Welcome and Introduction: What is NSLP?

Let’s Do Lunch

By Elizabeth Troutman and Susan Wunderink

Taking a Closer Look at the National School Lunch Program

The National School Lunch Program provides lunch and sometimes breakfast to children at school.  In 2009, the USDA funded 5.18 billion lunches at a cost of $9.8 billion. That’s 30.9 million lunches and 10.5 million breakfasts every day. 62% of those meals went to children in poverty or near-poverty.

As the nation tightens its belt with budget cuts and obesity initiatives alike, perhaps we need to take a closer look at whether the school lunch program is working the way it’s supposed to.

The Office of Management and Budget identified the National School Lunch Program as one of its top 13 “High Error Programs,” estimating a 16.3% improper payment rate. That comes to about $1.5 billion that American taxpayers might be spending on something other than lunch for schoolchildren.

Where is the $1.5 billion going? We’re not quite sure, but we have some ideas. We’ll outline them for you, and then give you the tools to do some research on your own.  The purpose of this website is to help you determine if federal funds are being spent appropriately in your school district.

There’s No Such Thing as Free Lunch

How Money Gets from the Fed to Your School Cafeteria

Every year, Congress approves funding for the U.S. Department of Agriculture (USDA) to spend on Food and Nutrition Services.  School lunch is somewhere between an entitlement and an appropriations bill; Congress funds the program every year, but they are required to approve it. Congress sets aside 30% of all customs receipts, which comes to approximately $7 billion each year. Congress also appropriates additional funding to cover the other costs of the National School Lunch Program.

When Congress reauthorized NSLP in 2010, the bill stated that the program’s purpose is “to improve child nutrition and wellness.” In congressional hearings, “child nutrition and wellness” clearly had to do with fending off child obesity and food insecurity. Meeting that goal means meeting a secondary goal: giving all children access to nutritious meals by a certification process that gets all poor and near-poor children registered for the free and reduced-price lunches.

Therefore, children living at 130% of the poverty line or below qualify for free lunch (NSLP factsheet, PDF). Children living between 130% and 185% of the poverty line qualify for reduced-price lunch, where they pay a low price for each school meal they eat. The USDA accounts for regional cost of living differences by using state poverty levels rather than the national average. Many children who are eligible do not enroll in the program. This is a big problem, so the new bill authorized pilot program s in 2004 (“direct certification”) to link Medicaid-eligible children into the school lunch program in order to increase participation.  The 2010 bill commits to expanding direct certification efforts.

Your school district works with a School Food Authority (SFA), which is a non-profit organization in charge of administering food services at each school. The School Food Authority–that is, the organization that runs the cafeteria–determines who is eligible for free or reduced-price lunch, counts up how many meals it serves to children in each of the 3 categories (free, reduced-price, and full-price), and reports the numbers, in most cases, to the state department of education. (Rarely, the state department of agriculture is involved.) The state reports the total numbers of all the SFAs in the state to the USDA.

Then, the USDA sends money back down to the states depending on the number of meals in each category.  The USDA sets the reimbursement rate for each category, which is published in the Federal Register. Until next school year, the rate is $2.72 per free lunch, $2.32 per reduced-price lunch, and $0.26 per full-price lunch. Once the money gets to the state, the state can take up to 1% for other programs.  Finally, the money gets to the SFAs to pay their expenses.

The typical school cafeteria spends $2.91 on each meal—rather than the $0.26 to $2.72 that gets reimbursed—and relies on USDA for about 51% of its revenue. Not all of those meal costs are for food. Much NSLP money goes for overhead, leaving about a dollar to make meals. (For a more detailed breakdown of food costs in an average district, click here [PDF]).

It’s Just Lunch…Right?

Where the Process Could Go Awry

This process seems relatively simple, but potential problems arise at each step. Our concern is that either (a) poor children do not have access to the lunch we promised them, or (b) taxpayer money is going to inappropriate expenses. When you consider your school’s lunch program, think about some of these issues.

  • Administrative Disconnects

The relationship between school district and school food authority is not an efficient one.  A 2007 report (PDF) from the Government Accountability Office found that poor communication between school districts and SFAs could lead to miscounting of meals. Schools cultures, priorities, and governing bodies may mean that SFAs are less interested in correct counts. A school might have a rule in place that no child is to be denied a meal, regardless of his or her ability to pay. Such policies will make counting difficult for SFAs.  Cafeterias contribute significantly to the school environment, and yet they are not governed by a school board. This disconnect can lead to problems for poor children and for appropriate meal counting.

  • School Food Authority Power

SFAs generate almost all the information the USDA and state departments receive. That means it would be relatively easy to over-report the number of meals served and pocket the reimbursements. Fraud of this kind is concentrated in a few schools, and very difficult for the public to spot. The state reviews each SFA once every five years.  Click here for complete detail of the accountability process.  Even if a state finds fraud, it does not usually publicize the fraud, and the SFA undergoes a long, forgiving process to “correct” any missteps. In a 2007 survey, nine states said that the review process is ineffective in identifying and correcting errors. States are very hesitant to impose sanctions on SFAs or refuse payment, because they know that children will not be able to eat lunch if they do.  Some states have gone so far as to allow “practice reviews” of SFAs before the actual review. The Secretary of Agriculture forbade this practice in 2007, but states still do not want to withhold funds from SFAs.

  • Kids in the Wrong Category

One major concern is that children who ought to be eligible for free or reduced-price meals are not eating hot lunch at school. One study found that only 37% of the kids who ought to be eating free lunch are actually able to do so in San Francisco high schools. On the other hand, the GAO found $940 million in over-payments because SFAs certified children who ought not to receive free lunch. Sharon Welborn, who oversees the Food and Nutrition Services at the Texas Department of Agriculture said, “the most common error we see is in certification…misidentifying a student as free, reduced, or paying when that is not the right status.”

  • Cafeteria Staff Errors

A cashier may count a meal as part of the National School Lunch Program, when it actually does not meet nutritional requirements.  That happens when students select their meals from the cafeteria line and fail to choose the components necessary for a reimbursable meal, or when the SFA does not have a meal plan that meets the nutritional guidelines. A cashier could also misidentify the student’s eligibility. In some cases, a cashier may let a child through even if he or she does not have enough money to pay for the meal. Just like halting payments to an SFA, sometimes enforcing the rules can be detrimental to the health of a child.

  • School Breakfast

The percentage of counting and claiming errors is twice as high in the school breakfast program. The USDA administers breakfast to a subset of schools through a similar process to the National School Lunch Program. States are not required to review the breakfast program, and 26 states confirmed that they do not review breakfast programs at all.

In sum…

In sum, the National School Lunch Program operations are much more complex than they may appear at first. We hope this website unravels some of the red tape for you, so you can see for yourself when this federal program does what is supposed to… and when it doesn’t. We encourage you to trace your lunch money through the system. Help hold our government accountable by asking: Are poor children in your community being fed a hot meal at school? Are funds being used appropriately in your schools?