School Meal Programs
Improved Reviews, Federal Guidance, and Data Collection Needed to Address Counting and Claiming Errors Gao ID: GAO-09-814 September 9, 2009In fiscal year 2008, the National School Lunch Program and School Breakfast Program provided meals to 30.9 million and 10.5 million children, respectively. Recently, the U.S. Department of Agriculture (USDA) issued the first estimate of improper payments due to meal counting and claiming errors in these programs, which was approximately $860 million (8.6 percent of federal program reimbursements) in school year 2005-2006. These errors include: (1) cashier errors, such as those made in determining if a meal meets the federal menu planning and nutrition requirements (meal counting), and (2) aggregation errors made when officials count and total meals for federal reimbursement (meal claiming). GAO was asked to review (1) actions taken by states and school food authorities (SFA) to identify and address meal counting and claiming errors; and (2) actions taken by USDA to help states and SFAs identify and address meal counting and claiming errors. GAO's steps included analyzing data on state administrative reviews of SFAs; surveying all states; conducting site visits; and interviewing federal, state, and SFA officials.
Although states and SFAs conduct program integrity reviews of the school meal programs, gaps in federal requirements for these reviews limit their effectiveness at identifying meal counting and claiming errors. States and SFAs are generally not required to review the School Breakfast Program, and 21 states reported through GAO's survey that they do not review the breakfast program. However, USDA estimates that the percentage of meal counting and claiming errors is higher in the breakfast program than the lunch program. Further, some states reported that SFA reviews of the meal programs are ineffective at identifying and reducing errors, which may be due, in part, to the self-assessment design of these reviews. When state and SFA reviews identify errors, meal counting and claiming errors persist. For example, in several SFAs that GAO visited, the same errors were identified during consecutive reviews. States and SFAs identified multiple factors that hinder efforts to address these errors, such as staff turnover, inadequate training, and school policies that complicate meal service. USDA has taken some actions to improve state reviews of SFAs, but it has not directly focused on oversight of meal counting and claiming. USDA recently provided new review forms and nationwide training to strengthen state reviews and also simplified the application process for state grants to conduct additional reviews of SFAs. However, USDA has not targeted its oversight efforts to identify or address meal counting and claiming errors. For example, USDA regional offices' reviews of state administration of the school meal programs do not focus on these errors, and some regional officials could not provide information on the extent of these errors in the states they oversee. USDA also has not updated its meal counting and claiming manual since it was first issued in 1991. Further, while USDA collects annual data on findings from state reviews of SFAs, the agency has not used these data for oversight purposes or to assess risks associated with meal counting and claiming errors.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-814, School Meal Programs: Improved Reviews, Federal Guidance, and Data Collection Needed to Address Counting and Claiming Errors
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Report to the Chairman, Committee on Agriculture, Nutrition and
Forestry, U.S. Senate:
United States Government Accountability Office:
GAO:
September 2009:
School Meal Programs:
Improved Reviews, Federal Guidance, and Data Collection Needed to
Address Counting and Claiming Errors:
GAO-09-814:
GAO Highlights:
Highlights of GAO-09-814, a report to the Chairman, Committee on
Agriculture, Nutrition and Forestry, U.S. Senate.
Why GAO Did This Study:
In fiscal year 2008, the National School Lunch Program and School
Breakfast Program provided meals to 30.9 million and 10.5 million
children, respectively. Recently, the U.S. Department of Agriculture
(USDA) issued the first estimate of improper payments due to meal
counting and claiming errors in these programs, which was approximately
$860 million (8.6 percent of federal program reimbursements) in school
year 2005-2006. These errors include: (1) cashier errors, such as those
made in determining if a meal meets the federal menu planning and
nutrition requirements (meal counting), and (2) aggregation errors made
when officials count and total meals for federal reimbursement (meal
claiming). GAO was asked to review (1) actions taken by states and
school food authorities (SFA) to identify and address meal counting and
claiming errors; and (2) actions taken by USDA to help states and SFAs
identify and address meal counting and claiming errors. GAO‘s steps
included analyzing data on state administrative reviews of SFAs;
surveying all states; conducting site visits; and interviewing federal,
state, and SFA officials.
