PI 35.045(4)(a)1.
1. The private school shall annually make an irrevocable election to either charge off all expenditures in each of the following categories entirely as a school year cost or amortize the expenditure over future periods as follows:
PI 35.045(4)(a)1.a.
a. Media may be amortized over 5 years or 20% annually. Under this subparagraph, media includes consumable instructional and administrative items that are expected to serve their principal purposes for more than a year and includes text and reference books, audio-visual materials, and computer software.
PI 35.045(4)(a)1.b.
b. Equipment and furnishings may be amortized over 5 years or 20% annually. Under this subparagraph, furnishings includes desks, chairs, and freestanding lockers. Only the additional cost difference between the allowance granted for equipment traded in and the value of new equipment acquired shall be eligible for inclusion in cost calculation.
PI 35.045(4)(a)1.c.
c. Buildings, sites and improvements may be amortized over 16 years or 6.25% annually. Under this subparagraph improvements include sidewalks, installed playground equipment, landscaping and building components such as lighting fixtures, built-in lockers, heating, ventilating and wiring systems. Only the difference between the amount previously included in cost and the value of the new building acquired shall be eligible for inclusion in cost calculation, if buildings are replaced.
PI 35.045(4)(a)1.d.
d. Leasehold improvements may be amortized over the remaining lease period.
PI 35.045(4)(a)2.
2. A private school may elect to charge off in accordance with
par. (a), the fair market value of existing items in each category as of July 1, 1996, or at the date first participating in the program or re-entering the program. The value of items not so elected to be charged off as a cost may not be eligible for inclusion in cost in future fiscal periods.
PI 35.045(4)(b)
(b) Capital outlay items previously included in cost computations may not again be included as a cost by successor ownership of the school, nor upon purchase by or transfer to other private schools participating in the Milwaukee parental choice program.
PI 35.045(4)(c)
(c) The private school shall maintain, indefinitely, documentation regarding capital outlay values, expenditures and their use in per pupil cost computation.
PI 35.045(5)
(5) A private school participating in the Milwaukee parental choice program for the first time may include in cost calculations start-up costs incurred prior to the start of the fiscal period.
PI 35.045 History
History: Emerg. cr. eff. 8-5-98; cr.
Register, February, 1999, No. 518, eff. 3-1-99; emerg. am. (1) (e) 3., eff. 1-4-00; am. (1) (e) 3.,
Register, July, 2000, No. 535, eff. 8-1-00; reprinted to correct error in (1) (e) (intro.),
Register, January, 2001, No. 541; emerg. am. (1) (intro.), (c), (e) (intro.) and 3., (4) (b) and (5), eff. 1-28-02;
CR 02-023: am. (1) (b), (2) (b) 2., 3., 4., and 6.,
Register August 2002 No. 560, eff. 9-1-02;
CR 04-076: am. (1) (intro.), (b), (c), and (3) (b) 4., renum. (1) (d) and (e) to be (1) (f) and (g) and am. (1) (g) 3., cr. (1) (d), (e) and (3) (b) 5.
Register October 2005 No. 598, eff. 11-1-05.
PI 35.046
PI 35.046
Financial audit requirements. PI 35.046(1)
(1) A private school under this chapter shall do all of the following:
PI 35.046(1)(a)
(a) Annually by September 1 following a school year in which the private school participated in the choice program, the private school shall submit to the department an independent financial audit of the private school conducted by a certified public accountant accompanied by the auditor's opinion statement that the financial information report required under
s. PI 35.045 is free from material misstatement and the private school's per pupil cost and any payment adjustment is fairly presented. The audit under this subdivision shall be limited in scope to those records that are necessary for the department to make payments under s.
119.23 (4) and
(4m), Stats.
PI 35.046(1)(b)
(b) Have a written engagement agreement, a copy of which shall be provided to the department upon request, with any auditor providing services required by this chapter. The written agreement shall contain all of the following:
PI 35.046(1)(b)1.
1. A statement that the auditor shall comply with generally accepted auditing standards and the requirements of this chapter. The written agreement shall also specify that the auditor shall comply with generally accepted governmental auditing standards if required by other government agencies providing funds to the private school.
PI 35.046(1)(b)2.
2. The responsibilities of the private school and the auditor in meeting the requirements of this chapter.
PI 35.046(1)(b)3.
