Wis. Admin. Code Department of Public Instruction § PI 35.045 - Financial reporting requirements and determining costs

Current through November 29, 2021

(1) Annually, by September 1 following a school year of operation under the choice program, a private school participating in the Milwaukee parental choice program shall submit, on a form provided by the department, a financial information report identifying the operating nature of the private school as required under s. PI 35.047(12) (a) and accompanied by the auditor's opinion statement required under s. PI 35.046(1) (a) containing the following information for the previous school year:
(a) Revenues and expenditures for all programs of the private school and the amount attributable to kindergarten through grade 12 educational programs.
(b) A statement of net choice program assets at the start and end of the school year.
(c) Enrollment and full-time equivalent membership for all pupils and for pupils participating in the Milwaukee parental choice program based on audited enrollments required under s. PI 35.04(9).
(d) A statement of cash flows.
(e) Such other information necessary for the fair determination of educational programming cost.
(f) Per pupil cost related to kindergarten through grade 12 educational programming computed on a full-time equivalent membership basis.
(g) The payment adjustment amount resulting from the private school's participation in the Milwaukee parental choice program during the previous school year. The payment adjustment amount shall be determined as follows:
1. The private school's educational programming cost shall be reduced by the following offsetting revenues:
a. Fees charged pupils for books and supplies used in classes and programs.
b. Rentals for school buildings.
c. Food service revenues.
d. Governmental financial assistance revenues.
e. Interest earnings and other income resulting from investment of debt proceeds.
2. The private school's per pupil cost shall be determined by dividing the net eligible educational programming cost determined under subd. 1. by the membership for all pupils enrolled in kindergarten through grade 12 educational programs.
3. The private school's membership of pupils participating in the Milwaukee parental choice program shall be multiplied by the lesser of the amount determined under s. 119.23(4) (b) 2, Stats., or the private school's per pupil cost under s. 119.23(4) (b) 1, Stats. If the result is greater than the amount of the choice program payments retained by the school, an adjustment payment shall be made to the private school within 60 days of the financial information report certified by the department. If the result is less than the amount of the choice program payments retained by the private school, the private school shall refund the amount of any overpayment to the department within 60 days of notification.

Note: The Financial Reporting Form may be obtained at no charge from the Department of Public Instruction, Milwaukee Parental Choice Program, P.O. Box 7841, Madison, WI 53707-7841.

(2) The accrual basis of accounting shall be used in reporting the information required under this section except as follows:
(a) Debt proceeds are included in revenue when received.
(b) Long-term debt principal and interest payments are included in expenditures when payments are due.
(c) Summer school program revenues and expenditures are reported in the fiscal year corresponding to the pupil membership used for program payment purposes.
(d) Withdrawals as salary compensation by individuals with a proprietary interest in the private school shall be included in expenditures only when identified as such on the private school's records and made by check on or before June 30.
(e) Acquisition of capital outlay items are reported in expenditures when acquired.
(3)
(a) Costs requiring allocation between kindergarten through grade 12 educational programming and other programs of the private school shall be made using one or more of the following allocation bases the private school considers most appropriate:
1. Instruction costs may be allocated based on either pupil full-time equivalency or time spent.
2. Student support service costs may be allocated based on either pupil full-time equivalency or time spent.
3. Administration costs may be allocated based on direct program expenditures, time spent, or full-time equivalent employees.
4. Accounting costs may be allocated based on either the number of transactions or time spent.
5. Facility operation and maintenance costs may be allocated based on floor space operated, space occupied over time, or labor hours.
6. Pupil transportation costs may be allocated based on miles driven, pupil miles driven or driver hours.
(b) The following may not be included in kindergarten through grade 12 educational programming cost:
1. Contributed services.
2. Fund raising.
3. Scholarship awards and financial support for pupils to attend the private school, including payments to parents or others on behalf of pupils.
4. Debt principal and interest payments to the private school's owners, sponsoring organization, or another related party as a result of internal financing from other funds of the school or other less-than-an-arms-length transaction. Borrowing from an endowment fund or from individuals serving on a board of directors or in an advisory capacity who do not have a proprietary interest in the school are not subject to the requirements under this subdivision. The interest rate on such borrowings may not exceed the published prime rate on the borrowing date.
5. All loans from an individual to the private school must result in a cash deposit to the school's or operating organization's depository account required under s. PI 35.047(5) (a). Unpaid reimbursements due related parties or employees of the private school shall not be considered a loan.
(4)
(a) The private school shall, for the purpose of computing per pupil cost, charge off non-debt financed capital outlay expenditures as follows:
1. The private school shall annually make an irrevocable election to either charge off all expenditures in each of the following categories entirely as a school year cost or amortize the expenditure over future periods as follows:
a. Media may be amortized over 5 years or 20% annually. Under this subparagraph, media includes consumable instructional and administrative items that are expected to serve their principal purposes for more than a year and includes text and reference books, audio-visual materials, and computer software.
b. Equipment and furnishings may be amortized over 5 years or 20% annually. Under this subparagraph, furnishings includes desks, chairs, and freestanding lockers. Only the additional cost difference between the allowance granted for equipment traded in and the value of new equipment acquired shall be eligible for inclusion in cost calculation.
c. Buildings, sites and improvements may be amortized over 16 years or 6.25% annually. Under this subparagraph improvements include sidewalks, installed playground equipment, landscaping and building components such as lighting fixtures, built-in lockers, heating, ventilating and wiring systems. Only the difference between the amount previously included in cost and the value of the new building acquired shall be eligible for inclusion in cost calculation, if buildings are replaced.
d. Leasehold improvements may be amortized over the remaining lease period.
2. A private school may elect to charge off in accordance with par. (a), the fair market value of existing items in each category as of July 1, 1996, or at the date first participating in the program or re-entering the program. The value of items not so elected to be charged off as a cost may not be eligible for inclusion in cost in future fiscal periods.
(b) Capital outlay items previously included in cost computations may not again be included as a cost by successor ownership of the school, nor upon purchase by or transfer to other private schools participating in the Milwaukee parental choice program.
(c) The private school shall maintain, indefinitely, documentation regarding capital outlay values, expenditures and their use in per pupil cost computation.
(5) A private school participating in the Milwaukee parental choice program for the first time may include in cost calculations start-up costs incurred prior to the start of the fiscal period.

Notes

Wis. Admin. Code Department of Public Instruction § PI 35.045
Emerg. cr. eff. 8-5-98; cr. Register, February, 1999, No. 518, eff. 3-1-99; emerg. am. (1) (e) 3., eff. 1-4-00; am. (1) (e) 3., Register, July, 2000, No. 535, eff. 8-1-00; reprinted to correct error in (1) (e) (intro.), Register, January, 2001, No. 541; emerg. am. (1) (intro.), (c), (e) (intro.) and 3., (4) (b) and (5), eff. 1-28-02; CR 02-023: am. (1) (b), (2) (b) 2., 3., 4., and 6., Register August 2002 No. 560, eff. 9-1-02; CR 04-076: am. (1) (intro.), (b), (c), and (3) (b) 4., renum. (1) (d) and (e) to be (1) (f) and (g) and am. (1) (g) 3., cr. (1) (d), (e) and (3) (b) 5. Register October 2005 No. 598, eff. 11-1-05.

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