Section PI 49.08 - Financial audit(1) FINANCIAL AUDIT REQUIREMENTS. Annually by October 15, a school shall submit 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 submit a financial audit that includes a modified audit opinion due to fixed assets purchased in previous years not being included in the financial audit.(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.(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.(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: (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.(b) The auditor shall trace all entries on the financial audit and financial audit supplemental schedule to the trial balance provided by the school.(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.(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 submit 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.Wis. Admin. Code Department of Public Instruction PI 49.08
Adopted by, EmR1619: emerg. cr., eff. 6-2-16; CR 16-005: cr., Register October 2016 No. 730, eff.11/1/2016Amended by, 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. 4/1/2020