources $ 1,683,770 $ 1,605,943

Total Liabilities Covered by Budgetary Resources 1,970,384 2,394,690

Total Liabilities Not Requiring Budgetary Resources 77,760 79,490

Total Liabilities $ 3,731,914 $ 4,080,123
FMC FISCAL YEAR 2021| Performance and Accountability Report| 52

NOTE 6. OTHER LIABILITIES

Other liabilities account balances as of September 30, 2021 were as follows:

Other liabilities account balances as of September 30, 2020 were as follows:

Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable (without reciprocals) $ 67,962 $ 67,962

Custodial Liability (to the General Fund) 77,700 77,700

Liability for Non-Entity Assets Not Reported on the Statement of 

Custodial Activity (to the General Fund) 60 60

Employer Contributions and Payroll Taxes Payable 190,118 190,118

Other Post Employment Benefits Due and Payable 50 50

Total Intragovernmental Other Liabilities $ 335,890 $ 335,890

With the Public

Accrued Funded Payroll and Leave $ 951,569 $ 951,569

Total Public Other Liabilities $ 951,569 $ 951,569

Total Other Liabilities $ 1,287,459 $ 1,287,459

Current Total

Intragovernmental

Employer Contributions and Payroll Taxes Payable (without reciprocals) $ 64,925 $ 64,925

Custodial Liability (to the General Fund) 79,430 79,430

Liability for Non-Entity Assets Not Reported on the Statement of 

Custodial Activity (to the General Fund) 60 60

Employer Contributions and Payroll Taxes Payable 153,940 153,940

Total Intragovernmental Other Liabilities $ 298,355 $ 298,355

With the Public

Accrued Funded Payroll and Leave $ 915,173 $ 915,173

Total Public Other Liabilities $ 915,173 $ 915,173

Total Other Liabilities $ 1,213,528 $ 1,213,528
FMC FISCAL YEAR 2021| Performance and Accountability Report| 53

NOTE 7. OPERATING LEASES

FMC occupies office space in five locations, of which four 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 total operating lease expense for the periods ended 

September 30, 2021 and 2020, respectively, were $3,646,836 and $3,123,201. The lease locations and 

terms are listed below:

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

The schedule of future payments for the term of the leases is as follows:

NOTE 8. COMMITMENTS AND CONTINGENCIES

FMC did not have any material contingent liabilities that met disclosure requirements as of September 30, 

2021 and 2020.

NOTE 9. INTER-ENTITY COSTS

FMC recognizes certain inter-entity costs for goods and services that are received from other federal entities 

at no cost or at a cost less than the full cost. Certain costs of the providing entity that are not fully reimbursed 

are recognized as imputed cost and are offset by imputed revenue. Such imputed costs and revenues relate 

to employee benefits and claims to be settled by the Treasury Judgement Fund. FMC recognizes as interentity costs the amount of accrued 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 periods ended September 30, 2021 and 2020, respectively, inter-entity costs were as follows:

Location Term Lease Expiration Date

Iselin, NJ 10 years 11/30/2023

Tacoma, WA 10 years 10/31/2031

Houston, TX 15 years 10/1/2033

Washington, DC 15 years 10/31/2037

Fiscal Year Totals Federal

2022 $ 3,674,487

2023 96,077

2024 1,936,234

2025 3,256,041

2026 3,291,320

Thereafter 40,183,880

Total Future Minimum Payments $ 52,438,039

2021 2020

Office of Personnel Management $ 1,153,832 $ 1,026,536 

Total Imputed Financing Sources $ 1,153,832 $ 1,026,536 
FMC FISCAL YEAR 2021| Performance and Accountability Report| 54

NOTE 10. UNDELIVERED ORDERS AT THE END OF THE PERIOD

As of September 30, 2021, budgetary resources obligated for undelivered orders were as follows:

As of September 30, 2020, budgetary resources obligated for undelivered orders were as follows:

NOTE 11. EXPLANATION OF DIFFERENCES BETWEEN THE SBR AND THE BUDGET OF 

THE U.S. GOVERNMENT

The President’s Budget that will include fiscal year 2021 actual budgetary execution information has not 

yet been published. The President’s Budget is scheduled for publication in February 2022 and can be found 

at the OMB Web site: http://www.whitehouse.gov/omb/. The 2022 Budget of the United States 

Government, with the "Actual" column completed for 2020, has been reconciled to the Statement of 

Budgetary Resources and there were no material differences. 

