PI 49.08(1)(c)(c) 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. 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.

PI 49.08(1)(d)(d) 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.

PI 49.08(2)(2) Compliance with American Institute of Certified Public Accountants requirements. An auditor engaged by a school to provide the audit opinion in this section shall comply with the auditing standards established by the American Institute of Certified Public Accountants, including all of the following:

PI 49.08(2)(a)(a) The auditor shall develop written audit programs identifying the steps and procedures to be followed in conducting the audit, including establishing the planning materiality that the auditor will use for the audit.

PI 49.08(2)(b)(b) The auditor shall trace all entries on the financial audit and financial audit supplemental schedule to the trial balance provided by the school.

PI 49.08(2)(c)(c) The auditor shall obtain sufficient appropriate audit evidence to conclude that the financial statements do not contain misstatements the effect of which, when aggregated with misstatements in other accounts and transactions, exceeds the planning materiality and results in a material misstatement in the financial statements or in the school’s net eligible education expenses. The auditor shall determine sufficient appropriate audit evidence based on the requirements of the American Institute of Certified Public Accountants.

PI 49.08(3)(a)(a) The standard financial audit shall be prepared in accordance with generally accepted accounting principles.

PI 49.08(3)(b)(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.

PI 49.08(3)(c)(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.

PI 49.08(4)(a)(a) The modified financial audit shall include an audited one-year statement of financial position prepared as required by generally accepted accounting principles.

PI 49.08(4)(b)(b) A school may submit a modified financial audit that includes a modified audit opinion due to post-retirement benefits being excluded from the statement of financial position.

PI 49.08(5)(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:

PI 49.08(5)(a)(a) Any letter issued under the American Institute of Certified Public Accountants Statement on Auditing Standards 114.

PI 49.08(5)(b)(b) Any letter issued under the American Institute of Certified Public Accountants Statement on Auditing Standards 115.

PI 49.08(5)(c)(c) Any other letter to management communicating significant deficiencies or material weaknesses in the internal controls.

PI 49.08 HistoryHistory: EmR1619: emerg. cr., eff. 6-2-16; CR 16-005: cr., Register October 2016 No. 730, eff. 11-1-16; EmR1815: emerg. r. and recr. (1), cr. (3) to (5), eff 7-1-18; EmR1911: emerg. r. and recr. (1), cr. (3) to (5), eff. 7-1-19; CR 19-095: r. and recr. (1), cr. (3) to (5) Register March 2020 No. 771, eff. 4-1-20.

PI 49.09(1)(1) Eligible education expenses. The eligible education expenses included in the financial audit supplemental schedule shall comply with all of the following:

PI 49.09(1)(a)(a) Eligible education expenses may only include those expenses that already have or will result in a cash disbursement.

PI 49.09(1)(b)(b) Eligible education expenses may only include the following:

PI 49.09(1)(b)1.1. 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.

PI 49.09(1)(b)2.2. 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:

PI 49.09(1)(b)2.a.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.

PI 49.09(1)(b)2.b.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.

PI 49.09(1)(c)(c) An expense may only be included as an eligible education expense one time.

PI 49.09(1)(d)(d) If an expense or government assistance revenue is partially related to educational programming, the school shall use an allocation method to determine the portion that is related to educational programming.