School Lunch: Implementing Nutrition Changes Was Challenging and Clarification of Oversight Requirements Is Needed
Published: 2014-01-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The National School Lunch Program served more than 31 million children in fiscal year 2012, in part through $11.6 billion in federal supports. The Healthy, Hunger-Free Kids Act of 2010 required USDA to update nutrition standards for lunches. USDA issued new requirements for lunch components--fruits, vegetables, grains, meats, and milk--and for calories, sodium, and fats in meals. USDA oversees state administration of the program, and states oversee local SFAs, which provide the program in schools. The changes were generally required to be implemented in school year 2012-2013. GAO was asked to provide information on implementation of the lunch changes.
GAO assessed (1) lunch participation trends, (2) challenges SFAs faced implementing the changes, if any, and (3) USDA's assistance with and oversight of the changes. To address these areas, GAO used several methods, including review of federal laws, regulations, and guidance; analysis of USDA's lunch participation data; a national survey of state child nutrition program directors; and site visits to eight school districts selected to provide variation in geographic location and certain school district and food service characteristics.
section_title: What GAO Found
paragraphs: Nationwide, student participation in the National School Lunch Program declined by 1.2 million students (or 3.7 percent) from school year 2010-2011 through school year 2012-2013, after having increased steadily for many years. This decrease was driven primarily by a decline of 1.6 million students eating school lunch who pay full price for meals, despite increases in students eating school lunch who receive free meals. State and local officials reported that the changes to lunch content and nutrition requirements, as well as other factors, influenced student participation. For example, almost all states reported through GAO's national survey that obtaining student acceptance of lunches that complied with the new requirements was challenging during school year 2012-2013, which likely affected participation in the program. Federal, state, and local officials reported that federally-required increases to lunch prices, which affected many districts, also likely influenced participation.
School food authorities (SFA) faced several challenges implementing the new lunch content and nutrition requirements in school year 2012-2013. For example, most states reported that SFAs faced challenges with addressing plate waste--or foods thrown away rather than consumed by students--and managing food costs, as well as planning menus and obtaining foods that complied with portion size and calorie requirements. SFAs that GAO visited also cited these challenges. However, both states and SFAs reported that they expect many of these areas will become less challenging over time, with the exceptions of food costs, insufficient food storage and kitchen equipment, and the forthcoming limits on sodium in lunches.
The U.S. Department of Agriculture (USDA) provided a substantial amount of guidance and training to help with implementation of the lunch changes and program oversight, but certain aspects of USDA's guidance may hinder state oversight of compliance. Starting in school year 2012-2013, USDA allowed states to focus their oversight of the lunch changes on providing technical assistance to SFAs rather than documenting instances of noncompliance and requiring corrective actions to address them. This assistance likely helped many SFAs move toward compliance with the new lunch requirements and become certified to receive increased federal reimbursements for lunches. However, evidence suggests this approach may have also resulted in some SFAs that were not fully meeting requirements being certified as in compliance. Without documentation of noncompliance and requirements for corrective actions, SFAs may not have the information needed to take actions to address these issues, and USDA may lack information on areas that are problematic across SFAs. Moving forward, USDA has been developing a new process for conducting program oversight, in part because of new statutory requirements. This new process adds requirements for reviewing SFA financial management, and many states reported a need for more guidance and training in this area. USDA has acknowledged that states' processes for reviewing this area have been inconsistent and sometimes inadequate in the past. While USDA has provided some assistance to states on the new requirements related to SFA financial management, until USDA has collected information from all states on their needs in this area, the department will not know if all states are fully prepared to oversee SFA financial management.
section_title: What GAO Recommends
paragraphs: To improve program integrity, GAO recommends that USDA clarify the need to document noncompliance issues found during state reviews of SFAs and complete efforts to assess states' assistance needs related to oversight of financial management. USDA generally agreed with GAO's recommendations.

