Wis. Admin. Code Department of Public Instruction PI 49.04

Current through October 28, 2024

Section PI 49.04 - Financial information and surety bond

(1) DEFINITIONS. In this section:

(a) "Initial expected payment" means a school's expected scholarship payment amount based on the total of the following:

1. The full-time equivalent for pupils expected to participate in the special needs scholarship program multiplied by the per pupil payment amount determined under s. 115.7915(4m), Stats. The full-time equivalent for the pupils in this subdivision shall be based on the number of scholarships identified as available in the school's notice of intent to participate filed under s. PI 49.03(3).

2. The expected summer school payment for pupils participating in the special needs scholarship program based on the expected number of special needs scholarship program pupils that will participate in summer school identified in the school's notice of intent to participate filed under s. PI 49.03(3).

(b) "Revised expected payment" means a school's expected scholarship payment amount calculated as the total of the following:

1. The full-time equivalent for pupils expected to participate in the special needs scholarship program multiplied by the per pupil payment amount determined under s. 115.7915(4m), Stats. The full-time equivalent for the pupils in this subdivision shall be based on the number of scholarships identified as available in a revised school information update form filed under sub. (5).

(1m) FINANCIAL REQUIREMENTS. If a school's initial expected payment is at least $50,000, the school shall do one of the following:

(a) Annually by the first weekday in June prior to the school year, file a bond with the department payable to the state of Wisconsin equal to 25 percent of the initial expected payment.

(b) Annually by the first weekday in March prior to the school year, file financial information with the department that demonstrates that the school has the ability to pay an amount equal to the initial expected payment, including all of the following:

1. A budget and cash flow report, on a form provided by the department, for the following school year that contains all of the following:

a. Anticipated enrollments for all pupils enrolled in the school.

b. Anticipated enrollments for special needs scholarship program pupils.

c. Estimated total revenues and costs.

d. Estimated amounts required under s. PI 49.09(3) (a) and (b).

e. A schedule of anticipated beginning and ending net assets.

f. Anticipated beginning and ending reserve balance.

2. 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:

a. Disclose to the department the outstanding amount owed.

b. File with 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.

3. The most recent balance sheet and income statement for the legal entity of the school.

4. Bank statements for all cash and investment accounts included in the balance sheet required under subd. 3.

5. Any other information required by the department to determine the financial position of the school.

Note: The budget and cash flow report may be obtained at no charge from the Wisconsin department of public instruction's webpage at http://dpi.wi.gov/sms/special-needs-scholarship.

(2) FINANCIAL INFORMATION REVIEW. The department shall review the financial information filed by a school under sub. (1m) (b) and any other information available to the department to determine if the school meets the requirements under s. 115.7915(6) (f) 2, Stats. In making a determination, the department shall remove the special needs scholarship program revenue from the school's budget to determine if any of the following indicators exist:

(a) The school has inadequate revenues and other financial resources to fund current operations in the budget filed under sub. (1m) (b).

(b) The school has negative cash flows in any month in the budget filed under sub. (1m) (b).

(c) The school has a negative net asset balance in the financial audit, or in a financial audit submitted under s. 118.60 or 119.23, Stats., or in the budget filed under sub. (1m) (b).

(d) The school has a negative net current obligation in the financial audit, or in a financial audit submitted under s. 118.60 or 119.23, Stats., or in the budget filed under sub. (1m) (b). The net current obligation shall be calculated as the current assets less the current liabilities.

(e) The school has a net loss or negative change in net assets in the financial audit, or a financial audit submitted under s. 118.60 or 119.23, Stats., or in the budget filed under sub. (1m) (b).

(f) The audit opinion statement included in the financial audit, or a financial audit submitted under s. 118.60 or 119.23, Stats., contains a qualification as to the school's ability to continue as a going concern.

(g) The school failed to make payments to vendors as required by written agreement or, if there is no written agreement, within 90 days of invoice or payment request. The department shall consider this an indicator even if the school has entered into a payment plan with the vendor to pay the past due amount.

(h) The school has past due amounts with government agencies, including payment of employee withholdings. The department shall consider this an indicator even if the school has entered into a payment plan with the government agency to pay the past due amount.

(i) The school failed to pay its employees as required by ch. 109, Stats., or by written agreement with the employee.

(3) INSUFFICIENT FINANCIAL INFORMATION.

(a) Except as provided under par. (b), the department shall determine that a school does not meet the requirements under s. 115.7915(6) (f) 2, Stats., if any of the indicators under sub. (2) exist.

(b) An amount in dispute identified under sub. (2) (g) shall not be considered an indicator under sub. (2) (g) if all of the following are true:

1. The school provided the department with written correspondence between the school and the vendor evidencing that the amount is in dispute.

2. The school has sufficient cash available to pay the amount in dispute.

3. The disputed amount is included in the budget as a current liability and paid in the first month of the budget.

(c) A school that does not meet the requirements under s. 115.7915(6) (f) 2, Stats., shall file a surety bond with the department that meets the requirements under sub. (1m) (a) by the first weekday in June prior to the school year.

(4) BOND CALL PROVISIONS. The department may call a bond filed by a school under this section for any of the following reasons:

(a) The school failed to timely file the report required under ss. PI 49.08 and PI 49.09 or the reports required under s. PI 49.07(1).

