THE MARITIME AQUARIUM AT NORWALK, INC.

Finding 2022-003 - Preparation of the SEFA Information on the Federal Program: All Federal programs Criteria or Specific Requirement: Title 2 CFR 200.508 ?Auditee Responsibilities? indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 ?Financial statements?). Title 2 CFR 200 Section 200.510 ?Financial Statements? requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Aquarium did not appropriately identify and track its Federal expenditures incurred under direct and pass-through Federal awards during the year under audit. Cause: The Aquarium did not maintain appropriate internal controls to correctly identify and track awards provided from the federal government, including those received through pass through entities. Effect or Potential Effect: The Aquarium incurred expenditures in excess of the $750,000 threshold, requiring a Uniform Guidance compliance examination. Questioned Costs: None noted. Context: The SEFA must be prepared by the auditee (as described in ?Criteria? above). Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that the Aquarium establish internal controls to correctly identify and track all Federal awards received either directly or indirectly. The expenditures incurred under direct and pass-through awards should be evaluated in aggregate periodically throughout the year (and at year-end) to determine if the Aquarium has reached the Uniform Guidance threshold. The Aquarium should ensure that the Uniform Guidance audit is completed, and the complete reporting package submitted to the Federal Audit Clearinghouse in advance of the reporting deadlines.

Views of Responsible Officials: As noted previously, management notes that expenditures of ongoing state and federal programs are internally reviewed and reconciled monthly, and required reporting to funding entities has been completed and submitted consistent with relevant reporting deadlines. However, transitions in systems and personnel as well as several large programs unique to the recent pandemic period challenged management to gather these details in the SEFA format early in the audit. In addition to continued monthly reconciliations, management will establish an additional more formal reconciliation quarterly during fiscal year 2023, and the more formalized grants reporting infrastructure we?re developing as well as upcoming additional staffing in finance and development will also strengthen our capacity for the timely preparations of the SEFA going forward.