diff --git a/src/Api/Controllers/BorrowsController.cs b/src/Api/Controllers/BorrowsController.cs
index ce16fece..43379604 100644
--- a/src/Api/Controllers/BorrowsController.cs
+++ b/src/Api/Controllers/BorrowsController.cs
@@ -252,6 +252,27 @@ public async Task<ActionResult<Result<BorrowDto>>> LostReport([FromRoute] Guid b
         return Ok(Result<BorrowDto>.Succeed(result));
     }
 
+    /// <summary>
+    /// Report found document
+    /// </summary>
+    /// <param name="borrowId">Id of the borrow request to be reported</param>
+    /// <returns></returns>
+    [RequiresRole(IdentityData.Roles.Staff)]
+    [HttpPost("found/{borrowId:guid}")]
+    [ProducesResponseType(StatusCodes.Status200OK)]
+    public async Task<ActionResult<Result<BorrowDto>>> FoundReport([FromRoute] Guid borrowId)
+    {
+        var currentUser = _currentUserService.GetCurrentUser();
+        var command = new ReportFoundDocument.Command()
+        {
+            CurrentUser = currentUser,
+            BorrowId = borrowId,
+        };
+
+        var result = await Mediator.Send(command);
+        return Ok(Result<BorrowDto>.Succeed(result));
+    }
+
     /// <summary>
     /// Get all logs related to requests.
     /// </summary>
diff --git a/src/Application/Borrows/Commands/ReportFoundDocument.cs b/src/Application/Borrows/Commands/ReportFoundDocument.cs
new file mode 100644
index 00000000..1ccb64c9
--- /dev/null
+++ b/src/Application/Borrows/Commands/ReportFoundDocument.cs
@@ -0,0 +1,106 @@
+using Application.Common.Exceptions;
+using Application.Common.Interfaces;
+using Application.Common.Models.Dtos.Physical;
+using AutoMapper;
+using Domain.Entities;
+using Domain.Statuses;
+using MediatR;
+using Microsoft.EntityFrameworkCore;
+using NodaTime;
+
+namespace Application.Borrows.Commands;
+
+public class ReportFoundDocument
+{
+    public record Command : IRequest<BorrowDto>
+    {
+        public User CurrentUser { get; init; } = null!;
+        public Guid BorrowId { get; init; }
+        
+    }
+
+    public class CommandHandler : IRequestHandler<Command, BorrowDto>
+    {
+        private readonly IApplicationDbContext _context;
+        private readonly IMapper _mapper;
+        private readonly IDateTimeProvider _dateTimeProvider;
+
+        public CommandHandler(IApplicationDbContext context, IMapper mapper, IDateTimeProvider dateTimeProvider)
+        {
+            _context = context;
+            _mapper = mapper;
+            _dateTimeProvider = dateTimeProvider;
+        }
+        
+        public async Task<BorrowDto> Handle(Command request, CancellationToken cancellationToken)
+        {
+            var borrowRequest = await _context.Borrows
+                .Include(x => x.Borrower)
+                .Include(x => x.Document)
+                .ThenInclude(x => x.Folder!)
+                .ThenInclude(x => x.Locker)
+                .ThenInclude(x => x.Room)
+                .FirstOrDefaultAsync(x => x.Id == request.BorrowId, cancellationToken);
+            
+            if (borrowRequest is null)
+            {
+                throw new KeyNotFoundException("Borrow request does not exist.");
+            }
+
+            var staff = await _context.Staffs
+                .Include(x => x.Room)
+                .FirstOrDefaultAsync(x => x.Id == request.CurrentUser.Id, cancellationToken);
+            
+            if (staff is null)
+            {
+                throw new KeyNotFoundException("Staff does not exist.");
+            }
+            
+            if (staff.Room is null)
+            {
+                throw new ConflictException("Staff does not have a room.");
+            }
+
+            // Staff cant report lost documents from other department 
+            if (staff.Room.Id != borrowRequest.Document.Folder!.Locker.Room.Id)
+            {
+                throw new ConflictException("Request cannot be checked out due to different room.");
+            }
+
+            if (borrowRequest.Document.Status is not DocumentStatus.Lost)
+            {
+                throw new ConflictException("Document is not lost.");
+            }
+            
+            if (borrowRequest.Status is not BorrowRequestStatus.Lost)
+            {
+                throw new ConflictException("Request is not lost.");
+            }
+            
+            // Get borrows for the lost document which are not processable 
+            var borrowsForDocument = _context.Borrows
+                .Include(x => x.Document)
+                .Where( x => x.Id != request.BorrowId 
+                             && x.Document.Id == borrowRequest.Document.Id 
+                             && x.Status == BorrowRequestStatus.NotProcessable);
+            
+            var localDateTimeNow = LocalDateTime.FromDateTime(_dateTimeProvider.DateTimeNow);
+            
+            foreach (var borrow in borrowsForDocument)
+            {
+                if (borrow.DueTime < localDateTimeNow)
+                {
+                    borrow.Status = BorrowRequestStatus.Pending;
+                }
+            }
+
+            borrowRequest.Status = BorrowRequestStatus.Returned;
+            borrowRequest.Document.Status = DocumentStatus.Available;
+            borrowRequest.ActualReturnTime = localDateTimeNow;
+            
+            var result = _context.Borrows.Update(borrowRequest);
+            await _context.SaveChangesAsync(cancellationToken);
+            return _mapper.Map<BorrowDto>(result.Entity);
+        }
+    }
+}
\ No newline at end of file