What GAO Found:
Although states and SFAs conduct program integrity reviews of the
school meal programs, gaps in federal requirements for these reviews
limit their effectiveness at identifying meal counting and claiming
errors. States and SFAs are generally not required to review the School
Breakfast Program, and 21 states reported through GAO‘s survey that
they do not review the breakfast program. However, USDA estimates that
the percentage of meal counting and claiming errors is higher in the
breakfast program than the lunch program. Further, some states reported
that SFA reviews of the meal programs are ineffective at identifying
and reducing errors, which may be due, in part, to the self-assessment
design of these reviews. When state and SFA reviews identify errors,
meal counting and claiming errors persist. For example, in several SFAs
that GAO visited, the same errors were identified during consecutive
reviews. States and SFAs identified multiple factors that hinder
efforts to address these errors, such as staff turnover, inadequate
training, and school policies that complicate meal service.
Figure: Federally Required Reviews of Counting and Claiming in Meal
Programs:
[Refer to PDF for image: illustration]
Each Year:
School lunch:
SFA:
Schools.
School breakfast:
NO SFA on-site review required.
Each 5-year review cycle:
School lunch:
State:
SFA:
Schools.
School breakfast:
NO state review required.
If the state finds errors during its review of an SFA, state conducts a
follow-up review, including some on-site school reviews of both lunch
and breakfast programs.
Source: GAO, Art Explosion (images).
[End of figure]
USDA has taken some actions to improve state reviews of SFAs, but it
has not directly focused on oversight of meal counting and claiming.
USDA recently provided new review forms and nationwide training to
strengthen state reviews and also simplified the application process
for state grants to conduct additional reviews of SFAs. However, USDA
has not targeted its oversight efforts to identify or address meal
counting and claiming errors. For example, USDA regional offices‘
reviews of state administration of the school meal programs do not
focus on these errors, and some regional officials could not provide
information on the extent of these errors in the states they oversee.
USDA also has not updated its meal counting and claiming manual since
it was first issued in 1991. Further, while USDA collects annual data
on findings from state reviews of SFAs, the agency has not used these
data for oversight purposes or to assess risks associated with meal
counting and claiming errors.
What GAO Recommends:
GAO recommends that the Secretary of Agriculture modify the
requirements for state and SFA reviews and improve federal guidance and
data collection. USDA agreed with GAO‘s recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-09-814] or key
components. For more information, contact Kay Brown at (202) 512-7215
or brownke@gao.gov.
[End of section]
Contents:
Letter:
Background:
States and SFAs Conduct Reviews, but Meal Counting and Claiming Errors
Persist:
USDA Has Taken Some Actions to Improve State Monitoring, but Has Not
Focused on Oversight of Meal Counting and Claiming:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Federal Reimbursement per Meal and Average Daily Participation
in the National School Lunch and School Breakfast Programs, School Year
2008-2009:
Table 2: APEC Estimates of Improper Payments Resulting from Meal
Counting and Claiming Errors, during School Year 2005-2006:
Figures:
Figure 1: Oversight and Monitoring Requirements for School Meal
Programs:
Figure 2: School Meal Service Process and Potential Points of Error in
the Meal Counting and Claiming Process:
Figure 3: Federally Required Reviews of Counting and Claiming
Procedures in the School Meal Programs:
Abbreviations:
SFA: school food authority:
FNS: Food and Nutrition Service:
APEC: Access, Participation, Eligibility, and Certification Study:
USDA: U.S. Department of Agriculture:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 9, 2009:
The Honorable Tom Harkin:
Chairman:
Committee on Agriculture, Nutrition and Forestry:
United States Senate:
Dear Mr. Chairman:
The National School Lunch Program and School Breakfast Program had a
combined fiscal year 2008 budget of $10.5 billion and provided lunches
and breakfasts to more than 30.9 million and 10.5 million children,
respectively. These programs are administered by the U.S. Department of
Agriculture (USDA) through state agencies that, in turn, oversee local
school food authorities (SFA). SFAs serve meals to children in schools
and are responsible for fulfilling federal program requirements, such
as accurately claiming meals for federal reimbursement and preparing
meals that meet specific menu planning and nutritional requirements. To
comply with federal requirements imposed by the Improper Payments
Information Act of 2002, USDA released a study in 2007 estimating that
$860 million in improper payments (8.6 percent of federal program
reimbursements) resulted from meal counting and claiming errors in the
school meal programs during school year 2005-2006. These errors
include: (1) cashier errors, such as those made in determining if a
meal meets the federal menu planning and nutritional requirements (meal
counting), and (2) aggregation errors made when officials count and
total meals for reimbursement (meal claiming).
