PI 35.12(1)(b)(b) An auditor shall obtain the school’s trial balance required under s. PI 35.11 (2) if the auditor is completing compilation or review services. PI 35.12(1)(c)(c) Except as provided in par. (d), an auditor may not post or prepare for posting typical reoccurring financial transactions to the school’s general ledger, including cash receipts and disbursements, invoices or billings for services, billings from vendors and suppliers, and payroll activity. PI 35.12(1)(d)(d) An auditor shall obtain written approval of the school’s management prior to posting adjusting, correcting, and closing journal entries to the school’s general ledger. An auditor’s working papers shall document evidence of management approval for all such entries resulting from a financial statement compilation, review, or audit. PI 35.12(1)(e)(e) If an auditor assists in the preparation of a school’s budget, the auditor shall do all of the following: PI 35.12(1)(e)2.2. Identify that such assistance was provided, if required by the department. PI 35.12(2)(2) Inquiries. An auditor shall promptly respond to inquiries or requests made by the department. The auditor shall notify the school of any inquiries or requests made by the department and the auditor’s response. PI 35.12(3)(3) Working papers retention. An auditor shall retain working papers relating to the enrollment audits under s. PI 35.07, the audit required under ss. PI 35.09 and 35.10, and the report on fiscal and internal control practices under s. PI 35.13 for at least 5 years from the due date of the financial audit, unless the department or a law enforcement agency requests the auditor to retain working papers for more than 5 years. PI 35.12(4)(4) Working papers review. An auditor shall permit the department to review audit working papers prepared in support of the enrollment audits under s. PI 35.07, the audit required under ss. PI 35.09 and PI 35.10, and the report on fiscal and internal control practices under s. PI 35.13. The auditor shall promptly provide copies of working papers the department requests. PI 35.12(5)(5) Auditor peer review report. An auditor completing any of the audits and agreed upon procedure reports under s. 119.23, Stats., or this chapter shall file the auditor’s peer review required under s. 442.087, Stats., with the department within 30 days of the report’s issuance. PI 35.12(6)(a)(a) The auditing firm that is engaged by a school to complete the audits and agreed upon procedure reports under this chapter or s. 119.23, Stats., shall be licensed as a certified public accounting firm by the accounting examining board under ch. 442, Stats. PI 35.12(6)(b)(b) The individual auditor who signs the engagement letter for the audits and agreed upon procedure reports under this chapter or s. 119.23, Stats., shall be a licensed certified public accountant by the accounting examining board under ch. 442, Stats. PI 35.12(7)(a)(a) The department may bar an auditor who fails to timely and properly fulfill the auditing and reporting requirements of this chapter or s. 119.23, Stats. PI 35.12(7)(b)(b) An auditor who is barred under par. (a) shall not complete accounting, auditing, or other reporting requirements for any school participating in a program under ss. 115.7915, 118.60, and 119.23, Stats., until such time as the auditor submits to the department evidence acceptable to the department that the auditor has made procedural changes to the manner in which the auditor conducts an audit and has successfully completed professional development training that will enable the auditor to comply with the requirements of this chapter, chs. PI 48 and 49, and ss. 115.7915, 118.60, and 119.23, Stats. PI 35.12 HistoryHistory: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; correction in (3), (7) (b) made under s. 35.17, Stats., Register July 2016 No. 727; correction in (7) (a) made under s. 35.17, Stats., Register December 2016 No. 732; CR 19-120: am. (5) Register May 2020 No. 773, eff. 6-1-20. PI 35.13PI 35.13 Fiscal and internal control practices. PI 35.13(1)(1) Financial accounting system. A school participating in the choice program shall use a double entry financial accounting system organized in a manner that enables preparation of the audit under ss. PI 35.09 and 35.10 and contains any other information necessary to fiscally manage the school. The accounting system shall identify all sources of funding a school uses in the school’s operation. The accounting system shall identify all of the following if the school receives revenue from the specified source: PI 35.13(1)(a)(a) Revenue from pupils participating in the choice program. PI 35.13(1)(b)(b) Revenue