If that berm is part of the dam, there are a number of things wrong. Snipe hit them for you.
A properly constructed dam, even one for a one-acre pond, needs to be properly built. Compaction is a "must". If that blown-out section wasn't properly compacted in lifts/layers, I would expect the rest of it is the same. Fix the break and you move the weak link. It becomes strong, but if the rest of the dam (if that's what we see in the image) is the same, it runs the same risk. Having an emergency spillway is a must and you can see why.
Post a picture of the whole dam and entire pond and let's give it a look.