Huh. 

North Carolina.

Why am I not surprised?

http://redspringscitizen.com/news/888/audit-schools-misspent-medicaid-dollars

QuoteThe 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.

"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.

"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."

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 maintainence costs, attorney fees and teacher reimbursements, according to Erica Setzer, the school system's finance officer.

The point should be further underscored that this was an instance in which oversight was actually applied.  In many cases it is not.