School Meal Programs: Experiences of the States and Districts That Eliminated Reduced-price Fees
Published: 2009-07-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2008, about 31 million children participated in the National School Lunch Program and more than 10 million children participated in the School Breakfast Program each school day. The U.S. Department of Agriculture's (USDA) Food and Nutrition Service (FNS) spent $11.7 billion on the school meal programs in that year. The majority of school meals are provided for free or at a reduced price to low-income students. Some states and school districts have chosen to implement programs that eliminate the reduced-price fee (known as ERP programs) and instead provide free meals to students eligible for the reduced fee. GAO was asked to provide information on (1) what is known about the states and districts that have eliminated the reduced-price fee for school meals, (2) the experiences of states and districts that have ERP programs with respect to participation, errors, and costs, and (3) the factors that may help or hinder the establishment or continuation of ERP programs. To obtain this information, GAO interviewed FNS officials, interviewed officials from state- and district-level programs, and conducted a Web-based survey of the 35 districts identified as having ERP programs. However, because the universe of ERP programs is unknown, survey results cannot be generalized to all districts with ERP programs. USDA did not provide formal written comments, but FNS provided technical comments, which were incorporated where appropriate.
section_title: What GAO Found
paragraphs: GAO identified 5 states and an additional 35 school districts in 19 other states that eliminated the reduced-price fee for school meals, primarily to increase participation or reduce hunger. States and districts eliminated reduced-price fees for either breakfast or lunch or, in some cases, for both meals. Further, some ERP programs included all grades, and some covered only the early school years. One state- and most district-level officials GAO interviewed or surveyed reported that ERP programs have increased the rate of participation among students who are eligible for reduced-price meals. Participation may increase for a number of reasons; however, for those districts that implemented ERP programs in the most recently completed school year (2007-2008) and provided participation data, their average increase in the participation rate among reduced-price-eligible students was greater than the national change in this rate over the same year. ERP programs involve additional costs to states and districts, as they bear the cost of the reduced-price fees that these students otherwise would have paid. For the state and district ERP programs that experienced increased participation, FNS reimbursements, and thus federal costs, also increased. While the increased reimbursements partially offset program costs, state ERP programs covered their remaining costs with state funds and districts used a variety of revenue sources. The majority of district-level officials reported that their districts experienced benefits from the ERP programs, such as a decrease in the burden on staff to collect unpaid meal fees from reduced-price-eligible students who received school meals but who charged these meals and built up a balance of unpaid meal fees. State officials GAO interviewed cited support from legislators and nonprofit organizations in establishing ERP programs in state law. Supportive school boards and superintendents were a major factor in establishing district-level programs. Most state officials indicated that a loss of state funding would threaten program continuation, while some district-level officials indicated they would try to raise additional revenue or reduce expenditures to cover program costs. As of late 2008, officials from all 5 states and most district-level ERP programs planned to continue their programs.

section_title: Letter
paragraphs: In fiscal year 2008, about 31 million children participated in the National  School Lunch Program (NSLP) and more than 10 million children  participated in the School Breakfast Program (SBP) each school day. The  school meal programs are administered by the U.S. Department of  Agriculture’s (USDA) Food and Nutrition Service (FNS) through state  agencies that, in turn, oversee local school food authorities (SFA). SFAs  that participate in the lunch and breakfast programs receive federal cash  reimbursements through the state agency for each meal they serve. USDA  spent $11.7 billion on these programs in fiscal year 2008. The majority of  school meals served through the NSLP and SBP are provided to low- income students. Depending on their household income and other factors,  students receiving school meals pay either the full meal price or a  reduced-price fee or receive free meals. Over half of the school meals  served in fiscal year 2008 were provided free to students, and an additional  10 percent were provided at a reduced price.
In 2004, Congress authorized a pilot project to assess the effects of  eliminating the reduced-price fee for school lunch and breakfast and  providing free meals to students who are eligible for reduced-price meals.  At that time, some Members of Congress expressed concern about reports  from school boards across the country that many parents were finding it  increasingly difficult to pay the reduced-price fee for school meals.  Although funds have not been appropriated to support this pilot project,  some states and school districts have chosen to implement their own  initiatives that eliminate the reduced-price fee and provide free meals to  students who are eligible for reduced-price meals (known as ERP  programs).  Specifically, these states and school districts do not collect  reduced-price fees from students who are eligible for reduced-price meals.  Instead, states and school districts with ERP programs bear the cost of the  reduced-price fees—not more than 40 cents for each lunch and 30 cents  for each breakfast served—that otherwise would have been paid by  students. However, these states and districts still collect full-price meal  fees from other students and still receive a cash reimbursement from FNS  for each meal they serve, based on the type of meal served (lunch or  breakfast) and the meal category (free, reduced price, or full price). States  and districts with ERP programs are reimbursed at the reduced-price rate  for the meals that they provide free to reduced-price-eligible students.
