Colombia's government has been paying out huge amounts in education subsidies for some 180,000 students who were falsely enrolled, officials say.
Officials said the fraudulent registers included multiple entries for individual pupils, students who never attended lessons or did not even exist.
The scam came to light during an initial audit of registers this year.
Education Minister Maria Fernanda Campo said the loss in state funds could amount to more than $100m (£64m).
Fraudulent lists have been uncovered in different parts of the country.
The attorney general's office is now investigating local education authorities and schools to check enrolment lists and discover where the subsidies have gone.
Ms Campo said the investigations would check that registered pupils "actually exist and are flesh and blood children, not phantom children".
Tough actionShe said areas found to have received funds based on these "phantom lists" would have their budgets docked.
President Juan Manuel Santos on Thursday gave a strong warning that his government was determined to root out corruption.
"Whoever wants to carry on robbing the state, in other words from other Colombians, should know that your days of profiting are numbered," said Mr Santos, who has been in office since August 2010.
In its 2011 report on the perception of corruption, Transparency International gave Colombia 3.4 on a rating going from zero (highly corrupt) to 10 (very clean).
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