SCHOOL-MEALS 

PROGRAMS

USDA Has Enhanced 

Controls, but 

Additional Verification 

Could Help Ensure 

Legitimate Program 

Access

Report to Congressional Requesters

May 2014

GAO-14-262

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-262, a report to 

congressional requesters

May 2014

SCHOOL-MEALS PROGRAMS

USDA Has Enhanced Controls, but Additional 

Verification Could Help Ensure Legitimate Program 

Access 

Why GAO Did This Study

In fiscal year 2012, over 31.6 million 

children participated in USDA’s 

National School Lunch Program 

(NSLP) at a cost of about $11.6 billion. 

In fiscal year 2013, USDA estimated 

NSLP certification errors of more than 

8 percent, or $996 million. GAO was 

asked to review possible beneficiary 

fraud within the program. 

This report assesses (1) steps taken to 

help identify and prevent ineligible 

beneficiaries from receiving benefits in 

school-meal programs and (2) what 

opportunities exist to strengthen 

USDA’s oversight of the school-meals 

programs. 

GAO reviewed NSLP policies, 

interviewed program officials, and 

randomly selected a nongeneralizable 

sample that included 25 of 7.7 million 

approved household applications from 

25 of 1,520 school districts in the 

Dallas, Texas, and Washington, D.C., 

regions. GAO performed limited 

eligibility testing using civilian federalemployee payroll data from 2010 

through 2013 due to the unavailability 

of other data sources containing 

nonfederal employee income. GAO 

also conducted interviews with 

households. Ineligible households 

were referred to the Inspector General.

What GAO Recommends

Among other things, GAO 

recommends that the Secretary of 

Agriculture develop a pilot program to 

explore the feasibility of using 

computer matching to identify 

households with income that exceeds 

program-eligibility thresholds for 

verification, and explore the feasibility 

of verifying a sample of categorically

eligible households. USDA generally 

agreed with the recommendations. 

What GAO Found

The U.S. Department of Agriculture (USDA) has taken several steps to 

implement or enhance controls to identify and prevent ineligible beneficiaries 

from receiving school-meals benefits. For example:

• USDA worked with Congress to develop legislation to automatically enroll 

students who receive Supplemental Nutritional Assistance Program benefits 

for free school meals; this program has a more-detailed certification process 

than the school-meals program. 

• Starting in the 2013-2014 school year, USDA increased the frequency with 

which state agencies complete administrative reviews of school districts from 

every 5 years to every 3 years. As part of this process, state agencies review 

applications to determine if eligibility determinations were correctly made. 

• In 2012, USDA issued guidance to clarify that school districts have the 

authority to verify approved applications for school-district employees when 

information indicates that the applicant misrepresented his or her income.

GAO identified opportunities to strengthen oversight of the school-meals 

programs while ensuring legitimate access, such as the following: 

• Exploring the feasibility of computer matching external income data, such as 

state payroll data, with participant information to identify households whose 

income exceeds eligibility thresholds for verification could help identify 

ineligible participants. Currently, school districts verify a sample of approved 

applications deemed “error-prone”—statutorily defined as those with reported 

income within $1,200 of the annual income levels specified in programeligibility guidelines—to determine whether the household is receiving the 

correct level of benefits (referred to as standard verification in this report). In 

a nongeneralizable review of 25 approved applications, GAO found that 9 of 

19 households that self-reported household income and size information 

were ineligible and only 2 could have been subject to standard verification.

• Verifying a sample of categorically eligible applications could help identify 

ineligible households. Currently, school-meal applicants who indicate 

categorical eligibility (by participating in certain public-assistance programs or 

meeting an approved designation, such as foster children) are eligible for 

free meals and are generally not subject to standard verification. In a 

nongeneralizable review of 25 approved applications, 6 households indicated 

categorical eligibility, 2 of which were ineligible, and another may have been 

eligible for reduced-price meals instead of free school meals.

Results of GAO’s Analysis of a Nongeneralizable Sample of 25 Approved

Household Applications from the 2010-2011 School Year

View GAO-14-262. For more information, 

contact Steve Lord at (202) 512-6722 or 

lords@gao.gov.
Page i GAO-14-262 School-Meals Eligibility 

Letter 1

Background 7

USDA Has Taken Steps to Help Identify and Prevent Ineligible 

Participants from Receiving Benefits 16

USDA Could Explore Options to Enhance the Verification Process 

to Further Strengthen Integrity While Ensuring Legitimate 

Access 22

Conclusions 36

Recommendations for Executive Action 37

Agency Comments 38

Appendix I Objective, Scope, and Methodology 41

Appendix II Additional Benefits Based on Eligibility in the School-Meals 

Programs 46

Appendix III Responsibilities of the Food and Nutrition Service, 

State Agencies, and School Districts 47

Appendix IV Sample School-Meals Household Application 48

Appendix V Comparison between Federal and Private-Sector Employees 49

Appendix VI Comments from the U.S. Department of Agriculture Food 

and Nutrition Service 51

Appendix VII GAO Contacts and Staff Acknowledgments 53

Contents
Page ii GAO-14-262 School-Meals Eligibility 

Tables

Table 1: Annual Income Eligibility Guidelines for a Family of Four 8

Table 2: Estimated Improper Payment Rates in the National 

School Lunch Program (NSLP) and School Breakfast 

Program (SBP) for Fiscal Year 2013 15

Figures

Figure 1: School Meals Application Highlighting Categorical 

Eligibility Requirements 11

Figure 2: Household-Application and Direct-Certification Methods 

for Eligibility Determinations in the School-Meals 

Programs 13

Figure 3: Standard Verification Thresholds for a Four-Member 

Household during the 2010-2011 School Year 26

Figure 4: Results of GAO’s Analysis of Approved Applications: 

Limited Number of Ineligible Households Met 

Requirements for Standard Verification 28
Page iii GAO-14-262 School-Meals Eligibility 

Abbreviations

APEC Access, Participation, Eligibility, and Certification

CBO Congressional Budget Office

CNR Child Nutrition and WIC Reauthorization Act of 2004

FDPIR Food Distribution Program on Indian Reservations

FNS Food and Nutrition Service

IPIA Improper Payments Information Act of 2002

NSLA Richard B. Russell National School Lunch Act

NSLP National School Lunch Program

OIG Office of the Inspector General

OMB Office of Management and Budget

SBP School Breakfast Program

SNAP Supplemental Nutrition Assistance Program

TANF Temporary Assistance for Needy Families

USDA United States Department of Agriculture

USPS U.S. Postal Service

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately.
Page 1 GAO-14-262 School-Meals Eligibility 

441 G St. N.W.

Washington, DC 20548

May 15, 2014

Congressional Requesters

A well-balanced and nutritional diet for school children is essential for 

their overall health and well-being, and helps promote academic 

achievement. With children spending a considerable amount of their day 

at school, meals served during the school day play an important role in 

providing such a diet. In 1946, the Richard B. Russell National School 

Lunch Act (NSLA)—established the National School Lunch Program 

(NSLP),1 and in 1966 the Child Nutrition Act established the School 

Breakfast Program (SBP).2

These programs—administered by the United States Department of 

Agriculture’s (USDA) Food and Nutrition Service (FNS)—operate in over 

89,000 schools and institutions.

These programs provide reimbursement to 

school districts and independent schools based on the number of meals 

served that meet certain federal requirements. Any child may purchase a 

meal through the NSLP or SBP; however, depending on household 

income, children may be eligible for reduced-price or free meals. The 

NSLP and SBP have the same eligibility requirements—families with 

incomes at or below 130 percent of the federal poverty level are eligible 

for free meals, and those with incomes between 130 and 185 percent of 

the federal poverty level are eligible for reduced-price meals. In fiscal year 

2012, over 31.6 million children participated in the NSLP each school day 

at a program cost of about $11.6 billion. Of the NSLP participants, 21.4 

million—or about 68 percent—received their lunches free or at a reduced 

price. In fiscal year 2012, approximately 12.9 million children participated 

in the SBP each school day, at a program cost of about $3.3 billion. Of 

those, over 10.8 million—or about 84 percent—received their breakfasts 

free or at a reduced price.

3

 1

42 U.S.C. § 1751 et seq.

All schools participating in the NSLP or 

SBP must make free and reduced-price meals available to eligible 

2

42 U.S.C. § 1771 et seq. The SBP started as a pilot project in 1966 and was made 

permanent in 1975.

3

Not all schools that participate in the NSLP participate in the SBP. During the 2013-2014 

school year, the NSLP operated in over 100,000 schools and institutions, and the SBP 

operated in over 89,000 schools and institutions.
Page 2 GAO-14-262 School-Meals Eligibility 

children. Individual student or household eligibility for free or reducedprice meals is determined by school-district review of applications 

submitted by households or through a process referred to as “direct 

certification.” Under direct certification, state agencies provide school 

districts with a list of students whose households receive certain publicassistance benefits, such as through the Supplemental Nutrition 

Assistance Program (SNAP), and school districts confer eligibility for free 

school meals to these students. Thus, participants are automatically

certified for school-meals benefits without having to fill out a separate 

school-meals application. Students receiving certain public-assistance 

benefits or meeting an approved designation, such as if they are 

homeless or foster children, are categorically eligible for free-meal 

benefits. Categorically eligible students can be certified into the schoolmeals program either through an application or direct certification. The 

Office of Management and Budget (OMB) has designated the NSLP as 1 

of 13 federal “high-error” programs due to its large estimated improper 

payments—approximately $1.8 billion in fiscal year 2013.4 According to 

OMB guidance, an improper payment is any payment that should not 

have been made or that was made in an incorrect amount (including 

overpayments and underpayments) under statutory, contractual, 

administrative, or other legally applicable requirements.5

In July 2012, we reported that some children were inappropriately 

certified for free school meals because their households were considered 

categorically eligible for SNAP even though they were not receiving 

 4

High-error programs are those programs that reported roughly $750 million or more in 

improper payments in a given year, did not report an error amount in the current reporting 

year but previously reported an error amount over the threshold, or have not yet 

established a program error rate and have measured components that were above the 

threshold. Office of Management and Budget, Issuance of Part III to OMB Circular A-123, 

Appendix C, Memorandum M-10-13 (Washington, D.C.: Mar. 22, 2010). USDA estimates 

that approximately $996 million of its fiscal year 2013 improper payments represents 

certification errors and approximately $778 million represents school district counting and 

claiming errors. The SBP had approximately $831 million in improper payments in fiscal 

year 2013.