3. Any other services in addition to those required by this chapter that the auditor is providing to the private school.
PI 35.046(1)(b)4.
4. The auditor's acknowledgement that the auditor is aware that the department will rely on the work of the auditor in fulfilling its requirements under this chapter.
PI 35.046(1)(b)5.
5. The auditor's compensation for the services the auditor is providing the private school.
PI 35.046(1)(c)
(c) Balance the financial accounting system required under
s. PI 35.047 (1) and provide the auditor with a trial balance of account balances.
PI 35.046(1)(d)
(d) Furnish all other financial and pupil records the auditor considers necessary to provide the audit opinion statement.
PI 35.046(1)(e)
(e) Approve adjusting entries recommended by the auditor recorded in the private school's financial accounting records.
PI 35.046(1)(f)
(f) Retain all financial records relating to the report required under
s. PI 35.045 for at least 3 years from the date of the department's certification of the financial information report under
s. PI 35.045 (1) (g) 3. unless required to retain such records longer by the department or a law enforcement agency.
PI 35.046(1)(g)
(g) Provide the department access to original records referenced in the auditor's working papers and provide copies as requested by the department.
PI 35.046(2)
(2) The auditor engaged by the private school to provide the opinion statement under
sub. (1) shall develop a written audit program identifying the steps and procedures followed in conducting the audit. The audit program shall include all the procedures specified in
sub. (3) and such other procedures agreed upon by the auditor and the department, and any other procedures the auditor considers necessary to fulfill professional responsibilities. The auditor shall retain working papers relating to audits under this section at least 3 years from the date of the department's certification of the financial information report under
s. PI 35.045 (1) (g) 3. unless requested to retain the working papers longer by the department or a law enforcement agency.
PI 35.046(3)(a)(a) The auditor shall determine that the financial report is free from material misstatement by performing procedures that in the auditor's judgment, provide reasonable assurance that the report does not contain misapplications of accounting requirements, departures from fact, or other errors or omissions. The auditor, in performing audit procedures to determine the report required under
s. PI 35.045 (1) is free from material misstatement, shall consider account balances and total non-payroll related transactions with any one party to be significant if they exceed the following:
PI 35.046(3)(a)1.
1. If the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g) is less than $100,000, the variance limitation shall be 4% of the reported costs.
PI 35.046(3)(a)2.
2. If the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g) is at least $100,000 but less than $1,000,000, the variance limitation shall be 2% of the reported costs.
PI 35.046(3)(a)3.
3. If the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g) is at least $1,000,000 but less than $3,000,000, the variance limitation shall be 1.5% of the reported costs.
PI 35.046(3)(a)4.
4. If the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g) is at least $3,000,000 but less than $5,000,000, the variance limitation shall be 1% of the reported costs.
PI 35.046(3)(a)5.
5. If the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g) is at least $5,000,000 but less than $10,000,000, the variance limitation shall be .7% of the reported costs.
PI 35.046(3)(a)6.
6. If the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g) is at least $10,000,000, the variance limitation shall be .5% of the reported costs.
PI 35.046(3)(b)
(b) The auditor shall consider accounts with a balance equal to at least 75% and individual transactions equal to at least 20% of the variance limitation amount determined under
par. (a) as being significant and shall perform tests of those accounts and transactions along with other procedures considered necessary to conclude that the accounts and transactions do not contain misstatements whose effect, when aggregated with misstatements in other accounts and transactions, would exceed the variance limitation identified under
par. (a) and result in a material misstatement in the private school's net eligible educational programming cost as determined under
s. PI 35.045 (1) (g).
PI 35.046(3)(d)
(d) The auditor shall perform all of the following regarding the private school's cash and investment balances:
PI 35.046(3)(d)1.
1. Confirm the private school's cash and investment account balances with depositories.
PI 35.046(3)(d)2.
2. Prepare or obtain and examine a reconciliation of confirmed cash and investment account balances to the private school's accounting records. The reconciliation shall include all of the following:
PI 35.046(3)(d)2.a.
a. Depository balances at the beginning of the fiscal period reconciled to the private school's accounting records.
PI 35.046(3)(d)2.b.
b. Receipts per depository statement reconciled to the private school's accounting records.
PI 35.046(3)(d)2.c.
c. Disbursements per depository statements reconciled to the private school's accounting records.
PI 35.046(3)(d)2.d.
d. Depository balances at the end of the fiscal period reconciled to the private school's accounting records.
