City of Upper SanduskyLocal Government

2 CFR § 3002 gives regulatory effect to the Department of Homeland Security for 2 C.F.R. § 200.329(c) which states, in part, reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. The final performance report submitted by the non-Federal entity and/or pass through entity must be due no later than 120 calendar days after the period of performance end date. Due to deficiencies in policies and procedures over reporting compliance we noted the following: • The required Programmatic Performance Report (PPR) for the period of July 1, 2024 through December 31, 2024 was not submitted on the FEMA Go website; • The required Federal Financial Report (SF-425) for the period of January 1, 2024 through June 30, 2024 was not submitted on the FEMA Go website; and • Two of the three required Federal Financial Reports (SF-425) were submitted after the due date (one three days late, one over four months late). Failure to prepare and submit federal grant reports could result in the City not receiving the reimbursements that it is entitled to. The City should implement policies and procedures to help ensure that federal grant reports are completed and submitted by the required date.

2 CFR 1000.10 provides that, except for the deviations set forth elsewhere in this Part, the Department of Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth at 2 CFR Part 200. 2 CFR 200.329(c)(1) states that non-Federal entities must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. 31 CFR 35.4(c) requires recipients, in part, during the period of performance, to provide the Secretary of the U.S. Department of Treasury periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary may require for the administration of this section. The U.S. Department of Treasury provided supplementary information in its interim final rule on reporting requirements for State and Local Fiscal Recovery Funds for 31 CFR Part 35 and provided further guidance in its Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance. The Compliance and Reporting Guidance, part 2 states that counties with a population below 250,000 residents must submit a Project and Expenditure Report by April 30, 2022 and then annually thereafter through the end of the award period on December 31, 2026. The City was required to submit a Project and Expenditure Report by April 30, 2023, to the U.S. Department of the Treasury through the Treasury’s Portal. However, the lack of adequate control procedures in place for reporting resulted in the City failing to submit the required report. Also, the lack of adequate control procedures in place for reporting resulted in the City incorrectly reporting obligated and expense amounts in the report due April 30, 2024, for the activity of April 1, 2023 - March 31, 2024, the City over-reported current period expenditures and current period obligations in the amount of $230,388. Failure to have the proper controls in place to ensure the accurate submission of the Project and Expenditure Reports could result in Treasury taking action against the City for failure to comply with programmatic requirements. The City should implement and have controls in place to ensure the annual Project and Expenditure Reports are accurate.

2 CFR 1000.10 gives regulatory effect to the Department of Treasury for 2 CFR part 200.302. CFR 200.302(a) states, in part, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR 200.302(b)(2) further states, in part, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosures of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Additionally, the Ohio Department of Development (ODOD) Water and Wastewater Infrastructure Program Grant Agreement provides in Exhibit II that "Program reports must be submitted on a quarterly basis. Program reports must be submitted by close of business, on the second Friday at the end of each quarter.” Due to deficiencies in the City’s internal controls over reporting, the City did not submit quarterly program reports for any quarter in 2024. Failure to submit required quarterly program reports could result in the City not receiving the reimbursements that it is entitled to. The City should implement internal controls to ensure that reports are submitted by the required deadlines per reporting requirements.