5

OMB, Issuance of Part III to OMB Circular A-123, Appendix C. Improper payment 

estimates reported by federal agencies are not intended to be an estimate of fraud in 

federal agencies’ programs and activities. This guidance also instructs agencies to report 

as improper payments any payments for which insufficient or no documentation was 

found. 
Page 3 GAO-14-262 School-Meals Eligibility 

SNAP benefits.6 NSLA, as amended by the Child Nutrition and WIC 

Reauthorization Act of 2004 (CNR), requires participants in SNAP to be 

directly certified for school-meals benefits without a separate schoolmeals application.7 We recommended that USDA provide guidance 

clarifying that children in households receiving no SNAP benefits should 

not be directly certified to receive free school meals. USDA agreed with 

our recommendation and has taken steps to address it. In September 

2009, we also reported that states and school food authorities8 conduct 

program-integrity reviews, but that gaps in federal requirements for these 

reviews limit the reviews’ effectiveness at identifying meal counting and 

claiming errors.9

Given the cost of the USDA school-meals programs and the high 

estimated improper-payment rates, you asked us to review possible 

beneficiary fraud occurring within the programs. Specifically, we assessed 

(1) what steps, if any, has USDA taken to help identify and prevent 

ineligible beneficiaries from receiving benefits in the school-meals 

programs, and (2) what opportunities, if any, exist to strengthen USDA’s 

oversight of the school-meals programs? We also report case-study 

examples of households that may have improperly received program 

We recommended that USDA modify the requirements 

for state and school food authority reviews and improve guidance on data 

collection; USDA agreed with and implemented our recommendations.

 6

GAO, Supplemental Nutrition Assistance Program: Improved Oversight of State Eligibility 

Expansions Needed, GAO-12-670 (Washington, D.C.: July 26, 2012). 

7

Pub. L. No. 108-265 § 104 (June 30, 2004). Some states designate households as 

categorically eligible for SNAP if they receive Temporary Assistance for Needy Families 

(TANF) benefits, even if those benefits are nonmonetary. Nonmonetary TANF benefits 

include, but are not limited to, an informational brochure, employment assistance, or 

childcare assistance. Households designated as categorically eligible for SNAP must go 

through a separate benefit determination process and not all are found eligible for SNAP 

benefits. Children in households that do not receive a SNAP benefit do not automatically 

qualify for free or reduced-price school meals.

8

For the purpose of the school-meals programs, the term “school food authority” is morecommonly used for purposes of operating the school meals program, such as when 

discussing agreements or nutritional requirements. A “local educational agency” is a public 

authority that is recognized in a state as an administrative agency for its public elementary 

or secondary schools. In this report, we use the term school district or district to refer to 

school food authorities and local educational agencies.

9

GAO, School Meal Programs: Improved Reviews, Federal Guidance, and Data Collection 

Needed to Address Counting and Claiming Errors, GAO-09-814 (Washington, D.C.: Sept. 

9, 2009). 
Page 4 GAO-14-262 School-Meals Eligibility 

benefits. Because of limited salary and income data available for all U.S. 

households, our case-study examples are limited to civilian executivebranch employees and United States Postal Service (USPS)

employees.10

To determine any steps USDA has taken to identify and prevent ineligible 

beneficiaries from receiving benefits and what opportunities, if any, exist 

to strengthen USDA’s oversight of the school-meals programs, we 

reviewed FNS policies and regulations, as well as the laws authorizing 

the school-meals programs. We also reviewed prior USDA reports and 

other studies concerning the programs. Further, we interviewed FNS 

officials to discuss the agency’s administration of the programs. We 

selected the Washington, D.C., and Dallas, Texas metropolitan regions—

areas with different federal-employee concentrations—for further work.11

We conducted interviews of officials responsible for administration and 

oversight of the program at the city level in Washington, D.C., and at the 

state level in Maryland, Texas, and Virginia, as well as at 25 school 

districts located in these regions. We initially obtained data from 28 

school districts for our review—14 located in the Dallas, Texas

metropolitan region and 14 in the Washington, D.C., metropolitan region, 

which includes Washington, D.C., and its Maryland and Virginia 

suburbs.12

 10Throughout this report, we use the term “federal employees” to refer to both civilian 

executive-branch employees and USPS employees. 

In the Dallas, Texas metropolitan region we selected school 

districts with student enrollment over 10,000 students. We selected all 

school districts in the Washington, D.C., metropolitan region excluding 56 

charter school districts in Washington, D.C. However, we did not use data 

from 3 school districts—1 located in the Dallas, Texas metropolitan region 

and 2 located in the Washington, D.C., metropolitan region—because the 

data were not reliable for our purposes. During the 2010-2011 school 

year, there were 57 school districts in Washington, D.C.; 49 in Maryland; 

1,260 in Texas; and 154 in Virginia for a total of 1,520. This selection is 

not representative of all states, school districts, or school-meal 

11The Washington, D.C.,and Dallas, Texas, metropolitan regions ranked 1st and 18th, 

respectively, among the 50 metropolitan regions with the largest number of executivebranch federal employees during fiscal year 2012. The Washington, D.C., region includes 

Washington, D.C.; Maryland; and Virginia.

12There were approximately 18,500 school districts in the United States during the 2010-

2011 school year.
Page 5 GAO-14-262 School-Meals Eligibility 

participants. We assessed controls related to the identification and 

prevention of ineligible beneficiaries in accordance with internal control 

standards.13

To further identify opportunities, if any, that exist to strengthen USDA’s 

oversight of the school-meals programs, we tested controls that are 

designed to identify and prevent ineligible school-meal beneficiaries. To 

do this, we selected a nongeneralizable sample of 48 households 

participating in the NSLP for further review and investigation.14 To select 

the sample, we matched school-meals eligibility data for the 2010-2011 

school year from the 25 school districts to executive-branch civilian 

federal-employee payroll data for approximately 2.5 million individuals to 

identify households that school districts deemed eligible for free or 

reduced-price school meals.15 We used civilian federal-employee payroll 

data obtained in 2010 through 2013 due to the unavailability of other data 

sources containing salary information for nonfederal employees. 

According to a January 2012 Congressional Budget Office Report, in 

2010, 1.7 percent of the U.S. workforce was made up of federal civilian 

employees—approximately 2.3 million compared to 111 million that were 

employed by the private sector and 20 million employed by state and 

local governments.16

A household member earning income does not preclude children in the 

household from being eligible for school-meals benefits. The purpose of 

our work was to select households for review and to determine whether 

any of the selected households were potentially ineligible for benefits 

based upon their pay and USDA eligibility guidelines. To assess the 

reliability of the school-meals eligibility and payroll data, we reviewed 

relevant documentation including NSLP applications, interviewed 

knowledgeable agency officials, and examined the data for errors and 

The results of our work were not designed to be 

generalizable and do not include private-sector employees.

 13GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

14USDA reported that approximately 7.7 million household applications were approved for 

free or reduced-price meals during the 2010-2011 school year. 

15The 2010-2011 school year was the last year in which the school-meals applications 

requested that the adult applicant provide his or her complete Social Security number. 

16Congressional Budget Office, Comparing the Compensation of Federal and PrivateSector Employees (Washington, D.C.: January 2012). 
Page 6 GAO-14-262 School-Meals Eligibility 

inconsistencies. We concluded that the school-meals eligibility data and 

payroll data were sufficiently reliable for the purposes of this report.

In selecting our sample, we narrowed the civilian federal-employee 

payroll data to those with income during the July 2010 to December 2010 

period—to coincide with the start of the school year, when most schoolmeals eligibility determinations are made. We then matched the schooldistrict beneficiary data to the federal-employee payroll data using the 

Social Security number, address, and name fields, to the extent they were 

available.17 On the basis of these matches, we randomly selected up to 

two households in each of the 25 school districts for an in-depth review, 

for a total of 48 cases.18

Our investigators interviewed the federal employees associated with the 

48 households in our nongeneralizable sample to obtain additional 

information about their applications, households, and employment. The 

specific findings from the selected cases cannot be generalized to other, 

or all, school-meals beneficiaries or federal-employee households that 

received school-meals benefits. Because our data were limited to federalemployee households in 25 school districts that were randomly selected 

on a nongeneralizable basis, the results of our cases cannot be 

generalized to a larger population of school-meals participants or to the 

entire federal workforce. We plan to refer any potentially ineligible 

Specifically, for each of the school districts, we 

reviewed one household that submitted an application that was used for 

benefit determination (25 cases), as well as one household that was 

directly certified (23 cases). For the 25 applicant cases, we reviewed 

available applications from 2010-2011 and salary information during this 

period, as well as any applications these households submitted during the 

2011-2012 and 2012-2013 school years. For the 23 cases in which the 

household was directly certified into the school-meals programs without 

submitting an application due to the household’s participation in SNAP or 

other assistance programs, we reviewed 2010-2011 salary information 

and obtained and reviewed the application the household submitted for 

the assistance program that allowed direct certification.

 17We applied a minimum threshold of $6,000 to the amount of federal salary earned 

during July 2010 to December 2010 in order to identify active employees for our 

nongeneralizable sample. Individuals with incomes of less than $6,000 were not part of 

the sample.

18Two selected school districts did not have any directly certified households that matched 

with federal-employee payroll data.
Page 7 GAO-14-262 School-Meals Eligibility 

households to USDA and their school districts for appropriate action as 

warranted.

We conducted this performance audit from February 2012 to May 2014 in 

accordance with generally accepted government auditing standards.19

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. We conducted our related 

investigative work from June 2013 to May 2014 in accordance with 

standards prescribed by the Council of the Inspectors General on Integrity 

and Efficiency. For a more-detailed description of our scope and 

methodology, see appendix I.

Within USDA, FNS has overall responsibility for overseeing the schoolmeals programs, which includes promulgating regulations to implement 

authorizing legislation setting nationwide eligibility criteria and issuing 

guidance. School-meals programs are administered at the state level by a 

designated state agency that issues policy guidance and other 

instructions to school districts providing the meals to ensure awareness of 

federal and state requirements. School districts are responsible for 

completing application, certification, and verification activities for the 

school-meals programs, and for providing children with nutritionally 

balanced meals each school day. The designated state agency conducts 

periodic reviews of the school districts to determine whether the program 

requirements are being met. Schools and households that participate in 

free or reduced-price meal programs may be eligible for additional federal 

and state benefits. Appendix II discusses those benefits. A graphic 

depicting the responsibilities of FNS, state agencies, and school districts 

can be found in appendix III.

 19The time frame required for our review was a result of various factors, including time 

required to complete data reliability assessments and data standardization of multiple 

databases. 

Background

School-Meals Programs 

Administration
Page 8 GAO-14-262 School-Meals Eligibility 

Children from families with incomes at or below 130 percent of the federal 

poverty level are eligible for free meals. Those with incomes between 130 

percent and 185 percent of the federal poverty level are eligible for 

reduced‐price meals. Income is any money received on a recurring 

basis—including, but not limited to, gross earnings from work, welfare, 

child support, alimony, retirement, and disability benefits—unless 

specifically excluded by statute.20 Table 1 below shows the annual 

income-eligibility guidelines in effect for a family of four during the 2010-

2011 through the 2013-2014 school years.21

Table 1: Annual Income Eligibility Guidelines for a Family of Four

Dollars

School year

Maximum household income for 

a family of four to qualify for 

free-meal benefitsa

Maximum household income for a 

family of four to qualify for 

reduced-price-meal benefitsa 

2010-2011 $28,665 $40,793

2011-2012 29,055 41,348

2012-2013 29,965 42,643

2013-2014 30,615 43,568

Source: U.S. Department of Agriculture (USDA).

a

Excludes Alaska and Hawaii.

