Welfare Reform

In 1997, the Summer Food Service Program relied on a network of 3,500 sponsors in local communities to provide free meals to more than 2 million children when school was out of session. The cost to the federal government was about $258 million. The Welfare Reform Act made three major changes to this program by reducing the federal subsidies that sponsors received for meals served, eliminating the federal subsidy for a fourth daily meal provided in summer camps and programs that mainly serve migrant children, and eliminating the grants available to help sponsors expand the program. GAO found that the reduction in federal subsidies for sponsors did not significantly affect the number of program sponsors or children participating in 1997. Almost half of the states, however, reported that the program was affected in other ways, such as sponsors' reducing the number of food items in the meals served or reducing the numbers of locations where meals were offered. Although the number of sponsors and children participating changed only minimally in 1997, both the Agriculture Department and the majority of states expect to see a decrease in the number of sponsors and the number of children participating in the future because of the reduced subsidies.

GAO noted that: (1) the reduction in federal subsidies for sponsors did not have a significant effect on the number of program sponsors or children participating in 1997; (2) state officials specifically identified only a handful of 1996 sponsors that stopped participating in the program in 1997 because of the reduced subsidies, and the number of children participating in the program was generally not affected; (3) however, almost half of the states reported that the program was affected in other ways, such as sponsors' reducing the number of food items in the meals provided or reducing the number of locations where meals were served; (4) while the number of sponsors and children participating changed only minimally in 1997, both the USDA and the majority of the states expect to see a decrease in the number of sponsors and in the number of children participating over the future because of the reduced subsidies; (5) USDA and several state officials said that some sponsors continued their participation in 1997 to test whether they could finally manage the program with the reduced rate; (6) USDA officials expect that sponsors that could not manage the program with the reduced rates will leave it in future years; and (7) on the other hand, USDA and some state officials said that other factors such as increased outreach efforts and state funding could mitigate the effects of the rate decrease on the number of sponsors and children participating in the future.