Office of Inspector General

 Independent Auditor’s Report of the

 FMC’s FY 2023 Financial Statements

A24-01

 November 2023

 FEDERAL MARITIME COMMISSION
 FEDERAL MARITIME COMMISSION

Washington, DC 20573

November 15, 2023 

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) 2023 and 2022 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, 2023 and 2022; 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, 2023 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
6116 Executive Blvd • Suite 500 Dembo Jones, P.C. 8830 Stanford Blvd • Suite 290

North Bethesda, MD 20852 A Member of Allinial Global Columbia, MD 21045

P 301.770.5100 • F 301.770.5202 www.dembojones.com P 410.290.0770 • F 410.290.0774

Independent Auditor’s Report

To Chairman Daniel B. Maffei

Federal Maritime Commission

In our audits of the fiscal years 2023 and 2022 financial statements of the Federal Maritime Commission 

(the Commission) we found:

• The Commission’s financial statements as of and for the fiscal years ended September 30, 2023, and

2022, 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;1and

• no reportable noncompliance for fiscal year 2023 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)2and other information included with the financial statements3; 

(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, Office of Management and 

Budget (OMB) Bulletin No. 24-01, Audit Requirements for Federal Financial Statements, and additional 

requirements of OMB, such as Circular No. A-136, Financial Reporting Requirements, we have audited 

the Commission’s financial statements. The Commission’s financial statements comprise the balance 

sheets as of September 30, 2023, and 2022; 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, the Commission’s financial statements present fairly, in all material respects, the 

Commission’s financial position as of September 30, 2023, and 2022, 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. 

3 Other information consists of information included with the financial statements, other than the RSI and the 

auditor’s report. 
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 the Commission

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 

The Commission management is responsible for

• the preparation and fair presentation of these financial statements in accordance with U.S. generally

accepted accounting principles;

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

principles;

• preparing and presenting other information included in the Commission’s Performance and

Accountability Report (PAR), and ensuring the consistency of that information with the audited

financial statements and the RSI; and

• 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 the Commission’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 (1) obtain reasonable assurance about whether the financial statements as a whole 

are free from material misstatement, whether due to fraud or error, and (2) 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.

2
Dembo Jones, P.C.

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.

• 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.

• 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 the Commission’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 the Commission’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. These procedures consisted of (1) inquiring of management about the 

methods of preparing the RSI and (2) comparing the RSI for consistency with management’s responses to 

our 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.

3
Dembo Jones, P.C.

Other Information 

The Commission’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 the Commission’s PAR. The other information comprises the financial statement 

audit summary 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 the Commission’s financial statements, we considered the Commission’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 deficiencies4

or to express an opinion on the effectiveness of the Commission’s internal control over financial reporting. 

Given these limitations, during our 2023 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. 

We noted one non-reportable matter involving internal control and its operation that we will communicate 

in a separate management letter to FMC management.

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

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

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

Budget audit guidance. 5

4A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe 

than a material weakness, yet important enough to merit attention by those charged with governance.

5Office of Management and Budget (OMB) Bulletin No. 24-01, Audit Requirements for Federal Financial Statements, issued on 

October 19, 2023. According to the guidance, for those controls that have been suitably designed and implemented, the auditor should 

perform sufficient tests of such controls to conclude on whether the controls are operating effectively (i.e., sufficient tests of controls to 

support a low level of assessed control risk). OMB audit guidance does not require the auditor to express an opinion on the effectiveness 

of internal control.

4
Dembo Jones, P.C.

Responsibilities of Management for Internal Control over Financial Reporting

The Commission 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.

Auditor’s Responsibilities for Internal Control over Financial Reporting 

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

year ended September 30, 2023, in accordance with U.S. generally accepted government auditing 

standards, we considered the Commission’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 the Commission’s internal control over financial reporting. 

Accordingly, we do not express an opinion on the Commission’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 

• 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

• 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 the Commission’s internal 

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

effectiveness of the Commission’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.

5
Dembo Jones, P.C.

Report on Compliance with Laws, Regulations, and Contracts

In connection with our audits of the Commission’s financial statements, we tested compliance with 

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

responsibilities discussed below.

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 2023 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 the Commission. 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. 

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

The Commission management is responsible for complying with laws, regulations, and contracts 

applicable to the Commission.

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 the Commission that have a direct effect on the determination of material amounts 

and disclosures in the Commission’s financial statements, and to perform certain other limited procedures. 

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

Commission. 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.

6

North Bethesda, Maryland

November 15, 2023