To provide a better understanding of the experiences of states and school  districts with ERP programs, this requested report presents information on  the following questions: (1) What is known about the state and local  jurisdictions that have eliminated the reduced-price fee for the school  lunch or breakfast programs? (2) What have been the experiences of state  and local jurisdictions that have eliminated reduced-price fees with  respect to factors such as participation, errors, and costs? (3) What factors  may help or hinder the establishment or continuation of programs that  eliminate reduced-price fees?
To answer these questions, we identified states and school districts that  have implemented ERP programs and collected information about their  experiences. In August 2008, FNS provided us with a preliminary list of 4  states with ERP programs and 43 school districts with ERP programs in 16  other states. However, FNS is not necessarily aware of all the states and  districts with ERP programs, because states and districts are not required  to report this information to FNS. We conducted follow-up with child  nutrition officials in Washington, D.C., and the 28 states for which no  information was provided, as well as officials in 10 states for which  information was incomplete or needed clarification. We identified 5 states  with ERP programs: Colorado, Maine, Minnesota, Vermont, and  Washington. In each of these states, we conducted semistructured phone  interviews with state child nutrition officials. We also conducted a Web- based survey of SFA officials in 51 school districts that we initially  identified as having ERP programs. We received survey responses from  officials in 44 districts, 35 of whom confirmed that their districts had ERP  programs. Our questionnaire asked these officials to describe the ERP  programs; the reasons they implemented these programs; the effects of the  programs on participation, errors, and costs; and the factors that helped or  hindered program implementation. While we did not validate specific  information that SFA officials reported in our survey, we reviewed their  responses and conducted follow-up as necessary to determine that the  data were complete, reasonable, and sufficiently reliable for the purposes  of this report. In addition, we conducted site visits with two school  districts (Grand Rapids Public Schools, Michigan and Salt Lake City  School District, Utah) and semistructured phone interviews with two  school districts (Great Neck Public Schools, New York, and Hillsborough  County School District, Florida). We selected these school districts based  on the following criteria: (1) variation in the duration of the ERP program,  (2) variation in the percentage of students eligible for free or reduced- price meals, and (3) variation in location and city size. In each of these  districts, we interviewed SFA officials responsible for administering the  school meal programs. In addition to collecting information from states  and school districts with ERP programs, we interviewed officials at FNS  and USDA’s Economic Research Service (ERS), as well as representatives  of child nutrition advocacy organizations and professional associations,  and reviewed relevant studies. We also conducted semistructured phone  interviews with SFA officials in 2 school districts we identified that had  discontinued ERP programs. We are not aware of any prior research that  has rigorously studied ERP programs at the state or district level. See  appendix I for more information on our scope and methodology.
We conducted our work from August 2008 to July 2009 in accordance with  all sections of GAO’s Quality Assurance Framework that are relevant to  our objectives. The framework requires that we plan and perform the  engagement to obtain sufficient and appropriate evidence to meet our  stated objectives and to discuss any limitations in our work. We believe  that the information and data obtained, and the analysis conducted,  provide a reasonable basis for any findings and conclusions in this  product.
subsections: section_title: Background
subsections: section_title: National School Lunch Program and School Breakfast Program Structure
paragraphs: The two largest federal school meal programs, the NSLP and the SBP, aim  to address problems of hunger, food insecurity, and poor nutrition by  providing nutritious meals to children in schools. The NSLP, established in  1946, and the SBP, permanently established in 1975, provide nutritionally  balanced low-cost or free lunches and breakfasts in participating schools.  At the federal level, these programs are administered by FNS as part of its  strategic goal to improve the nation’s nutrition and health, and the  department has laid out plans to increase access to, and utilization of,  these school meal programs.
At the state level, the NSLP and SBP are typically administered by state  education agencies, which operate the programs through agreements with  SFAs. SFAs, in turn, administer the school meal programs at individual  schools. SFAs must offer meals that meet federal nutritional requirements,  operate the food service on a nonprofit basis and follow the record- keeping and claims procedures required by USDA. As shown in fig. 1, SFAs  receive cash reimbursements from FNS through the state agency for each  meal they serve, based on the type of meal served (lunch or breakfast) and  the meal category (free, reduced price, or full price). In addition, unless  they are eligible for free meals, students pay a full-price or reduced-price  fee to SFAs for each meal they receive, depending on their household  income. To supplement the federal reimbursement, some state agencies  also use state funds to provide cash reimbursements to SFAs based on the  number of meals they serve.
In school year 2008-2009, FNS per meal reimbursement rates ranged from  24 cents for a full-price lunch to $2.57 for a free lunch (see table 1).
section_title: Free and Reduced-price School Meals for Low- Income Students
paragraphs: The majority of the meals served through the NSLP and SBP are provided  for free or at a reduced price to low-income students. In fiscal year 2008,  about half of the school lunches served were provided for free and about  10 percent were provided at a reduced price. Similarly, about 71 percent of  the school breakfasts served were provided for free and about 10 percent  were provided at a reduced price (see fig. 2). The laws governing the  school lunch and breakfast programs establish maximum charges for  reduced-price meals, but SFAs set their own fees for full-price meals.