Because the USDA study was the first national study to document meal
counting and claiming errors, there is now increased interest in how
these errors are being addressed. The importance of taking action to
reduce these errors and ensure that program funds are being used as
effectively as possible may be particularly heightened if program
participation continues to increase in the current economic
environment. Based on your request, we conducted a study reviewing (1)
state and SFA actions taken to identify and address meal counting and
claiming errors, and (2) USDA actions taken to help states and SFAs
identify and address meal counting and claiming errors.
To address these objectives, we reviewed relevant federal laws,
regulations, and agency guidance, as well as federal data on states'
administrative reviews of the school lunch program. We also interviewed
USDA Food and Nutrition Service (FNS) officials, both from headquarters
and all seven of its regional offices, as FNS oversees the school meal
programs. In addition, we used multiple methods to gather information
on state and SFA actions. First, we administered a Web-based survey of
state child nutrition program directors in all 50 states and the
District of Columbia between February and March 2009,[Footnote 1] to
which all state directors responded. While we did not validate specific
information that directors reported through our survey, we determined
that the data were sufficiently reliable for the purposes of this
report. Second, we conducted site visits to at least one state in six
of the seven FNS regions.[Footnote 2] States selected provided
geographic variation and had both high levels of school meal errors
found during state administrative reviews and relatively high
percentages of students eligible for free and reduced price meals. We
visited one state (California, Illinois, Massachusetts, Mississippi,
and Texas) in five of the regions, and in the Mid Atlantic Region, we
visited both Washington, D.C. and Maryland. During each site visit, we
interviewed state-level child nutrition program directors, as well as
officials from two to three SFAs that either had experienced
significant meal counting and claiming errors or had systems in place
that state officials considered to be effective at identifying and
reducing such errors. For each SFA interviewed, we also reviewed recent
state monitoring findings on meal counting and claiming errors and
observed school meal procedures in one or more schools. We cannot
generalize our findings beyond the SFAs we visited.
We conducted this performance audit from August 2008 through September
2009 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives. See
appendix I for additional information about our methodology.
Background:
The school lunch and breakfast programs are overseen and administered
by USDA through FNS, state agencies, and local SFAs. FNS sets
nationwide eligibility and program administration criteria and provides
reimbursements to states for each meal served that meets federal menu
planning and nutrition requirements and is served to an eligible
student. FNS also provides states with commodities based on the number
of reimbursable lunches served. States have written agreements with
SFAs to administer the meal programs, provide federal reimbursements to
SFAs, and oversee SFA compliance with program requirements. SFAs--
nonprofit entities responsible for local administration of the school
meal programs--plan, prepare, and serve meals to students in
schools.[Footnote 3]
SFAs determine the price they charge for school meals, but some
children are eligible to receive free or reduced price meals.
Specifically, children are eligible for free meals if their families
have incomes at or below 130 percent of the federal poverty guidelines
and reduced price meals if their families have incomes between 130 and
185 percent of the federal poverty guidelines. SFAs can charge a
maximum of $0.40 for a reduced price lunch and $0.30 for a reduced
price breakfast. Children who are not eligible for free or reduced
price meals pay the entire price charged by the SFA for the meal.