In Millions

Federal Non-Federal Total

Unpaid Undelivered Orders $ 998,579 $ 2,741,390 $ 3,739,969

Total Undelivered Orders $ 998,579 $ 2,741,390 $ 3,739,969

Federal Non-Federal Total

Paid Undelivered Orders $ 14,584 $ - $ 14,584

Unpaid Undelivered Orders 1,454,064 2,359,886 3,813,950

Total Undelivered Orders $ 1,468,648 $ 2,359,886 $ 3,828,534

New Obligations

Budgetary & Upward Net

Resources Adjustments Outlays

Combined Statement of Budgetary Resources $ 30 $ 28 $ 27

Unobligated Balance Not Available (1) (1) -

Difference - Due to Rounding (1) - -

Budget of the U.S. Government $ 28 $ 27 $ 27
FMC FISCAL YEAR 2021| Performance and Accountability Report| 55

NOTE 12. CUSTODIAL ACTIVITY

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

FMC measures and reports cash collections and refunds. These collections are reported as custodial activity 

on the “Statement of Custodial Activity.” The type of cash collected is for fines, penalties, and 

administrative fees. A small portion is for interest on the past due fines. Another component of the custodial 

revenue is general proprietary receipts (User Fees) for the application of licenses issued to qualified Ocean 

Transportation Intermediaries (OTI’s) in the U.S., FMC reviews petitions, status changes and special 

permission fees. FMC believes that all fines, penalties, administrative fees and user fees will be collected 

in full. There are no material uncollectible accounts as of September 30, 2021 and 2020.

Custodial collections are reported on the Statement of Custodial Activity. The miscellaneous receipts are 

broken out in the general receipt funds as follows:

2021 2020

Fines, Penalties, and Forfeitures $ - $ 103

General Fund Proprietary Receipts (User fees) 216,490 190,950

Refunds of Proprietary Receipts (User fees) (250) (2,375)

Interest - 15

Total Custodial Collections $ 216,240 $ 188,693
FMC FISCAL YEAR 2021| Performance and Accountability Report| 56

NOTE 13. RECONCILIATION OF NET COST TO NET OUTLAYS 

The reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an accrual 

basis, provides an explanation of the relationship between budgetary and financial accounting information. 

Reconciliation of Net Cost Outlays as of September 30, 2021:

Intragovernmental With the Public Total 

$ 10,932,169 $ 19,818,672 $ 30,750,841

Property, Plant, and Equipment Depreciation Expense - (5,612) (5,612)

Increase/(Decrease) in Assets:

Accounts Receivable, Net - (140) (140)

Other Assets (14,584) - (14,584)

(Increase)/Decrease in Liabilities:

Accounts Payable 21,601 484,039 505,640

Federal Employee and Veteran Benefits Payable - (83,501) (83,501)

Other Liabilities (39,265) (36,396) (75,661)

Financing Sources:

Imputed Cost (1,153,832) - (1,153,832)

$ (1,186,080) $ 358,390 $ (827,690)

Financing Sources:

Transfers Out (In) Without Reimbursements (26,715) - (26,715)

$ (26,715) $ - $ (26,715)

Distributed Offsetting Receipts (SBR 4200) - - (216,490)

Custodial/Non-Exchange Revenue 216,240 (214,509) 1,731

$ 216,240 $ (214,509) $ (214,759)

$ 9,935,614 $ 19,962,553 $ 29,681,677

Budgetary Agency Outlays, Net $ 29,681,677

Misc Items

Total Other Reconciling Items

Components of Net Cost Not Part of the Budgetary 

Total Net Outlays (Calculated Total) 

Net Operating Cost (SNC)