School districts are required to determine whether students are eligible to  receive free or reduced-price school meals based on federal poverty  guidelines. Students are eligible for free meals if their household income  is less than or equal to 130 percent of the federal poverty level, or if they  are homeless, runaway, or migrant, as defined in the law. Students are  eligible for reduced-price meals if their household income is greater than  130 percent and less than or equal to 185 percent of the federal poverty  level (see table 2). Typically, parents submit school meal applications to  school districts each school year, including self-reported household  income, household size, and information on whether the household  participates in any other federal nutrition assistance programs. Districts  review school meal applications and certify students as being eligible for  free or reduced-price meals, and are required by FNS to annually verify the  accuracy of their eligibility determinations for a sample of free and  reduced-price meal applicants. If students’ household income is above  185 percent of the federal poverty level, they pay the full-price fee for  school meals set by the SFA.
According to USDA, nearly half of the households that received free or  reduced-price school lunches from mid-November to mid-December 2007  faced food insecurity, in that they had difficulty providing enough food for  all their members because of a lack of resources. Specifically, ERS  analyzed data from an annual food security survey conducted by the U.S.  Census Bureau in December 2007 and found that 47 percent of the  households that received free or reduced-price school lunches in the  month prior to the survey faced food insecurity at some time during 2007.  Overall, ERS found that the NSLP reached 33.6 percent of the 13 million  food insecure households in the United States in the month prior to the  survey.
section_title: Student Meal Fees and Federal Reimbursements in a District ERP Program
paragraphs: While a typical school district participating in the NSLP or SBP collects  fees from eligible students who receive reduced-price meals, districts with  ERP programs have chosen to provide free meals to reduced-price-eligible  students and bear the cost of the reduced-price fees that these students  otherwise would have paid (for a comparison of fees and reimbursements  for districts with and without an ERP lunch program, see fig. 3). Both  typical school districts and districts with ERP programs collect full-price  meal fees from other students and receive a cash reimbursement from  FNS for each meal they serve, based on the type of meal served (lunch or  breakfast) and the meal category (free, reduced price, or full price).
section_title: Recent Trends in School Meal Program Participation
paragraphs: As shown in table 3, in recent years, participation in school meals has  increased overall and among students in all three meal categories. A  variety of factors may affect the number of students participating in school  meals, such as economic conditions, changes in student enrollment,  improvements in food quality and meal choices, and school meal program  marketing efforts.
Despite these increases in participation, some students who are certified  as being eligible to receive free or reduced-price meals do not participate  in school meals, as shown in figure 4. According to FNS, in fiscal year  2008, about 81 percent (15.4 million) of the approximately 19 million  students certified as eligible for free meals participated in school lunch  and about 39 percent (7.5 million) of these students participated in school  breakfast. Similarly, about 72 percent (3.1 million) of the approximately  4.3 million students certified as eligible for reduced-price meals  participated in school lunch, and about 24 percent (1 million) of these  students participated in school breakfast. A recent Mathematica Policy  Research study identified school type (elementary school, middle school,  or high school) and student attitudes toward school meals as factors  affecting both the breakfast and lunch participation of students who are  certified as eligible for free or reduced-price meals. This study found that  when controlling for other factors, high school students are less likely to  participate in school meals than middle school students, and middle  school students are less likely to participate in school meals than  elementary school students. This study also found that students who are  satisfied with the taste of school meals are much more likely to participate  in school meals than students who are not.
section_title: Universal Free Meals Programs
paragraphs: Some individual schools and districts have implemented programs that  provide free meals to all students regardless of income. These schools and  districts still receive a cash reimbursement from FNS for each meal they  serve, based on the type of meal served (lunch or breakfast) and the meal  category (free, reduced price, and full price) and are still required to  determine student eligibility for free and reduced-price meals and report  the number of meals they serve by meal category. However, these schools  and districts do not collect reduced-price fees or full-price fees from  students and therefore need to make up for this lost revenue in other  ways. Because the federal reimbursement is significantly higher for free  and reduced-price meals than for full-price meals, these programs may not  be as costly an alternative for schools with a very high percentage of  students eligible for free or reduced-price meals schools relative to  schools with a lower percentage of these students. Two USDA special  assistance provisions of the NSLP and the SBP allow participating schools  and districts to provide reimbursable, universal free meals to all  participating students regardless of their household income. These  special assistance provisions are intended to reduce the administrative  burden for individual schools and districts by allowing them to process  school meal applications and determine eligibility for free and reduced- price meals less frequently. For additional information about universal  free meals programs, see appendix II.
section_title: Some States and Districts Eliminated the Reduced-price Fee to Increase Participation or Reduce Hunger
paragraphs: Acting on their own initiative, at least 5 states and 35 school districts  eliminated the reduced-price fee for breakfast, lunch, or both meals in  school year 2008-2009, primarily to increase participation or reduce  hunger. We identified 5 statewide ERP programs in Colorado, Maine,  Minnesota, Vermont, and Washington, and 35 district-level programs in 19  other states out of approximately 14,000 districts nationwide. (See fig. 5.)
The 5 state programs included more than 1,400 districts. The states and  districts with ERP programs included both small and large districts based  on student enrollment, with an average percentage of reduced-price- eligible students similar to the national average of 9 percent across nearly  14,000 districts. (See table 4.)
