OREGON COAST AQUARIUM, INC.Non-Profit

Finding Number: 2021-003 Finding Type: Federal award finding and financial statement finding Federal Assistance Listing No.: 59.075 Program Name: Shuttered Venue Operators Grant Program Federal Agency: U.S. Small Business Administration Pass-Through Entity: n/a Grant Number: n/a Federal Award Year: 2021 Control Deficiency Type: Significant deficiency over compliance and over financial reporting Instance of Noncompliance: No Compliance requirement: Allowable activities/costs Questioned Costs: None Repeat Finding: No Criteria: Costs must be tracked and adequately documented in order to be allowable under federal awards and other awards, as required by allowable cost/cost principles contained in Title 2, U.S. Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, subpart E. The organization should have controls to ensure only allowable costs are charged to the federal awards. In addition, in accordance with 2 CFR 200.510, the organization must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial statements which must include the total federal awards expended. Condition: The SEFA prepared by the organization did not reflect the correct amounts charged to federal awards. Cause: The organization did not have an effective system to track all costs charged to the federal award nor adequate controls and procedures over the preparation of the SEFA. Effect: Noncompliance such as unallowable costs charged to the federal award could occur and not be detected. Also an incomplete SEFA could result in the incorrect federal program(s) being tested as major program(s) or resulting in an incorrect-determination of the requirement for a Single Audit. Questioned Costs: None Audit Recommendation: We recommend that management establish a more robust system to easily identify and track all costs charged to federal awards to ensure that only allowable costs are charged to the federal award. Such a system will also facilitate the accurate preparation of a SEFA. Management?s Response: This was the first time the Aquarium has been subject to the Single Audit, and there was a fundamental misunderstanding over what was required to be reported on the SEFA. The Aquarium reported total annual award amount as opposed to allowable costs, resulting in a misstatement on the schedule. The Aquarium has processes in place to track allowable costs, including grant tracking expense schedules and staff time sheets.