Total Components of Net Operating Cost Not Part of the 

Budgetary Outlays

Components of the Budget Outlays That Are Not Part 

Total Components of the Budget Outlays That Are Not 

Part of Net Operating Cost

Budgetary Agency Outlays, Net (SBR 4210)
FMC FISCAL YEAR 2021| Performance and Accountability Report| 57

Reconciliation of Net Cost Outlays as of September 30, 2020:

Intragovernmental With the Public Total 

Net Operating Cost (SNC) $ 9,895,354 $ 19,365,597 $ 29,260,951

Property, Plant, and Equipment Depreciation Expense - (37,497) (37,497)

Increase/(Decrease) in Assets:

Accounts Receivable, Net - 76,902 76,902

Other Assets 14,584 - 14,584

(Increase)/Decrease in Liabilities:

Accounts Payable (74,609) (868,686) (943,295)

Federal Employee and Veteran Benefits Payable - (160,952) (160,952)

Other Liabilities (52,626) (272,213) (324,839)

Financing Sources:

Imputed Cost (1,026,536) - (1,026,536)

$ (1,139,187) $ (1,262,446) $ (2,401,633)

Distributed Offsetting Receipts (SBR 4200) - - (191,075)

Custodial/Non-Exchange Revenue 188,693 (266,330) (77,637)

Non-Entity Activity 110 - 110

$ 188,803 $ (266,330) $ (268,602)

$ 8,944,970 $ 17,836,821 $ 26,590,716

Budgetary Agency Outlays, Net $ 26,590,716

Components of Net Cost Not Part of the Budgetary 

Total Components of Net Operating Cost Not Part of the 

Budgetary Outlays

Budgetary Agency Outlays, Net (SBR 4210)

Misc Items

Total Other Reconciling Items

Total Net Outlays (Calculated Total) 
FMC FISCAL YEAR 2019| Performance and Accountability Report| 58

PART FOUR 

OTHER INFORMATION

Fiscal Year 2021
FMC FISCAL YEAR 2021| Performance and Accountability Report| 59

INSPECTOR GENERAL’S STATEMENT ON MANAGEMENT AND 

PERFORMANCE CHALLENGES

 FEDERAL MARITIME COMMISSION

Washington, DC 20573

October 15, 2021

Office of Inspector General

TO: Chairman Maffei 

Commissioner Dye 

Commissioner Khouri

Commissioner Sola

Commissioner Bentzel

FROM: Inspector General 

SUBJECT: Inspector General’s Statement on the Federal Maritime Commission’s Management and 

Performance Challenges

The Reports Consolidation Act of 2000 (Public Law 106-531) 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 to be included in the Federal Maritime Commission’s 

(FMC) Performance and Accountability Report (PAR) for fiscal year (FY) 2021. 

Similar to last year, the Office of Inspector General (OIG) has identified the Coronavirus Disease 

2019 (COVID-19) pandemic and information technology (IT) security to be management and 

performance challenges. Both issues are also government-wide challenges and not unique to the FMC. 

In addition, the OIG has added a third issue to this year’s annual management and performance challenge 

report, high turnover in senior positions. The OIG’s assessment for all three issues is based on 

information derived from a combination of sources, including OIG evaluation work; Commission reports; 

Federal government reports; and a general knowledge of the Commission’s programs. 

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 FMC PAR that 

is due by November 15, 2021. 

/s/

Jon Hatfield

Attachment

Cc: Lucille L. Marvin, Managing Director

Patrick M. Moore, Director, Enterprise Services/Chief Financial Officer

Steven J. Andersen, General Counsel

Kathie L. Keys, Special Assistant to the Managing Director
FMC FISCAL YEAR 2021| Performance and Accountability Report| 60

Office of Inspector General (OIG)

Fiscal Year 2021 Management Challenges

The Management Challenge - Coronavirus Disease 2019 (COVID-19) Pandemic

In 2021, COVID-19 continued to present significant challenges in the United States and 

globally due to the serious health and economic issues. Challenges continued, but the FMC 

worked to effectively fulfill its mission during the pandemic. The agency’s mission is to ensure a 

competitive and reliable international ocean transportation supply system that supports the U.S. 

economy and protects the public from unfair and deceptive practices. The Commission has been 

focused on COVID-19-related impacts on ocean shipping and the cruise industry while at the same 

time ensuring workplace health and safety. 