State- and district-level officials we interviewed most often cited reducing  hunger and food insecurity or increasing participation of low-income  students as primary reasons for implementing the ERP programs. State  officials from 4 of the 5 states cited reducing hunger and food insecurity,  through increasing participation of low–income students, as the primary  reason for implementing the ERP programs. For example, an official in 1  of the 5 states said the state had ranked high in the nation for hunger and  food insecurity several years ago, and the official thought the ERP  program would be one way to help address this problem. Similarly, in our  survey, almost all district officials cited reducing hunger and food  insecurity and increasing participation of reduced-price-eligible students  as major or moderate reasons for implementing the ERP programs as well.  (See fig. 6.) SFA officials we interviewed in one district said the district  started its ERP program to help those students who were not eating  breakfast or lunch because their families could not afford either meal,  even at the reduced price, much less both meals.
Some state- and district-level officials we interviewed or surveyed also  cited the intention to improve academic performance and increase overall  participation as major reasons for implementing these ERP programs. One  state implemented its statewide program primarily in response to the view  that eating breakfast is related to academic success.
States and districts implemented ERP programs in various ways. For  example, state- and district-level officials said they eliminated reduced- price fees for either breakfast, lunch, or both meals. (See table 5.)
There was also some variation in the grades included in the state- and  district-level ERP programs. Officials from all 5 states we interviewed and  most of the 35 districts we surveyed eliminated the reduced-price fee for at  least one meal in all grades. However, Colorado and Washington provided  free lunch to reduced-price-eligible students in specific grades in addition  to breakfast for all grades; Colorado’s lunch ERP program was limited to  kindergarten through second grade, and in Washington ERP lunch was  limited to kindergarten through third grade. One district ERP program was  limited to eighth grade and below, and some district ERP programs  included preschool, while others did not.
In addition, some states and districts used ERP programs in combination  with other free meal programs. Four of the 5 states with ERP programs  included schools or districts with universal free meal programs. For  example, while Colorado schools provide ERP for breakfast, Denver  Public Schools, the state’s largest school district, has offered universal free  breakfast for the last few years. Thirteen of the 35 districts with ERP  programs for one meal also had universal programs for the other meal. For  example, the Hillsborough County School District in Florida provides  lunch through its ERP program but has also offered free breakfast to all  students through a universal free meals program since 2002. Unlike ERP  programs that only subsidize the fees paid by students eligible for reduced- price meals, universal free meal programs also subsidize the fees paid by  students for full-price meals, and the cost is borne by the SFA.
section_title: One State and Most Districts That Eliminated the Reduced-price Fee Reported Increased Participation, Which Partially Offset Program Costs
subsections: section_title: One State and Most Districts with ERP Programs Reported Increased Participation, and Most Districts Observed No Effect on Administrative Errors
paragraphs: One state official and SFA officials in most districts we surveyed reported  that their ERP programs have increased the rate of participation among  students who are eligible for reduced-price meals. For example,  according to a Washington official, after the state implemented its ERP  program for school breakfast in September 2006, the breakfast  participation rate of reduced-price-eligible students increased from about  19 percent (15,373 students) in October 2005 to about 25 percent (21,644  students) in October 2006. In addition, officials in Maine and Vermont,  which both implemented state ERP programs in September 2008, told us  preliminary data suggest that these programs have increased the  participation of reduced-price-eligible students. Similarly, in our school  district survey, SFA officials in 28 of the 31 districts with ERP breakfast  programs reported that these programs have increased the participation of  reduced-price-eligible students in school breakfast, while officials in 2  districts reported no change in breakfast participation and one district  official did not know whether breakfast participation had changed.  Officials in 20 of the 23 districts with ERP lunch programs reported that  these programs have increased the participation of reduced-price-eligible  students in school lunch, while again officials in 2 districts reported no  change in lunch participation and one district official did not know  whether lunch participation had changed. In a separate survey question,  some SFA officials provided data indicating that the rate of participation  among reduced-price-eligible students increased, on average, by 9  percentage points in breakfast and 11 percentage points in lunch, since  their ERP programs were implemented (see table 6).
The increase in the participation rate among reduced-price-eligible  students in these districts may not be entirely due to the ERP programs, as  participation rates may vary even in districts without ERP programs over  time, but at least some of the increases in participation appear to be a  result of the ERP programs themselves. SFA officials in districts with  ERP programs reported that the average increase in the lunch  participation rate among reduced-price-eligible students (11 percentage  points) was greater than the average increase in this participation rate  among students in the free (5 percentage points) or full-price (5  percentage points) meal categories for their districts. Further, in the four  districts that implemented their ERP programs in school year 2007-2008  and provided participation data—2 of these districts had ERP programs  for breakfast and lunch, and 2 districts limited their ERP programs to  breakfast—the increase in the breakfast participation rate (2 to 11  percentage points) and lunch participation rate (7 to 10 percentage points)  among reduced-price-eligible students was greater than the national  change in these participation rates (less than a 1 percentage point change  each for breakfast and lunch).