from parents or other privately paid tuition pupils. PI 35.13(1)(c)(c) Revenue from the school district in which the school is located for instruction of pupils enrolled in the school. PI 35.13(1)(d)(d) Revenue from the school district in which the school is located for transportation of the school’s pupils. PI 35.13(2)(2) School budget. A school shall complete all of the following: PI 35.13(2)(a)(a) Annually by June 30, a budget for the following school year that contains all of the following: PI 35.13(2)(a)1.1. Anticipated enrollments for all pupils enrolled in the school. PI 35.13(2)(a)6.6. Identification of the contingent funding sources the school will use should actual enrollments be less than expected. PI 35.13(2)(b)(b) If a school’s actual third Friday in September enrollment for all pupils or for choice program pupils varies by 20 percent or 20 pupils, whichever is less, from the anticipated enrollments the school used in the budget required under par. (a), the school shall, annually by November 1, complete a revised budget containing all of the following: PI 35.13(2)(b)1.1. The information required in par. (a) that reflects revenues resulting from the school’s actual third Friday in September enrollment. PI 35.13(2)(b)2.2. Any other required budget changes related to the change in revenues resulting from the school’s actual third Friday in September enrollment. PI 35.13(3)(3) Expense payment. A school shall pay in full all of the following as required by the written agreement or, if there is no written agreement, within 90 days of the receipt of the invoice or payment request: PI 35.13(3)(b)(b) Reimbursements to employees and other persons for expenses incurred on behalf of the school. A school may only reimburse an employee or other person if the employee or other person submits receipts supporting the reimbursement to the school and the request for reimbursement is made within the time period specified in the school’s written policy for reimbursement. The school shall retain a record of all reimbursements, including supporting receipts. PI 35.13(4)(4) Employee compensation. A school shall do all of the following: PI 35.13(4)(a)(a) Have a signed, written agreement for each employee stating the employee’s compensation. The agreement shall be signed by the employee and a representative of the school before the school makes the first payment to the employee for the school year. PI 35.13(4)(b)(b) Provide each employee with a document that states the dates that the school will pay the employee. The school shall provide a copy of this document to the employee before the school makes the first payment required by the document. PI 35.13(4)(c)(c) Provide a written document to the employee specifying any changes to a document under par. (a) or (b) before any change is effective. The written notification does not need to be signed. If the change is to the compensation for the employee, the written notification shall include all of the following: PI 35.13(4)(c)1.1. The dollar amount of the compensation change or how the compensation change will be calculated. PI 35.13(4)(c)2.2. If the compensation change is a one time amount that will be paid to the employee, the written notification shall specify when the one time compensation payment will be paid. PI 35.13(4)(c)3.3. If the compensation change is an ongoing change, the written notification shall specify the date the ongoing compensation change is effective. PI 35.13(5)(5) Financial internal control system. A school shall have an adequate system of financial internal controls which requires a school to do all the following: PI 35.13(5)(a)(a) Deposit all receipts and pay all disbursements from a depository account maintained solely for the school’s purposes unless the operating organization’s financial accounting system separately identifies the school’s transactions and account balances. The depository account the school or its operating organization uses for school purposes shall be located in the state of Wisconsin. PI 35.13(5)(b)(b) Maintain documentation as to the nature and source of all cash receipts. PI 35.13(5)(c)(c) Use pre-numbered checks for all non-electronic school disbursements except those from a petty cash fund. PI 35.13(5)(d)(d) Maintain invoices and payment requests supporting disbursements. PI 35.13(5)(e)(e) Ensure that no checks or other withdrawals are denied due to insufficient funds. PI 35.13(5)(f)(f) Authorize electronic fund transfers by the school in accordance with a policy established by the school. PI 35.13(5)(g)(g) Reconcile the school’s bank accounts on a monthly basis. PI 35.13(5)(h)(h) Establish a policy