Section 49.04. Financial information and surety bond.

 

(1)   Financial requirements. The department shall calculate the amount of scholarships expected to be received by each school based on the number of pupils included in a school's notice of intent to participate submitted under s. PI 49.03 (3) . If a school expects to receive at least $50,000 in scholarships in the following school year, the school shall do one of the following:

(a) Annually by June 1 prior to the school year, provide a bond payable to the state of Wisconsin equal to 25% of the total amount of scholarships expected to be received by the school during the school year.

(b) Annually by March 1 prior to the school year, submit financial information to the department that demonstrates that the school has the ability to pay an amount equal to the total amount of scholarships expected to be received by the school during the school year, 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.

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. Submit to 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. Submit to the department the most recent balance sheet and income statement for the legal entity of the school.

4. Submit to the department bank statements for all cash and investment accounts included in the balance sheet required under subd. 3.

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

(2)   Financial information review. The department shall review the financial information provided by a school under sub. (1) (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 submitted under sub. (1) (b) .

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

(c) The school has a negative net asset balance in the financial audit or in the budget submitted under sub. (1) (b) .

(d) The school has a negative net current obligation in its financial audit or in the budget submitted under sub. (1) (b) . The net current obligation shall be calculated as the current assets less the current liabilities.

(e) The school has a net operating loss in the financial audit or in the budget submitted under sub. (1) (b) .

(f) The audit opinion statement included in the financial audit 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 provide a surety bond that meets the requirements under sub. (1) (a) by June 1 prior to the school year.

(4)   Bond call provisions. The department may call a bond submitted 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)  Notwithstanding subs. (1) (a) and (3) (c) , a school shall provide a surety bond that meets the requirements under sub. (1) (a) by August 1, 2016, if the school is required to provide a surety bond under this section for the school year ending June 30, 2017.

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

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 . Microsoft Windows NT 6.1.7601 Service Pack 1