Two states and most school districts with ERP programs observed no  effect on school meal program errors related to student eligibility or meal  counting. Implementing an ERP program would generally not be  expected to have an effect on school meal program errors, because school  districts and SFAs are required to follow the same administrative  procedures regardless of whether or not they collect reduced-price fees.  According to FNS officials, districts that eliminated the reduced-price fee  are still required to process school meal applications and certify students  as being eligible for reduced-price meals under federal poverty guidelines,  and SFAs are still required to count the number of reduced-price meals  they serve and report this meal count to FNS. In two of the 5 states with  ERP programs, officials said they believe that these programs had no  effect on school meal program errors. In two other states, officials told us  that they were unable to determine whether the ERP programs had an  effect on errors. In the fifth state, an official said that districts’ meal- counting errors increased temporarily because of the implementation of  the state ERP program, which required districts to change the way they  reported to the state the number of meals served. However, this official  told us that these errors have since returned to their previous levels. In our  survey, SFA officials in 32 of the 35 school districts with ERP programs  reported that these programs had no effect on errors related to student  eligibility, and officials in 31 districts reported that these programs had no  effect on meal-counting errors.
section_title: States and Most Districts Covered Their ERP Program Costs through Increased Federal Reimbursements and Other Funding Sources
paragraphs: ERP programs involve additional costs to states and school districts, as  well as to the federal government. The state or school district  implementing the ERP program bears the cost of the reduced-price fee— no more than 30 cents for each breakfast served and 40 cents for each  lunch served—that otherwise would have been paid by reduced-price- eligible students. Across the 5 states with ERP programs, officials told us  that the costs for them to implement these programs ranged from about  $144,000 to about $3 million per year, and across the 4 school districts  with ERP programs we interviewed, SFA officials said that program costs  ranged from about $12,000 to about $370,000 per year. In addition, both  state- and district-level ERP programs involve an additional cost to the  federal government because these programs generally lead to increased  participation among reduced-price-eligible students, thus increasing the  reimbursement that FNS provides to states. In addition to the FNS  reimbursement, some states also provide a reimbursement to SFAs based  on the number of meals they serve. In these cases, the increased  participation among reduced-price-eligible students associated with ERP  programs involves additional costs to states.
While increased federal reimbursements partially offset program costs for  the state and district ERP programs that experienced increased  participation, all 5 state ERP programs used state appropriations to cover  their remaining program costs, and districts used a variety of revenue  sources to manage their remaining program costs. Increased FNS  reimbursements can offset program costs when the amount of the per  meal reimbursement exceeds the cost to the SFA of producing the meal. In  our survey, SFA officials in 21 of the 35 districts with ERP programs said  that they received an increased reimbursement amount from FNS as a  result of increased participation. For example, an SFA official from the  Grand Rapids Public Schools told us that the total additional cost to the  district associated with the ERP program is about $92,000 per year, but the  net cost of the program is about $64,000 per year, because the SFA  experienced an increase of about $28,000 per year in its FNS  reimbursement as a result of increased participation. SFA officials in 2 of  these 21 districts told us that increased participation also allowed them to  obtain additional state funding. For example, because the Salt Lake City  School District receives state liquor tax funding based on the number of  lunches served by the SFA, the increased participation associated with the  ERP program also resulted in additional state funding. While SFA officials  in 16 districts told us that the additional revenue from increased  participation covered program costs, officials in 3 districts told us that it  did not cover program costs, and officials in 2 districts said they did not  know whether it covered program costs.  Several SFA officials told us  that their districts covered program costs by supplementing increased  reimbursement revenue from FNS with school district revenue from à la  carte sales, catering, or other district funds, and one of these officials also  reported increasing the full-price meal fee to help cover costs. Even so,  officials in the 2 districts we identified that had discontinued ERP  programs told us they did so because they were unable to continue to  cover program costs.
Some SFA officials identified factors that minimized the additional costs  associated with implementing ERP programs. A few SFA officials noted  that their districts were already bearing the cost of the reduced-price fee  for some students prior to implementing ERP programs because reduced- price-eligible students participating in school meals were often unable to  pay this fee. For example, an SFA official in 1 district said that over 33  percent of reduced-price-eligible students were receiving meals but were  not paying the reduced-price fee. Also, some districts experienced  economies of scale because ERP programs increased participation but did  not increase their labor costs. Specifically, SFA officials in these districts  told us that they were able to serve meals to more students without hiring  additional staff or increasing work hours for existing staff, because the  additional number of meals served at each school was relatively small.  Similarly, in our survey, SFA officials in 30 of the 35 districts with ERP  programs reported that these programs had no effect on or decreased the  overall workload of kitchen and cashier staff at participating schools.
section_title: Most Districts Experienced Benefits from ERP Programs, such as a Decrease in the Administrative Burden on District Staff and Improvements in Satisfaction with School Meals
paragraphs: SFA officials in nearly all of the school districts we surveyed reported that  ERP programs either had no effect on or decreased the overall  administrative burden on district staff (see table 7). Several officials who  reported that ERP programs decreased this administrative burden  explained that district staff no longer spend time trying to collect unpaid  meal charges from reduced-price-eligible students who receive school  meals but are unable to pay the reduced-price fee. One of these officials  further explained that prior to the implementation of the ERP program,  students who were unable to pay the reduced-price fee would charge these  meals and build up a balance of unpaid meal fees, and staff would then  spend time trying to collect these fees from parents. Several officials noted  that attempts to collect these fees were sometimes unsuccessful, and one  official said he believed that the cost of the administrative time spent  trying to collect these fees was greater than the value of the fees  themselves.
