The AG says the district improperly claimed $186,000 in reimbursement on a Medicaid match program that was designed to help students with medical care.
Medicaid reimburses the school for the hours teachers spend helping students and parents access medical services through the Washington HealthCare Authority.
"It's a program like many others that are attached to significant rules," said interim superintendent Steve Warren. "But it doesn't matter how small the piece of the pie, we have to be accountable for every dime and we should be."
Warren says it's not clear if there was a misunderstanding of the program rules listed in the email or a violation of those rules.
A letter from the attorney general office detailing the investigation says the Centralia School District acted "in deliberate ignorance of the truth or falsity of the information' contained in its time study forms, which is sufficient to establish CSD liability."
While Warren acknowledges more training needs to be done for staff using the program, the Centraila School Board agreed to pay $372,000 back to the Washington HealthCare Authority after the investigation -- a fair settlement, Warren says.
He says he's confident his investigation will reveal how and why so much money was improperly claimed.
Meanwhile, the attorney general's office says they hope this case sends a message to all school districts to ensure they comply with the law.