The FMC has effectively utilized computer technology, and with the implementation of 

remote work processes, the important and vital work of the FMC has continued during the 

pandemic. The FMC continued maximum telework flexibility for its entire workforce during 

2021. The agency’s headquarters has remained open throughout the pandemic and several 

employees continue to work in their offices in Washington, D.C. 

Agency Progress and the Challenge Ahead

Throughout 2021, management has devoted considerable time on planning for a workplace 

transition and reentry, a point in time when COVID-19 conditions will be suitable to safely return 

to the office. This planning involves significant communication with the workforce, including 

listening sessions, an all-hands Town Hall meeting, newsletters, and regular meetings for all staff. 

Planning also involves monitoring Federal guidance, local COVID-19 conditions at the FMC 

headquarters and FMC’s Area Representative field offices, and requirements provided by the Safer 

Federal Workforce Task Force.

In the summer of 2021, the Centers for Disease Control and Prevention (CDC) recognized 

a significant increase in new COVID-19 cases reversed what had been a steady decline. CDC 

reported a rapid and alarming rise in the COVID-19 case and hospitalization rates around the 

country, to include the Washington, D.C. metro area where the FMC is headquartered. Due to the 

surge in COVID-19 cases, Federal agencies including FMC had to re-implement the requirement 

to wear masks when in the office, regardless of vaccination status. In addition, like all Federal

agencies, the FMC has been working to implement the requirement that all FMC employees and 

contractors without a legal required exception need to be fully vaccinated by November 22, 2021. 

As a result of the changing COVID-19 situation and the lack of significant improvement 

in conditions, in the fall of 2021 the agency decided to delay the workplace transition and reentry 

dates previously contemplated and new dates have been established. Chairman Maffei reiterated 

the agency’s commitment to the safety and health of Commission employees, contractors, and the 

public, and this will continue to lead the agency’s considerations and discussions regarding a return 

to the workplace. The OIG will continue to be engaged with agency management on their planning 

and decisions to return to a pre-COVID-19 operational workplace status safely and effectively.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 61

The Management Challenge - Information Technology (IT) Security

Over the last several years and continuing in FY 2021, the OIG’s audit work has found the 

FMC to be focused on maintaining an effective IT security program. The FMC is highly dependent 

on IT systems and electronic data to carry out agency operations and to process, maintain, and 

report essential information. Therefore, the security of these systems and data is vital to ensure 

the confidentiality, integrity, and availability of FMC systems and information. Risks to the 

FMC’s IT systems can include insider threats from witting or unwitting employees, escalating and 

emerging threats from around the globe, and new and more destructive attacks.

The Government Accountability Office (GAO) has designated information security as a 

government-wide high-risk area since 1997. GAO expanded this high-risk area in 2003 to include 

protection of critical cyber infrastructure and, in 2015, to include protecting the privacy of 

personally identifiable information (PII). GAO’s high-risk program focuses attention on 

government operations that GAO identifies as high-risk due to their greater vulnerabilities to fraud, 

waste, abuse, and mismanagement or the need for transformation to address economy, efficiency, 

or effectiveness challenges. 

Agency Progress and the Challenge Ahead

The Federal Information Security Modernization Act (FISMA) establishes information 

security program and evaluation requirements for Federal agencies in the executive branch, 

including the FMC. Each year, the OIG oversees an independent FISMA audit of the information 

security program and practices of the agency. The results of the audit are reported annually to the 

Office of Management and Budget (OMB); selected congressional committees; the Comptroller 

General; and the FMC’s Commission and management. 