Most of the SFA officials we surveyed reported that ERP programs have  had a generally positive effect on students’ attitudes about and parents’  level of satisfaction with the school meal programs (see table 8). SFA  officials in several districts also reported other benefits. One official told  us she believes that the ERP program has increased administration and  faculty support for the school meal programs, and another official noted  that the program has increased the school board’s level of satisfaction  with the school meal programs. SFA officials in several other school  districts noted that their ERP programs have been well received by their  communities.
Some SFA officials we surveyed told us they believe that ERP programs  have improved students’ academic performance, although they did not  conduct research on the effect of these programs on academic  performance (see table 9). Officials in more than half of the districts (19 of  35) responded that they did not know what effect their ERP programs had  on academic performance.
One SFA official noted that it would be difficult to link improvements in  academic performance to ERP programs because there are many factors  that affect academic performance. Even so, some research studies indicate  that participation in school breakfast may be associated with  improvements in performance on standardized tests and math grades as  well as improvements in school attendance and punctuality.
section_title: Supportive State Legislators and District School Boards Helped Establish ERP Programs, but Fiscal Challenges Could Hinder Program Continuation
subsections: section_title: Support from State Legislators, Nonprofit Organizations, District School Boards, and Superintendents Helped Establish ERP Programs
paragraphs: Supportive legislators and nonprofit organizations played a major role in  establishing ERP programs at the state level, and support from school  boards and superintendents was a major factor in establishing programs at  the district level. Officials that we spoke with from all 5 states cited strong  support from key legislators and various nonprofit organizations  concerned with child nutrition and hunger as a major factor in establishing  an ERP program under state law. For example, an official from the state of  Colorado told us that the state school nutrition association had contacted  state legislators to promote the elimination of reduced-price fees for  school meals, and one legislator was particularly supportive of  implementing a statewide ERP program. A Washington state official told  us that a coalition of several organizations contacted every member of the  state Ways and Means Committees to promote legislation that would  eliminate reduced-price fees. As shown in figure 7, most SFA officials from  the district-level programs we identified reported that supportive school  boards and superintendents were major factors in helping implement their  ERP programs.
We also asked state- and district-level officials we interviewed and  surveyed about the effect that a number of other factors might have had  on the implementation of ERP programs. Specifically, we asked about a  lack of program funding, limited information on program development,  and requirements to continue annual certification of student eligibility for  reduced-price meals, but in general few states and districts indicated that  these were major factors that hindered implementation. See figure 8 for  district survey responses. For state ERP programs, lack of funding was not  a major factor largely because funds were appropriated by the state  legislature when these programs were established. However, at least one  official indicated that the state’s decision to limit the number of grades  covered by the ERP program for lunch may have been due to funding  restrictions. Regarding program development, while officials in one state  found information on other state ERP programs to have been very helpful,  another state official cited unique circumstances as one reason why the  information was not that helpful in developing her state’s ERP program.  Regarding the district-level ERP programs, these districts were generally  committed to making their programs work, had the support they needed,  and were able to succeed. However, the number of districts that may have  tried to implement ERP programs and been unsuccessful is not known.  Finally, most state- and district-level program officials did not see  continuing to certify reduced-price-eligible students as a major hindrance  because systems to capture this information were already in place.
section_title: Fiscal Challenges Could Limit Available Funding for ERP Programs but Cuts May Be Manageable for Some District-level Programs
paragraphs: Funding for the state ERP programs may be vulnerable to across-the- board budget cuts, but most district-level SFA officials reported less  dependence on state funding and more options for managing ERP program  costs. Officials from all 5 state programs indicated that dedicated state  appropriations were a primary source of ERP funding, and officials from  four of these states indicated that a loss of state funding would be a threat  to the continuation of their programs. While state or local budget cuts  might also affect district funding, especially in the current fiscal  environment, some district-level ERP programs might be better situated to  withstand such cuts. For example, we asked several of the SFA officials  from district-level ERP programs that we interviewed what would happen  to their programs if their funds were cut. Even under declining fiscal  conditions, when we conducted our interviews during the latter part of  2008 and early 2009, the officials indicated that the SFAs would explore  ways to raise additional revenue or reduce expenditures so that they could  continue to cover ERP program costs. Further, officials from several SFAs  that we interviewed indicated that the net costs of their district-level ERP  programs were less than 1 percent of their annual expenditures.  Specifically, an SFA official from the Grand Rapids Public Schools—with  annual expenditures of about $8.3 million—estimated the annual net cost  of its ERP program at about $64,000 per year. An SFA official from the  Great Neck Public Schools in New York told us that the average number of  students participating in reduced-price lunch was only about 7.6 percent  (221 of 2,921) of the total number of students who participated in school  lunch on a daily basis. In addition, SFA officials told us that they have  flexibility to potentially offset revenue losses. For example, the SFA  official from Great Neck told us that her district’s ERP program had  previously covered costs through revenue generated by à la carte sales,  but noted that recent declines in sales may require the district to begin  using reserve funds to cover program costs.
