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. PI 35.13(13)(13) Management letter review. An auditor shall review the management letter required under s. 119.23 (7) (am) 2m. a., Stats., and determine whether a school has properly remediated any concerns raised by the auditor in the letter. If the auditor determines a concern has not been properly remediated by the school, the auditor shall include the following in the report: PI 35.13(13)(b)(b) The action the school has taken to remediate the concern. PI 35.13(14)(14) Fiscal and internal control practices report. A school shall engage an auditor to submit a report to the department by December 15 attesting to the school’s compliance or non-compliance with the fiscal and internal control practices required in this section. The report shall meet all of the following requirements: PI 35.13(14)(a)(a) The report shall be prepared in accordance with professional standards and identify the procedures agreed upon by the auditor and the department that were used in determining compliance or non-compliance. In making such a determination, the auditor shall not rely on oral or written representations of the school’s management or staff. PI 35.13(14)(b)(b) If the auditor determines that the school has not complied with the fiscal and internal control practices in subs. (1) to (12), the report shall include a letter from the school describing the reasons for noncompliance and the corrective action the school is taking. PI 35.13 NoteNote: The fiscal and internal control practices report may be obtained at no charge from the Wisconsin department of public instruction’s webpage at http://dpi.wi.gov/sms/choice-programs. PI 35.13 HistoryHistory: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; correction in (1) (intro.) made under s. 35.17, Stats., Register July 2016 No. 727; CR 19-120: am. (2) (intro.), cr. (2) (a) 7., am. (2) (b) (intro.), (4) (a), renum. (4) (c) to (4) (c) (intro.) and am., cr. (4) (c) 1. to 3., r. (10), cr. (10m), am. (14) (b) Register May 2020 No. 773, eff. 6-1-20. PI 35.14PI 35.14 First time participant financial requirements. PI 35.14(1g)(a)(a) “Initial expected payment” means a school’s expected payment amount calculated as the total of the following: PI 35.14(1g)(a)1.1. The full-time equivalent for pupils participating in a program under ss. 118.60 and 119.23, Stats., multiplied by the per pupil payment amount determined under ss. 118.60 (4) and 119.23 (4), Stats. The full-time equivalent for the pupils in this subdivision shall be based on the available seats in each program under ss. 118.60 and 119.23, Stats., in a school’s notice of intent to participate filed under ss. PI 35.03 (3) and 48.03 (3) or the new private school participation information submitted under ss. PI 35.04 (2) and 48.04 (2). PI 35.14(1g)(a)2.2. The expected summer school payment for pupils participating in a program under ss. 118.60 and 119.23, Stats., based on the expected number of choice program pupils that will participate in summer school identified in the school’s notice of intent to participate filed under ss. PI 35.03 (3) and 48.03 (3) or the new private school participation information submitted under ss. PI 35.04 (2) and 48.04 (2). PI 35.14(1g)(b)(b) “Revised expected payment” means a school’s expected payment amount calculated as the total of the following: PI 35.14(1g)(b)1.1. The full-time equivalent for pupils participating in a program under ss. 118.60 and 119.23, Stats., multiplied by the per pupil payment amount determined under ss. 118.60 (4) and 119.23 (4), Stats. The full-time equivalent for the pupils in this subdivision shall be based on the pupils participating in a program under ss. 118.60 and 119.23, Stats., reported in the school’s pupil count report for the third Friday in September required under ss. PI 35.06 (8) and 48.06 (8). PI 35.14(1r)(1r) May 1 requirements. By May 1 of the school year immediately preceding the first school year in which a first time participant school intends to participate in the choice program, a first time participant shall participate in a fiscal management training program approved by the department and fulfill the requirements under sub. (3) or (4). PI 35.14(3)(3) Budget requirement. A school that selects the budget and cash flow report option shall submit to the department all of the following: PI 35.14(3)(a)(a) A budget and cash flow report, on a form provided by the department, for the following school year that contains all of the following: PI 35.14(3)(a)1.1. Anticipated enrollments for all pupils enrolled in the school. PI 35.14(3)(a)7.7. The contingent funding sources the school will use if actual enrollments are less than expected and evidence of the availability of the funding sources. PI 35.14(3)(a)8.8. A statement of whether the school has any past due amounts, interest, or penalties due to the U.S. internal revenue service, the Wisconsin department of workforce development, or the Wisconsin department of revenue. An amount must be disclosed even if it is in dispute. If a school has past due amounts, interest, or penalties due to a government entity, the school shall do all of the following: PI 35.14(3)(a)8.b.b. Submit to the department statements or other correspondence from the government entity stating the amount the government entity claims is due, the amount in dispute, and nature of the amount due. PI 35.14 NoteNote: A budget and cash flow report form may be obtained at no charge from the Wisconsin department of public instruction’s webpage at http://dpi.wi.gov/sms/choice-programs. PI 35.14(4)(4) Bond Requirement. A school that selects the surety bond option shall annually submit a bond payable to the state of Wisconsin equal to 25 percent of the initial expected payment until the school meets all of the requirements in sub. (7). PI 35.14(5)(5) Revised bond. A school that submitted a bond under sub. (4) shall provide a revised bond if the difference between the initial expected payment and the revised expected payment is at least $50,000. The revised bond shall be equal to 25 percent of the revised expected payment. A school shall file the revised bond with the department by the first weekday in November. PI 35.14(6)(6) Bond call provisions. The department may call a bond submitted by a school under this section for any of the following reasons: PI 35.14(6)(c)(c) The school failed to timely refund the department the reserve balance as prescribed under s. 118.60 or 119.23, Stats., this chapter, or ch. PI 48. PI 35.14(6)(d)(d) The school failed to timely refund the department any other money owed to the department for any other reason under s. 118.60 or 119.23, Stats., this chapter, or ch. PI 48. PI 35.14(7)(7) Bond removal requirements. A school that selected the surety bond option the first school year it participated in the choice program must submit a bond by May 1 annually until all of the following apply: PI 35.14(7)(a)(a) The school provides a standard financial audit prepared at the consolidated level as required by generally accepted accounting principles that meets all of the following requirements: PI 35.14(7)(a)1.1. The financial statements are two-year comparative financial statements that include the audit of the full-year financial information for both school years.
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