section_title: Letter
paragraphs: The National School Lunch Program, which is intended to promote the  health and well-being of schoolchildren, served an estimated 31.6 million  children in fiscal year 2012 supported in part through federal subsidies  and commodities totaling $11.6 billion. Although federal requirements for  the content of school lunches have existed since the program’s creation,  the Healthy, Hunger-Free Kids Act of 2010—the law that most recently  reauthorized school meal programs—required that they be updated in  order to help reduce childhood obesity and improve children’s diets. The  Act required the U.S. Department of Agriculture (USDA), which  administers the National School Lunch Program, to update the  requirements for the content of school lunches based on  recommendations from the Institute of Medicine. USDA issued final  regulations defining the new requirements in January 2012 and required  that many of them be implemented beginning in school year 2012-2013.  USDA’s updated regulations aim to provide lunches high in nutrients and  low in calories that better meet the dietary needs of schoolchildren and  protect their health. To that end, the regulations made several changes  and additions to the previous requirements for the content of school  lunches, such as requiring that each student’s lunch contain at least one  fruit or vegetable. Under agreements with state agencies, local school  food authorities (SFA), which are generally aligned with school districts,  serve meals to children in schools and are the entities responsible for  implementing these requirements.
As school year 2012-2013 progressed, both USDA and the media  reported that states, SFAs, school officials, parents, and students  expressed some concerns about the school lunch changes. While the  changes to school lunch were the primary school food changes required  to be implemented in school year 2012-2013, the Healthy, Hunger-Free  Kids Act of 2010 also required similar updates to nutrition standards for  the School Breakfast Program and other foods sold in schools—known as  competitive foods—and USDA prescribed that these changes generally  be implemented in school year 2013-2014 and beyond. In view of both  the ongoing and future changes to school foods, you asked us to provide  information on implementation of the changes to school lunch. This report  assesses: (1) trends in school lunch participation, (2) challenges, if any,  SFAs faced implementing the lunch changes, and (3) USDA’s efforts to  assist with implementation of the lunch changes and ensure compliance  with program requirements. In June 2013, we testified on our initial  findings on challenges SFAs faced implementing the lunch changes, and  recommended that USDA make modifications to some of the new lunch  requirements.
To answer these questions, we gathered information through several  methods. At the federal level, we reviewed relevant federal laws,  regulations, and guidance and interviewed USDA officials. Further, we  analyzed USDA’s national data on meals served in the National School  Lunch Program and reviewed the department’s method for determining  lunch participation from these data. To assess their reliability, we  interviewed USDA officials, reviewed related documentation, and  compared the data we received from USDA with its published data. We  determined these data and the participation methodology to be sufficiently  reliable for the purposes of this report. To assess USDA’s assistance and   We  oversight efforts, we relied on federal standards for internal controls.also reviewed several key studies on the National School Lunch Program.  For example, we reviewed USDA’s School Nutrition Dietary Assessment  Study IV (2012), which provides information on school lunches and other  foods sold in schools nationwide in school year 2009-2010. In addition,  because it is the basis for USDA’s revised regulations on the content of  school lunches, we reviewed the Institute of Medicine’s report, School  Meals: Building Blocks for Healthy Children (2010). We assessed the  methodologies and findings of the studies we reviewed and determined  that they were sufficiently reliable for the purposes of this report.
To gather information from the state level, we conducted a national  survey of state child nutrition directors that oversee the National School  Lunch Program in the 50 states and the District of Columbia. We  administered our Web-based survey between June and July 2013, and all  state directors responded. While we did not validate specific information  that directors reported through our survey, we reviewed their responses,  and we conducted follow-up, as necessary, to determine that their  responses were complete, reasonable, and sufficiently reliable for the  purposes of this report. To gather information directly from those affected  by the changes in the schools, we conducted site visits to eight school  districts in eight states across the country between March and May 2013.  The school districts selected for these visits provide variation across  geographic location, district size, and certain characteristics of the student  population and district food services. In each district, we met with SFA  staff at the district and school levels, school administrators, and students,  and we observed lunch in at least two schools of different grade levels,  for a total of 17 schools. We also interviewed the eight state child nutrition  program directors who oversee these districts. We cannot generalize our  findings from the site visits beyond the school districts we visited. To  gather additional information, we interviewed representatives from several  stakeholder groups, including a group of eight SFA directors representing  both their own districts and their regions of the country, and a group of  eleven relevant industry representatives. For additional information on  the report’s scope and methodology, see appendix I.
We conducted this performance audit from February 2013 to January  2014 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The National School Lunch Program was established in 1946 by the  National School Lunch Act and is intended to safeguard the health and  well-being of the nation’s children. The program provides nutritionally  balanced low-cost or free lunches to children in public and nonprofit  private schools and residential child care institutions. In fiscal year 2012,  the federal government spent $11.6 billion on the National School Lunch  Program, which served lunches to 31.6 million children on average each  month.
