IDC Error, Reference 2025-003 Audit Finding: For both programs, 50 expenditure transactions were selected for testing. Of these transactions, three that were unallowed under the MTDC definition for the program as stated in the Grant Award Notification were inappropriately charged indirect cost. These transactions totaled $364.32 (TRIO Program Cluster) and $242.87 (GEAR UP) and were charged indirect cost at a rate of 8% for a total indirect cost of $29.15 and $17.57, respectively. Our sample was not, and was not intended to be, statistically valid. Cause of the Finding: The University’s system for tracking costs requires manual review and adjustment, and this review was not completed on a timely basis. This resulted in the charging of inappropriate indirect costs not being corrected during the fiscal year. Effect of the Finding: Unallowable indirect costs were charged to the program and, as such, ED provided excess funding to the University. Corrective Action Plan: To address the errors identified in the IDC funds, the following corrective actions will be taken: 1. Immediate Review and Correction of Existing Data o The IDC errors had already been identified through the University’s monthly reconciliation process, and all corrections were completed by the end of each grant’s period of performance. o The University will continue to review existing processes and work with appropriate internal stakeholders to identify systematic improvements that reduce the need for manual review and adjustment. 2. System and Process Improvements o The University will evaluate its current approach for identifying and correcting unallowable IDC charges to ensure controls operate effectively throughout the year. As part of this review, procedures will be updated to clarify when IDC corrections under $50 per award will be completed, shifting required adjustments from the grant period of performance end date to the fiscal year end to promote consistency and timely resolution. 3. Training for Staff o Grants staff will receive refresher training on the allowability of costs under the Modified Total Direct Cost (MTDC) base, including proper identification of expenditures subject to indirect cost. o Training materials will be documented for reference and future onboarding. 4. Ongoing Monitoring o The University will continue its monthly grant award reconciliation procedures, including a review of MTDC IDC charges, to ensure any unallowable expenditures are identified and corrected promptly. 5. Timeline for Implementation o Updated procedures will be updated by Grant Office staff by February 28, 2026. o Staff training sessions: First session scheduled by February 28, 2026, with periodic refreshers as available. o Ongoing monitoring procedures will continue on a monthly basis. 6. Responsible Parties The Vice President for Finance & Operations and Assistant Vice President of Financial Operations will oversee the implementation of the corrective action plan. Responsible party contact information is located at uco.edu.