(b) The school failed to timely refund the department any amount certified due from the school under s. PI 49.07(4).

(c) The school failed to timely refund the department the reserve balance as prescribed under s. PI 49.09.

(d) The school failed to timely refund the department any other money owed to the department for any other reason under this chapter or s. 115.7915, Stats.

(5) REVISIONS TO NUMBER OF AVAILABLE SCHOLARSHIPS.

(a) A school that filed a bond under sub. (1m) (a) that the department determined met the requirements under s. 115.7915(6) (f) 1, Stats., may revise the number of scholarships available as follows:

1. The school shall file with the department a school information update form with the revised number of scholarships available. The school information update form shall include the expected summer school payment for pupils participating in the special needs scholarship program based on the expected number of special needs scholarship program pupils that will participate in summer school identified in the school's notice of intent to participate filed under s. PI 49.03(3).

2. A school may not accept more special needs scholarship program pupils than indicated on its notice of intent to participate under s. PI 49.03(3) until the school information update form is filed with the department.

3. The school shall file with the department a revised bond if the expected payment increases and the difference between the initial expected payment and the revised expected payment based on the number of scholarships available under subd. 1 is at least $50,000. The revised bond shall be equal to 25 percent of the revised expected payment based on the number of scholarships available under subd. 1. This bond shall be filed with the department by the first weekday in November.

4. After the third Friday in September, a school may not increase the number of scholarships available under this paragraph if either of the following apply:

a. If a bond was not revised under subd. 3., the revised expected payment is at least $50,000 more than the initial expected payment.

b. If a bond was revised under subd. 3., the revised expected payment is at least $50,000 more than the amount calculated under subd. 3.

(b) A school that filed financial information under sub. (1m) (b) that the department determined met the requirements under s. 115.7915(6) (f) 2, Stats, may revise the number of scholarships available as follows:

2. The school shall file a bond with the department if the expected payment increases and the difference between the initial expected payment and the revised expected payment based on the number of scholarships available under subd. 1 is at least $50,000. The bond shall be payable to the state of Wisconsin and be equal to 25 percent of the difference between the initial expected payment and the revised expected payment based on the number of scholarships under subd. 1. This bond shall be filed with the department by the last weekday in August.

3. A school may not accept more special needs scholarship program pupils than indicated on its notice of intent to participate under s. PI 49.03(3) until the bond required under subd. 2. is filed with the department.

4. After the last weekday in August, a school may not increase the number of scholarships available under this paragraph if either of the following apply:

a. If a bond was not filed under subd. 2., the revised expected payment is at least $50,000 more than the initial expected payment.

b. If a bond was filed under subd. 2., the revised expected payment is at least $50,000 more than the amount calculated under subd. 2.

(c) A school that had an initial expected payment of less than $50,000 may revise the number of scholarships available as follows:

2. The school shall file with the department a bond if the expected payment increases and the revised expected payment based on the number of scholarships available under subd. 1 is at least $50,000. The bond shall be payable to the state of Wisconsin and be equal to 25 percent of the revised expected payment based on the number of scholarships available under subd. 1. This bond shall be filed with the department by the last weekday in August.

4. After the last weekday in August, a school may not increase the total number of scholarships available under this paragraph if either of the following apply:

a. If a bond was not filed under subd. 2., the revised expected payment is at least $50,000.

b. If a bond was filed under subd. 2., the revised expected payment is at least $50,000 more than the amount calculated under subd. 2.

(d) A school that files a revised school information update form under this subsection may not remove an available scholarship for which it has already received an application under s. PI 49.05(3) or a transfer request under s. PI 49.05(5) (b) unless the application or transfer request has been determined ineligible.

(e) Pupils that are determined eligible under s. PI 49.05(4) (a) or (5) (c) 1. for whom there is no scholarship available until the requirements in par. (a), (b) or (c) are met shall be placed on the waiting list as specified under s. PI 49.05(4) (c) 2. for applications and s. PI 49.05(5) (c) 2. for transfer requests.

Wis. Admin. Code Department of Public Instruction PI 49.04

Adopted by, EmR1619: emerg. cr., eff. 6-2-16; CR 16-005: cr., Register October 2016 No. 730, eff.11/1/2016

Amended by, EmR1630: emerg. r. (5), eff. 11-1-16; CR 16-066: r. (5) Register April 2017 No. 736, eff. 5/1/2017

Amended by, EmR1815: emerg. r. and recr. (1), cr. (1m), am. (2) (intro.), (a) to (e), (3) (c), cr. (5), eff 7-1-18; EmR1911: emerg. r. and recr. (1), cr. (1m), am. (2) (intro.), (a) to (f), (3) (c), (4) (intro.), cr. (5), eff. 7-1-19; CR 19-095: r. and recr. (1), cr. (1m), am. (2) (intro.), (a) to (f), (3) (c), (4) (intro.), cr. (5) Register March 2020 No. 771, eff. 4/1/2020

The school information update form may be obtained at no charge from the Wisconsin department of public instruction's webpage at http://dpi.wi.gov/sms/special-needs-scholarship.