The preliminary results of the OIG’s Fiscal Year 2021 Audit of the FMC’s Compliance 

with the Federal Information Security Modernization Act (FISMA) indicate the FMC resolved one 

of the prior year audit recommendations and made progress towards implementing the other 

FISMA audit recommendation. Specifically, the Office of Management Services (OMS) updated

the Acquisition policy with necessary IT security language. In addition, the FY 2020 FISMA audit 

found that although the FMC has various information technology security policies and procedures, 

several had not been reviewed or updated in a timely manner, or they were lacking from 

development into a formalized policy. The OIG recommended the agency review, update, and 

finalize the applicable policies and procedures in accordance with Federal and agency 

requirements. Overall, the FY 2021 FISMA preliminary audit results indicate the FMC has an 

effective information security program. 

Significant cybersecurity incidents in the Federal government in recent years highlight 

those continued advancements in computer and communication technologies will likely result in 

ongoing challenges protecting Federal systems, to include the FMC. Particularly because of the 

FMC’s small size and limited resources, it is critical for the FMC to prioritize security controls 

and enhancements based on risk and continue to properly plan and partner with Federal agencies 

to protect vital agency resources.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 62

The Management Challenge – High Turnover in Senior Positions

In the last three years, the FMC has experienced a high turnover in senior management 

positions due to employee retirements and separations. The high turnover in senior positions is 

particularly challenging for a small organization like the FMC because all the FMC bureaus and 

offices lack multiple management layers to draw upon when senior leadership turnover occurs. 

Although the FMC was relatively quick to fill these positions and with very qualified and 

competent individuals, the turnover of many talented and very experienced senior leaders in a 

relatively short period of time has resulted in the loss of institutional knowledge and expertise that 

required many years to develop. 

Figure 1 below illustrates the senior leadership turnover in the last three years. 

Specifically, in 2019, the agency experienced senior leadership turnover in the Office of Budget 

and Finance, Office of the Area Representatives, and Office of the Administrative Law Judges. In 

2020, the Bureau of Certification and Licensing, Office of General Counsel, Office of Consumer 

Affairs and Dispute Resolution, and Office of Human Resources had senior leadership change. 

Finally, in 2021 through September, the Bureau of Trade Analysis, Office of the Managing 

Director, and the Office of Equal Employment Opportunity experienced changes in senior 

leadership.

Figure 1 – FMC Organizational Chart
FMC FISCAL YEAR 2021| Performance and Accountability Report| 63

In September 2020, the OIG completed an audit survey of the agency’s succession planning 

process. One of the outcomes of the audit survey included highlighting the importance of 

succession planning, a process defined as any effort to ensure the continued effective performance 

of an organization, division, department, or work group by making provisions for the development, 

replacement, and strategic application of key people over time. Our survey work, including a 

review of workforce planning documents and interviews with the Office of Human Resources 

Director and Technical Lead did not reveal any problem areas that warranted further OIG review 

in the near term. The OIG found that the agency had implemented some succession planning best 

practices and has access to and utilizes a variety of information to assist the Commission in 

identifying trends for succession planning purposes. While the OIG made no recommendations at 

the completion of the audit survey, the OIG did provide suggestions for the agency to consider to 

improve their succession planning process. The main suggestion for management consideration 

was the implementation of a Succession Management Plan for key positions. FMC management 

agreed to consider the OIG’s suggestions and was responsive to the OIG’s work. 

Agency Progress and the Challenge Ahead

Agency management recognizes the unusually high rate of retirements and separations in 

management and other positions and has been taking steps to address this issue. For the last several 

years, the FMC has been very focused on improving employee engagement. Specifically, the 

Partnership for Public Service’s Best Places to Work Rankings, derived from the Office of 

Personnel Management’s Federal Employee Viewpoint Survey (FEVS), is a survey to measure 

employee engagement. The rankings help Federal agencies measure employees' perceptions of

whether, and to what extent, conditions characterizing successful organizations are present in their

agency. In the 2020 rankings, the FMC moved up three places from number ten to number seven. 

The FMC has remained in the Top 10 Best Places to Work for Small Agencies since 2018. A 

highly engaged workforce increases the likelihood of retaining staff and being able to effectively 

recruit new experienced and talented staff.