Children from families with incomes over 185 percent of the federal 

poverty level pay full price, though their meals are still subsidized to some 

extent.22

 20Income not to be counted in the determination of a household’s eligibility includes, but is 

not limited to, the value of benefits under SNAP or Food Distribution Program on Indian 

Reservations (FDPIR), student financial assistance benefits, and loans. 78 Fed. Reg. 

17628 (Mar. 22, 2013).

21The income-eligibility guidelines are in effect from July 1 to June 30 of each year. The 

income-eligibility guideline amounts in Alaska and Hawaii are higher. 

22Local school districts set their own prices for full‐price (paid) meals, but must operate 

their meal services as nonprofit programs. For July 1, 2013, through June 30, 2014, the 

basic cash reimbursement rate for lunch ranged from $2.93 to a maximum allowable of 

$3.16 for free meals, $2.53 to $2.76 for reduced-price meals, and $0.28 to $0.42 for paid 

meals. The cash reimbursement rate for breakfast ranged from $1.58 to a maximum 

allowable of $1.89 for free meals, $1.28 to $1.59 for reduced-price meals, and $0.28 for 

paid meals. Higher NSLP and SBP reimbursement rates are in effect for Alaska and 

Hawaii.

Eligibility Determinations 

and Verification
Page 9 GAO-14-262 School-Meals Eligibility 

In addition, students who are in households receiving benefits under 

certain public-assistance programs—specifically, SNAP, Temporary 

Assistance for Needy Families (TANF), or Food Distribution Program on 

Indian Reservations (FDPIR)—or meet certain approved designations 

(such as students who are designated as homeless, runaway, or migrant; 

a foster child) are eligible for free school meals regardless of income.

School districts certify students into the school-meals programs using one 

of two methods—either through (1) a household application identifying 

household information such as income and household size, or information 

on participation in public-assistance programs or (2) direct certification.23

During the 2012-2013 school year, 11.7 million students were certified for 

free or reduced-price meals through a household application, and 12.3

million students were directly certified.24

• Household application. Under the household-application method, a 

household submits an application provided by the school district. 

Since a household application is used for all members in the 

household, a single application can list multiple students. Schools 

send school-meals applications home at the beginning of each school 

year, but household applicants may apply at any time during the 

course of the year. Online applications are also available in some 

school districts. The applicant lists all sources of household income, 

the frequency with which it is received, and the names of all 

household members, among other information. One adult from the 

household signs the application, certifying that the information 

provided is correct. No supporting documentation—such as tax 

returns or pay stubs—is required at the time of application. In 

accordance with USDA guidance, school districts are not to conduct 

any actions to verify the information on the application during the 

certification process; they must accept the applications at face value 

Once a child is certified into the 

school-meals program, the eligibility determination is in effect for the 

entire year; households are not required to inform the school if wages rise 

above the income-eligibility guidelines during the school year.

 2342 U.S.C. § 1758. Categorical eligibility can be conferred through either a household 

application or direct certification.

24A household application is used for all members in the household; therefore, an 

application can contain multiple students. While 24 million students were deemed eligible 

for free or reduced-price meals, according to USDA officials, not all students who were 

deemed eligible participate. 

Certification
Page 10 GAO-14-262 School-Meals Eligibility 

and determine eligibility based on the information voluntarily disclosed 

in the application.25 In addition, students who are in households 

receiving benefits under certain public-assistance programs, including

SNAP or TANF, or meet an approved designation—regardless of 

income—are categorically eligible for free school meals. For example, 

students who are designated as (1) homeless, runaway, or migrant; 

(2) a foster child; or (3) enrolled in a federally funded Head Start 

Program are categorically eligible for free meals. These households 

must state the reason for their categorical eligibility on the application 

along with any applicable public-assistance identification numbers.

FNS officials told us that school district officials have a responsibility 

to verify homeless, runaway, and migrant applications as part of the 

application approval process. Figure 1 below is an example of a 

school-meals application and information required to be deemed

categorically eligible. Appendix IV provides a sample school-meals 

household application. The school district reviews data on the 

application, such as household size, income, or participation in an 

approved public-assistance program or other approved designation, 

and makes an eligibility determination. Starting with the 2011-2012 

school year, applicants are required to provide the last four digits of 

their Social Security numbers rather than the entire nine-digit 

number.26

 257 C.F.R. § 245.6(c)(4) and USDA Eligibility Manual. In commenting on a draft of this 

report, USDA explained that beginning on July 1, 2014, school districts that demonstrate a 

high level of or high risk for certification, verification, and other administrative errors will be 

required to ensure that the initial eligibility determination for each application is reviewed 

for accuracy prior to notifying a household of its eligibility status

2642 U.S.C. § 1758(d).
Page 11 GAO-14-262 School-Meals Eligibility 

Figure 1: School Meals Application Highlighting Categorical Eligibility Requirements

• Direct Certification. Children in households that receive certain 

public-assistance benefits—SNAP, FDPIR, or TANF—are 

automatically eligible for free school meals through “direct 

certification.” Under the direct-certification method, school districts 

certify children who are members of households receiving public 

assistance as eligible for free school meals based on information 
Page 12 GAO-14-262 School-Meals Eligibility 

provided by the state or local agency administering those programs. 

Starting in the 2008-2009 school year, school districts were required 

to directly certify SNAP households into the school-meals programs.27

Figure 2 below describes the household-application and directcertification methods that households use to become certified for free or 

reduced-price meals.

A student or household that meets an approved designation—such as 

homeless or foster children—can also be directly certified into the 

school-meals programs without having to complete a household 

application.

 27The Child Nutrition and WIC Reauthorization Act of 2004 (CNR) required all states to 

establish a system of direct certification of school-age SNAP participants by the 2008-

2009 school year. The requirement applies only to children participating in SNAP;

however, states and school districts may also directly certify children from TANF and 

FDPIR households, as well as children meeting an approved designation.
Page 13 GAO-14-262 School-Meals Eligibility 

Figure 2: Household-Application and Direct-Certification Methods for Eligibility Determinations in the School-Meals Programs

a

Students who meet an approved designation—(1) homeless, runaway, or migrant; (2) foster 

child; or (3) enrolled in a federally funded Head Start Program—are categorically eligible for free 

school meals.
Page 14 GAO-14-262 School-Meals Eligibility 

After school districts certify household eligibility for school-meals program 

benefits, they must annually verify a sample of household applications 

approved for free or reduced-price school-meals benefits to determine 

whether the household has been certified to receive the correct level of 

benefits—we refer to this process as “standard verification.”28 As dictated 

by statute, school districts are required to verify a random sample of 

applicants. The sample size is equal to the lesser of 3 percent of 

approved applications, selected from error-prone applications, or 3,000 

error-prone applications unless an alternative sample size is used.29 For 

the purposes of standard verification, the NSLA defines error-prone 

applications as certified applications with monthly income within $100 

of—or with annual income within $1,200 of—the income eligibility limits 

for free or reduced-price meals. Households that indicate categorical 

eligibility on an application and households that enter the program 

through direct certification are generally not subject to the standard 

verification process.30

Further, as described in USDA’s eligibility manual for school meals, 

school districts are obligated to verify additional applications if they deem 

them to be questionable, which is referred to as for-cause verification.31

 2842 U.S.C. § 1758(b)(2)(D).

Verification—whether standard or for-cause—is conducted only for those 

29If there are not an adequate number of error-prone applications to draw a 3 percent 

sample, school districts are to conduct standard verification on all error-prone applications 

and select the remaining required applications from all certified applications, including 

applications indicating categorical eligibility. School districts may qualify to use one of two 

alternate sample sizes based upon the nonresponse rate for the preceding school year. 

The sample size under alternate one is equal to the lesser of: 3 percent of all applications 

or 3,000 applications selected at random. The sample size under alternate two is equal to 

the lesser of: 1,000 of all applications plus the lesser of (a) 500 applications that provide a 

case number in lieu of income information or (b) 1⁄2 of 1 percent of applications approved 

that provide a case number in lieu of income information. USDA guidance also states that 

school districts must not verify more or less than the standard sample size or alternative 

sample size.

30Households that indicate categorical eligibility could be subject to verification if a school 

district did not have enough error-prone applications to meet the 3 percent sampling 

requirement and drew additional applications from all those certified for standard 

verification. If selected, the validity of the case number stated on the application would be 

verified.

31United States Department of Agriculture, Food and Nutrition Service, Eligibility Manual 

for School Meals: Determining and Verifying Eligibility (Washington, D.C.: January 2008). 

This guidance has been included in all subsequent manuals. 

Verification
Page 15 GAO-14-262 School-Meals Eligibility 

beneficiaries receiving benefits through the household-application 

process; directly certified households are not subject to verification. 

Households selected for verification (standard or for-cause) must submit 

supporting documentation—such as pay stubs, benefit award letters from 

state agencies for benefits such as Social Security, or supplemental 

security income, or support payment decrees from courts—to the school 

district, or be removed from the program. The school district reviews the 

information, determines whether the household’s free or reduced-price 

status is correct, and makes corrections, as necessary.

The Improper Payments Information Act of 2002, as amended,32 requires 

agencies to identify, measure, prevent, and report their improper payment 

amounts and to develop and implement improper payment reduction 

plans, among other things. For fiscal year 2013, USDA reported that the 

NSLP and SBP had estimated improper payment rates of approximately 

15.7 percent and 25.3 percent, respectively—equating to about $1.8 

billion and $831 million.33

Table 2: Estimated Improper Payment Rates in the National School Lunch Program 

(NSLP) and School Breakfast Program (SBP) for Fiscal Year 2013

Table 2 below shows the portion of improper 

payments in the NSLP and SBP attributable to certification errors versus 

counting and claiming errors, as reported for fiscal year 2013.

NSLP SBP

Type of error

Amount of 

improper 

payments 

(dollars in 

millions)

Percentage of 

program 

payments 

deemed 

improper 

(percent)

Amount of 

improper 

payments 

(dollars in 

millions)

Percentage of 

program 

payments 

deemed 

improper 

(percent)

Certification $996 8.8% $312 9.5%

Counting/claiming 778 6.9 519 15.8

Total $1,774 15.7% $831 25.3%

Source: U.S. Department of Agriculture (USDA).

Note: The United States Department of Agriculture Office of the Inspector General (OIG) reported that 

NSLP and SBP improper payment estimates may be unreliable because they were based on the 

2005-2006 school year and confidence levels could not be provided for subsequent years. Estimated 

 32Pub. L. No. 107-300 (Nov. 26, 2002).

33United States Department of Agriculture, Agency Financial Report, Fiscal Year 2013

(Washington, D.C.: December 2013).

Improper Payment Rates 

Associated with the 

School Meals Programs
Page 16 GAO-14-262 School-Meals Eligibility 

improper payments in the NSLP and SBP are due to certification errors, such as incorrect eligibility 

determinations, as well as noncertification errors, such as meal-counting and meal-claiming errors.

