SECTION 44. PI 49.07 (3) (f) is amended to read:
PI 49.07 (3) (f) Verify that the total number of pupils attending the school on the official attendance records match the total number of pupils based on the original classroom recordspupil count report under s. PI 49.06 (5) (b) for each grade. SECTION 45. PI 49.07 (3) (h) is repealed.
SECTION 46. PI 49.07 (3) (j) 3., (k), (m), (p), and (t) are amended to read:
PI 49.07 (3) (j) 3. Pupils participating in a program under ss.s. 118.60 or 119.23, Stats. (k) Select a sample of at least 60 pupils not participating in the special needs scholarship program from original classroom records and verify the school included the selected pupils in the pupil count report under s. PI 49.06 (5) (b)official attendance records. The sample shall include pupils from each classroom. If the pupils are in different classrooms during the day, the auditor may select one period and select pupils from each classroom for that period. If the auditor identifies an auditing exception, the auditor shall increase the sample size in increments of 60 pupils until the auditor finds no additional exceptions or until the auditor verifies that all pupils have been properly included in reported enrollments. If the school has an enrollment of fewer than 60 pupils who did not participate in the special needs scholarship program, the auditor shall examine records for all pupils who did not participate in the special needs scholarship program. (m) Verify that any application that has not been counted on a previous count date under s. PI 49.06 (5) (b) meets the requirements of s. PI 49.05 and s. 115.7915 (2), Stats. If the auditor identifies that an application is missing the information required under s. PI 49.05 (4) (a) 2. or 3., the school may correct the application may be corrected if the applicant provides the missing documentation. The missing documentation shall be provided by December 15 for applications accepted by the third Friday in September and by May 1 for applications accepted by the second Friday in January.the due date of the enrollment audit specified under sub. (1) in which the application is required to be reviewed under this subsection. If the missing documentation is not provided by the required date, the application shall be determined ineligible. (p) Verify that the school completed the background checks required under s. PI 49.03 (4) and did not employ or contract any individuals that metcomplied with the requirements under s. PI 49.03 (4) (a) or (b).
(t) Verify that any transfer request that has not been counted on a previous count date under s. PI 49.06 (5) (b), meets the requirements of s. PI 49.05. If the auditor identifies that a transfer request is missing the information required under s. PI 49.05 (5) (b) 2. or 3., the school may correct the transfer request if the applicant provides the missing documentation. The missing documentation shall be provided by the due date of the enrollment audit specified under sub. (1) in which the transfer request is required to be reviewed under this subsection. If the missing documentation is not provided by the required date, the transfer request shall be determined ineligible. SECTION 47. PI 49.07 (3) (u) is created to read:
PI 49.07 (3) (u) If the school operated a summer school program, review all school documentation to support the summer school report the school filed with the department under s. PI 49.16 (5). The review shall be part of the third Friday in September enrollment audit. SECTION 48. PI 49.07 (4) (a) is amended to read:
PI 49.07 (4) (a) Upon review of the enrollment audits, the department shall certify an amount due from a school for payments made to the school for ineligible pupils or an amount due to the school for additional eligible pupils. The certifications shall include any adjustments identified in the financial audit submitted under s. PI 49.08 and PI 49.09 to the actual costs incurred in the reports submitted under s. PI 49.13 (7). If a school fails to providefile an enrollment audit with the department, the department may determine that all special needs scholarship program pupils are ineligible. SECTION 49. PI 49.07 (4) (b) (intro.) is renumbered PI 49.07 (4) (b) and amended to read:
PI 49.07 (4) (b) A school shall refund to the department the amount certified as due to the department as follows:specified under s. PI 49.13 (6). SECTION 50. PI 49.07 (4) (b) 1. and 2. are repealed.
SECTION 51. PI 49.08 (1) is repealed and recreated to read:
PI 49.08 (1) Financial audit requirements. Annually by October 15, a school shall submit a financial audit and financial audit supplemental schedule to the department. The financial audit shall comply with all of the following:
(a) The financial audit shall either include the school-only balances and activity or shall be prepared at the consolidated level as permitted by generally accepted accounting principles.
(b) A school may submit a financial audit that includes a modified audit opinion due to fixed assets purchased in previous years not being included in the financial audit.
(c) The school shall have support for the original purchase price for the fixed assets and evidence that the school paid for the fixed asset purchases in order for the depreciation expense to be an eligible education expense. If any fixed assets are included in the statement of financial position that do not meet these requirements, the financial audit shall include a footnote disclosure that includes the fixed asset amount, accumulated depreciation, and current year depreciation expense for the fixed assets that do not meet the requirements to be included as an eligible education expense.
(d) Except as provided under par. (b) and sub. (4) (b), a financial audit that includes a modified audit opinion does not meet the requirements under s. 115.7915 (6) (e), Stats., and this chapter unless the modification is approved by the department. SECTION 52. PI 49.08 (3), (4), and (5) are created to read:
PI 49.08 (3) Standard financial audit.