COMMENTS ON INSPECTOR GENERAL’S STATEMENT 

The Commission welcomes the Inspector General’s assessment of the most serious 

management and performance challenges facing the Federal government in general, and how 

these affect the FMC. The Commission appreciates the OIG’s continuing engagement with 

management on the planning and decision-making process to safely return to a pre-COVID-19 

operational status. Annual FISMA audits and the Inspector General’s recommendations for 

strengthening the Commission’s IT security controls continue to play an essential role in

keeping the Commission up-to-date on significant risks and challenges, and are invaluable in 

aiding to protect its resources. The Commission’s work on succession planning and being able 

to quickly fill senior-level and other vacant positions at the Commission has helped to mitigate 

the effects of the unprecedented high turnover rate experienced over the last several years. 

The Commission intends to continue its efforts to improve employee engagement and retain its 

place among the Top 10 Best Places to Work for Small Agencies.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 64

FINANCIAL STATEMENT AUDIT SUMMARY

Table 1 is a summary of the results of the independent audit of the FMC’s financial statements 

by the agency’s auditors in connection with the FY 2021 audit.

MANAGEMENT ASSURANCES SUMMARY

Table 2 is a summary of management assurances related to the effectiveness of internal control 

over the FMC’s financial reporting and operations, and its conformance with financial 

management system requirements under Sections 2 and 4, respectively, of the FMFIA. This 

table also summarizes compliance with the FFMIA, which is not applicable to the Commission.

Table 1. Summary of Financial Statement Audit

Audit Opinion Unmodified

Restatement No

Material Weaknesses Beginning balance New Resolved Consolidated Ending Balance

None n/a n/a n/a n/a n/a

Total Material Weaknesses None None n/a n/a None

Table 2. Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

Total Material Weaknesses None n/a n/a n/a n/a None

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

[name of weakness] None n/a n/a n/a n/a None

Total Material Weaknesses None n/a n/a n/a n/a None

Compliance with Federal Financial Management System Requirements (FMFIA § 4)

Statement of Assurance Unmodified

Material Weaknesses Beginning Balance New Resolved Consolidated Reassessed Ending Balance

[name of noncompliance] None n/a n/a n/a n/a None

Total noncompliance None n/a n/a n/a n/a None

Compliance with Section 803(a) of the Federal Financial Management Improvement Act (FFMIA)

Agency Auditor

1. Federal Financial Management System Requirements FFMIA does not apply to the FMC n/a

2. Applicable Federal Accounting Standards FFMIA does not apply to the FMC n/a

3. USSGL at Transaction Level FFMIA does not apply to the FMC n/a
FMC FISCAL YEAR 2021| Performance and Accountability Report| 65

IMPROPER PAYMENTS INFORMATION ACT

The FMC reports its compliance with the Payment Integrity Information Act of 2019 through 

OMB’s annual data call on payment integrity. The FMC’s information is provided at 

www.paymentaccuracy.gov. 

FRAUD REDUCTION REPORT

The FMC has a low appetite for fraud. The FMC complies with the Fraud Risk and Data 

Analytics Act of 2015 and follows the Standards for Internal Control in the Government through 

its enterprise risk management program and financial accounting practices. The FMC’s Risk 

Committee, managing risk enterprise-wide, considers fraud risks on a regular basis. 

Financial stewardship is an important part of the FMC’s risk management strategy. Internal 

controls and financial and accounting data are subject to multiple levels of monthly and/or 

annual review performed internally by the FMC and externally by the BFS. The most recent IG 

risk assessment of the purchase card program, completed in 2020, considered several factors, 

including: effectiveness of internal controls; training requirements; policies and procedures; 

any prior problems with the program; and previous audits and reviews. The OIG concluded the 

risk of illegal, improper, or erroneous use in the FMC’s purchase card program is “low.” The 

OIG’s next audit or review of the agency’s purchase card program will be conducted in 2022.

