Governments counted students with disabilities three times before noticing huge variations caused by different states' privacy legislation that could cause funding problems.
Some states had to ask parents to opt-in to the data collection while others had an opt-out rule, a senate committee has been told.
The states are looking at how many students need extra help in the classroom because of their disability, and to what degree, in order to refine school funding levels for 2015.
Poor data could affect how much extra money is available to help children with disabilities.
A fourth round of data collection - the second widespread one - is happening now.
Education department official Martin Hehir told the committee the broad variation in results between states from the widespread collection in 2013 didn't give him "an enormous amount of confidence" in the data.
"One of the factors is some jurisdictions used an opt-in process, so they asked parents if they wanted to participate," he told the committee in Canberra on Friday.
"That will always leave you with a lower collection level."
Committee chairwoman Jacinta Collins, who was the parliamentary secretary for schools for much of the previous government's term, said this was the first she'd heard of such a problem.
"I'm flabbergasted," she told the department officials.
"In all jurisdictions we've already had about three rounds of collection and you're now telling me, ... that oh, oops there was an issue we hadn't realised?"
Mr Hehir said the effect on data quality hadn't been noticeable in the first two, smaller, rounds.
Department associate secretary Tony Cook said each state's privacy laws dictated whether they had to ask parents to opt-in or opt-out.
"The states themselves would have to fundamentally change their privacy legislation," he said.
It's believed the number of students needing extra help at school will jump greatly when all states apply the same definitions from 2015.
If this is the case, the funding shortfall could be about $2 billion.
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