The funds had been used to pay for stays in Indianapolis in recent years and were mistakenly paid through his Senate office account due to staff errors, he told Politico.
"I was unaware of routine staff work over the course of several years where we may have made mistakes," Lugar said. "I'm sorry that I was not more observant."
Politico said Thursday the oversight could have repercussions for Lugar in areas other than his checkbook. Lugar has withstood repeated criticism from political opponents who contend his long tenure in the Senate has nullified his Indiana residency.
Senate rules require members to have a "duty station" in their home states where they live when the Senate is not in session. Senators are not allowed to use office funds to pay for hotel stays during those periods.
The duty station rules come into play for Lugar, Politico said, because he does not own a home back in Indiana even though he lists a place he sold in 1977 as his Hoosier home address.
Lugar's camp has brushed off complaints about his residency and recently ran a campaign ad calling the complaints "Mickey Mouse."