(a) The standard financial audit shall be prepared in accordance with generally accepted accounting principles.
(b) Except as provided under par. (c), the standard financial audit shall include 2-year comparative financial statements containing all of the statements required by generally accepted accounting principles, including a statement of financial position, a statement of activities, and a statement of cash flows. Both years of the financial statements shall be audited.
(c) The first year a school completes a standard financial audit for the special needs scholarship program, the statement of activities and statement of cash flows may only include the current school year.
(4) Modified financial audit.
(a) The modified financial audit shall include an audited one-year statement of financial position prepared as required by generally accepted accounting principles.
(b) A school may submit a modified financial audit that includes a modified audit opinion due to post-retirement benefits being excluded from the statement of financial position.
(5) Management letter. The management letter required under s. 115.7915 (6) (e), Stats., shall include all of the following if issued by the auditor: (a) Any letter issued under the American Institute of Certified Public Accountants Statement on Auditing Standards 114.
(b) Any letter issued under the American Institute of Certified Public Accountants Statement on Auditing Standards 115.
(c) Any other letter to management communicating significant deficiencies or material weaknesses in the internal controls.
SECTION 53. PI 49.09 (1) (b) is renumbered 49.09 (1) (b) (intro.) and is amended to read:
PI 49.09 (1) (b) Eligible education expenses may only include the following:
1. In a standard financial audit, expenses that are in the statement of activities, except for the cost of land. The amount that the school paid for land shall be included in the first year the land is used for educational programming using an allocation method under par. (d), if applicable.
SECTION 54. PI 49.09 (1) (b) 2. is created to read:
PI 49.09 (1) (b) 2. In a modified financial audit, expenses that would be included in the statement of activities for the school year based on generally accepted accounting principles except for the following:
a. The amount that the school paid for land shall be included in the first year the land is used for educational programming using an allocation method under par. (d), if applicable.
b. Post-retirement benefits may be included as an eligible education expense based on the amount expended for the post-retirement benefits in the school year.
SECTION 55. PI 49.09 (1) (e) 1., (2), (3) (a) (intro.), 1., 2., 3.b. and 4., (b) 1., 2., and 3.b., (c) 1. and 3. are amended to read:
PI 49.09 (1) (e) 1. Contributed services, capitalfixed assets or goods.
(2) Auditor review of eligible education expenses. An auditor shall ensure the eligible education expenses a school included in the supplemental schedule comply with the requirements under sub. (1) and s. PI 49.08 (1) (c). (3) (a) Net eligible education expenses exclusivelyincurred primarily for special needs scholarship program pupils as follows:
1. Determine the amount of eligible education expenses exclusively forprimarily special needs scholarship program pupilsexpenses. The amount included as an eligible education expense shall be determined using an allocation method specifically related to the expense being allocated. This amount may not include costs included as eligible in any statements provided under s. PI 49.13 (7). 2. Subtract all government assistance revenues received for eligible education expenses exclusively forprimarily special needs scholarship program pupilsexpenses.
3.b. The non-administrative fundraising expenses included in the expenses in subd. 1. In this subdivision, administrative expenses include expenses for school personnel, copying, mailing, or capitalfixed assets used for other school purposes.
4. Subtract all insurance proceeds received for eligible education expenses exclusively forprimarily special needs scholarship program pupilsexpenses.
(b) 1. Determine the amount of eligible education expenses, excluding eligible education expenses in par. (a) and costs included as eligible in any statements provided under s. PI 49.13 (7) incurred in that school year. If an expense is included under par. (a) that is not 100 percent related to special needs scholarship program pupils, the total expense prior to applying the allocation percentage shall be excluded under this subdivision. 2. Subtract all government assistance revenues received for eligible education expenses, excluding eligible education expenses in par. (a) and any offsetting revenue in the statements provided under s. PI 49.13 (7). 3.b. The non-administrative fundraising expenses included in the expenses in subd. 1. In this subdivision, administrative expenses include expenses for school personnel, copying, mailing, or capitalfixed assets used for other school purposes.
(c) 1. Calculate the percentage of pupils at the school participating in the special needs scholarship program as the full-time equivalent for the special needs scholarship program pupils compared to the all pupil full-time equivalent. The full-time equivalents shall be based on the average of the full-time equivalents determined in the enrollment audits under s. PI 49.07. The full-time equivalent for the special needs scholarship program pupils shall exclude pupils that received a payment under s. PI 49.13 (7) in that school year. 3. Add the net eligible education expenses under par. (a) and costs included as eligible in any statements provided under s. PI 49.13 (7) incurred in that school year. SECTION 56. PI 49.09 (3) (c) 4. is created to read:
PI 49.09 (3) (c) 4. Subtract offsetting revenue in the statements provided under s. PI 49.13 (7) for offsetting revenue related to that school year.
