McCoy says the boys were playing "Truth or Dare" when one of the dares was to go up to McCoy's 12-year-old daughter and call her the n-word to her face.

Gerald says the boys were "bold enough to do it" -- and his daughter is devastated.

McCoy says his daughter did NOT get violent -- instead she reported the boys to school officials.

But what pissed Gerald off ... the school never contacted Gerald or his wife. Instead, he learned about the incident from his daughter and had to contact the school to find out how they were handling the situation.

McCoy says the school should have contacted the parents FIRST and then launched the investigation -- instead of the other way around.

"There is no way, shape or form where that was handled properly," McCoy says.

McCoy says the school ultimately decided on a 1-day suspension -- and McCoy is PISSED saying, "A 1-day suspension is not doing anything."

McCoy feels the school was trying to sweep the incident under the rug because they're not taking racism seriously enough ... and he feels it's important to share the story with the public.