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Indiana University to return $440,000 to USAID after audit

June 27, 2016

Indiana University will repay nearly $440,000 to the U.S. Agency for International Development after an audit found improper documentation of how the money was spent, school officials said.

The money involved a $65 million agreement between IU and USAID for a medical training facility in Kenya, IU vice president for research Fred Cate told The Bloomington Herald-Times. The IU School of Medicine formed the partnership with an African medical school to provide health services and conduct research. IU regularly sends doctors, medical students and medical residents to the program.

About $438,600 has to be returned. Most of it, about $330,000, is because IU signed construction contracts for facilities to be built in Kenya before the agreement with the federal government was signed.

"It would be like signing a mortgage on a house before the title cleared," he said. "You can't include those costs."

About $10,000 must be returned because it was spent on travel without prior approval and $20,000 for late payment on construction contracts, Cate said. About $23,000 must be returned because subcontractor work was done abroad instead of locally and $5,000 involves payroll costs, he said.

IU is responsible for about $51,000 of the total amount that needs to be returned. The rest involves subcontractors. But Cate said the school would repay the total because IU is the entity that received the money.

"We said, 'Look, fine, we'll pay those costs ourselves since we can't find documentation for all of them,'" he said.

Cate said the audit and repayments do not involve illegal activity.

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