After an audit found Douglas County schools owes the state $4.2 million, the Superintendent sent a letter to parents blaming a documentation issue and calling the decision "illogical."
For every student in class, Douglas County School District gets money from the Colorado Department of Education.
But a routine audit of the 2012-2013 and 2013-2014 school years raised red flags about those funds.
"It showed that they were counting students as full-time who were actually part-time," said Dana Smith, a spokeswoman with the Colorado Department of Education.
By state law, full-time students must have 360 hours of instruction every semester, but the audit found more than 1,200 full-time students were short on time.
"Some students were just a little bit short by maybe three hours, and others were over 200 hours short," Smith said.
But in an email to parents, Douglas County Superintendent Liz Fagan blamed a documentation issue and said the state education commissioner had denied an appeal and decided to "unreasonably demand" the $4.2 million back.
"We know the kids were there. It's just a matter of reporting and documenting that," said Kevin Larsen, president of the Douglas County Board of Education.
"I'm not even kidding you, in some cases we're talking kids [who] were falling seconds or even a few minutes short.They graduated with extra hours and went to college. They were full-time students. The remedy is to take it to court," Larsen warned.
But records show the Commissioner of Education Robert Hammond used his discretion to give the district a $1.1 millionr break on penalties, allowing for an alternate calculation and for a three-hour shortage.
But ultimately, Hammond stated that there is evidence the district knew there was a problem and needs to pay back the extra money.
Smith said these types of shortages are not uncommon, but because this is one of the largest school districts in the state, the number of students and hefty price tag is unusual.