The school lunch program is overseen by USDA’s Food and Nutrition  Service (FNS) through its headquarters and regional offices and is  administered through state agencies and local SFAs (see fig. 1). FNS  defines program requirements and provides reimbursements to states for  lunches served. FNS also provides states with commodities—foods  produced in the United States that are purchased by USDA and provided  to SFAs—based on the number of lunches served. States have written  agreements with SFAs to administer the meal programs, and states  provide federal reimbursements to SFAs and oversee their compliance  with program requirements. SFAs plan, prepare, and serve meals to  students in schools.
subsections: section_title: Meal Component and Nutrition Standards
paragraphs: Although federal requirements for the content of school lunches have  existed since the National School Lunch Program’s inception in 1946, as  research has documented changes in the diets of Americans and the  increasing incidence of overweight and obesity in the United States, the  federal government has taken steps to improve the nutritional content of  lunches. Specifically, since 1994, federal law has required SFAs to serve  school lunches that are consistent with the Dietary Guidelines for  Americans. In 2004, federal law required USDA to issue rules providing  SFAs with specific recommendations for lunches consistent with the most  recently published version of the Guidelines. As a result of that  requirement, USDA asked the Institute of Medicine to review the food and  nutritional needs of school-aged children in the United States using the  2005 Dietary Guidelines for Americans and provide recommended  revisions to meal requirements for the National School Lunch Program.
The Healthy, Hunger-Free Kids Act of 2010 required USDA to update  federal requirements for the content of school lunches based on the  Institute of Medicine’s recommendations, which were published in 2010.  USDA issued final regulations that made changes to many of the lunch  content and nutrition requirements in January 2012 and required that  many of the new lunch requirements be implemented beginning in school  year 2012-2013. (See fig. 2.) Regarding the lunch components—fruits,  vegetables, meats, grains, and milk—lunches must now include fat-free  or low-fat milk, limited amounts of meats/meat alternates and grains,  and whole grain-rich foods. Further, lunches must now include both fruit  and vegetable choices, and although students may be allowed to decline  two of the five lunch components they are offered, they must select at  least one half cup of fruits or vegetables as part of their meal. (See fig. 3  for examples of lunches with three and five components.) Regarding the  nutrition standards, the regulations now include maximum calorie levels  for lunches, require that lunches include no trans fat, and set future  targets to reduce sodium in lunches. In addition to changes to the  content of lunches, regulations also required that all SFAs use the same  approach for planning lunch menus—Food-Based Menu Planning. This  approach involves providing specific food components in specific  quantities, where previously districts could choose from a variety of  approaches. Further, the new regulations require SFAs to plan menus  based on one set of student grade groups—grades K-5, grades 6-8 and  grades 9-12—regardless of whether their schools align with these groups.  Although regulations have long adjusted lunch content requirements by  student grade level, previous regulations allowed SFAs a few student  grade group options from which to choose those that best aligned with  their schools.
In addition to changes to the content and nutrition requirements for school  lunches, the Healthy, Hunger-Free Kids Act of 2010 required that USDA  update the requirements for school breakfasts and establish new  standards for all other foods and beverages sold in schools, which are  commonly referred to as competitive foods because they compete with  school meal programs. USDA’s January 2012 final regulations on the new  lunch requirements also included the new breakfast requirements that are  to be implemented over several school years, beginning generally in  school year 2013-2014. The regulations establish three meal components  for breakfast—fruit or vegetable, grain or meat, and milk—and require  that breakfasts include whole grain-rich foods and only fat-free or low-fat  milk. Additional changes to the previous breakfast requirements include  that breakfasts must now be at or below calorie maximums and comply  with limits on sodium and trans fat. Beginning in school year 2014-2015,  schools must offer one cup of fruit with each breakfast each day, an  increase from the previous requirement of ½ cup, though vegetables  meeting specific requirements may be substituted for fruit. In addition, as  with lunch, students will be required to take a fruit or vegetable as part of  their meal. Separate from the lunch and breakfast regulations, USDA  issued an interim final rule on the new requirements for competitive foods  in June 2013 and required that they be implemented in school year 2014- 2015. Competitive foods are often sold through vending machines,  school stores, and fundraisers, and also include SFA sales of a la carte  items in the cafeteria. Prior to the enactment of the Healthy, Hunger-Free  Kids Act of 2010, USDA’s authority to regulate competitive foods was  limited to those foods sold in the food service area during meal periods. In  contrast, the new regulations include nutrition requirements for all foods  and beverages sold on school campuses during the school day outside of  the federal school meal programs.