In March 2013, USDA’s Office of the Inspector General (OIG) reported 

that FNS officials were continuing to work with states to address the high 

estimated improper-payments rate. However, in the same report, the 

USDA OIG noted that FNS baselines for improper payments may be 

unreliable because they were based on the 2005-2006 school year and 

confidence levels could not be provided for subsequent years.34 To 

update data used to determine FNS current improper-payment estimates, 

FNS hired a contractor to conduct a study for the 2012-2013 school year. 

In 2012, FNS officials told us that they believe this study will better reflect 

current improper-payment rates for the NSLP and SBP, and in April 2014 

stated that they expect to release the results of the study in early 2015.

To address the high improper-payment rates in the school-meals 

programs, among other actions, USDA worked with Congress to develop 

the Child Nutrition and WIC Reauthorization Act of 2004 (CNR).35

 34USDA commissioned a November 2007 NSLP/SBP Access, Participation, Eligibility, and 

Certification (APEC) Study to estimate certification and noncertification errors in the NSLP 

and SBP during the 2005-2006 School Year. The study developed a series of models that 

USDA uses to estimate program improper payments annually. 

CNR 

required school districts to directly certify students that receive SNAP 

benefits for free meals in all school districts by the 2008-2009 school 

year. USDA officials told us that they are emphasizing the use of direct 

certification, because, in their opinion, it helps prevent certification errors 

without compromising access. School-meals programs and SNAP have 

35Pub. L. No. 108-265 (June 30, 2004). 

USDA Has Taken 

Steps to Help Identify 

and Prevent Ineligible 

Participants from 

Receiving Benefits

USDA Has Increased the 

Use of Direct Certification
Page 17 GAO-14-262 School-Meals Eligibility 

similar income-eligibility limits.36

To test the effectiveness of direct certification in identifying and 

preventing ineligible participants from receiving benefits, we reviewed a 

nongeneralizable sample of 23 households who were directly certified for 

free-meal benefits and found two cases where the household appeared 

ineligible for SNAP benefits, and therefore may have been inappropriately 

directly certified into the school-meals programs, as described below.

Because these households were directly certified for school-meals 

benefits, the school district would not be aware of the SNAP error unless 

notified by the appropriate state agency.

Further, the application process for 

SNAP is more detailed than the certification process under the NSLP. 

Direct certification has reduced the administrative burden on SNAP 

households, as they do not need to submit a separate school-meals 

application. It also reduces the number of applications school districts 

must review. In commenting on a draft of this report, USDA reiterated that 

school districts do not have access to SNAP eligibility documents, are not 

required to review household SNAP applications, and therefore accept 

the SNAP eligibility determination at face value. FNS officials also told us 

that once school districts receive confirmation that a household is eligible 

for direct certification, they are not required to determine whether the 

household is still eligible throughout the year.

• One household received SNAP benefits from October 2009 to 

October 2010. However, one household member started employment 

in March 2010 and, based upon his biweekly pay of approximately 

$3,300, his household of four members would no longer have 

qualified for SNAP benefits. The SNAP Notice of Food Benefit 

Extension sent to the household dated March 7, 2010, required 

notification of changes to job status and rate within 10 days beginning 

in May 2010. Based on the change of wages in March 2010, this 

household would have not have remained eligible for SNAP benefits 

and thus would not have been eligible for direct certification for free 

school meals during the 2010-2011 school year.

• One household’s SNAP application incorrectly omitted a member of 

the household who earned income and provided financial support. 

 36To qualify for SNAP benefits, households must meet certain income and resource tests. 

In general, a household’s gross monthly income cannot exceed 130 percent of the federal 

poverty level. 
Page 18 GAO-14-262 School-Meals Eligibility 

Had the SNAP application included this household member’s income, 

the household would not have qualified for SNAP benefits; therefore, 

this household should not have been directly certified for free school 

meals during the 2010-2011 school year.

We will include these instances in our referrals to USDA and the state 

agency administering SNAP for appropriate action, as warranted.

Since passage of the CNR, the number of school districts directly 

certifying SNAP-participant children has continued to increase. For 

example, during the 2008-2009 school year, 78 percent of school districts 

directly certified students, and by the 2012-2013 school year, this 

percentage had grown to 91 percent of school districts, bringing the 

estimated percentage of SNAP-participant children directly certified for 

free school meals to 89 percent.37

USDA is also conducting demonstration projects in selected states and 

school districts to explore the feasibility of directly certifying children that 

participate in the Medicaid program.38

 37States that fail to achieve a direct-certification rate of at least 95 percent by the 2013-

2014 school year are required to implement direct-certification improvement plans. 

According to a USDA report, states cited the inability of direct-certification improvement 

measures to account for children who receive SNAP benefits but who are not enrolled in 

schools and thus not eligible for direct certification. These students include homeschooled children, school dropouts, and some homeless and migrant children. Another 

commonly cited challenge was incorporating nonpublic schools more efficiently into the 

direct-certification process. U.S. Department of Agriculture, Food and Nutrition Service, 

Office of Policy Support, Direct Certification in the National School Lunch Program: State 

Implementation Progress, School Year 2012-2013, Special Nutrition Programs Report No. 

CN-13-DC, prepared by Mathematica Policy Research, Inc. (Alexandria, Va.: November 

2013). 

During the demonstration projects, 

eligible children will be directly certified for free school meals based on a 

review of income and participation information received from Medicaid 

agencies through automated data-matching processes, with no 

household-application requirement. Five states participated in the studies 

during the 2012-2013 school year, six participated during the 2013-2014 

38In all states, the combined income eligibility limit for Medicaid exceeds the NSLP income 

eligibility limit of 130 percent of the federal poverty guideline.
Page 19 GAO-14-262 School-Meals Eligibility 

school year, and more are expected to participate during the 2014-2015 

school year.39

USDA requires administering state agencies to conduct regular, on-site 

reviews—referred to as administrative reviews—to evaluate school 

districts that participate in the school-meals programs.40 The Healthy, 

Hunger-Free Kids Act of 2010 increased the frequency of these reviews 

from every 5 years to every 3 years.41 Starting with the 2013-2014 school 

year, state agencies are required to conduct administrative reviews at 

least once during a 3-year review cycle, with no more than 4 years 

between the reviews. During this process, state agencies are to 

determine whether free, reduced-price, and paid lunches were properly 

provided to eligible students; and that meals are counted, recorded, 

consolidated, and reported through a system that consistently yields 

correct claims.42

As part of this process, state agencies are to conduct on-site reviews of 

school districts to help ensure that applications are complete and that the 

correct eligibility determinations were made based on applicant 

information. In reviewing eligibility determinations, the state agency may 

elect to review documentation for all students certified for free or reducedprice or a statistically valid sample. Once the names of students subject 

to review have been identified, the state agency reviews the household 

application or direct certification to determine whether or not the 

certification decision was correct; supporting documents—such as payroll 

records or benefit award letters—are not obtained during the 

administrative review process. In addition, during the on-site review, state 

agency officials are to observe the meal service—to determine whether 

the meals claimed meet the federal requirements for a reimbursable 

 39USDA, Food and Nutrition Service, National School Lunch Program and School 

Breakfast Program: Request for Applications for Participation in Demonstration Projects to 

Evaluate Direct Certification with Medicaid (Alexandria, Va.: November 2012). 

407 C.F.R. § 210.18, Prior to the 2013-2014 school year, these reviews were referred to as 

Coordinated Review Efforts. In commenting on a draft of this report, USDA clarified that 

administrative reviews include off-site procedures where state agencies evaluate the 

school district’s system for making eligibility determinations including direct certification.

41Pub. L. No. 111-296, § 207 (Dec. 13, 2010). 

42Additional changes are being made to the administrative review process, including 

focusing the application review process at the school district level instead of the school 

level.

USDA Has Increased the 

Frequency of State 

Agency Reviews
Page 20 GAO-14-262 School-Meals Eligibility 

lunch, including nutrition and portion requirements—as well as the 

process of counting and recording meals. School districts that have

administrative review findings are to submit a corrective-action plan to the 

state agency, and the state agency is to follow up to determine whether 

the issue has been resolved. USDA regulations require all state agencies 

to report the results of administrative reviews to FNS by March 1 of each 

school year.43

We reviewed administrative review reports from the 25 school districts we 

selected that were completed between February 2008 and December 

2012. Administrative review reports from 11 school districts cited some 

incorrect eligibility determinations. Incorrect eligibility determinations 

ranged from 1 to 15 per district—based on the stated information on the 

application. The number of incorrect determinations found in each school 

district was small compared to the number of applications reviewed, 

which ranged from 687 to 8,398. As required, these 11 school districts 

submitted a corrective-action plan to the state addressing how they would 

ensure that all meal-benefit applications are reviewed and certified based 

on eligibility guidelines. The state agency determines if the school 

district’s corrective action satisfactorily resolves the problem; the state 

agency cannot close the review until all identified issues have been 

addressed. The administrative review reports from the remaining 14 

school districts in our sample did not cite any incorrect eligibility 

determinations.

FNS officials told us that as part of their oversight of state 

agencies, they confirm that agencies have completed the administrative 

reviews.

In commenting on a draft of this report, USDA told us that it makes grant 

funds available annually to states to fund the performance of additional 

administrative reviews, oversight, and training for school districts with a 

high level or risk of administrative errors. USDA stated that since fiscal 

year 2005, $4 million has been set aside annually for these grants. 

According to USDA, from fiscal year 2005 to 2013, FNS awarded 60 

grants totaling $26.5 million. 

 437 C.F.R. § 210.18 (n).
Page 21 GAO-14-262 School-Meals Eligibility 

As discussed earlier in this report, school districts are obligated to verify 

the eligibility of applicants whose application information is deemed 

questionable under the “for-cause” verification process. Examples of 

relevant recent cases include the following:

• The Chicago Board of Education OIG reported that in fiscal year 

2012, a cohort of highly paid and high-level Chicago Public Schools 

administrators falsified information on school-meals applications and 

the office noted the possibility of system-wide school-meals fraud.44

Specifically, the report cited 21 principals, assistant principals, and 

recently promoted assistant principals who understated their own 

income or falsified the number of household members, including 

leaving themselves off the applications.

• In July 2013, the State of New Jersey Office of the State Comptroller 

issued a report on fraudulent school-lunch program applications filed 

by public employees.45

In February 2012, USDA distributed guidance to state administrators to 

clarify that school districts have the authority to review approved 

applications for free or reduced-price meals for school-district employees 

when known or available information indicates school-district employees 

may have misrepresented their incomes on their applications. However, 

this for-cause verification should be used selectively and not to verify the 

household income of all school district employees whose children are 

certified for free or reduced-price meals. Under the guidance, school 

districts can identify children of school-district employees and use salary 

The report, reviewing a sample of schools that 

received more than $1 million in reimbursements for school lunches in 

the 2010-11 school year, found a number of public employees who 

materially underreported their household income on school-lunch 

applications, including 101 public employees (elected school-board 

members and school-district employees among them) who provided 

materially false information. Further, according to the July 2013 report, 

numerous applicants substantially underreported the income of 

household members and many failed to list income-generating 

household members on their applications.

