Wis. Admin. Code Department of Public Instruction PI 14.03

Current through October 28, 2024

Section PI 14.03 - Minimum standards for audit and standard school district audit contract

(1) DEFINITIONS. In this section:

(a) "Auditor" means the licensed accountant employed by the school board to perform the audit.

(b) "Licensed accountant" means a person licensed as a certified public accountant or a public accountant by the accounting examining board under ch. 442, Stats.

(c) "Uniform grants guidance" means the provisions of the United States office of management and budget, uniform administrative requirements, cost principles, and audit requirements for federal awards under 2 CFR, part 200.

(2) MINIMUM STANDARDS FOR AUDIT.

(a) Under s. 120.14(1), Stats., at the close of each fiscal year, the school board of each common or union high school district shall employ a licensed accountant to audit the school district accounts and certify the audit. The minimum requirements for the audit are as follows:

1. The auditor shall conduct an examination of the basic financial statements including the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the school district for the fiscal year.

2. The auditor's examination shall be made in accordance with all applicable federal laws and regulations and Wisconsin Statutes and administrative rules, including the following:

a. Generally accepted auditing standards as required under s. Accy 1.202. For purposes of the contract under sub. (3), the procedures necessary to comply with the generally accepted auditing standards shall include the applicable procedures outlined by the American institute of certified public accountants in the industry audit guide, audits of state and local governmental units and by the department in the Wisconsin school district audit manual.

b. The standards for financial and compliance audits contained in the standards for audits of governmental organizations, programs, activities, and functions, issued by the comptroller general of the United States.

c. Uniform grants guidance.

3. The financial statements presented in the auditor's report shall comply with generally accepted accounting principles, as promulgated by the governmental accounting standards board, and shall conform to the accounting system prescribed by the department under s. 115.28(13), Stats.

4. The auditor shall express an opinion on the financial statements of all funds covered in the scope of the audit. If the auditor is unable to express an unqualified opinion, the auditor shall state fully the reasons for qualification or disclaimer of opinion. The school district shall correct any deficiency which results in a qualification or disclaimer of opinion.

(b)Independence. The auditor shall maintain independence with respect to the financial statements and the opinion.

(c)Timing, location and conduct of audit work.

1. The school district shall be responsible for the proper recording of transactions in the books of account, for the safeguarding of assets, and for the substantial accuracy of the financial statements. The school district officers shall close and balance all accounts and have the financial statements for all funds and account groups prepared prior to examination by the auditor.

2. The audit shall be conducted on school district premises.

3. The auditor shall observe on school district premises the adequacy of the systems of internal control for all funds of the school district, including those concerned with maintaining compliance with legal provisions related to finance. If material weaknesses are noted, the auditor shall review appropriate recommendations with the appropriate administrator and shall include them in a separate letter to the school board.

4. The auditor shall retain the audit workpapers and reports for at least 3 years from the date of the audit report, unless the auditor is notified in writing by the department or by the United States department of education to extend the retention period. The auditor shall respond directly to inquiries from the department or from the United States department of education, and permit these agencies, upon written request, to review audit workpapers. The auditor shall notify the school board of any such inquiries or requests and of the auditor's response.

(d)Reports. The auditor shall submit to the school board the following reports and shall supply copies for transmittal to the department and other agencies as may be required under applicable statutes or rules:

1. Auditor's report on the school district's financial statements prepared according to generally accepted accounting principles, as promulgated by the governmental accounting standards board, with supplemental information as required by the department or requested by the district.

2. Financial audit statement for the fiscal year.

3. Management letter, commenting on material weaknesses in internal control and identifying possible noncompliance with any legal provisions related to finance with appropriate recommendations.

3m. Auditor's communication with those charged with governance, including any significant findings or issues from the audit.

4. Federal program audit reports and schedules, as appropriate.

5. State program audit reports and schedules, as appropriate.

6. Membership agreed upon procedures report, prepared in accordance with standards for attestation engagements promulgated by the American institute of certified public accountants, if required by the department under s. 115.28(18), Stats.

Note: The following forms are available at no charge from the Department of Public Instruction, School Financial Services Team, P.O. Box 7841, Madison, WI 53707:

PI 1506 Financial Audit Statement

(3) STANDARD SCHOOL DISTRICT AUDIT CONTRACT. The school board may utilize the standard school district audit contract format prescribed by the department in the appendix to this chapter. If the school board does not utilize the format prescribed by the department, it shall ensure that the contract contains all of the provisions in sub. (2) and all of the following provisions:

(a) It shall specify the compensation agreed upon between the school board and the auditor including an estimate as to the total cost of the audit provided by the auditor.

(b) It shall specify terms of payment.

(c) It shall be signed by both of the following:

1. A school district officer who is authorized by the school board to enter into a contractual agreement.

2. The owner or partner of the audit firm.

(4) NONCOMPLIANCE WITH THE MINIMUM STANDARDS FOR AUDIT. Any audit which the department determines is not in compliance with this section shall be referred to the school district for corrective action.

Wis. Admin. Code Department of Public Instruction PI 14.03

Cr. Register, April, 1979, No. 280, eff. 5-1-79; am. Register, July, 1982, No. 319, eff. 8-1-82; r. and recr. Register, May, 1987, No. 377, eff. 6-1-87; renum. (1) (c), (d), (f) and (g) to be PI 14.001(1) to (4), Register, June, 1988, No. 390, eff. 7-1-88; r. (1) (b), (2) (a) 3., and (d) 4.,renum. (2) (a) 4. and 5. to be 3. and 4. and am. 3. as renum., am. (2) (a) 1., 2. a., c., and (d) 1., and renum. (1) (e) to be (1) (b) and (2) (d) 5. to 7. to be 4. to 6., Register, April, 2001, No. 544, eff. 5-1-01.

Amended by, CR 17-056: cr. (1) (c), am. (2) (intro.). (a) 1., 2. c., (c) 3., cr. (d) 3m., am. (d) 6. Register January 2018 No. 745, eff. 2/1/2018

Audits of State and Local Governmental Units may be obtained from the American Institute of Certified Public Accountants, 1211 Avenue of the Americas, New York, NY 10036-8775.

Governmental Accounting and Financial Reporting Standards may be obtained from the Governmental Accounting Standards Board of the Financial Accounting Foundation, High Ridge Park, Stamford, CT 06905-0821.

The Wisconsin School District Audit Manual may be obtained from the Department of Public Instruction, 125 South Webster Street, P.O. Box 7841, Madison, WI 53707.

Standards for Audits of Governmental Organizations, Programs, Activities and Functions by the Comptroller General of the United States may be obtained from Superintendent of Documents, Public Documents Department, U.S. Government Printing Office, Washington, D.C. 20402.

All of the above publications are available for examination at the Department of Public Instruction, School Financial Services Team, 125 South Webster Street, Madison, WI.