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On Behalf of School in Choice Program, WILL settles with DPI in Audit Dispute
WILL challenged DPI’s mandated audit that cost a school hundreds of thousands of dollars
September 14, 2015, Milwaukee, WI – On behalf of their client, Grace Christian Academy, the Wisconsin Institute for Law & Liberty has reached a settlement with Wisconsin’s Department of Public Instruction over a claim challenging the legal authority of DPI to reject financial audits done by independent certified public accountants. The agreement provides protection to Grace Christian Academy, a private school in the Milwaukee Parental Choice Program, from potential adverse results from the DPI’s prior decision and places Grace Christian Academy in essentially the same position it would be in if its independently certified audit had been accepted by DPI in the first instance.
Before the recently passed state budget, Wisconsin law required private schools in the choice program to submit Financial Information Reports (FIR) to DPI that documented a school’s costs and expenses for educating children. This annual financial audit was completed by an independent, certified public accountant who certified that the school’s report was free of material misstatements and fairly presented the school’s pupil costs.
Grace Christian Academy carefully followed all of those requirements and independent auditors approved the school’s financial statements for the school year 2013-14. But, DPI rejected the report, disputing with the independent auditors whether over $200,000 would be used for educating children. In May 2015, Grace Christian retained WILL to challenge the legal authority of DPI to “audit” the “auditors.”
The settlement was possible based on changes made to state law by the recently enacted state budget in July 2015. This new law substantially curbs DPI’s legal authority to change an independent audit and requires industry-standard GAAP accounting, instead of a Financial Information Report uniquely created by the DPI.
Cindi Hummitzsch, School Administrator of Grace Christian Academy, in response to the settlement, said, “We are pleased that DPI has accepted the settlement, allowing us to use every penny possible to educate children at our school. Grace Christian Academy is grateful for all the hard work done by Representative Dale Kooyenga and the other state legislators who made changes to the state law that paved the way for this agreement.”