 44Chicago Board of Education, Office of the Inspector General, Annual Report 2012 

(Chicago, Ill.: Dec. 28, 2012). 

45State of New Jersey Office of the State Controller, Investigative Report: Fraudulent 

School Lunch Program Applications Filed by Public Employees (July 17, 2013). 

USDA Has Issued 

Guidance on the Use of 

For-Cause Verification
Page 22 GAO-14-262 School-Meals Eligibility 

information available to them to identify questionable applications and 

then conduct for-cause verification on the questionable applications, if 

necessary. In August 2012, USDA also updated its school-meals eligibility 

manual—used by school districts to determine and verify eligibility—with 

this guidance. Our analysis of this guidance is presented below.

As discussed earlier in this report, USDA regulations require that school 

districts conduct for-cause verification of all questionable applications.46

 467 C.F.R. § 245.6a(c)(7). 

Officials from 11 of the 25 school districts told us during our interviews 

that they conduct for-cause verification. These officials provided 

examples of how they would identify suspicious applications, such as 

when a household submits a modified application—changing income or 

the household members—after being denied or when different 

households include identical public-assistance benefit numbers (e.g., if 

different households provide identical SNAP numbers). However, officials 

from 9 of the 25 school districts told us that they did not conduct any forcause verification. For example, one school-district official explained that 

the school district accepts applications at face value. An official from 

another school district said that his district does not conduct for-cause 

verification and added that he is not sure how to identify questionable 

applications. Additionally, officials from 5 of the 25 school districts told us 

they only conduct for-cause verification if someone (such as a member of 

the public or a state agency) informs them of the need to do so on a 

household. Although not generalizable, responses from these school 

USDA Could Explore 

Options to Enhance 

the Verification 

Process to Further 

Strengthen Integrity 

While Ensuring 

Legitimate Access

Guidance to Clarify Use of 

For-Cause Verification 

Could Enhance Oversight
Page 23 GAO-14-262 School-Meals Eligibility 

districts provide insights about if and under what conditions for-cause 

verifications are conducted.

USDA officials stated that school districts have the obligation to conduct 

for-cause verification if they suspect inaccurate information, but added 

that staff may be hesitant to perform it because of the potential work 

burden it may create. USDA officials also told us that some school 

districts may be reluctant to conduct for-cause verification because of 

concerns about appearing to target certain groups of people. In April 

2013, USDA issued a memorandum stating that effective for the 2013-

2014 school year, all school districts must specifically report the total 

number of applications that were verified for cause. Prior to this, USDA 

did not collect any information on applications that have undergone forcause verification. USDA officials told us that they will use the information 

to determine the frequency with which school districts conduct for-cause 

verification. This information is to be provided to USDA in April 2014; 

however, since this is the first year the information is being collected, it 

may take school districts additional time to finalize the reports. While 

school districts are to report the number of applications verified for cause, 

the outcomes of those verifications will be grouped with the outcomes of 

applications that have undergone standard verification. As a result, USDA 

plans to review the results to determine the frequency with which school 

districts conduct for-cause verification but will not have information on 

specific outcomes, which it may need to assess the effectiveness of forcause verifications and to determine what actions, if any, are needed to 

improve program integrity.

During our review of 25 households that applied for and received schoolmeals benefits, we identified one household that reapplied for schoolmeals benefits during the 2011-2012 school year less than 2 weeks after 

being denied benefits for not meeting the eligibility requirements. The new 

application removed a source of income—child support—and the 

household was approved for reduced-price meals.47

 47Income to be reported on the application includes: gross earnings from work, welfare, 

child support, alimony, retirement, and disability benefits. 

When we interviewed 

the applicant, she said that she could not remember if she received child 

support payments at the time she resubmitted the application. This 

household also applied for school-meal benefits during the 2012-2013 

school year. The application did not indicate child-support payments, and 
Page 24 GAO-14-262 School-Meals Eligibility 

the household was subsequently approved for reduced-price meals. This 

household was not subjected to for-cause verification by the school 

district even though households resubmitting an application with less 

income a short time after being denied benefits could be a red flag to 

indicate that for-cause verification should be conducted.48

While USDA has issued guidance specific to school-district employees 

and instructs school districts to verify questionable applications in its 

school-meals eligibility manual, we found that the guidance does not 

provide possible indicators or describe scenarios that could assist school 

districts in identifying questionable applications. Standards for Internal 

Control in the Federal Government call for agencies to design control 

activities to ensure management’s directives are carried out.49 Reviewing 

the data gathered on for-cause verification for the 2013-2014 school year 

could help USDA determine if data on the outcome of for-cause 

verifications should be reported separately from standard verification 

results. Further, as noted above, evaluating this data could help USDA 

determine whether additional guidance would be beneficial to assist 

school districts in identifying applications that should be subject to forcause verification. Such guidance could include criteria and examples of 

possible indicators of questionable or ineligible applications.

USDA’s standard verification process—the terms of which are statutorily 

defined—makes it difficult to detect all households that misreport their 

income and that are ineligible for program benefits. It could also result in 

the removal of eligible beneficiaries, as households that do not respond to 

the verification notice are removed from the program. Electronically 

matching household-application information to other data sources—such 

as state income databases or public-assistance databases—could hold 

promise in identifying high-income households for validation while not 

disrupting program benefits to eligible households.

 48We did not confirm if the applicant received child support payments at the time of 

application. An official from this school district told us that this school district does not 

conduct for-cause verification.

49GAO/AIMD-00-21.3.1.

Income-Based Verification 

Could Enhance Oversight
Page 25 GAO-14-262 School-Meals Eligibility 

As described earlier in this report, with the exception of for-cause 

verification, standard verification is generally limited to approved 

applications considered “error-prone.”50 Error-prone is statutorily defined 

as approved applications where stated income is within $100 of the 

monthly or $1,200 of the annual applicable income-eligibility guideline. 

Households with reported incomes that are more than $1,200 above or 

below the free-meals eligibility threshold and more than $1,200 below the 

reduced-price threshold would generally not be subject to this verification 

process.51

 50As dictated by statute, school districts are required to verify a sample of applicants. The 

sample size is equal to the lesser of 3 percent of approved applications, selected from 

error-prone applications, or 3,000 error-prone applications unless an alternative sample 

size is used. If there are not an adequate number of error-prone applications to draw a 3 

percent sample, school districts are to conduct standard verification on all error-prone 

applications and select the remaining required applications from all certified applications, 

including applications indicating categorical eligibility. All applications can be subject to 

for-cause verification.

Figure 3 shows the income thresholds of applicants that would 

and would not be considered error-prone for a four-person household 

during the 2010-2011 school year.

51Households with reported incomes more than $1,200 above the reduced-price threshold 

should not be certified for free or reduced-price meals and therefore not subject to 

verification. 

Standard Verification Limited to 

Small Portion of Beneficiaries
Page 26 GAO-14-262 School-Meals Eligibility 

Figure 3: Standard Verification Thresholds for a Four-Member Household during the 2010-2011 School Year

Note: Data are from the Richard B. Russell National School Lunch Act (NSLA) and the United States 

Department of Agriculture (USDA) income-eligibility guidelines for the 2010-2011 school year. Only 

approved applications are subject to standard verification.

In addition to the nongeneralizable sample of 23 households receiving 

school-meal benefits through direct certification discussed in the previous 

section, we reviewed a nongeneralizable sample of 25 households 

receiving school-meals benefits through an approved application. 

Nineteen household applications were certified based upon their stated 

income and household size.52

 52Six of the 25 approved household applications we reviewed indicated categorical 

eligibility. The results of these cases are discussed later in this report. 

Of these, we determined that 9 were not 

eligible for free or reduced-price-meal benefits they were receiving 

because their income exceeded eligibility guidelines. Further, 2 of these 9 

households stated annualized incomes that were within $1,200 of the 
Page 27 GAO-14-262 School-Meals Eligibility 

eligibility guidelines. These two households could have been subject to 

standard verification had they been selected as part of the sample by the 

district; however, they were not selected or verified. The remaining 7 of 9 

households stated annualized incomes that did not fall within $1,200 of 

the eligibility guidelines and thus would not have been subject to standard 

verification. Figure 4 shows the results of our review.
Page 28 GAO-14-262 School-Meals Eligibility 

Figure 4: Results of GAO’s Analysis of Approved Applications: Limited Number of Ineligible Households Met Requirements 

for Standard Verification

Note: There are two ways children may be classified as categorically eligible: (1) through participation 

in certain public-assistance programs, such as Supplemental Nutrition Assistance Program (SNAP) or 

Temporary Assistance for Needy Families (TANF), or (2) through meeting an approved designation, 

such as homeless or foster child.
Page 29 GAO-14-262 School-Meals Eligibility 

Of the 19 households shown above that indicated eligibility based on selfreported household size and income, we determined that 9 were not 

eligible for free or reduced-price-meal benefits they were receiving 

because their known income exceeded eligibility guidelines. For example, 

one household we reviewed submitted a school-meals application for the 

2010-2011 school year seeking school-meals benefits for two children. 

The household stated an annual income of approximately $26,000 per 

year, and the school district appropriately certified the household to 

receive reduced-price-meal benefits based on the information on the 

application. However, through review of the payroll records, we 

determined that the adult applicant’s income at the time of the application 

was approximately $52,000—making the household ineligible for benefits. 

This household also applied for and received reduced-meal benefits for 

the 2011-2012 and 2012-2013 school years by understating its income. 

Its 2012-2013 annualized income was understated by about $45,000. 

Because the income stated on the application during these school years 

was not within $1,200 per year of the income-eligibility requirements, the 

application was not deemed error-prone and was not subject to standard 

verification. Had this application been subjected to verification, a valid pay 

stub would have indicated the household was ineligible. We interviewed 

the adult applicant as part of our investigation, and the applicant admitted 

to underestimating her income.

Another household in our sample submitted a school-meals application 

for the 2010-2011 school year—stating an income that equated to 

approximately $32,500 annually and a household size of five members—

and was approved for free-meal benefits. However, at the time of the 

application, the household’s annualized income was at least $60,000, 

making the household ineligible for free or reduced-price meals. The 

household application stated an annualized income that put it within the 

error-prone range; however, it was not among the 3 percent sample of 

error-prone applications selected for verification.53

 53The annual eligibility guideline for a household of five during the 2010-2011 school year 

was $33,527 for free meals and $47,712 for reduced-price meals; the error-prone range is 

$46,512 to $47,712 and $32,327 to $34,727. 

This household applied 

for school-meals benefits for the 2011-2012 school year—stating an 

annualized income that equates to approximately $39,600—and was 

approved for reduced-price meals. However, based on our review of 

payroll information, household income was at least $73,000 during 

2011—a difference of about $33,000—making this household ineligible 
Page 30 GAO-14-262 School-Meals Eligibility 

for free or reduced-price meals. When interviewed, the applicant said that 

her children completed the application and that she signed it.54

In another instance, a household submitted a school-meals application for 

the 2010-2011 school year—stating an annualized income that equates to 

approximately $19,200 and a household size of four—and was approved 

for free school-meals benefits. This application omitted a parent living in 

the household and earning annualized income of approximately $55,000. 