indicating what expenses will be included in eligible education expenses and the methods that will be used to allocate any expenses or government assistance revenues that are related to eligible education expenses and other activities. PI 35.13(6)(6) Government agency filings and payments. A school shall be current with all of the following: PI 35.13(6)(a)(a) Filing, payments, and withholdings payment requirements of the U.S. internal revenue service. PI 35.13(6)(b)(b) Filing, payments, and withholdings payment requirements of the Wisconsin department of revenue. PI 35.13(6)(c)(c) Filing and payment requirements of the Wisconsin department of workforce development. PI 35.13(6)(d)(d) Filing and payment requirements of the Wisconsin department of financial institutions. PI 35.13(6)(e)(e) Filing requirements of the Wisconsin department of safety and professional services. PI 35.13(6)(f)(f) Auditing requirements of federal, state, and local government entities. The school shall submit to the department a copy of audit reports issued or revisions of such reports within 30 days of submission to the requiring government agency. PI 35.13(7)(7) Liability insurance. A school shall have insurance coverage 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. A school’s minimum insurance coverage shall be as follows: PI 35.13(7)(b)(b) Commercial general liability insurance in the following amounts unless the coverage amounts are based on a written recommendation of a risk or insurance consultant. PI 35.13(7)(b)1.1. For each occurrence, minimum coverage in the amount of $1,000,000. PI 35.13(7)(c)(c) Umbrella excess liability insurance with an aggregate limit minimum coverage of $5,000,000, unless the coverage amount is based on a written recommendation of a risk or insurance consultant. PI 35.13(7)(d)(d) Auto liability insurance with a combined single limit minimum coverage of $1,000,000 for each accident unless the coverage amount is based on a written recommendation of a risk or insurance consultant. PI 35.13(7)(e)(e) Errors and omissions insurance for school management with an aggregate limit minimum coverage of $1,000,000 unless the coverage amount is based on a written recommendation of a risk or insurance consultant. PI 35.13(7)(f)(f) Sexual misconduct liability insurance with an aggregate limit minimum coverage of $1,000,000 unless the coverage amount is based on a written recommendation of a risk or insurance consultant. PI 35.13(8)(8) School bus. If a school operates or contracts for the operation of school buses with an organization other than a Wisconsin school district, the school or the contracted operator shall have school bus insurance as required under s. 121.53, Stats., and complete the inspections required under s. Trans 300.87. The school may not contract for the school bus operation with an organization other than a Wisconsin school district unless the operator has provided the school with a certificate of insurance meeting the requirements of s. 121.53, Stats., and has completed the inspection report required under s. Trans 300.87. PI 35.13(9)(9) Alternative vehicle pupil transportation. Any motor vehicle, other than school buses, used by a school to provide pupil transportation shall comply with the conditions specified in s. 121.555, Stats. PI 35.13(10m)(a)(a) In this subsection, “license” means a valid license issued by the department under ch. PI 34. PI 35.13(10m)(b)(b) Schools shall conduct criminal background investigations of all employees by completing one of the following: PI 35.13(10m)(b)1.1. Conduct a criminal background check prior to employing any individual at the school and every 5 years after the date of the previous background check. PI 35.13(10m)(b)2.2. Complete all of the following procedures for an individual with a license: PI 35.13(10m)(b)2.b.b. Annually determine that the individual has a license in advance of the employee working for the school term. PI 35.13(10m)(c)(c) The requirements under par. (b) shall be completed for all individuals defined as employees under s. 108.02 (12), Stats., who are directly or indirectly related to educational programming. For the purposes of this paragraph, an individual shall be determined to be directly or indirectly related to educational programming if any of the following apply: PI 35.13(10m)(c)3.3. The individual performs financial, administrative, or academic duties for the school. PI 35.13(11)(11) Fidelity bond. A school shall have a fidelity bond indemnifying the school against loss resulting from dishonesty, malfeasance, or neglect by owners, officers, and employees.
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