SFAs receive federal reimbursements for all meals served to eligible
students that meet menu planning and nutritional requirements,
regardless of whether children pay for the meals or receive them for
free. To receive federal reimbursements for meals, SFAs coordinate with
schools to process an individual household application for most
children applying for the free and reduced price programs[Footnote 4]
and verify eligibility for at least a sample of households that apply.
SFAs also must keep daily track of meals provided. The amount of
federal reimbursement that SFAs receive for each meal provided to a
child is based on the eligibility category of the child and the meal
program. (See table 1.)
Table 1: Federal Reimbursement per Meal and Average Daily Participation
in the National School Lunch and School Breakfast Programs, School Year
2008-2009:
Eligibility category: Free;
Lunch program: Federal reimbursement per meal[A]: $2.57;
Lunch program: Average children served per day[B]: 15,900,000;
Breakfast program: Federal reimbursement per meal[A]: $1.40;
Breakfast program: Average children served per day[B]: 8,100,000.
Eligibility category: Reduced price;
Lunch program: Federal reimbursement per meal[A]: $2.17;
Lunch program: Average children served per day[B]: 3,100,000;
Breakfast program: Federal reimbursement per meal[A]: $1.10;
Breakfast program: Average children served per day[B]: 1,100,000.
Eligibility category: Paid;
Lunch program: Federal reimbursement per meal[A]: $0.24;
Lunch program: Average children served per day[B]: 11,300,000;
Breakfast program: Federal reimbursement per meal[A]: $0.25;
Breakfast program: Average children served per day[B]: 2,000,000.
Source: USDA.
[A] These are the basic cash reimbursement levels for school year 2008-
2009. Higher federal reimbursement rates apply for Alaska and Hawaii,
and for schools with high percentages of low-income students.
[B] Data for May 2009. Participation data in table are approximate.
[End of table]
To be eligible for federal reimbursement, meals served by SFAs must
adhere to the Dietary Guidelines for Americans, which include limits on
total fat and saturated fat and call for diets moderate in sodium. The
meals must also meet standards for the recommended daily allowances of
calories, as well as nutrients such as protein, calcium, iron, and
vitamins A and C.[Footnote 5] There are five federally approved food-or
nutrient-based menu planning approaches for school meals. For example,
under the traditional food-based menu planning approach, SFAs must
offer five food items from four food components--meat/meat alternate,
vegetables or fruits, grains/breads, and milk--for a lunch to qualify
as reimbursable. SFAs choose the specific foods served and how they are
prepared and presented. Under the nutrient standard menu planning
approach, SFAs use a computer-based menu planning system that uses
approved software to automatically analyze the specific nutrient
content of planned menu items.
Oversight and Monitoring in the School Meal Programs:
USDA policies and regulations establish an oversight and monitoring
framework for school meal programs to help ensure accurate meal
counting and claiming. (See figure 1.) Specifically, regulations
require data on meals served that qualify for federal reimbursement to
be recorded at the point of service in schools and reported from SFAs
to states, and states to FNS. Both SFAs and states are required to
regularly check meal counts to assess their reliability and reconcile
any incorrect counts before submitting meal claim data for federal
reimbursement. Federal regulations also require FNS, state agencies,
and SFAs to conduct reviews of the school meal programs. FNS regions
must conduct management evaluations of each state's administration of
the school meal programs and share evaluation findings with the state.
[Footnote 6] Through the coordinated review effort, states are required
to conduct reviews of each SFA's administration of the lunch program at
least once during each 5-year review cycle[Footnote 7] and share review
findings with the SFA and FNS. At the local level, SFAs are required to
conduct annual on-site reviews of the meal counting and claiming
procedures in each school participating in the lunch program.
