PI 35.10(1)(e)3.3. Daycare expenses except expenses for before or after school care for kindergarten through grade 12 pupils that are enrolled in educational programming at the school. PI 35.10(1)(e)5.5. Expenses for pupils who are enrolled in the public school district and attending the private school. PI 35.10(2)(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), s. PI 35.09 (1) (c), and the policy established under s. PI 35.13 (5) (h). PI 35.10(3)(3) Supplemental schedule calculations. The supplemental schedule shall calculate all of the following: PI 35.10(3)(a)(a) Net eligible education expenses for all pupils as follows: PI 35.10(3)(a)1.1. Determine the amount of eligible education expenses. This amount shall not include special needs scholarship program excluded expenses. PI 35.10(3)(a)2.2. Subtract all government assistance revenues received for eligible education expenses. This amount shall not include government assistance revenues subtracted in s. PI 49.09 (3) (a) 2. or in the statements provided under s. 115.7915 (4c). PI 35.10(3)(a)3.b.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 fixed assets used for other school purposes. PI 35.10(3)(a)4.4. Subtract all insurance proceeds received for eligible education expenses. This amount shall not include insurance proceeds subtracted in s. PI 49.09 (3) (a) 4. PI 35.10(3)(b)(b) The net eligible education expenses for pupils participating in a program under ss. 118.60 and 119.23, Stats., as follows: PI 35.10(3)(b)1.1. Calculate the percentage of pupils at the school participating in a program under ss. 118.60 and 119.23, Stats., as the full-time equivalent for the pupils participating in a program under ss. 118.60 and 119.23, Stats., 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 ss. PI 35.07 and 48.07. PI 35.10(3)(c)1.1. Determine the total revenue received under ss. 118.60 and 119.23, Stats. Summer school revenue received under ss. 118.60 and 119.23, Stats., shall be included in the school year it is received. PI 35.10(3)(d)(d) The school’s cash and investment balance that shall be maintained under sub. 4 as follows: PI 35.10(3)(d)1.1. Determine the sum of any remaining depreciation on fixed assets used by the school and any land purchases that have not yet been included in eligible cost under sub. (1) (b) that meet the requirements to be included as an eligible education expense. The depreciation under this subdivision shall not include depreciation for leased right of use assets. PI 35.10(3m)(3m) Paycheck Protection Program loans. Notwithstanding sub. (3) (a) 2., the forgiven portion of Paycheck Protection Program loans administered by the U.S. small business administration under 15 USC 636 may not be included as offsetting government assistance revenue in the supplemental schedule. PI 35.10(4)(4) Maintain reserve balance. The school shall maintain the reserve balance, if positive, for future eligible education expenses for choice pupils. The school’s cash and investment balance shall be at least as much as the amount calculated under sub. (3) (d), if positive. If the school is also participating in the program under s. 115.7915, Stats., the cash and investment balance shall be at least as much as the reserve calculated under this chapter and s. PI 49.09 less the sum of any remaining depreciation on fixed assets used by the school and any land purchases that have not yet been included in eligible cost under sub. (1) (b) that meet the requirements to be included as an eligible education expense. The depreciation under this subsection shall not include depreciation for leased right of use assets. If a school fails to maintain a sufficient cash and investment balance, it shall repay the reserve balance to the department as specified under s. PI 35.19 (5). PI 35.10(5)(a)(a) If a school ceases to participate or is barred from participation in all of the programs the school is participating in under ss. 118.60 and 119.23, Stats., it shall submit to the department the financial audit required under s. 119.23 (7) (am) 2m. a., Stats., for the final school year in which it participated. The net eligible education expenses under sub. (3) (a) shall be multiplied by the percent of the school year the school participated in the choice program if the school was not eligible for all of the payments under s. PI 35.19. This percentage shall be calculated as follows: PI 35.10(5)(a)1.1. The net eligible education expenses shall be multiplied by 25 percent if the school was only eligible for the September payment. PI 35.10(5)(a)2.2. The net eligible education expenses shall be multiplied by 50 percent if the school was only eligible for the September and November payments. PI 35.10(5)(a)3.3. The net eligible education expenses shall be multiplied by 75 percent if the school was only eligible for the September, November, and February payments. PI 35.10(5)(b)(b) If a school fails to submit the financial audit, the school’s net eligible education expenses for the year shall be determined to be zero for purposes of determining the school’s reserve balance. PI 35.10(6)(6) Refund of the reserve. If a school ceases to participate or is barred from participating in all of the programs the school is participating in under ss. 118.60 and 119.23, Stats., and the school’s reserve is positive, the school shall refund the reserve balance to the department as specified under s. PI 35.19 (5). PI 35.10 HistoryHistory: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; CR 19-120: renum. (1) (b) to (1) (b) (intro.) and am., cr. (1) (b) 1., 2., am. (1) (e) 1., r. (1) (e) 4., cr. (1) (e) 4m., am. (2), (3) (a) 1., 2., renum. (3) (a) 3. to (3) (a) 3. (intro.) and am., cr. (3) (a) 3. a., b., am. (3) (a) 4., (b) 1., (c) 1., cr. (3) (c) 4., am. (3) (d) 1., (4), renum. (5) to (5) (a) (intro.) and am., cr. (5) (a) 1. to 3., (b), am. (6) Register May 2020 No. 773, eff. 6-1-20; EmR2117: emerg. cr. (3m), eff. 6-12-21; CR 21-046: cr. (3m) Register February 2022 No. 794, eff. 3-1-22. PI 35.11PI 35.11 School financial requirements. PI 35.11(1)(1) Engagement letter. A school shall have a written engagement letter with each auditor providing services required by this chapter. The school or auditor shall provide a copy of the engagement letter to the department upon request. The written engagement letter shall contain all of the following: PI 35.11(1)(a)(a) A statement that the auditor shall comply with generally accepted auditing standards and the requirements of this chapter. PI 35.11(1)(b)(b) A statement that the auditor shall comply with generally accepted governmental auditing standards if other governmental agencies providing funds to the school so require. PI 35.11(1)(c)(c) The responsibilities of the school and the auditor in meeting the requirements of this chapter. PI 35.11(1)(d)(d) The services the auditor provides to the school that are in addition to those audit and attestation services required under this chapter. PI 35.11(1)(e)(e) The auditor’s acknowledgement that the department will rely on the auditor’s work to fulfill the department’s responsibilities under s. 119.23, Stats., and this chapter. PI 35.11(1)(f)(f) The auditor’s compensation for the services the auditor provides to the school. PI 35.11(2)(2) Financial accounting system. A school shall balance the financial accounting system required under s. PI 35.13 (1) and provide the auditor with a trial balance of the account balances. PI 35.11(3)(3) Adjusting entries. Adjustments to the school’s trial balance recommended by a school’s auditor shall be approved by the school before the entries are recorded in the school’s financial accounting system. PI 35.11(4)(4) Records retention. A school shall retain all financial and pupil records 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 school retain the records for more than 5 years. PI 35.11(5)(5) Records availability. A school shall furnish all financial and pupil records the auditor considers necessary to provide the audit opinion or agreed upon procedure reports. Upon request by the department, a school shall provide the department access and copies to the records referenced in the auditor’s working papers. PI 35.11(6)(6) School responsibility. An auditor’s failure to completely or properly perform the responsibilities set forth in s. 119.23, Stats., or this chapter is not a defense to any determination the department makes under this chapter or s. 119.23, Stats. PI 35.11(7)(7) Auditor bar. A school participating in the choice program may not engage an auditor who the department bars under s. PI 35.12 (7), 48.12 (7), or 49.11 (7) until such time as the auditor provides evidence acceptable to the department that the auditor has made procedural changes and has successfully completed professional development training that enables 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 35.11 HistoryHistory: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; correction in (7) made under s. 35.17, Stats., Register July 2016 No. 727; CR 19-120: am. (6) Register May 2020 No. 773, eff. 6-1-20. PI 35.12(1)(1) Independence requirements. An auditor engaged by a school to meet the requirements under this chapter and s. 119.23, Stats., shall comply with the standards of the American Institute of Certified Public Accountants, including all of following: 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:
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