Despite potential fiscal challenges at the time we conducted our  interviews and survey, all 5 states and 30 of the 35 districts surveyed  reported that they plan to continue their ERP programs in the future. The  other 5 districts had not decided to discontinue their programs, but said  they did not know if the programs would continue. Some state- and  district-level officials believe that there is an even greater need for this  type of program at a time when some families are experiencing increased  economic hardship. However, state and local fiscal conditions have  continued to deteriorate since we began our audit work and the effect of  the changes in the economic climate on ERP programs is unknown.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to USDA for review and comment.  USDA did not provide written comments. However, FNS provided us with  technical comments that helped clarify our report’s findings, which we  incorporated where appropriate.
We are sending copies of this report to relevant congressional committees  and other interested parties and will make copies available to others upon  request. In addition, the report will be available at no charge on GAO’s  Web site at http://www.gao.gov. If you or your staff have any questions  about this report, please contact me at (202) 512-7215 or  brownke@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Key contributors to this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: To provide a better understanding of the experiences of states and school  districts with programs that eliminated the reduced-price fee (known as  ERP programs), this report presents information on the following  questions: (1) What is known about the state and local jurisdictions that  have eliminated the reduced-price fee for the school lunch or breakfast  programs? (2) What have been the experiences of state and local  jurisdictions that have eliminated reduced-price fees with respect to  factors such as participation, errors, and costs? (3) What factors may help  or hinder the establishment or continuation of programs that eliminate  reduced-price fees?
To answer these questions, we identified states and school districts that  have implemented ERP programs and collected information about their  experiences. We are not aware of any prior research that has rigorously  studied ERP programs at the state or district level. We conducted  semistructured phone interviews with state child nutrition officials from  the 5 states we identified as having ERP programs (Colorado, Maine,  Minnesota, Vermont, and Washington). We also conducted a Web-based  survey of local school food authority (SFA) officials in 51 school districts  initially identified as having ERP programs and gathered in-depth  information from 4 of these districts through site visits or phone  interviews. In addition to collecting information from these states and  school districts, we interviewed officials at the U.S. Department of  Agriculture’s (USDA) Food and Nutrition Service (FNS) and Economic  Research Service (ERS) as well as representatives of child nutrition  advocacy organizations and professional associations, reviewed relevant  studies, and conducted semistructured phone interviews with SFA  officials in 2 school districts we identified that had discontinued ERP  programs.
We conducted our work from August 2008 to July 2009 in accordance with  all sections of GAO’s Quality Assurance Framework that are relevant to  our objectives. The framework requires that we plan and perform the  engagement to obtain sufficient and appropriate evidence to meet our  stated objectives and to discuss any limitations in our work. We believe  that the information and data obtained, and the analysis conducted,  provide a reasonable basis for any findings and conclusions in this  product.
subsections: section_title: Interviews with States
paragraphs: To learn about the experiences of states with ERP programs, we  conducted semistructured phone interviews with officials in the 5 states  we identified as having these programs: Colorado, Maine, Minnesota,  Vermont, and Washington. In August 2008, FNS provided us with a  preliminary list of 4 states that had implemented ERP programs and a fifth  state with pending legislation that, if enacted, would create a state ERP  program. However, FNS is not necessarily aware of all the states with ERP  programs, because states are not required to report this information to  FNS. We contacted this fifth state and determined that it had already  implemented a state ERP program. In each of these 5 states, we  interviewed child nutrition officials responsible for administering the  school meal programs at the state level. There may be additional states  with ERP programs that we did not identify as part of this study.
section_title: Survey of District-level SFA Officials
paragraphs: We also conducted a Web-based survey of SFA officials in 51 school  districts initially identified as having implemented these programs. We  identified school districts with ERP programs using a preliminary list of  these districts, by state, provided by FNS in August 2008. This list included  43 districts in 16 states. However, FNS is not necessarily aware of all the  districts with ERP programs, because districts are not required to report  this information to FNS. We conducted follow-up with child nutrition  officials in Washington, D.C., and the 28 states for which no information  was provided, as well as officials in 5 states for which information was  incomplete or needed clarification, and officials in 5 states for which  contact information for district-level SFA officials was either missing or  needed clarification.  As a result of our follow-up efforts, we removed 9  districts from the original FNS list and added 17 new districts, for a total of  51 districts. We surveyed SFA officials in all 51 districts included in this  revised list. There may be additional school districts with ERP programs  that we did not identify as part of this study. Because the universe of  districts with ERP programs is unknown, the results of our survey cannot  be generalized to all districts with ERP programs.