Figure 1: Oversight and Monitoring Requirements for School Meal
Programs:
[Refer to PDF for image: illustration]
[End of figure]
The school meal programs' oversight and monitoring requirements are
part of their internal controls, which are an integral component of
management. Internal control is not one event, but a series of actions
and activities that occur on an ongoing basis. Effective internal
controls include creating an organizational culture that promotes
accountability and the reduction of error, analyzing program operations
to identify areas that present the risk of error, making policy and
program changes to address the identified risks, and monitoring the
results and communicating the lessons learned to support further
improvement.[Footnote 8]
School Meal Counting and Claiming Errors:
To comply with the Improper Payments Information Act of 2002,[Footnote
9] in November 2007 USDA released the "Access, Participation,
Eligibility, and Certification Study" (APEC),[Footnote 10] which
provided the first national measure of improper payments in the school
meal programs.[Footnote 11] APEC estimated that approximately $860
million in improper payments occurred in the school lunch and breakfast
programs due to meal counting and claiming errors during school year
2005-2006.[Footnote 12] Meal counting, or cashier, errors occur when:
* a student's specific meal selection does not meet the menu planning
and nutritional requirements of a reimbursable meal,
* the SFA's planned meal components do not meet the menu planning and
nutritional requirements of a reimbursable meal, or:
* a cashier incorrectly records the student's categorical eligibility
(i.e., free, reduced price, or paid).
Meal claiming, or aggregation, errors generally occur because data on
meals served are compiled and totaled by several different entities
before they are submitted to FNS as a meal claim for reimbursement.
Specifically, aggregation errors occur when:
* the daily meal count totals from the school cafeteria cashiers or
points of sale are not summed correctly,
* school meal count totals are incorrectly reported to or recorded by
the SFA, or:
* school meal count totals are incorrectly reported from the SFA to the
state.
Figure 2: School Meal Service Process and Potential Points of Error in
the Meal Counting and Claiming Process:
[Refer to PDF for image: illustration]
Counting meals (during meal service):
Cashier:
* Determines whether meal includes all of the planned menu components;
* Determines the student‘s categorical eligibility (free, reduced
price, or paid).
Claiming meals (after meal service):
School:
* After a meal, school staff totals meal counts, sometimes from
multiple cashier lines;
* Daily or weekly, school totals meal counts and submits them to SFA;
SFA:
* SFA totals all schools‘ meal counts monthly and submits them to state
for reimbursement.
Sources: GAO, Art Explosion (images).
Note: Actions taken before meal service may also cause meal counting
errors. Specifically, errors occur when the SFA's planned meal
components do not meet the menu planning and nutritional requirements
of a reimbursable meal.
[End of figure]
APEC found that a substantial source of meal counting and claiming
errors were cashier errors, particularly for the breakfast program.
Concerning aggregation, APEC found that school to SFA meal count
reports were the most likely to be erroneous. (See table 2.) However,
when this type of aggregation error occurred, APEC found it was
typically the case that SFA-reported meal counts were larger than those
reported by the school, which resulted in overpayments to the SFA. APEC
found that both cashier errors and aggregation errors between the
school and SFA were concentrated in a small number of schools that had
high error rates.
Table 2: APEC Estimates of Improper Payments Resulting from Meal
Counting and Claiming Errors, during School Year 2005-2006:
Total federal program reimbursements:
Lunch program: Federal dollars: $8,060 million;
Lunch program: Percentage of federal funds: 100;
Breakfast program: Federal dollars: $1,940 million;
Breakfast program: Percentage of federal funds: 100.
Total meal counting & claiming improper payments (gross):
Lunch program: Federal dollars: $555 million;
Lunch program: Percentage of federal funds: 6.9;
Breakfast program: Federal dollars: $306 million;
Breakfast program: Percentage of federal funds: 15.8.
Cashier/counting error:
Lunch program: Federal dollars: $248 million;
Lunch program: Percentage of federal funds: 3.1;
Breakfast program: Federal dollars: $189 million;
Breakfast program: Percentage of federal funds: 9.8.
Aggregation/claiming error:
Lunch program: Federal dollars: $307 million;
Lunch program: Percentage of federal funds: 3.8;
Breakfast program: Federal dollars: $117 million;
Breakfast program: Percentage of federal funds: 6.0.
School points of sale to school total:
Lunch program: Federal dollars: $26 million;
Lunch program: Percentage of federal funds:
