Chapter PI 35

PI 35.14 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; CR 19-120: renum. (1) (intro.), (a) to (c) to (1r), (3) (a) to (c) and, as renumbered, am. (1r), cr. (1g), r. (2), cr. (3) (intro.), (a) 6m., (4) to (11) Register May 2020 No. 773, eff. 6-1-20; correction in (1g) (a) 1., (b) 1. made under s. 35.17, Stats., Register May 2020 No. 773.

PI 35.15 PI 35.15 Lack of financial viability and going concern determinations.

PI 35.15(1) (1) Indicators. Any of the following shall be indicators that a school does not have the ability to continue as a going concern or that the school does not meet the financial viability requirements under s. 119.23 (7) (am) 2m. b. or (7m) (c), Stats.:

PI 35.15(1)(a) (a) The budget and statement of cash flows required under s. PI 35.13 (2) or 35.14 (3) show the school has inadequate revenues and other financial resources to fund current operations, has negative cash flows, has a negative net asset balance, or has a net loss.

PI 35.15(1)(b) (b) The audit opinion statement included in the financial audit, or in a financial audit submitted under s. 115.7915, Stats., contains an emphasis of matter regarding the school’s ability to continue as a going concern.

PI 35.15(1)(c) (c) The school failed to make payments as required under s. PI 35.13 (3) or (4).

PI 35.15(1)(d) (d) The school failed to be current with filings, payments, or withholdings payments required under s. PI 35.13 (6).

PI 35.15(1)(e) (e) The audit reports required under s. PI 35.13 (6) (f) contain questioned costs or compliance findings that may affect the school’s ability to continue.

PI 35.15(1)(f) (f) The school has a negative net asset balance in its financial audit or in a financial audit submitted under s. 115.7915, Stats.

PI 35.15(1)(g) (g) The school has a negative net current obligation in its financial audit, in a financial audit submitted under s. 115.7915, Stats., or in the budget and statement of cash flows required under s. PI 35.13 (2) or 35.14 (3). The net current obligation shall be calculated as the current assets less the current liabilities.

PI 35.15(1)(h) (h) The school has a net loss or negative change in net assets in its financial audit or in a financial audit submitted under s. 115.7915, Stats.

PI 35.15(2) (2) Information to be submitted. A school shall submit to the department any information the department requires to determine the ability of the school to continue financially, including an audit of the school’s legal operating organization prepared in accordance with generally accepted accounting principles. The school shall provide the department authority to speak directly to the U.S. internal revenue service, the Wisconsin department of revenue, or the Wisconsin department of workforce development to determine the school’s compliance with the requirements under s. PI 35.13 (6).

PI 35.15(3) (3) Notification of financial impairments. The school shall promptly notify the department in writing of impairments in the school’s ability to finance its operations.

PI 35.15(4) (4) Notification of ceasing operations. A school participating in the choice program shall notify the department immediately of a decision to cease educational program operations.

PI 35.15(5) (5) Training. Upon the request of the department, a school that has one or more of the indicators in sub. (1) shall attend a fiscal management training approved by the department.

PI 35.15(6) (6) Financial viability review and surety bond requirement.

PI 35.15(6)(a) (a) The state superintendent shall review information submitted under s. 119.23, Stats., and this chapter and determine whether a school is financially viable.

PI 35.15(6)(b) (b) If the state superintendent determines that a school is not financially viable, the state superintendent may require a school to immediately obtain a surety bond. The surety bond shall be made payable to the state of Wisconsin. The purpose of the bond shall be to protect the department and the taxpayers of Wisconsin against loss in the event of any of the following:

PI 35.15(6)(b)1. 1. The school fails to timely file the reports required under s. PI 35.07 (1) or s. 119.23 (7) (am) 2m. a., Stats.

PI 35.15(6)(b)2. 2. The school fails to timely refund any amount certified due from the school under s. PI 35.07 (4).

PI 35.15(6)(b)3. 3. The school fails to timely repay the reserve balance under s. PI 35.10.

PI 35.15(6)(c) (c) The amount of the bond required under par. (b) shall be equal to 25 percent of the total current school year payment amount as determined under s. 119.23 (4) and (4m), Stats.

PI 35.15(6)(d) (d) The bond shall remain in force until all of the following occur:

PI 35.15(6)(d)1. 1. The school has a positive net asset balance for two consecutive school years, as indicated in the school’s financial audit. The net asset balance used for this determination may only include pledge receivables or other receivables for which the school receives cash payments within one year of the date pledged or within one year of the date the amount is included as a receivable.

PI 35.15(6)(d)2. 2. The school has a positive net current obligation for two consecutive school years, as shown by the school’s financial audit. The net current obligation shall be calculated as the current assets less the current liabilities. The asset balance used for this determination may only include pledge receivables or other receivables for which the school received cash payments within one year of the date pledged or within one year of the date the amount is included as a receivable.

PI 35.15(6)(d)3. 3. The school has net income for two consecutive school years, as indicated in the school’s financial audit. The net income used for this determination may only include revenue for which the school receives cash payments within one year of the date pledged or within one year of the date the school includes the amount as revenue.

PI 35.15(6)(d)4. 4. The school pays all amounts owed to the U.S. internal revenue service, Wisconsin department of revenue, and Wisconsin department of workforce development on a timely basis for two consecutive school years, including full payment of any wage claims and past due amounts, interest, and penalties. The school shall submit to the department a letter from each of these entities indicating compliance with this requirement and provide the department the authority necessary to speak directly to these agencies to confirm compliance.

PI 35.15(6)(d)5. 5. The school has paid all vendors and employees as required by s. PI 35.13 (3) and (4) for two consecutive school years.

PI 35.15(6)(d)6. 6. The school’s financial audit does not contain an emphasis of matter or an expression of the auditor’s doubt as to the school’s ability to continue as a going concern for two consecutive school years.

PI 35.15(6)(d)7. 7. If the school’s financial audit does not include all revenues, expenditures, assets, and liabilities of the legal operating organization of the school, the school shall submit to the department financial statements for the school’s legal operating organization prepared in accordance with generally accepted accounting principles that meet all of the following requirements:

PI 35.15(6)(d)7.a. a. The financial statements do not contain a qualified audit opinion or an expression of the auditor’s doubt as to the organization’s ability to continue as a going concern.

PI 35.15(6)(d)7.b. b. The financial statements are two-year comparative financial statements that include the audit of the full-year financial information for the school years in which the requirements in subds. 1. to 6. are satisfied.

PI 35.15(6)(d)7.c. c. The financial statements show that the legal operating organization of the school also meets the requirements under subds. 1. to 5.

PI 35.15(6)(e) (e) If the school is unable to complete the requirements in par. (d) within 5 years from the date the department initially requires a surety bond or if the school’s financial position worsens, the department may terminate the school from the choice program.

PI 35.15(6)(f) (f) Upon the request of the department, a school that is required to provide a surety bond under par. (b) shall do all of the following:

PI 35.15(6)(f)1. 1. Attend fiscal management trainings.

PI 35.15(6)(f)2. 2. Submit to the department budget and cash flow reports and turnaround plans as prescribed by the department.

PI 35.15 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; correction in (1) (intro.), (a), (2) made under s. 35.17, Stats., Register July 2016 No. 727; CR 19-120: am. (1) (intro.), (a), (b), (f) to (h), (6) (b) (intro.), (c), (d) 4. to 6., (e) Register May 2020 No. 773, eff. 6-1-20.

PI 35.16 PI 35.16 Administrator, teacher and teacher aide requirements.

PI 35.16(1) (1) Definitions. In this section:

PI 35.16(1)(a) (a) “Accredited institution of higher education” means an institution that is listed on the U.S. Department of Education Database of Accredited Postsecondary Institutions and Programs.

PI 35.16(1)(b) (b) “Administrator” has the meaning given in s. 119.23 (1) (ae), Stats.

PI 35.16(1)(c) (c) “Teacher” has the meaning given in s. 119.23 (1) (d), Stats.

PI 35.16(1)(d) (d) “Teacher aide” means any individual assisting with educational programming who is not a teacher or volunteer.

PI 35.16(2) (2) Administrator and teacher requirements. Except as provided under s. 119.23 (2) (c), Stats., all administrators and teachers at a school shall comply with the requirements under s. 119.23 (2) (a) 6., Stats., whether they are a paid employee, substitute, independent contractor, or uncompensated volunteer.

PI 35.16(3) (3) Teacher aide requirements. All teacher aides at the school shall comply with the requirements under s. 119.23 (7) (b) 3., Stats., whether they are a compensated or uncompensated employee, substitute, or independent contractor.

