THE SCIENCE CENTER OF IOWA

Criteria The Organization?s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes, in accordance with generally accepted accounting principles (U.S. GAAP). Condition During the course of the financial statement audit, numerous audit adjustments were necessary to ensure the financial statements are fairly presented in accordance with generally accepted accounting principles. Cause Internally prepared financial statements do not conform with generally accepted accounting principles. In certain instances, information necessary to migrate the Organization?s financial statements to U.S. GAAP is not being retained by staff on an ongoing basis. Effect The Organization?s internally prepared financial statements did not conform with U.S. GAAP. Material adjustments were required as part of the audit process. Recommendation We recommend management develop and implement a plan to migrate the Organization?s internal financial statements to U.S. GAAP.

Science Center management, including the CFO and CEO, agrees with the need to migrate the Organization?s internal financial statements to comply with GAAP accounting. Steps have been taken to convert from a cash to accrual basis of accounting and we are in the process of hiring an outside consultant to assist us with setting up procedures and documentation.

2021-001

Criteria The Organization?s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes, in accordance with generally accepted accounting principles (U.S. GAAP). Condition During the course of the financial statement audit, numerous audit adjustments were necessary to ensure the financial statements are fairly presented in accordance with generally accepted accounting principles. Cause Internally prepared financial statements do not conform with generally accepted accounting principles. In certain instances, information necessary to migrate the Organization?s financial statements to U.S. GAAP is not being retained by staff on an ongoing basis. Effect The Organization?s internally prepared financial statements did not conform with U.S. GAAP. Material adjustments were required as part of the audit process. Recommendation We recognize that the COVID-19 pandemic has placed additional fiscal constraints on the organization?s ability to dedicate further resources towards financial reporting. However, while management may elect to retain the Organization?s internal financial statements on an accounting basis other than U.S. GAAP, as part of its internal control over financial reporting processes, it is necessary to continue to produce information required to migrate management?s internal financial statements to U.S. GAAP on an ongoing and timely basis. The annual audit process cannot be relied upon as part of internal control processes. Response Science Center of Iowa (SCI) had a 40% workforce reduction in March of 2020 due to the COVID-19 pandemic, in which one full time accounting staff position was eliminated. The existing accounting staffs absorbed the additional workload and focused on the daily operations. SCI partially relied on the annual audit process to make final adjustments in the financial reporting according to U.S. GAAP on accrual basis, such as depreciation calculations and restricted projects expense tracking. However, the internal control of cash handling was never compromised. It has been difficult to take on more accounting duties that required higher skills with the limited resources of the accounting team. Management will review the auditor?s recommendations to identify opportunities to produce the information necessary for U.S. GAAP basis financial reporting on an ongoing basis. Conclusion Response accepted.

Science Center of Iowa (SCI) had a 40% workforce reduction in March of 2020 due to the COVID-19 pandemic, in which one full time accounting staff position was eliminated. The existing accounting staffs absorbed the additional workload and focused on the daily operations. SCI partially relied on the annual audit process to make final adjustments in the financial reporting according to U.S. GAAP on accrual basis, such as depreciation calculations and restricted projects expense tracking. However, the internal control of cash handling was never compromised. It has been difficult to take on more accounting duties that required higher skills with the limited resources of the accounting team. Management will review the auditor?s recommendations to identify opportunities to produce the information necessary for U.S. GAAP basis financial reporting on an ongoing basis.