section_title: SFA Finances
paragraphs: SFAs generally determine the prices they charge for school meals, but  some children are eligible to receive free or reduced-price meals. Under  the National School Lunch Act, children are eligible for free meals if their  families have incomes at or below 130 percent of the federal poverty  guidelines and reduced-price meals if their families have incomes  between 130 and 185 percent of the federal poverty guidelines. SFAs can  charge a maximum of $0.40 for a reduced-price lunch. Children who are  not eligible for free or reduced-price meals pay the full price charged by  the SFA for the meal. However, SFAs receive federal reimbursements for  all lunches served to eligible students that meet federal lunch component  and nutrition requirements, regardless of whether children pay for the  meals or receive them for free. The amount of federal reimbursement that  SFAs receive for each meal served to a child is based on the eligibility  category of the child and the proportion of the SFA’s total lunches that are  served to children eligible for free and reduced-price meals. For example,  in school year 2013-2014, federal reimbursements are $2.93 for each free  lunch, $2.53 for each reduced-price lunch, and $0.28 for each paid lunch  for SFAs with less than 60 percent of their total lunches served to children  eligible for free and reduced-price meals. SFAs with a higher proportion of  their total lunches served to children eligible for free and reduced-price  meals may qualify for a higher per lunch reimbursement rate  SFAs must comply with certain financial requirements when operating the  National School Lunch Program. Specifically, the National School Lunch  Act requires that SFAs operate as nonprofit entities. Federal regulations  further dictate that SFAs must use all revenue for the operation or  improvement of the program and generally limit their net cash  resources—the cash SFAs carry in their accounts—to three months of  average operating expenditures. In the event that an SFA’s resources  exceed this limit, the state agency may require the SFA to invest the  excess funds in the program or otherwise reduce the SFA’s account  balance.
The Healthy, Hunger-Free Kids Act of 2010 contained two new revenue  requirements related to the prices SFAs set for paid lunches and other  foods sold outside of the school meal programs. These provisions were  developed, in part, because of a USDA study that found the average  prices charged for paid lunches and for other foods by some SFAs were  less than the cost of producing those foods. While SFAs continue to  determine the price they charge for school lunches, beginning in school  year 2011-2012, the Act requires SFAs to provide the same level of  support for paid lunches as is provided for free lunches. If an SFA’s  average paid lunch price is less than a specified amount—$2.59 for  school year 2013-2014—the SFA must either increase the price it  charges for paid lunches or provide non-federal funding to cover the  difference. Concerning other foods sold by SFAs outside of the school  meal programs, the Act requires that revenues from the sales of these  foods generate at least the same proportion of SFA revenues as they  contribute to SFA food costs, in effect requiring SFAs to charge prices  that cover the costs of those foods.
section_title: Program Oversight and Administrative Review Process
paragraphs: As required by the National School Lunch Act, USDA policies and  regulations establish an oversight and monitoring framework for the  National School Lunch Program to help ensure that meals served meet  content and nutrition requirements and that SFAs follow required eligibility  and financial practices and maintain sound financial health. USDA is  required to review state administration of the program, and states are  required to review SFA administration of the program.
Although states have been required to regularly review SFA  administration of the National School Lunch Program for over two  decades, the Healthy, Hunger-Free Kids Act of 2010 required USDA to  amend its unified accountability system to ensure SFA compliance with  requirements for all school meal programs. Further, the Act requires  states to review SFAs on a 3-year cycle, which is a change from the  previous 5-year cycle. While USDA has not yet issued regulations on the  new requirements, USDA has developed and provided states with  guidance on an updated and streamlined administrative review process  that changes some of the review procedures and required review areas.  For example, USDA developed risk-based tools to determine the degree  to which each area must be reviewed and made changes to procedures  used when SFAs claim or receive federal reimbursements they are not  entitled to.review certain areas and added review of SFA financial management to  the administrative review process. Specifically, states are now required to   Further, USDA modified the extent to which states must  review SFAs’ nonprofit food service accounts, use of commodities,  indirect costs, and compliance with requirements for pricing paid lunches  and other foods sold outside of the school meal programs. USDA officials  told us that the new administrative review process was developed with  extensive input from a workgroup that included state and USDA  representatives. Although a new 3-year cycle of administrative reviews  began in school year 2013-2014, because federal regulations have not  yet been updated to reflect the new administrative review process, USDA  used its waiver authority to provide states with the flexibility to follow the  new administrative review requirements or the previous requirements.
