(a) All applications determined eligible under s. PI 49.05 (4) and (7)(7m) or transfer requests accepted under s. PI 49.05 (5) and (7) that have not previously been submitted to the department. (c) As part of the pupil count report for the third Friday in September, a school shall do all of the following for pupils that participatedsubmitted applications or transfer requests in a previous school year that were determined eligible under s. PI 49.05 and have not withdrawn from the school or the special needs scholarship program in the previous school year: 1.a. The documentation is dated between the third Friday in August and October 1the last weekday in September. If a school receives a lease agreement as a residency document, the lease term includes the third Friday in September.
SECTION 30. PI 49.06 (5) (d) and (e) are created to read:
PI 49.06 (5) (d) A list of the pupils that were enrolled in the special needs scholarship program that are no longer eligible for a scholarship under s. PI 49.05 (8) and have not been previously reported to the department. (e) As part of the pupil count report for the third Friday in September, the school shall provide the school’s start and end date for the current school year.
SECTION 31. PI 49.07 (1) (intro.) and (b), (2), and (3) (a) are amended to read:
PI 49.07 (1) Report completion and submission. A school shall engage an auditor to compile the enrollment audit using agreed upon procedures that identify ineligible pupils for whom the school has received payment under s. 115.7915 (4m) or (4p), Stats., and additional eligible pupils qualifying the school for a payment. 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. A school shall submit an enrollment audit to the department for the following: (b) The second Friday in January enrollment reported under s. PI 49.06 (5) (b). A school shall submit its second Friday in January enrollment audit to the department by the first weekday in May 1. (2) School records. A school shall provide its auditor with the official attendance records and the original classroom records for the auditor’s use in conducting the enrollment audit. The official attendance records shall identify pupils participating in the special needs scholarship program. If the official attendance records are from the school’s student information system, the school may provide a separate report from the student information system that identifies which students are special needs scholarship program pupils.
(3) (a) Determine the school’s process for preparing attendance records and accepting and reviewing applications and transfer requests.
SECTION 32. PI 49.07 (3) (e) is repealed.
SECTION 33. 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 34. PI 49.07 (3) (h) is repealed.
SECTION 35. PI 49.07 (3) (k), (m), (p) and (t) are amended to read:
PI 49.07 (3) (k) Select a sample of at least 60 pupils not participating in the special needs scholarship program from original classroomofficial attendance records and verify the school included the selected pupils in the pupil count report under s. PI 49.06 (5) (b). 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 met the requirements under s. PI 49.03 (4) (a) or (b)(c) 1. or 2. (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) (c) 1. b., 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 36. PI 49.07 (u) is created to read:
PI 49.07 (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 37. 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 38. PI 49.07 (4) (b) 1. and 2. is repealed.
SECTION 39. PI 49.08 (1) is repealed and recreated to read:
PI 49.08 (1) Financial audit requirement. Annually by October 15, a school shall provide 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 provide a financial audit that includes a modified audit opinion due to fixed assets purchased in previous years not being included in the financial audit as follows:
1.
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.2.
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.(c) 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 40. 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 provide 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 41. PI 49.09 (1) (b), (3) (a) (intro.), 1. and 2. and 4., (b) 1., (d) 1., (e) 1., and (4) are 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.
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.
(3) (a) Net eligible education expenses exclusivelyprimarily for special needs scholarship program pupils as follows:
1. Determine the amount of eligible education expenses exclusivelyprimarily for special needs scholarship program pupils. Eligible education expenses primarily for special needs scholarship program pupils shall be at least 50 percent related to special needs scholarship program pupils. The amount included as an eligible education expense shall be determined using an allocation method specifically related to the expense being allocated.
2. Subtract all government assistance revenues received for eligible education expenses exclusivelyprimarily for special needs scholarship program pupils.
4. Subtract all insurance proceeds received for eligible education expenses exclusivelyprimarily for special needs scholarship program pupils.
(b) 1. Determine the amount of eligible education expenses, excluding eligible education expenses in par. (a). 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.
