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‘Crazy’ audit process for choice schools in Milwaukee may finally end

By   /   September 29, 2015  /   News  /   No Comments

The Wisconsin Department of Public Instruction‘s audit program for schools in the Milwaukee Parental Choice Program has been called “crazy,” but changes included in the recent state budget may finally bring some sanity to the program.

“I’ve been a CPA for 25 years and I’ve never seen anything like DPI’s approach to the audits of choice schools,” Noel Williams told Wisconsin Watchdog.

Williams, managing partner of Williams CPA in Milwaukee, has worked as an auditor for MPCP schools for 10 years.

Schools in the choice program are required by law to hire an independent CPA to produce an audit report on the school’s financial situation and on whether students receiving vouchers are eligible to do so.

“DPI is the user of the audit report, just like as an investor in Exxon/Mobil would be the user of their audit report. The investor would use it to look up how Exxon/Mobil did this year and make decisions about the viability of the company. When DPI gets an audit report, it is supposed to it make judgments based on the nature of the report,” Williams explained.

“Although the law does allow DPI to follow-up with the auditor to clarify things that weren’t clear, in my opinion, DPI has grossly abused that power. Every one of the audit firms I’m acquainted with has gotten countless phone calls and emails on every audit report, requesting copies of data, clarification as to how they arrived at a conclusion.”

“It seems DPI’s intent has been to make it difficult and unpleasant to work with choice schools,” Williams said.

A 2013 report from EAG News.org and the Wisconsin Institute for Law and Liberty reached the same conclusion.

Choice school officials and CPAs working as auditor told the report’s authors DPI’s process was used to “unfairly harass and intimidate them.”

photo courtesy of Noel Williams

WILLING TO SPEAK OUT: Many CPAs and school administrators believe DPI has abused its authority in the school choice audit program, but only Noel Williams was willing to speak on the record about the situation

The report included incidents of auditors required to provide DPI with documentation far beyond anything included in normal audits, including spelling errors in student voucher applications. Williams has had similar experiences.

DPI can use something as trivial as a spelling error to declare a child ineligible to receive a voucher.

The EAG/WILL report didn’t name any of the officials or auditors who were interviewed, because “they only agreed to speak anonymously, due to fear of retribution by DPI.”

That didn’t surprise Williams, the only person willing to speak on the record with Wisconsin Watchdog about the audit program.

“It’s what professionals do. We go along to get along. We’ve all seen the John Doe situation, we all know our tax dollars can be used to punish us for speaking out. But I don’t choose this moment in my life to be afraid,” Williams said.

Wisconsin Watchdog submitted questions regarding the audit process to DPI via email but did not receive a reply.

Although auditors were unwilling to speak publicly about the situation, their frustration led them to contact state lawmakers.

“The people I heard most often from about the audit program were auditors,” state Rep. Dale Kooyenga, R-Brookfield, told Wisconsin Watchdog.

“These were CPAs, people who deal with the SEC and other government agencies at all levels, telling me the school report process was crazy. It was a situation where DPI was basically auditing the auditors, which it didn’t have authority to do. The amount of extra time and the number of extra documents auditors had to produce was driving up the cost of these audits to schools.”

Kooyenga introduced amendments in the biennial budget to streamline the audit process.

DPI will now have only 90 days to certify an audit after it’s submitted. During that period, it can only contact an auditor once. That contact must be in writing and may only contain questions regarding matters that may substantially effect a school’s viability.

Williams is cautiously hopeful.

“It should be an improvement, but I’d like to see the results of DPI’s rule-making process regarding the changes before I can be sure,” Williams said.

RELATED: State Supreme Court will decide who makes the rules for education in Wisconsin

Kooyenga understands Williams’ caution.

“We’ve seen in the past where an agency manages to circumvent the intent of the law through its rule-making process,” Kooyenga said.

“So, I’m always skeptical, but I think in this case we’ve been pretty clear and specific what they cannot do, but it remains to be seen.”

Contact Paul Brennan at [email protected]


Paul formerly served as staff reporter for Watchdog.org.