Food Assistance

On an average school day, an estimated 25 million children at more than 93,000 locations nationwide receive meals through the National School Lunch Program. In fiscal year 1993, federal funding for the program totaled about $4.7 billion. In 1991 and 1992, the Agriculture Department's Food and Nutrition Service, which runs the program, published the results of a survey of state and local school officials on the cost of meals. The results suggested that the level of federal reimbursement paid to schools for each free meal they served was roughly equivalent to the national average cost to produce the meal. This briefing report discusses (1) GAO's review of the Food and Nutrition Service study, (2) the ability of local school food authorities to produce meals at or below the reimbursement rate for free meals, (3) differences in meal production costs among regions, and (4) the appropriateness of the index that the Food and Nutrition Service uses to adjust reimbursement rates.

GAO found that: (1) FNS has concluded that the federal reimbursement rate for a free meal is roughly equivalent to the national average cost to produce the meal; (2) the small differences between the reimbursement rate and the cost of meals is not statistically significant; (3) the reimbursement rate for school years 1988 through 1989 included 8 cents' worth of bonus commodities, in addition to the entitlement commodities included in the reimbursement; (4) bonus commodities are available from the Department of Agriculture (USDA) under its agricultural price support programs, but their availability is not guaranteed to schools and their value can vary from year to year; (5) between 58 and 80 percent of school food programs are able to produce meals at or below the reimbursement rate for free meals; (6) overall meal costs are higher in the Northeast and West than in the South mostly because of higher labor costs; and (7) FNS uses a reasonable index to adjust the federal level of reimbursement.