The Commission has financial and administrative controls in place, including an internal 

controls policy which provides management and internal control processes for identifying and 

addressing major performance and management challenges and areas at greatest risk of fraud, 

waste, abuse and mismanagement. In 2020, the FMC’s OIG, with the assistance of independent 

financial auditors, completed a review of the Commission’s administrative control of funds. The

Management Letter on Administrative Control of Funds, A-20-02a, determined that the 

Commission has an internal control system in place for its funds control and recommended 

additional opportunities to further strengthen the agency’s controls. The Commission’s 

administrative control of funds policy is currently in final review by the Office of Management 

and Budget. 

In addition, the Commission’s acquisitions policy protects the integrity of the contracting 

process, and includes ethical requirements and standards of conduct in accordance with the 

Procurement Integrity Act and Federal Acquisition Regulations.

The FMC does not oversee or have responsibility for any credit, grant, or loan programs. No 

new programs were initiated in FY 2021, and no current programs are at high risk for fraud, 

abuse, or exposure to waste.
FMC FISCAL YEAR 2021| Performance and Accountability Report| 66

CIVIL MONETARY PENALTY ADJUSTMENT FOR INFLATION

The Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 104-410, as amended by the 

Debt Collection Improvement Act of 1996, Pub. L. 104-134, and the Federal Civil Penalties 

Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74, requires agencies to make 

regular and consistent inflationary adjustments of civil monetary penalties to maintain their 

deterrent effect. Below are the civil penalties that the FMC may impose, authority for imposing 

the penalty, dates of inflation adjustments, and current penalty levels. The Federal Register 

notice (86 FR 2560) may be viewed at: Federal Register :: Inflation Adjustment of Civil Monetary 

Penalties.

Penalty Statutory 

Authority

Date of Previous 

Adjustment

Date of Current 

Adjustment

Maximum 

Penalty

Adverse impact on U.S. carriers by foreign 

shipping practices 46 U.S.C. 42304 January 15, 2020 January 15, 2021 $2,166,279

Knowing and Willful violation / Shipping 

Act of 1984, or Commission regulation or 

order

46 U.S.C. 41107(a) January 15, 2020 January 15, 2021 $61,820

Violation of Shipping Act of 1984, 

Commission regulation or order, not 

knowing and willful

46 U.S.C. 41107(b) January 15, 2020 January 15, 2021 $12,363

Operating in foreign commerce after tariff 

suspension 46 U.S.C. 41108(b) January 15, 2020 January 15, 2021 $123,641

Failure to provide required reports, etc. / 

Merchant Marine Act of 1920 46 U.S.C. 42104 January 15, 2020 January 15, 2021 $9,753

Adverse shipping conditions / Merchant 

Marine Act of 1920 46 U.S.C. 42106 January 15, 2020 January 15, 2021 $1,950,461

Operating after tariff or service contract 

suspension / Merchant Marine Act of 1920 46 U.S.C. 42108 January 15, 2020 January 15, 2021 $97,523

Failure to establish financial responsibility 

for non-performance of transportation* 46 U.S.C. 44102 January 15, 2020 January 15, 2021 $24,634$822

Failure to establish financial responsibility 

for death or injury* 46 U.S.C. 44103 January 15, 2020 January 15, 2021 $24,634$822

Program Fraud Civil Remedies Act / makes 

false claim

31 U.S.C. 

3802(a)(1) January 15, 2020 January 15, 2021 $11,803

Program Fraud Civil Remedies Act / giving 

false statement

31 U.S.C. 

3802(a)(2) January 15, 2020 January 15, 2021 $11,803

*These amounts are based on the penalties established in § 44104 for violations of §§ 44102 and 44103: $5,000, 

plus $200 for each passage sold. These penalties were established in 1966 and, applying the statutory inflation 

adjustment formula, amount to $24,634, plus $822 for each passage sold, in current dollars. 

BIENNIAL REVIEW OF USER FEES

Agencies are required by the Chief Financial Officers Act of 1990 to conduct biennial reviews of 

fees and other charges that they impose, and to revise these fees and charges to cover program 

and administrative costs incurred, as necessary. The Commission voted to update user fees, a 

direct final rule was published in the Federal Register on November 13, 2020, and became 

effective on January 27, 2021. User fee rates will next be examined in CY 2022.