PI 35.16(4) (4) Foreign degree transcript evaluation. If an individual requires a bachelor’s degree under s. 119.23 (2) (a) 6., Stats., and has a degree or educational credential from a foreign institution, the individual shall have the degree or educational credential, transcripts, and pattern of training evaluated by one of the following professional evaluation services to determine if the degree or credential is equivalent to a bachelor’s degree from an accredited institution of higher education in the United States:

PI 35.16(4)(a) (a) Educational Credential Evaluators, Inc.

PI 35.16(4)(b) (b) Academic and Credential Records Evaluation and Verification Service.

PI 35.16(4)(c) (c) American Association of Collegiate Registrars and Admissions Officers.

PI 35.16(4)(d) (d) Any other organization members of the National Association of Credential Evaluation Services or the Association of International Credentials Evaluators.

PI 35.16(5) (5) Required documentation. A school shall obtain and retain the following documentation to demonstrate that each administrator and teacher has the credentials required under s. 119.23 (2) (a) 6. a. and b., Stats.:

PI 35.16(5)(a) (a) A copy of the degree or diploma or an official transcript that states the month and year the degree was earned.

PI 35.16(5)(b) (b) If the administrator or teacher has a degree or educational credential from a foreign institution, the school shall obtain a copy of the evaluation report required under sub. (4) and ensure it indicates the individual has the equivalent of a bachelor’s degree or higher from an accredited institution of higher education in the United States.

PI 35.16(5)(c) (c) A copy of the license issued by the department and verification that the license is current from the department website.

PI 35.16 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; correction in (5) (intro.) made under s. 35.17, Stats., Register July 2016 No. 727.

PI 35.17 PI 35.17 Auditor fee.

PI 35.17(1) (1) The department shall annually determine the amount of the nonrefundable fee a school shall pay to the department under s. 119.23 (2) (a) 3., Stats. The department shall calculate the amount of the auditor fee by dividing the cost of the auditor position and unfunded prior year auditor costs, as determined by the department, by the number of schools that are required to submit the information under s. PI 35.06 (8).

PI 35.17(2) (2) Except as provided under s. PI 35.04 (1) (e), a school shall pay the auditor fee with a cashier’s check or another guaranteed manner permitted by the department by January 10 of the year prior to the school year in which the school participates in the choice program.

PI 35.17 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; CR 19-120: am. Register May 2020 No. 773, eff. 6-1-20.

PI 35.18 PI 35.18 Income limit calculation. Annually by the first weekday in December, the state superintendent shall calculate the income and tuition limits for pupil participation in the choice program for the next school year as follows:

PI 35.18(1) (1) Multiply the most recent federal poverty level available from the federal office of management and budget by 3.00 to determine the income limit for pupils participating in the choice program in the next school year.

PI 35.18(2) (2) Multiply the most recent federal poverty level available from the federal office of management and budget by 2.20 to determine the income limit above which a school may charge tuition to choice pupils who are in grades 9 to 12.

PI 35.18 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; CR 19-120: am. (intro.) Register May 2020 No. 773, eff. 6-1-20.

PI 35.19 PI 35.19 State aid payment calculation. The state superintendent shall make the payments under ss. 119.23 (4) and (4m), Stats., to schools participating in the choice program. The state superintendent may withhold payment from a school under ss. 119.23 (4) and (4m), Stats., if the school violates this chapter or s. 119.23, Stats. The state superintendent shall make the payments as follows:

PI 35.19(1) (1) September payment. The state superintendent shall calculate the September payment as the full-time equivalent for the choice program pupils multiplied by the per pupil payment amount determined under s. 119.23 (4), Stats., multiplied by 25 percent. The full-time equivalent for the choice program pupils at the school shall be based on the report filed under s. PI 35.06 (7). The state superintendent may not make a September payment to a school that has ceased instruction prior to the payment date.

PI 35.19(2) (2) November payment. The department shall calculate the November payment as the full-time equivalent for the choice program pupils multiplied by the per pupil payment amount determined under s. 119.23 (4), Stats., multiplied by 50 percent less the September payment received for the pupil. The full-time equivalent for the choice program pupils shall be based on the choice program pupils reported in the school’s pupil count report for the third Friday in September required under s. PI 35.06 (8), unless a pupil is determined ineligible by the department. The November payment shall include any payments due to the school for summer school instruction of choice program pupils in the immediately preceding summer as indicated in the report filed under s. 119.23 (4) (a), Stats., unless otherwise determined ineligible by the department. The department may not make a November payment to a school that has ceased instruction prior to the payment date.