PI 35.046(3)(e)
(e) Prepare or obtain and examine a reconciliation of payroll withholdings to remittances to authorized agencies or taxing authorities.
PI 35.046(4)
(4) The auditor engaged under this section shall comply with the requirements of
s. Accy 1.101, and with all of the following:
PI 35.046(4)(a)
(a) An auditor providing financial statement compilation or review services to the private school may not perform the audit under
sub. (1) (a) unless the private school makes available a trial balance, based on the school's general ledger established as part of financial accounting system under
s. PI 35.047 (1), for the compilation or review services.
PI 35.046(4)(b)
(b) An auditor that performs the audit under
sub. (1) (a) or compilation or review services under
par. (a) may not post, or prepare for posting, original or source document transactions such as cash receipts and disbursements, invoices or billings for services, billings from vendors and suppliers, payroll activity and other typical reoccurring financial transactions to the private school's general ledger.
PI 35.046(4)(c)
(c) The auditor may prepare and post adjusting, correcting, and closing journal entries to the private school's general ledger that have the written approval of the private school's management. The auditor's working papers shall document evidence of management approval for all such entries resulting from financial statement compilation, review or audit.
PI 35.046(4)(d)
(d) The auditor may assist in the preparation of the budget required under
s. PI 35.047 (2) (b). In providing assistance, the auditor shall comply with
s. Accy 1.201, regarding forecasts, and shall identify as required by the department, that such assistance was provided.
PI 35.046(5)
(5) The auditor engaged under
sub. (1) (a) shall evaluate whether there is substantial doubt about the private school's ability to continue as a going concern for a reasonable period of time. If after considering identified conditions and events and plans of the private school's management, the auditor concludes that substantial doubt about the private school's ability to continue as a going concern for a reasonable period of time remains, the auditor's report shall include an explanatory paragraph in the opinion statement required under
sub. (1) (a) to reflect that conclusion.
PI 35.046 History
History: Emerg. cr. eff. 8-5-98; cr.
Register, February, 1999, No. 518, eff. 3-1-99; emerg. am. (1) (b), (2) (b) 2. to 4. and 6., eff. 1-28-02;
CR 02-023: am. (1) (b), (2) (b) 2., 3., 4. and 6.,
Register August 2002 No. 560, eff. 9-1-02;
CR 04-076: r. and recr.
Register October 2005 No. 598, eff. 11-1-05.
PI 35.047(1)
(1) A private school under this chapter shall use a double entry financial accounting system that is organized in such a manner that it will enable preparation of the report required under
s. PI 35.045 (1) and provide such other information to fiscally manage the private school. The accounting system shall identify all the sources of funding used in the private school's operation specifically identifying all of the following:
PI 35.047(1)(a)
(a) Revenue for pupils participating in the choice program.
PI 35.047(1)(b)
(b) Revenue for parent or other private-paid tuition pupils.
PI 35.047(1)(c)
(c) Revenue from payments made to or due the private school from the school district for instruction provided pupils enrolled in the private school.
PI 35.047(1)(d)
(d) Revenue from payments made to or due the private school from the school district for transportation of the private school's pupils.
PI 35.047(1)(e)
(e) Revenue from federal, state and local governments for instructional programs, food service and facility acquisition.
PI 35.047(2)(a)(a) Except as specified under
par. (b), annually, prior to the start of the private school's fiscal period, the administrator of the private school shall prepare a budget for the ensuing fiscal period showing anticipated enrollments for all pupils enrolled in the school and for choice program pupils, estimated revenues and costs, and a schedule of anticipated beginning and ending net choice program assets. The budget shall identify contingent funding sources the private school will use should actual enrollments be less than expected.
PI 35.047(2)(b)
(b) A private school filing an initial notice of intent to participate in the choice program under
s. PI 35.03 (1) shall, by the following May 1, submit to the department the information required in
par. (a) along with a schedule of monthly cash flow requirements on a form provided by the department.
PI 35.047(2)(c)
(c) A private school that participated in the program under this chapter in the immediately preceding school year shall revise the information required in
par. (a) to reflect revenues resulting from the school's actual third Friday in September enrollment and related required budget changes if the actual third Friday in September enrollment for all pupils or for choice program pupils varies by 20% or 20 pupils, whichever is less, from the anticipated enrollments used in the budget required under
par. (a).