Had the wage-earner and his income been included, this household 

would not have qualified for free or reduced-price meals. This household 

applied for and was approved for free school-meals for the 2011-2012 

and 2012-2013 school years. Again, these applications omitted the parent 

and his wages—which amounted to approximately $62,000 during 2011 

and $64,000 during 2012. Had his income been included, the household 

would not have qualified for free or reduced-price meals. When 

interviewed, the parent said that he was not aware that his children had 

been receiving free school-meals benefits. Because the stated income on 

the application was outside the error-prone range, and the school district 

only verified error-prone applications during these school years, this 

household would not have been subject to standard verification. 

Individuals with knowledge of the program-eligibility guidelines could 

understate their income to avoid scrutiny, as this would likely prevent the 

application from being reviewed under standard verification, although forcause verification could identify the understatement.55

For fiscal year 2013, USDA reported NSLP and SBP certification errors of 

approximately 8.8 percent and 9.5 percent as part of its improper 

payment estimation.56

 54This household did not submit a school-meals application for the 2012-2013 school 

year. 

As explained previously, USDA OIG noted that 

these estimates may be unreliable because they were based on the 

2005-2006 school year and confidence levels could not be provided for 

subsequent years. FNS has hired a contractor to conduct a revised study 

55None of the applicants we interviewed told us they deliberately understated their income 

to avoid verification. 

56United States Department of Agriculture, Agency Financial Report, Fiscal Year 2013

(Washington, D.C.: December 2013).
Page 31 GAO-14-262 School-Meals Eligibility 

for the 2012-2013 school year, which is expected to be complete in 

November 2014.57

Once a household application has been certified as eligible to receive 

benefits, and if it is selected for verification, school districts obtain 

supporting documentation from the applicant—such as pay stubs or 

benefit-award letters—in order to evaluate whether or not the household’s 

free or reduced-price status is correct.58 However, because the 

verification process relies on responses from applicants, it could lead to 

eligible children being removed from the program if the applicant does not 

respond to the school district’s verification request. USDA told us that 

during the 2012-2013 school year, school districts verified approximately 

203,200 applications.59

A household failing to respond to a request for verification may not mean 

the household was ineligible for the initial benefits received.

Of these, 43.5 percent were receiving the correct 

level of benefits, and approximately 23.6 percent had their level of 

benefits adjusted to properly reflect their eligibility based on verification. 

Of the applications selected for verification, 32.8 percent did not respond 

and were excluded from receiving free or reduced-price school meals.

60

 57USDA commissioned a November 2007 NSLP/SBP Access, Participation, Eligibility, and 

Certification (APEC) Study to estimate certification and noncertification errors in the NSLP 

and SBP during the 2005-2006 school year. The study developed a series of models that 

USDA uses to estimate program improper payments annually. 

USDA 

officials also told us that households may not respond because the adult 

applicant may not have time to provide supporting documentation, may 

58According to USDA guidance, school districts are not to conduct any actions to verify the 

information on the application during the certification process; they must accept the 

applications at face value and determine eligibility based on the information voluntarily 

disclosed in the application. In 2004, USDA issued the results of a pilot study to determine 

the effects of requiring documentation to households applying for benefits and reported 

that it had the adverse effect of limiting access to students eligible to receive school-meals 

benefits. Mathematica Policy Research, Inc., Evaluation of the National School Lunch 

Program Application/Verification Pilot Projects, vol. 1: “Impacts on Deterrence, Barriers, 

and Accuracy” (Princeton, N.J.: February 2004). This report was prepared for USDA. 

59Total application verification rates may be greater than 3 percent because school 

districts are required to verify all questionable applications through for-cause verification 

even if that would increase the sample size above the 3 percent maximum.

60School districts are required to follow up with households that do not respond to the 

initial request for verification. Households that do not respond to the verification request 

may reapply—with documentation—for school-meals benefits at any time. 

Current Standard Verification 

Process Could Remove 

Eligible Beneficiaries
Page 32 GAO-14-262 School-Meals Eligibility 

not understand the instructions, or may be hesitant to provide income 

information, though the household is still eligible to receive the benefits. 

Further, a study commissioned by the USDA to examine outcomes of the 

verification process during the fall of 2002 found that approximately half of 

the households that did not respond to the verification request were 

eligible for free or reduced-price meals.61

As described above, standard verification is generally limited to approved 

applications where stated income is within $1,200 of the annual 

applicable income-eligibility guideline amount. Applications with stated 

income outside of these thresholds would generally not be subject to 

standard verification. However, our review of a nongeneralizable sample 

of 25 households found 9 applications that were ineligible for benefits, 7 

of which would have been excluded from standard verification.

Standards for Internal Control in the Federal Government indicate that 

internal controls should include control activities and risk assessments.62

These, among other controls, should be effective and efficient in 

enforcing program requirements. Independent verification is a key 

detection and monitoring component of an agency’s fraud-prevention 

framework and is a fraud-control best practice.63

 61United States Department of Agriculture, Food and Nutrition Service, Case Study of 

National School Lunch Program Verification Outcomes in Large Metropolitan School 

Districts, report no. CN-04-AV3 (April 2004). Districts in this study were, on average, about 

10 times larger than the average public school district, both in the number of schools they 

operate and their total student enrollment. Therefore, the districts in this study were not 

selected to be representative of all regular public school districts nationwide.

One method to identify 

potentially ineligible applicants and effectively enforce program-eligibility 

requirements is through the independent verification of income 

information with an external source, such as state payroll data. States or 

school districts, through data matching, could identify households that 

have income greater than the eligibility limits for further follow-up. This 

risk-based approach would allow school districts to focus on potentially 

62GAO/AIMD-00-21.3.1. 

63The fraud-prevention framework was developed on the basis of findings from a GAO 

audit of Hurricanes Katrina and Rita relief efforts, and the internal control standards from 

the Standards for Internal Control in the Federal Government. For more detail, see GAO, 

Hurricanes Katrina and Rita Disaster Relief: Prevention Is the Key to Minimizing Fraud, 

Waste, and Abuse in Recovery Efforts, GAO-07-418T (Washington, D.C.: Jan. 29, 2007); 

and GAO/AIMD-00-21.3.1. 

Electronic Matching Could 

Help to Identify Potentially 

Ineligible Applications
Page 33 GAO-14-262 School-Meals Eligibility 

ineligible families, while not interrupting program access to other 

participants.

While electronic verification could yield positive results, there are some 

potential limitations. For example, state income databases may not 

contain all sources of household income—such as child-support 

payments or income earned by individuals who do not have a Social 

Security number. Additionally, it may not be cost-effective or possible for 

school districts to use external data when conducting verification. Thus, 

states may be better positioned to complete this matching and to report 

findings to specific school districts.

A study commissioned by USDA to explore the feasibility of computer 

matching in the NSLP during the 2004-2005 school year cited limitations 

to having school districts directly verify income information with state 

agencies.64

Electronic verification of a sample of applicants (beyond those that are 

statutorily defined as error-prone) through computer matching by school 

districts or state agencies with other sources of information—such as 

state income databases or public-assistance databases—could help 

effectively identify potentially ineligible applicants. However, it is not clear 

whether such a process is cost-effective. Thus, developing a pilot to 

explore the feasibility of implementing a cost-effective mechanism to 

conduct electronic verification at the state or school-district level could 

help inform the extent to which this alternative is feasible. Because 

For example, because income data are reported for 

individuals, not households, school districts would need to obtain Social 

Security numbers for all income earners in the household in order to 

verify household income. The study also found that computer-matching 

results can be inaccurate and that income discrepancies between the 

state database and the household application would require follow-up 

with the household that is similar to the existing verification process. 

However, technology and data-matching software and techniques have 

improved significantly in the last decade and could hold promise in 

efficiently identifying only potentially ineligible households for further 

follow-up while not removing program beneficiaries whose incomes are 

within the eligibility guidelines.

 64United States Department of Agriculture, Data Matching in the School Lunch Program: 

2005, vol. 1: Final Report, report no. CN-06-DM (Alexandria, VA.: February 2007).
Page 34 GAO-14-262 School-Meals Eligibility 

standard verification is dictated by statute, if the results of the pilot show 

promise in identifying ineligible beneficiaries, developing a legislative 

proposal to expand the verification process to include independent 

electronic verification for a sample of all school-meals applications could 

help USDA identify and prevent ineligible beneficiaries in the schoolmeals program.

We found that ineligible households may be receiving free school-meals 

benefits by submitting applications that falsely state that a household 

member is categorically eligible for the program due to participating in 

certain public-assistance programs—such as SNAP or TANF—or meeting 

an approved designation—such as foster child or homeless. Of the 25 

household applications we reviewed, 6 were approved for free schoolmeals benefits based on categorical eligibility, and 3 of these were 

potentially ineligible for the benefit.65

• One household applied for benefits during the 2010-2011 school 

year—providing a public-assistance benefit number—and was 

approved for free-meal benefits. However, when we verified the 

information with the state, we learned that the number was for 

medical-assistance benefits—a program that is not included in 

categorical eligibility for the school-meals programs. When 

interviewed, the parent said that he could not remember if the benefits 

they received were SNAP or medical assistance. On the basis of our 

review of payroll records, this household’s annualized income of at 

least $59,000 during 2010 would not have qualified the household for 

free or reduced-price-meal benefits. This household applied for 

school-meals benefits during the 2011-2012 and 2012-2013 school 

Figure 3 illustrates these results. 

Specifically, we found the following:

 65One of the six categorically eligible households in our sample included a SNAP number 

for a person sharing the same address as the child. Program regulations allow students 

whose household income exceeds the school-meals eligibility guidelines to qualify for free 

school-meals benefits if they share an address with someone receiving public-assistance 

benefits. Under USDA guidance, categorical eligibility for free meals is extended to all 

children in a household if any member of a household—whether responsible for the child 

or not—receives SNAP, TANF, or FDPIR. In this instance, the student’s guardian earned 

income that exceeded the limits for free or reduced-price school meals, but was residing 

with a relative who, as a separate household, received public assistance. Because the 

student shared an address with someone receiving SNAP, the student was certified for 

free school meals in accordance with program rules.

Expanded Verification of 

Applications That Indicate 

Categorical Eligibility 

Could Enhance Program 

Integrity
Page 35 GAO-14-262 School-Meals Eligibility 

years, again indicating the same public-assistance benefit number—

and was approved for free-meal benefits.

• Another household applied for benefits during the 2010-2011 school 

year—providing a public-assistance benefit number—and was 

approved for free-meal benefits. When interviewed, the parent said 

that the household received SNAP benefits. However, when we 

verified the information with the state, officials told us the household 

was not receiving public-assistance benefits at the time of 

application.66

• In a 2010-2011 school year application, one household indicated that 

the student was a foster child; however, when we interviewed the 

applicant, she told us that she has never had foster children. This 

household was not eligible for free meals, but may have been eligible 

for reduced-price meals.67

Because applications that indicate categorical eligibility are generally not 

subject to standard verification, these ineligible households would likely 

not be identified unless they were selected for for-cause verification or as 

part of the administrative review process, even though they contained 

inaccurate information. These cases underscore the potential benefits 

that could be realized by verifying beneficiaries with categorical eligibility. 

