Rachel Buckland was accused of using the N-word when referring to a resident while working at Berelands Care Home in Prestwick.
However in a hearing by the Nursing and Midwifery Council, the panel was extremely critical of the quality of the investigation by the home, describing it as "extremely poor".
They said important information had not been accurately recorded.
The NMC was told that at no time was Ms Buckland given the opportunity to comment on the minutes or sign them to confirm their accuracy.
The nurse alleges the accusation was a "witch hunt" by colleagues.