Office of Inspector General

 Independent Auditor’s Report of the

 FMC’s FY 2022 Financial Statements

A23-02

 November 2022

 FEDERAL MARITIME COMMISSION
 FEDERAL MARITIME COMMISSION

Washington, DC 20573

November 15, 2022 

Office of Inspector General

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

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) 2022 and 2021 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, 2022 and 2021; 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, 2022 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. 
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 
Independent Auditor’s Report

To Chairman Daniel B. Maffei 

Federal Maritime Commission

In our audits of the fiscal years 2022 and 2021 financial statements of Federal Maritime 

Commission (FMC) we found: 

• FMC’s financial statements as of and for the fiscal years ended September 30, 2022, and 2021, 

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

accounting principles; 

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

procedures we performed;1 and

• no reportable noncompliance for fiscal year 2022 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)2; (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

Opinion 

In accordance with U.S. generally accepted government auditing standards and Office of 

Management and Budget (OMB) Bulletin No. 22-01, 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, 2022, and 2021; the related statements of net cost, changes 

in net position, and budgetary resources for the fiscal years then ended; and the related notes to the 

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

respects, FMC’s financial position as of September 30, 2022, and 2021, and its net cost of 

operations, changes in net position, and budgetary resources for the fiscal years then ended in 

accordance with U.S. generally accepted accounting principles. 

1

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such 

that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be 

prevented, or detected and corrected, on a timely basis. A deficiency in internal control exists when the design or 

operation of a control does not allow management or employees, in the normal course of performing their assigned 

functions, to prevent, or detect and correct, misstatements on a timely basis.

2

The RSI consists of “Management’s Discussion and Analysis”, which is included with the financial statements.

6116 Executive Blvd • Suite 500 

North Bethesda, MD 20852

Dembo Jones, P.C.

A Member of Allinial Global

8850 Stanford Blvd • Suite 2000

Columbia, MD 21045

P 301.770.5100 • F 301.770.5202 www.dembojones.com P 410.290.0770 • F 410.290.0774
Dembo Jones, P.C.

Basis for Opinion 

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

standards. Our responsibilities under those standards are further described in the Auditor’s 

Responsibilities for the Audit of the Financial Statements section of our report. We are required to 

be independent of FMC and to meet our other ethical responsibilities, in accordance with the 

relevant ethical requirements relating to our audit. We believe that the audit evidence we have 

obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Responsibilities of Management for the Financial Statements

FMC 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 FMC’s documents 

containing the audited financialstatements and auditor’s report, and ensuring the consistency of that 

information with the audited financial statements and the RSI; and (4) designing, implementing, 

and maintaining effective internal control relevant to the preparation and fair presentation of 

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are 

conditions or events, considered in the aggregate, that raise substantial doubt about FMC’s ability 

to continue as a going concern for a reasonable period of time.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole 

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report 

that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute 

assurance and therefore is not a guarantee that an audit of the financial statements conducted in 

accordance with U.S. generally accepted government auditing standards will always detect a 

material misstatement or a material weakness when it exists. The risk of not detecting a material 

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve 

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 

Misstatements, including omissions, are considered to be material if there is a substantial 

likelihood that, individually or in the aggregate, they would influence the judgment made by a 

reasonable user based on the financial statements.

In performing an audit in accordance with U.S. generally accepted government auditing standards, 

we:

• Exercise professional judgment and maintain professional skepticism throughout the audit. 
Dembo Jones, P.C.

• Identify and assess the risks of material misstatement of the financial statements, whether due 

to fraud or error, and design and perform audit procedures responsive to those risks. Such 

procedures include examining, on a test basis, evidence regarding the amounts and disclosures 

in the financial statements in order to obtain audit evidence that is sufficient and appropriate 

to provide a basis for our opinion. 

• Obtain an understanding of internal control relevant to our audit 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 FMC’s internal control over financial 

reporting. Accordingly, no such opinion is expressed.

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

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

financial statements.

• Perform other procedures we consider necessary in the circumstances.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, 

that raise substantial doubt about FMC’s ability to continue as a going concern for a reasonable 

period of time.

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control–related matters that we identified during the financial statement audit.

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. 

Such information is the responsibility of management and, although not a part of the financial 

statements, is required by FASAB, which considers it to be an essential part of financial reporting 

for placing the financial statements in appropriate operational, economic, or historical context. We 

have applied 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.
Dembo Jones, P.C.

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. Management is responsible for the 

other information included in FMC’s documents. The other information comprises the financial 

summaries but does not include the financial statements and our auditor’s report thereon. Our 

opinion on the financial statements does not cover the other information, and we do not express an 

opinion or any form of assurance thereon. 

In connection with our audit of the financial statements, our responsibility is to read the other 

information and consider whether a material inconsistency exists between the other information 

and the financial statements, or the other information otherwise appears to be materially misstated. 

If, based on the work performed, we conclude that an uncorrected material misstatement of the 

other information exists, we are required to describe it in our report.

Report on Internal Control over Financial Reporting

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

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

Results of Our Consideration of Internal Control over Financial Reporting

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

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

significant deficiencies or to express an opinion on the effectiveness of 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 or significant deficiencies may exist that have not been identified.

Basis for Results of Our Consideration of Internal Control over Financial Reporting 

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

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

Responsibilities of Management for Internal Control over Financial Reporting 

FMC management is responsible for designing, implementing, and maintaining effective internal 

control over financial reporting relevant to the preparation and fair presentation of financial 

statements that are free from material misstatement, whether due to fraud or error.
Dembo Jones, P.C.

Auditor’s Responsibilities for Internal Control over Financial Reporting 

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

ended September 30, 2022, in accordance with U.S. generally accepted government auditing 

standards, we considered FMC’s internal control relevant to the financial statement audit 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 FMC’s internal control over financial reporting. 

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

are required to report all deficiencies that are considered to be 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. 

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.

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 FMC’s internal 

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

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

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 

responsibilities discussed below. 
Dembo Jones, P.C.

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 2022 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. 

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

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

auditing standards. Our responsibilities under those standards are further described in the Auditor’s 

Responsibilities for Tests of Compliance section below.

Responsibilities of Management for Compliance with Laws, Regulations, and Contracts 

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

to FMC.

Auditor’s Responsibilities for Tests of Compliance with Laws, Regulations, and Contracts 

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 to perform certain other limited procedures. 

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

FMC. We caution that noncompliance may occur and not be detected by these tests.

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. 

North Bethesda, Maryland 

November 15, 2022