Institution Name Philander Smith University Fiscal Year Ended June 30, 2025 Federal Program / Assistance Listing Number (ALN) Finding Reference Number 2025-003 1. Finding Summary The auditor noted that the University did not submit is audit reporting package and data collection form to the Federal Audit Clearinghouse within the time frame required. 2. Management’s Position Management agrees with the finding. Management Explanation Management agrees with the finding and acknowledges that the identified condition resulted from staffing vacancies and timing delays in the annual audit caused by limited staff. 3. Root Cause Analysis The root cause was staffing vacancies which has caused the University to fall behind on key reconciliations and month-end close processes. With fewer personnel, existing staff had to take on additional responsibilities which has caused slower turnaround times for day-to-day duties. Although staff are cross-trained where appropriate, vacancies disrupt normal workflows. 4. Corrective Action(s) Management is working to fill vacancies and also further cross-train staff. The University is also considering how to best engage temporary staff based on funding available from vacancies. The University acknowledges that although month-end workflows are in place, monitoring needs to be strengthen, especially during peak times. Finally, the University is investing in a new cloud-based Enterprise Resource Planning (ERP) software designed for higher education institutions, Ellucian Colleague, which should automate more business processes and reconciliations. Description of Corrective Actions The University has recently hired a Controller, a position which has been vacant for some time. The Controller will work to strengthen month-end workflows, staff training, and to fill remaining vacancies. 5. Risk Mitigation (Required — Even if Disagreeing) The University institution recognizes the importance of mitigating compliance risk in this area. Accordingly, the corrective actions described above are designed to reduce the risk of inconsistent documentation, misinterpretation of regulatory requirements, and future audit findings. 6. Responsible Party • Office/Department: Business Office • Title of Responsible Official: Vice President for Fiscal Affairs • Name (optional): _____________________________ 7. Implementation Timeline • Corrective action implemented: ☒ Yes ☐ No • If not fully implemented, expected completion date: December 31, 2026 8. Status of Corrective Action (For Prior-Year or Repeat Findings) ☐ Fully implemented ☐ Partially implemented ☐ Not yet implemented Evidence of Implementation Hiring documentation for the Controller. 9. Monitoring and Sustainability The University will conduct quarterly internal reviews of month-end close commencing the period ending June 30, 2026 to monitor progress with audit preparation which will ensure timely Federal Audit Clearinghouse submission. 10. Management Certification I certify that the information provided above is accurate and represents management’s corrective action plan for the audit finding identified. Signature: ________________________________________________ Name: __LaTonya Hayes_____________________________________ Title: ___Interim CFO_______________________________________ Email: __lhayes@philander.edu_______________________________ Phone: __(501) 370-5341____________________________________ Date: ___9/17/2026__________________________________________