We will refer these potentially ineligible households to USDA and their 

school district for appropriate action as warranted. Furthermore, the 

administrative review report for one district we reviewed noted that 

categorical-eligibility determinations were not always correct, including 

migrant, homeless, runaway, Head Start, and Even Start programs.

A school-district official told us that this 

household was directly certified for free-meal benefits during the 

2011-2012 and 2012-2013 school years.

USDA’s eligibility manual states that school districts should be aware of 

the characteristics of a valid SNAP or TANF number and are allowed to 

 66This household submitted an application in September 2010, but based on information 

from the state, public-assistance benefits did not start until November 2010. The 

household may have qualified for free meals based on household size and income at the 

time of application; however, this information was not part of the application. 

67We cannot conclusively determine whether this household was eligible for reduced-price 

meals because we do not have access to nonfederal payroll records and other sources of 

income. 
Page 36 GAO-14-262 School-Meals Eligibility 

verify this information with the appropriate agency. However, these 

numbers can vary in terms of length. An official from one state told us that 

because the length of SNAP and TANF numbers varies, it is difficult to 

determine whether a number is valid simply by looking at it. A household 

could also provide an old case number—which appears valid—and the 

school district would not know that the household is not receiving publicassistance benefits unless the school district verifies the information with 

the appropriate state agency.

Standards for Internal Control in the Federal Government state that 

control activities should be effective and efficient in enforcing program 

requirements and help in detecting errors and fraud. Since applications 

that indicate categorical eligibility are generally not selected for standard

verification, there is limited oversight over these beneficiaries.

Individuals with knowledge of the program-eligibility guidelines could 

indicate categorical eligibility to avoid scrutiny, as this would prevent the 

application from ever being verified unless the school-district official 

certifying the household had specific knowledge that the information was 

not accurate. Verifying a sample of applications that indicate categorical 

eligibility could assist in identifying ineligible households that are receiving 

benefits and help improve program integrity. For example, USDA could 

have school districts select a sample of applications indicating categorical 

eligibility and verify the information with the appropriate agency. With the 

increase in the number of school districts that directly certify SNAPparticipant children, school districts may already have mechanisms to 

match students with SNAP data provided by the state agency. 

Alternatively, USDA could consider having the state agency perform this 

verification as part of its periodic administrative review of the school 

district.

OMB’s designation of the school-meals program as a “high-error”

program with significant estimated improper payments makes it important

that internal controls and oversight for the school-meals programs be 

strengthened while simultaneously ensuring that students who qualify for 

benefits are not adversely affected. USDA has taken steps to strengthen 

controls and to increase access to eligible individuals by working with 

Congress, school districts, and other public-assistance programs to find 

new ways to provide benefits to those requiring assistance. However, the 

cases we identified in which households received school-meals benefits 

that they were not eligible for highlight the deficiencies with current 

controls and the need for additional corrective actions. Evaluating the 

Conclusions
Page 37 GAO-14-262 School-Meals Eligibility 

data collected on completed for-cause verifications for the 2013-2014 

school year could help USDA determine whether specific data on forcause verification outcomes should be reported separately from standard 

verification results and whether additional guidance for conducting forcause verification—including criteria and examples of possible indicators 

of questionable or ineligible applications—would be beneficial. Moreover, 

a cost-effective mechanism to electronically verify applicant information 

with income or other data sources such as public-sector wage records 

could help enhance the current verification process and strengthen 

program integrity. While challenges may exist in verifying beneficiary 

income through computer matching, 9 years have passed since USDA 

conducted a pilot to determine the feasibility of electronic verification. The 

cost of the school-meals programs, continued high improper payments, 

and advances in technology support the need to revisit the feasibility of 

conducting computer matching in the school-meals programs to enhance 

current verification efforts. If appropriate, developing a legislative proposal 

to expand the statutorily defined verification process to include additional 

independent electronic verification for a sample of all school-meals 

applications could help USDA identify and prevent ineligible applicants 

from participating in the school-meals program. In addition, verifying a 

sample of applications that indicate categorical eligibility could assist in 

identifying ineligible households that are receiving benefits and help 

improve program integrity.

To improve integrity and oversight of the school-meals programs, we 

recommend that the Secretary of Agriculture take the following four 

actions:

• Evaluate the data collected on for-cause verifications for the 2013-

2014 school year to determine if for-cause verification outcomes 

should be reported separately, and if appropriate, develop and 

disseminate additional guidance for conducting for-cause verification 

that includes criteria for identifying possible indicators of questionable 

or ineligible applications.

• Develop and assess a pilot program to explore the feasibility of 

computer matching school meal participants with other sources of 

household income, such as state income databases, to identify 

potentially ineligible households—those with income exceeding 

program-eligibility thresholds—for verification.

Recommendations for 

Executive Action
Page 38 GAO-14-262 School-Meals Eligibility 

• If the pilot program shows promise in identifying ineligible households, 

develop a legislative proposal to expand the statutorily-defined 

verification process to include this independent electronic verification 

for a sample of all school-meals applications.

• Explore the feasibility of verifying the eligibility of a sample of 

applications that indicate categorical eligibility for program benefits 

and are thus not subject to standard verification.

We provided a draft of this report to USDA for its review and comment. 

Written comments from the Administrator for FNS are reprinted in 

appendix VI. In its written comments, FNS indicated that it has long 

recognized the importance of addressing improper payments and 

program integrity problems to meet the mission of its programs and that it 

will carefully consider our specific recommendations as it moves forward 

in its efforts to improve integrity in the school-meals programs. The letter 

also describes several steps FNS is taking to strengthen program 

integrity, many of which are highlighted in this report. An e-mail dated 

May 2, 2014, from the FNS GAO Liaison/Coordinator stated that FNS 

generally agreed with our recommendations. FNS also provided technical 

comments, which we incorporated as appropriate. In its technical 

comments, FNS outlined potential challenges in implementing computer 

matching of school meal participants with data on other sources of 

income, such as challenges in working with state data or with incomplete 

Social Security numbers, and the potential costs of verifying income data 

and following up with households. We noted potential challenges in our 

report and acknowledge them in our recommendation that USDA develop 

and assess a pilot program to explore the feasibility of this process. We 

believe that the continued high improper payments rate and advances in 

technology support the need to conduct this pilot and, if it shows promise, 

to develop a legislative proposal to expand its use. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to interested 

congressional committees, the Secretary of Agriculture, and other 

interested parties. In addition, the report will be available at no charge on 

the GAO website at http://www.gao.gov.

Agency Comments 
Page 39 GAO-14-262 School-Meals Eligibility 

If you or your staff have questions about this report, please contact me at 

(202) 512-6722 or lords@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix VII.

Stephen M. Lord

Managing Director, Forensic Audits and Investigative Service
Page 40 GAO-14-262 School-Meals Eligibility 

List of Requesters

The Honorable Thomas R. Carper

Chairman

The Honorable Tom Coburn, M.D.

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Claire McCaskill

Chairman

Subcommittee on Financial and Contracting Oversight

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Debbie Stabenow

Chairwoman

The Honorable Thad Cochran

Ranking Member

Committee on Agriculture, Nutrition, and Forestry

United States Senate

The Honorable John Kline

Chairman

Committee on Education and the Workforce

House of Representatives

The Honorable Todd Rokita

Chairman

Subcommittee on Early Childhood, Elementary, and 

 Secondary Education

Committee on Education and the Workforce

House of Representatives
Appendix I: Objective, Scope, and 

Methodology

Page 41 GAO-14-262 School-Meals Eligibility 

This report assesses (1) what steps, if any, has the U.S. Department of 

Agriculture (USDA) taken to help identify and prevent ineligible 

beneficiaries from receiving benefits in school-meals programs, and (2) 

what opportunities, if any, exist to strengthen USDA’s oversight of the 

school-meals programs? We also report case-study examples of 

households that may have improperly received program benefits. 

Because of limited salary and income data available for all U.S. 

households, our case-study examples are limited to civilian executivebranch employees and United States Postal Service (USPS) employees.1

To determine any steps USDA has taken to identify and prevent ineligible 

beneficiaries from receiving benefits and what opportunities, if any, exist 

to strengthen USDA’s oversight of the school-meals programs, we 

reviewed USDA’s program policies and regulations, as well as legislation 

relating to the school-meals programs. We also reviewed prior USDA 

reports and other studies concerning the programs. Further, we 

interviewed officials from USDA’s Food and Nutrition Service to discuss 

the agency’s administration of the programs. We selected the 

Washington, D.C., and Dallas, Texas metropolitan regions—areas with 

different federal-employee concentrations—for further work.2 We 

conducted interviews of officials responsible for administration and 

oversight of the program at the city level in Washington, D.C., and the 

state level in Maryland, Texas, and Virginia, as well as at 25 school 

districts located in these regions. We initially obtained data from 28 

school districts for our review—14 located in the Dallas, Texas,

metropolitan region and 14 in the Washington, D.C., metropolitan region, 

which includes Washington, D.C., and its Maryland and Virginia suburbs.3

 1

Throughout this report, we use the term “federal employees” to refer to both civilian 

executive-branch employees and USPS employees. 

In the Dallas, Texas, metropolitan region we selected school districts with 

student enrollment over 10,000 students. We selected all school districts 

in the Washington, D.C., metropolitan region, excluding 56 charter school 

districts in Washington, D.C. However, we did not use data from 3 school 

2

The Washington, D.C and Dallas, Texas metropolitan regions ranked 1st and 18th, 

respectively, among the 50 metropolitan regions with the largest executive-branch federal

employees during fiscal year 2012. The Washington, D.C. metropolitan region includes 

Washington, D.C., Maryland, and Virginia.

3

There were approximately 18,500 school districts in the United States during the 2010-

2011 school year.

Appendix I: Objective, Scope, and 

Methodology
Appendix I: Objective, Scope, and 

Methodology

Page 42 GAO-14-262 School-Meals Eligibility 

districts—1 located in the Dallas, Texas metropolitan region and 2 located 

in the Washington, D.C., metropolitan region—because the data were not 

reliable for our purposes. During the 2010-2011 school year there were 

57 school districts in Washington, D.C.; 49 in Maryland; 1,260 in Texas; 

and 154 in Virginia for a total of 1,520. This selection is not representative 

of all states, school districts, or school-meal participants. We assessed 

controls related to the identification and prevention of ineligible 

beneficiaries in accordance with internal control standards.4

To further identify opportunities, if any, that exist to strengthen USDA’s 

oversight of the school-meals programs we tested controls that are 

designed to identify and prevent ineligible school-meals beneficiaries. To 

do this, we selected a nongeneralizable sample of 48 households 

participating in the National School Lunch Program (NSLP) for further 

review and investigation. To select the sample, we matched school-meals 

eligibility data for the 2010-2011 school year from the 25 school districts 

to civilian executive-branch federal-employee payroll data. The 2010-

2011 school year was the last year in which the school-meals applications 

requested that the adult applicant provide his or her complete Social 

Security number. While we do not expect federal employees to be any 

more or less likely to commit fraud than employees in other sectors, we 

completed case-study work based on the availability of centralized salary, 

address, Social Security number, and employment data for federal 

employees—these data were used to identify participants in NSLP, 

regardless of income. The results of our work cannot be generalized to all 

participants because it does not include private-sector employees. 