We conducted the survey from December 2008 to March 2009, and  achieved a response rate of 83 percent. We received survey responses  from SFA officials in 44 school districts, 35 of whom confirmed that their  districts had implemented ERP programs. To increase the survey response  rate, we conducted follow-up by both e-mail and phone with all  nonrespondents. The questionnaire asked SFA officials about the number  of students eligible for reduced-price meals; the meals and grades covered  by the ERP programs; the reasons they implemented these programs; the  duration of these programs; the effects of the programs on participation,  errors, and costs; the factors that helped or hindered program  implementation; and whether or not they plan to continue the ERP  programs in the future. While we did not validate specific information that  SFA officials reported in our survey, we reviewed their responses and  conducted follow-up as necessary to determine that the data were  complete, reasonable, and sufficiently reliable for the purposes of this  report.
Because we did not select a probability sample, our survey results do not  have sampling errors. However, the practical difficulties of conducting any  survey may introduce nonsampling errors, such as variations in how  respondents interpret questions. We took steps to minimize nonsampling  errors, such as pretesting the draft questionnaire. Specifically, we  pretested the draft questionnaire by phone with SFA officials in 5 school  districts—1 district in each of the states of Arizona, Indiana, Tennessee,  Utah, and Virginia—in September through December 2008. In the pretests,  we were generally interested in the clarity of the questions and the logical  flow of the questionnaire. For example, we wanted to ensure that the  definitions used in the questionnaire were clear and understandable, the  categories provided in closed-ended questions were complete, and the  ordering of questions was logical. We made revisions to the questionnaire  in response to each of the pretests. In addition, using a Web-based survey  minimized nonsampling errors because this format eliminated the need for  and the errors associated with a manual data entry process. Specifically,  the Web-based survey allowed respondents to enter their responses  directly into the survey Web site and automatically created a database  record for each respondent. To further minimize errors, the programs used  to analyze the survey data were independently verified to ensure the  accuracy of this work.
section_title: Site Visits and Interviews with School Districts
paragraphs: To gather in-depth information from several school districts with ERP  programs, we conducted site visits with 2 school districts (Grand Rapids  Public Schools, Michigan and Salt Lake City School District, Utah) and  semistructured phone interviews with two other school districts (Great  Neck Public Schools, New York and Hillsborough County School District,  Florida), all of which also responded to our Web-based survey. We  selected these districts based on the following criteria: (1) variation in the  duration of the ERP program, (2) variation in the percentage of students  eligible for free or reduced-price meals, and (3) variation in location and  city size. In each of these districts, we interviewed SFA officials  responsible for administering the school meal programs.
section_title: Other Interviews and Reviews of Relevant Studies
paragraphs: In addition to collecting information from states and school districts with  ERP programs, we interviewed officials at FNS and ERS as well as  representatives of child nutrition advocacy organizations and professional  organizations, including the Food Research and Action Center (FRAC) and  the School Nutrition Association (SNA). We also conducted  semistructured phone interviews with SFA officials in 2 school districts we  identified (Milpitas Unified School District, California, and Tacoma Public  Schools, Washington) that had discontinued ERP programs. Additionally,  we reviewed relevant studies, such as USDA’s NSLP/SBP Access,  Participation, Eligibility, and Certification (APEC) Study, USDA’s  School Lunch and Breakfast Cost Study–II, and a Mathematica Policy  Research study conducted for ERS on the factors associated with school  meal participation and the relationships between different participation  measures.
section_title: Appendix II: Universal Free Meals Programs under Alternative USDA Special Assistance Provisions
paragraphs: Some schools and districts have chosen to provide universal free meals to  all participating students regardless of their household income under two  alternative special assistance provisions of the National School Lunch  Program (NSLP) and the School Breakfast Program (SBP), known as  Provision 2 and Provision 3. These special assistance provisions in the  SBP and NSLP are intended to reduce the administrative burden for  individual schools and districts by allowing them to process school meal  applications and determine eligibility for free and reduced-price meals less  frequently. Specifically, these schools and districts are only required to  process applications and determine eligibility in the first year (base year)  of a 4-year or 5-year period. Although these provisions are intended to  reduce the administrative burden, participating schools and districts bear  the costs of providing free meals to students who qualify for reduced-price  or full-price meals. Participating schools and districts still receive cash  reimbursements from FNS based on the meal category for which students  are eligible. According to FNS, during the 2007-2008 school year, more  than 2,900 schools—about 3 percent of the 95,331 schools participating in  the NSLP in that year—were participating in Provision 2 or Provision 3.  Table 10 compares key aspects of standard school meal programs,  Provision 2 programs, Provision 3 programs, and ERP programs.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: Heather McCallum Hahn (Assistant Director) and Dan Alspaugh (Analyst- in-Charge) managed all aspects of the assignment. Caitlin Croake and  Rosemary Torres Lerma made significant contributions to this report, in  all aspects. In addition, Luann Moy provided technical support in design  and methodology, survey research, and statistical analysis; Susan Baker  provided statistical analysis; James Rebbe provided legal support; Mimi  Nguyen provided graphic design assistance; and Susannah Compton  assisted in the message and report development.