For school year 2012-2013, as SFAs worked to implement the required  changes to the content of school lunches, USDA established interim  procedures for program oversight.  Specifically, to ensure that state  agencies provided training and technical assistance to help SFAs  implement the changes to the content of lunches, USDA allowed states to  postpone administrative reviews until school year 2013-2014.during school year 2012-2013, states were required to review  documentation submitted by SFAs and certify those SFAs determined to  be in compliance with the new lunch requirements. USDA also required  states to conduct on-site validation reviews to a sample of at least 25  percent of certified SFAs to ensure SFA compliance. Once certified, SFAs  receive an additional six cents for each reimbursable lunch served, as  provided for in the Healthy, Hunger-Free Kids Act of 2010.
The National School Lunch Program’s oversight and monitoring  requirements are part of the program’s internal controls, which are an  integral component of management. Internal control is not one event, but  a series of actions and activities that occur on an ongoing basis. Effective  internal controls include creating an organizational culture that promotes  accountability and the reduction of errors, analyzing program operations  to identify areas that present the risk of error, making policy and program  changes to address the identified risks, and monitoring the results and  communicating the lessons learned to support further improvement.  Despite the National School Lunch Program’s oversight and monitoring  requirements, the program has been found to have a relatively high  incidence of program errors. For example, USDA’s most recent study of  program errors found that $248 million in improper payments (3.1 percent  of federal reimbursements) during school year 2005-2006 resulted from  school food service staff incorrectly assessing and recording lunches  eligible for federal reimbursement. At the time of the study, federal  requirements for the content of lunches had been consistent for 10 years.
section_title: School Lunch Participation Declined by 1 Million Students in Recent Years, Likely Due to the Changes to Lunch Requirements and Other Factors
subsections: section_title: Total School Lunch Participation Declined by 1 Million Students from School Years 2010-2011 through 2012-2013
paragraphs: Nationwide, participation in the National School Lunch Program declined  in recent years after having increased steadily for more than a decade.  According to our analysis of USDA’s data, total student participation—the  total number of students who ate school lunches—dropped from school  years 2010-2011 through 2012-2013 for a cumulative decline of 1.2  million students (or 3.7 percent), with the majority of the decrease  occurring during school year 2012-2013. (See fig. 4.) The decrease in  the total number of students eating school lunches during the last 2  school years was driven primarily by a decrease of 1.6 million students  paying full price for meals, despite increases in the number of students  eating school lunches who receive free meals. While the number of  students who buy full-price lunches each month has been declining  gradually since school year 2007-2008, the largest one-year decline—10  percent—occurred in school year 2012-2013. In contrast, the number of  students participating in the program each month who receive free meals  has steadily increased over the years, though the increase was much  smaller in the last year. (See fig. 5.) In addition, some evidence  suggests that the total number of students eating school lunches declined  more in schools with older students. For example, in six of the seven  SFAs we visited that provided participation details by school level,  participation declined to a greater extent among older students than  elementary students in school year 2012-2013.
The changes in lunch program participation were likely influenced by  factors that directly affected students’ eligibility for free and reduced-price  school meals. Since the recent economic downturn began in late 2007,  the number of children under age 18 living in poverty nationwide has  increased substantially, according to data from the U.S. Census Bureau.Consistent with this shift, our analysis of USDA’s data shows that the  number of students approved for free meals nationally has been  increasing at a greater rate since school year 2007-2008, and the number  of students required to pay full price for their lunches has been  decreasing. (See fig. 6.) This was also true in the districts we visited  where two SFA directors noted that the recent economic downturn likely  contributed to an increase in the number of children approved for free and  reduced-price meals in their districts. In addition to economic conditions,  other program changes may have also influenced these trends, such as  adjustments to the process for determining student eligibility for free and  reduced-price school meals.