PI 35.19(3) (3) February payment. The department shall calculate the February payment as the full-time equivalent for the choice program pupils multiplied by the per pupil payment amount determined under s. 119.23 (4), Stats., multiplied by 25 percent. The full-time equivalent for the choice program pupils shall be based on the choice program pupils reported in the school’s pupil count report for the second Friday in January under s. PI 35.06 (8), unless a pupil is determined ineligible by the department. The department may not make a February payment to a school that has ceased instruction prior to the payment date.

PI 35.19(4) (4) May payment. The department shall calculate the May payment as the full-time equivalent for the choice program pupils multiplied by the per pupil payment amount determined under s. 119.23 (4), Stats., multiplied by 25 percent. The full-time equivalent for the choice program pupils shall be based on the choice program pupils reported in the school’s pupil count report for the second Friday in January under s. PI 35.06 (8), unless a pupil is determined ineligible by the department. The department may not make a May payment to a school that has ceased instruction prior to the end of its scheduled school term unless the school obtained prior written approval from the department to end the school term early.

PI 35.19(5) (5) Amount due to department. A school shall refund an amount due to the department under this chapter or s. 119.23, Stats., as follows:

PI 35.19(5)(a) (a) If the school is currently eligible to receive choice program payments, the department shall reduce the payments made under s. 119.23 (4) and (4m), Stats., by the amount owed. If reducing a payment made under s. 119.23 (4) and (4m), Stats., is insufficient to pay the amount owed, the school shall pay the remaining amount within 60 days of the date of the notice to the school of the amount due.

PI 35.19(5)(b) (b) If the school is not currently eligible to receive choice program payments, the school shall refund the department within 60 days of the date of the notice to the school of the amount due.

PI 35.19 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16; correction in (intro.) made under s. 35.17, Stats., Register July 2016 No. 727; CR 19-120: am. (1) to (4), cr. (5) Register May 2020 No. 773, eff. 6-1-20.

PI 35.20 PI 35.20 Department authority.

PI 35.20(1) (1) Inquiries. Except as provided under s. 119.23, Stats., the department may make inquiries to ascertain the accuracy and completeness of information contained in audits or reports required under s. 119.23, Stats., or this chapter. Schools and auditors shall promptly respond to inquiries made by the department.

PI 35.20(2) (2) Training. The department may provide training to school staff and auditors. The department may charge a reasonable fee for providing training under this subsection.

PI 35.20(3) (3) Disqualified person. The department may disqualify a person under s. 119.23 (1) (ag), Stats., whether the individual is compensated or uncompensated.

PI 35.20(4) (4) Pupil confidentiality. The department shall maintain pupil confidentiality at all times.

PI 35.20 History History: CR 16-004: cr. Register July 2016 No. 727, eff. 8-1-16.

PI 35.21 PI 35.21 Request for a hearing on department action.

PI 35.21(1) (1) Who may request. A person or school adversely affected by an action of the department under this chapter or s. 119.23, Stats., may request a contested case hearing on that action. A request for a contested case hearing shall be filed with the office of legal services within 14 days of the date of the department’s action.

PI 35.21 Note Note: See s. 227.42, Stats. A request for a contested case hearing may be filed with the office of legal services at the following address:

PI 35.21 Note Office of Legal Services
Wisconsin Department of Public Instruction
125 S. Webster St.
PO Box 7841
Madison, WI 53707-7841

PI 35.21(2) (2) Request form.

PI 35.21(2)(a) (a) A request for a contested case hearing under sub. (1) shall be in writing and shall describe all of the following:

PI 35.21(2)(a)1. 1. The department action on which a hearing is requested.

PI 35.21(2)(a)2. 2. The requester’s substantial interest claimed to be adversely affected.

PI 35.21(2)(a)3. 3. How the department’s action adversely affected the requester’s substantial interest.

PI 35.21(2)(a)4. 4. The grounds for the hearing request, including each of the specific material facts or legal issues that are in dispute. Any material fact or legal issue that is not disputed shall be deemed admitted.