RALEIGH — The Public Schools of Robeson County unknowingly misspent about $3 million in Medicaid reimbursements intended for students with disabilities, according to a report by the Office of the State Auditor.

The report, which was released on Monday, suggests that Robeson County schools aren’t the only ones in the state that failed to spend the money properly because of misinformation provided by the state’s Department of Public Instruction regarding how it should be used.

“Based on information from DPI, the district was not required to use funding for Medicaid reimbursement for the Exceptional Children’s Department only. As a result, some of the funds for Medicaid reimbursement were used to support Exceptional Children and other needs of the district,” interim Superintendent Tommy Lowry said in a letter to the auditor’s office.

According to the report, the school district from 2011 to 2013 received about $1.1 million per year in Medicaid reimbursements to pay for direct and administrative costs associated with services for students with disabilities. About $1 million per year was not used for those purposes, the report said.

Believing it could use the money as needed, the school system added the money into its General Fund and put it towards a range of expenses, including maintenance costs, attorney fees and teacher reimbursements, according to Erica Setzer, the school system’s finance officer.

During the three-year period, the school system reported using $26,780 from Medicaid reimbursements for its Special Olympics Very Special Arts Program, but “did not track specifically how those funds were spent,” the report said.

“Had the district used the Medicaid administrative reimbursements towards providing services to students with disabilities, it could have offered them more of the required services. These required services are designed to meet the unique needs of children with disabilities and prepare them for further education, employment and independent living,” the report said.

Additionally, about $364,000 in Medicaid reimbursements went unclaimed by the school district during that time because it under-reported reimbursable expenses for salary and benefits.

According to the report, the Department of Public Instruction had told school districts the Medicaid reimbursements were unrestricted funds, although it did encourage using the money for students with disabilities.

“Consequently, there is a statewide risk that [Local Education Agencies] are using about $18 million per year in Medicaid administrative reimbursements for purposes other than the benefit of students with disabilities,” the report said.

Lowry’s letter, which is included in the report, says the school district is still seeking guidance on exactly how the money should be spent. The Department of Public Instruction says it will issue a directive by Friday telling all Local Education Agencies to use the reimbursements “solely for students with disabilities.”

The Public Schools of Robeson County will put in place a plan for corrective action by October, Lowry said.

“We will be reaching out to DPI and State Auditor’s Office to help with staff development for Medicaid reimbursement understanding that this is a public school organization and not a system that has knowledge of Medicaid reimbursement,” the letter said.

The Department of Public Instruction is recommending that it monitor how the school system spends Medicaid reimbursements.