The Windham Northeast Supervisory Union may have misspent more than $1 million in federal special education funds, according to a draft report of the 2004-05 school year put together by the Vermont Department of Education.

The special education audit, which every district in the state is required to complete every few years, is still in the draft form and the damage is expected to be less than the approximately $1.6 million that was discovered by state auditors.

WNESU administrators have been poring through boxes of old records to reconcile the differences, and while WNESU Superintendent Johanna Harpster said she expects some of the money will be accounted for, she also said that the district will likely be penalized.

"The numbers are usually alarming when you first look at them," Harpster said about the special education audits that first come back from the education department. "We are trying to track down the information and get the numbers to a point where they are less alarming."

Vermont Department of Education spokeswoman Jill Remick said districts only have to make up 57 percent of the difference after the two sides settle on a final number.

Remick also said districts are not required to pay the money back, but rather lose future federal special education funding until the misspent money is accounted for.