PI 35.047(2)(d)
(d) A private school filing an initial notice of intent to participate in the choice program under
s. PI 35.03 (1), shall submit to the department by the following November 1, on a form provided by the department, a budget as required in
par. (a) reflecting the school's actual third Friday in September enrollments and any related changes in revenues, costs and monthly cash flow requirements.
PI 35.047(3)
(3) A private school shall make payment of all the following within 90 days of receipt of invoice or payment request or as per written agreement:
PI 35.047(3)(b)
(b) Reimbursements to employees and other individuals for expenses incurred on behalf of the private school. The employee or related party shall request reimbursement within the time period specified by the private school's written policy for such reimbursement. All reimbursements shall be made on the basis of original receipts that shall be retained by the private school in support of the paid reimbursement.
PI 35.047(4)
(4) A private school shall make payments to employees based on written documents specifying compensation and dates for payment. The private school shall provide this information to any employee requesting it.
PI 35.047(5)
(5) A private school shall have an adequate system of financial internal controls that includes all of the following:
PI 35.047(5)(a)
(a) Depositing all receipts and paying all disbursements from a depository account or accounts maintained solely for the private school's purposes unless the operating organization's financial accounting system provides for separate identification of the private school's revenue and expenditure transactions. The depository account or accounts used by the private school or those used by its operating organization for school purposes shall be located within the state of Wisconsin.
PI 35.047(5)(b)
(b) Maintaining documentation as to the nature and source of all cash receipts.
PI 35.047(5)(c)
(c) Depositing intact and separate from all other receipts of the school, payments received for choice program pupils. The private school shall maintain a record of the deposit date for all individual payments received for the choice program pupils.
PI 35.047(5)(d)
(d) Using pre-numbered checks for all school disbursements, except those from a petty cash fund.
PI 35.047(5)(e)
(e) Maintaining on file original invoices and payment requests supporting disbursements.
PI 35.047(5)(f)
(f) Using internal control practices recommended in previous fiscal practices reports required under
sub. (13).
PI 35.047(6)
(6) A private school or its operating organization shall be current with all of the following:
PI 35.047(6)(a)
(a) Filing and withholdings payment requirements of the federal internal revenue service. If the private school or its operating organization is required to file annual information return form 990 or form 990-EZ, a copy of the information in the filed return identified as available for public inspection by the federal internal revenue service shall be provided to the department by the private school within 30 days after filing.
PI 35.047(6)(b)
(b) Filing and withholdings payment requirements of the Wisconsin department of revenue.
PI 35.047(6)(c)
(c) Filing requirements of the Wisconsin department of workforce development.
PI 35.047(6)(d)
(d) Filing requirements of the Wisconsin department of financial institutions.
PI 35.047(6)(e)
(e) Filing requirements of the Wisconsin department of safety and professional services.
PI 35.047(6)(f)
(f) Auditing requirements of federal, state and local government agencies. The private school shall provide the department with a copy of audit reports issued or revisions within 30 days of submission to the requiring government agency.
PI 35.047(7)
(7) A private school shall have worker's compensation coverage and shall have liability and errors and omissions insurance coverage for incidents resulting from omissions or actions of the private school's owners, directors or employees. Coverage shall be provided by an insurance company licensed to do business in the State of Wisconsin or by a non-profit, tax exempt mutual protective organization covering risks of schools of, and controlled by, a religious denomination. All coverage shall be on an occurrence form or a claims made basis. Minimum coverage shall be as follows:
PI 35.047(7)(b)
(b) Commercial general liability in the following amounts unless the coverage amounts are based on a written or documented verbal recommendation of a risk or insurance consultant.
PI 35.047(7)(b)1.
1. For each occurrence, minimum coverage in the amount of $1,000,000.
PI 35.047(7)(c)
(c) Umbrella excess liability, an aggregate limit minimum coverage of $5,000,000, unless the coverage amounts are based on a written or documented verbal recommendation of a risk or insurance consultant.
PI 35.047(7)(d)
(d) Auto liability, a combined single limit minimum coverage of $1,000,000 for each accident unless the coverage amount is based on a written or documented verbal recommendation of a risk or insurance consultant.
PI 35.047(7)(e)
(e) Errors and omissions for school leaders, an aggregate limit minimum coverage of $1,000,000 unless the coverage amount is based on a written or documented verbal recommendation of a risk or insurance consultant.
