The integration of artificial intelligence (AI) tools like ChatGPT into education presents significant opportunities to foster interactive and student-centered learning. This study surveyed 61 educators during an online AI workshop to examine their baseline prompt-design skills, explore their perceptions of student use of ChatGPT, and identify associated challenges and strategic opportunities. Importantly, the six-element prompt design framework was deliberately shared only after data collection, ensuring that the study captured prompt-design abilities at a true baseline without prior intervention, which constitutes a novel contribution of this research. Findings reveal that although most educators expressed enthusiasm for ChatGPT’s potential, there was notable variability in their ability to design effective prompts. Specifically, over 77% of the initial prompts were vague and lacked essential elements such as context, role, or format, indicating a substantial gap in prompt-engineering competence. Some respondents faced difficulties in crafting contextual and specific prompts, while others demonstrated creative uses of ChatGPT to inspire classroom activities and support student discussions. Additionally, ethical concerns, such as plagiarism, overreliance, and the reliability of ChatGPT-generated answers, emerged as critical issues. The study highlights the urgent need for targeted digital literacy training, prompt-design strategies, and institutional policies that promote the ethical and pedagogically sound use of ChatGPT in both physical and online classrooms. These findings provide a unique and timely foundation for guiding AI adoption in education by underscoring the necessity of equipping educators with tailored digital literacy training and clear ethical guidelines, which are critical for fostering innovative, responsible, and context-sensitive teaching practices.