Members of the Academy Community: Recently, financial management and control practices at the Academy have come under increased scrutiny. Internal reviews conducted by the Maritime Administration (MARAD) have found several weaknesses in the Academy's financial operations, as well as potential violations of the Anti-Deficiency Act (ADA). And today, the Government Accountability Office (GAO)—Congress’ investigative arm—has released another audit of the Academy, one which began in July 2008 (available online at http://www.gao.gov/new.items/d09635.pdf). Overall, the GAO confirmed the basic findings MARAD outlined in its internal controls review. The Academy's arrangements with its Non-Appropriated Fund Instrumentalities (NAFIs) involved the institution in a variety of inappropriate financial transactions, some of which proved to be possible ADA violations. In addition to those matters already known to DOT, GAO's report identified several new areas of concern, or provided detail on matters already identified as possible financial issues. Among these items, the most consequential involves apparently charging midshipmen more in fees for their personal expenses than was appropriate. This additional revenue was used to augment the school's operating budget. While not necessarily illegal, many of these charges (including activity, athletic and waterfront fees) were deemed inappropriate by the GAO. The Superintendent and other members of the senior staff had an opportunity to review the GAO's report. We believe it is straightforward in its assessment of facts, and blunt in its recommendations. As a result of MARAD's review and the GAO audit, both the Maritime Administration and the Department have recognized the need for direct, proactive engagement in the administration of the Academy. They have already begun to take substantial steps to increase their oversight of the Academy's programs and policies to ensure that both the Maritime Administrator and the Secretary are cognizant of emerging issues, needs, and concerns. In addition, a number of corrective actions are already planned, underway, or completed that address each of GAO's recommendations. While the GAO report may not cast the United States Merchant Marine Academy in a completely positive light, keep in mind that its focus was on our process and not our product. The Academy is a unique school, unlike any other public or private institution of higher education. It has a record of service to our midshipmen, the maritime industry, the Armed Forces, and our Nation. We can be confident in our results and in our mission: to educate and graduate merchant marine officers and leaders of honor and integrity who serve the maritime industry and Armed Forces and contribute to the economic, defense, and homeland security interests of the United States. If you have any questions about the report or the Department's plans for addressing the GAO's recommendations, please feel free to ask. The Secretary of Transportation is preparing a complete response to each of the recommendations in the report, which is due in 60 days. In addition, in the coming days, we can expect some interest within the press, as well as from alumni, parents, and our stakeholders in industry. Should you be contacted by a member of the media, please refer that inquiry to Marty Skrocki at 516-773-5374 or firstname.lastname@example.org. He will be the initial point of contact for inquiries directed to USMMA, and will coordinate with Ms. Susan Clark, the Public Affairs Officer at the Maritime Administration, in responding to any media contacts and requests. Acta Non Verba! Eric Wallischeck --------------------------------------------------------------- CAPT Eric York Wallischeck Chief of Staff United States Merchant Marine Academy Kings Point, NY 11024-1699 516-773-5232 (office) 516-773-5509 (fax) email@example.com Help the environment – please don't print this email unless you really need to!