City of WaverlyLocal Government

2 CFR § 1000.10 gives regulatory effect to the Department of Treasury for the following sections of 2 CFR 200: 2 CFR § 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.320(b)(2)(ii) requires non-federal entities to have a written method for conducting technical evaluations of the competitive proposals received and for selecting contract recipients. 2 CFR 200.319(d) requires non-federal entities to have written procedures for procurement transactions to ensure all solicitations incorporate a clear and accurate description of the technical requirements for the property, equipment, or service to be procured and identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. The Village was awarded grant monies under the Uniform Guidance (UG); however, the Village did not establish formal written policies required by the UG for the sections listed above. A lack of policies could result in inadequate guidance for individuals to follow and ensure proper compliance. To help ensure compliance with the Uniform Guidance requirements, the Village should establish and maintain timely updated policies and, more importantly, implement procedures as specified by UG requirements for all grant monies received. Any changes to the Village's policies should also be formally approved by Council and documented within the minutes.

31 CFR 19.305(a) states that Non-Federal entities are prohibited from entering into a covered transaction with parties that are suspended or debarred or whose principals are suspended or debarred, unless the Department of the Treasury grants an exception under 31 CFR § 19.120. 31 CFR 19.200 identifies "covered transactions" as nonprocurement or procurement transactions at the primary tier, between a Federal agency and a person; or at the lower tier, between a participant in a covered transaction and another person. A contract for goods and services awarded under a nonprocurement transaction (e.g. grant or cooperative agreement) are covered transactions if the contracts are expected to equal or exceed $25,000 or meet certain other specified criteria outlined in 31 CFR § 19.220. Generally, nonprocurement transactions (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless exempt by 31 CFR § 19.215. When a non-Federal entity enters into a covered transaction, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking SAM exclusions (https://sam.gov/); collecting a certification from the entity, or adding a clause or condition to the covered transactions with that entity. The Village did not have the proper internal controls in place to verify that all entities, with whom the Village had entered into covered transactions, had not been suspended or debarred. During testing of the State Local Fiscal Recovery Fund program, we noted two vendors that had a payment of more than $25,000 in which the Village had no evidence of the vendors being checked for SAM exclusions, collected a certification from the vendor, or added a clause or condition identifying that the vendors were not suspended or debarred. Due to the deficient internal control structure, the required verification was not completed for the covered transaction in the State Local Fiscal Recovery Fund program during Fiscal Year 2024. Failing to have the appropriate controls in place may result in vendors receiving federal funds that are suspended or debarred. The Village should establish and implement internal controls to help ensure that prior to contracting with vendors that will be paid with federal funds, the Village verify the vendor is not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor.

2 CFR § 1000.10 gives regulatory effect to the Department of Treasury for 2 CFR 200.329(c)(1) which states in part, that non-federal entities must submit performance reports at least annually but not more frequently than quarterly. Recipients must use the standard financial reporting forms or such other forms as may be authorized by the Office of Management and Budget (OMB) (approval is indicated by an OMB paperwork control number on the form) when reporting to the Federal awarding agency. Each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency. Due to deficiencies in internal controls over reporting, the following errors were noted: • The Village did not accurately report current expenditures on the Project and Expenditure report in the amount of $218,642. • The Project and Expenditure report for Reporting Period ended March 31, 2025 was also not filed by the required due date. • The Village did not accurately report current expenditures on the Project and Expenditure report in the amount of $25,322 for the reporting period ended March 31, 2025. • In addition to these issues, the Village was also required to submit Program Reports on a quarterly basis by close of business on the second Friday at the end of each quarter and a final project report to be submitted 15 days after the end of the agreement (December 31, 2024) to the Ohio Department of Development (ODOD) for their infrastructure grant. The Village did not submit the reports in a timely manner as they were submitted in November 2025. By not properly filing the required reports with accurate underlying support, the Village is not in noncompliance with the requirements set forth by the U.S. Department of Treasury and requirements set forth by the Ohio Department of Development. This could result in the Treasury not fully being aware of how the Village is utilizing the funding in determining if the Village is following other requirements and using the funding properly. The Village should establish and implement additional controls to ensure all components of reporting federal expenditures are accurately reported in a timely manner.