Additional information comparing federal and private-sector employee 

wages can be found in appendix V.

We began by examining databases containing students deemed eligible 

for free or reduced-price school meals for the 2010-2011 school year from 

the 25 school districts. These data generally contained personally 

identifiable information for the child and an adult household member, as 

well as household income and size. The data also contained information 

about whether a household was directly certified into the program or 

approved through a household application. We also obtained civilian 

federal-employee payroll data for approximately 2.5 million individuals 

 4

GAO, Internal Control: Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1. (Washington, D.C.: November 1999).
Appendix I: Objective, Scope, and 

Methodology

Page 43 GAO-14-262 School-Meals Eligibility 

from five federal-payroll processors. These data contained personally 

identifiable information for the federal employee, as well as wages by pay 

period for some or all of calendar year 2010. We used federal-employee 

payroll data to develop case studies due to the unavailability of other data 

sources containing salary information for nonfederal employees. To 

assess the reliability of the school-meals eligibility and payroll data, we 

reviewed relevant documentation, interviewed knowledgeable agency 

officials, and examined the data for obvious errors and inconsistencies. 

We concluded that the school-meals eligibility data and payroll data were 

sufficiently reliable for purposes of this report.

Next, we narrowed the civilian federal-employee payroll data to those with 

income during the July 2010 to December 2010 period—to coincide with 

the start of the school year when most school-meals eligibility 

determinations are made. We matched the school district and federal 

payroll data using the Social Security number of the adult household 

member, an address key composed of the address and zip code, and 

name fields, to the extent they were available. Our matches included 

households that, based on income, appeared both eligible and ineligible 

to participate in the school-meals programs. A household member 

earning income does not preclude children in the household from being 

eligible for school-meals benefits. From our matches, we generated 

randomly sorted lists of free and reduced-price school-meals participants 

who submitted an application and randomly sorted lists of students who 

were directly certified for free school meals in each of the 25 school 

districts.

We then randomly selected up to two households in each of the 25 school 

districts for an in-depth review, for a total of 48 cases. Specifically, for 

each of the school districts, we reviewed one household that submitted an 

application that was used for benefit determination (25 cases), as well as 

one household that was directly certified (23 cases).5

 5

USDA reported that approximately 7.7 million household applications were approved for 

free or reduced-price meals during the 2010-2011 school year. 

Two of the 25 

school districts did not have any directly certified students who matched 

with the payroll data. We applied a minimum threshold of $6,000 to the 

amount of federal salary earned during July 2010 to December 2010 in 

order to identify active employees for our sample. In the event an adult 

applicant was deceased or could not be located, we selected the next 
Appendix I: Objective, Scope, and 

Methodology

Page 44 GAO-14-262 School-Meals Eligibility 

participant from the randomly sorted list. The specific findings from the 

selected cases cannot be generalized to other, or all, school-meals 

beneficiaries or federal-employee households that received school-meals 

benefits. Because our data were limited to federal-employee households 

in 25 school districts that were selected on a nonrandom basis, the 

results of our cases cannot be generalized to a larger population of 

school-meals participants or to the entire federal workforce.

Once we identified the sample, we contacted the school districts and the 

states in our sample to obtain supporting documentation. For the 25 

households that submitted a school-meals application, we requested and 

reviewed the available applications from the 2010-2011 school year to 

see what the applicant listed as his or her household income and 

household size. We used the school-meals income-eligibility guidelines to 

determine whether school districts correctly determined eligibility based 

upon the information stated on the application. We also reviewed schoolmeals applications from the 2011-2012 and 2012-2013 school years, if 

submitted. For the 23 directly certified households, we obtained and 

reviewed the public-assistance application associated with the household 

from state agencies in the District of Columbia, Maryland, Texas, and 

Virginia to see what the applicant listed as the household income and 

composition.

We then reviewed the payroll records of the applicant or other household 

member to obtain information on their actual minimum income during the 

period the application was signed and to determine whether the federal 

employee’s income stated on the school-meals or public-assistance 

application was accurate. If the applicant’s income, along with the income 

of other household members listed on the application, exceeded the 

eligibility guideline based on the number of household members stated on 

the application, we considered these households to be potentially 

ineligible for school-meals benefits.6

To conduct our investigative work, we interviewed individuals from the 48 

households in our nongeneralizable sample—23 households that were 

directly certified and 25 that applied for benefits. We interviewed these 

individuals to determine whether the information entered on the 

 6

Because we do not have access to all sources of income—such as child support or 

income earned by non-federal-employee household members, we cannot conclusively 

determine whether a household was eligible for school-meals benefits. 
Appendix I: Objective, Scope, and 

Methodology

Page 45 GAO-14-262 School-Meals Eligibility 

applications was accurate, to confirm their income, and to determine the 

composition of their households. Investigators also conducted a review of 

the associated payroll records and school-meals application or publicassistance application to inform the interviews.

We conducted this performance audit from February 2012 to May 2014 in 

accordance with generally accepted government auditing standards.7

 7

The timeframe required for our review was a result of various factors, including time 

required to complete data reliability assessments and data standardization for multiple 

databases. 

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. We conducted our related 

investigative work from June 2013 to May 2014 in accordance with 

standards prescribed by the Council of the Inspectors General on Integrity 

and Efficiency.
Appendix II: Additional Benefits Based on 

Eligibility in the School-Meals Programs

Page 46 GAO-14-262 School-Meals Eligibility 

Schools and households that enroll students in free or reduced-price 

school meals may be eligible for additional federal and state benefits. For 

example, the U.S. Department of Education, through Title I of the 

Elementary and Secondary Education Act, provided approximately $13.8 

billion in funds to schools with high concentrations of low-income families 

during fiscal year 2013. The distribution of federal Title I funds within 

schools and school districts can be based, in part, on the number of 

students eligible for free and reduced-price meals. In addition, separate 

state funding for schools can also be tied to the percentage of students 

eligible for free or reduced-price school meals. Further, the Universal 

Service Program for Schools and Libraries, also known as the E-rate 

program—created by the Telecommunications Act of 1996—provides 

schools with discounts on eligible telecommunications services, Internet 

access, and internal connections (such as network wiring).1

Households can also receive additional benefits by participating in the 

school-meals programs. For example, the Lifeline Program, administered 

by the Universal Service Administration Company on behalf of the

Federal Communications Commission, provides phone service discounts 

for households that participate in the NSLP or other qualifying assistance 

programs. We reviewed guidance from one school district that provides 

other benefits to households qualifying for free or reduced-price meals, 

including textbook assistance, and waiving college application fees and 

athletic fees.

Discounts 

can range from 20 to 90 percent, and the primary measure for 

determining the discount is the percentage of students eligible under the 

National School Lunch Program (NSLP) for free or reduced-price meals.

 1

47 U.S.C. § 254.

Appendix II: Additional Benefits Based on 

Eligibility in the School-Meals Programs
Appendix III: Responsibilities of the Food and 

Nutrition Service, State Agencies, and School 

Districts

Page 47 GAO-14-262 School-Meals Eligibility 

Appendix III: Responsibilities of the Food 

and Nutrition Service, State Agencies, and 

School Districts
Appendix IV: Sample School-Meals Household 

Application

Page 48 GAO-14-262 School-Meals Eligibility 

Appendix IV: Sample School-Meals 

Household Application
Appendix V: Comparison between Federal and 

Private-Sector Employees

Page 49 GAO-14-262 School-Meals Eligibility 

According to a January 2012 Congressional Budget Office (CBO) Report, 

in 2010, 1.7 percent of the U.S. workforce was made up of federal civilian 

employees—approximately 2.3 million compared to 111 million that were 

employed by the private sector and 20 million employed by state and 

local governments.1

According to CBO’s study, employees of the federal government have 

varying levels of educational attainment. For example, about 50 percent 

of federal employees have either a high-school diploma or less or, at 

most, some college, compared to about 70 percent of the private-sector 

workforce. In the federal government, about 50 percent of employees 

have a bachelor’s degree or higher education attainment, while in the 

private sector about 30 percent of the workforce has comparable 

education. The wages of federal versus private-sector employees vary 

when considering level of education attained. In addition, CBO found that 

federal civilian workers with no more than a high-school education earned 

about 21 percent more, on average, than similar workers in the private 

sector, while those with some college earned 15 percent more, on 

average than similar workers in the private sector. Employees whose 

highest level of education is a bachelor’s degree earned roughly the same 

hourly wage, on average, in the federal government as in the private 

sector. Federal workers with a doctorate or professional degree earned 

23 percent less per hour, on average than similar workers in the private 

sector.

Another 800,000 are employed by government 

enterprises that typically pay for employee compensation through the sale 

of services rather than through tax revenue, the United States Postal 

Service (USPS) being the largest such employer. Further, federal 

employees can be both part-time and intermittent, such as census 

enumerators, whose jobs last from 2 to 8 weeks.

While this CBO report does provide a point of comparison between 

civilian federal workers and the private sector, the data analyzed do not 

mirror the federal-employee population used in this report. For example, 

the CBO report does not include workers in government enterprises, 

including USPS, seasonal, or part-time civilian federal employees, while 

our analysis does. Therefore, while the results of the CBO report are 

 1

Congressional Budget Office, Comparing the Compensation of Federal and PrivateSector Employees, (Washington, D.C.: January 2012). 

Appendix V: Comparison between Federal 

and Private-Sector Employees
Appendix V: Comparison between Federal and 

Private-Sector Employees

Page 50 GAO-14-262 School-Meals Eligibility 

presented for informational purposes, they should not be used to draw 

conclusions about civilian federal-employee and USPS pay used in our 

analysis.
Appendix VI: Comments from the U.S. 

Department of Agriculture Food and Nutrition 

Service

Page 51 GAO-14-262 School-Meals Eligibility 

Appendix VI: Comments from the U.S.

Department of Agriculture Food and Nutrition 

Service
Appendix VI: Comments from the U.S. 

Department of Agriculture Food and Nutrition 

Service

Page 52 GAO-14-262 School-Meals Eligibility 
Appendix VII: GAO Contacts and Staff 

Acknowledgments

Page 53 GAO-14-262 School-Meals Eligibility 

Stephen M. Lord, (202) 512-6722 or lords@gao.gov

In addition to the contact named above, Heather Dunahoo (Assistant 

Director), John W. Cooney, Heather Cowles, Ranya Elias, Erika Lang, 

Kathryn Larin, Maria McMullen, Dan Meyer, Linda Miller, Sandra Moore, 

Robert Ridley, and Daniel Silva made key contributions to this report.

Appendix VII: GAO Contacts and Staff 

Acknowledgments

GAO Contacts

Staff 

Acknowledgments

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