Consistent with declines in the number of students participating in the  lunch program, our analysis shows that the proportion of all students  eating school lunches declined in school year 2012-2013. The  participation rate measures the proportion of all students in schools with  the National School Lunch Program who ate school lunches in each  month. In school year 2012-2013, the overall participation rate declined,  primarily driven by a decline in the participation rate for paid students.  (See fig. 7.) In that year, the participation rate for paid students declined  to approximately 38 percent—the lowest rate in over a decade.
section_title: Participation Decreases Were Likely Influenced by Several Factors, Including Implementation of the New Federal Requirements
paragraphs: Several factors likely influenced the recent decreases in lunch  participation, and while the extent to which each factor affected  participation is unclear, state and local officials reported that the  decreases were influenced by changes made to comply with the new  lunch content and nutrition standards. Almost all states reported that  student acceptance of the changes was challenging for at least some of  their SFAs during school year 2012-2013, a factor that likely affected  participation. All eight SFAs we visited also noted that students  expressed dislike for certain foods that were served to comply with the  new requirements, such as whole grain-rich products and vegetables in  the beans and peas (legumes) and red-orange sub-groups, and this may  have affected participation. Further, some SFAs we visited noted that  negative student reactions to lunches that complied with the new meat  and grain portion size limits directly affected program participation in their  districts. For example, in one district, changes the SFA made to specific  food items, such as sandwiches, contributed to a middle and high school  boycott of school lunch by students that lasted for 3 weeks at the  beginning of school year 2012-2013. During this time, participation in  school lunch significantly declined in those schools.
Federally-required increases in the prices of paid lunches in certain  districts—also known as paid lunch equity—are another change that state  and SFA officials believe likely influenced lunch participation. This  requirement, included in the Healthy, Hunger-Free Kids Act of 2010,  caused many SFAs to raise the price of their paid lunches beginning in  school year 2011-2012. Officials from three states and four SFAs we  spoke with as part of our site visits believe the price increases likely  contributed to declines in the number of students buying full-price  lunches. In addition, SFA officials in two districts we visited expressed  concern that lunch price increases are particularly difficult for families who  do not receive free or reduced-price lunches but have limited incomes, as  the new prices may no longer be affordable. Further, SFA officials in two  districts believed that lunch price increases, combined with the lunch  content changes, led some students to stop buying school lunches  because they felt they were being asked to pay more for less food. Some  middle and high school students we talked to in these districts echoed  this sentiment and said this combination led them to consider food  options other than the school lunch program, particularly at the beginning  of the 2012-2013 school year. SFA officials noted that middle and high  schools are more likely to have alternatives to school lunches available,  such as foods sold through vending machines, a la carte lines in the  cafeteria, and fundraisers, as well as policies that allow students to  purchase food off of the school campus.
The reaction to the paid lunch price increases is consistent with USDA’s  expectations. Prior to implementation, the department estimated that  nearly all schools would need to increase their lunch prices in response to  the requirements, and these increases were expected to decrease the  number of students eating school lunches as they chose not to eat,  brought their lunches from home, or acquired food from other sources. Although the paid lunch equity provisions were included in the Healthy,  Hunger-Free Kids Act of 2010 in part to help SFAs cover the costs of the  foods needed to comply with the new lunch requirements, some officials  we spoke with expressed concern about the potential impact on the  program if the number of students buying full-price lunches continues to  decrease. Specifically, several state and SFA officials we spoke with  expressed concerns that such a trend would hinder the program’s ability  to improve the diet and overall health of all schoolchildren and potentially  increase stigma in the cafeteria for low-income students.
In the preamble to the interim rule on paid lunch equity requirements, USDA estimated  that most schools affected by the requirements in school year 2011-2012 would need to  increase paid lunch prices by only 5 cents in order to comply. National School Lunch  Program: School Food Service Account Revenue Amendments Related to the Healthy,  Hunger-Free Kids Act of 2010, 76 Fed. Reg. 35,301, 35,306 (June 17, 2011). USDA’s  research suggests that a 5 cent increase in paid lunch prices results in a 0.55 percent  decrease in the student participation rate. See USDA, School Nutrition Dietary  Assessment Study-III (Alexandria, VA: November 2007). feedback than normal in school year 2012-2013 with concerns about the  program, which some believed was in response to negative media  attention. Another factor that may have affected participation is the time  allotted for lunch periods, according to officials in three districts we  visited. SFA officials in one district noted that some of the changes to  lunches, such as the requirement that students take a fruit or vegetable  with their lunches, confused staff and students and led to longer lunch  lines, particularly at the beginning of school year 2012-2013. One district  we visited also made significant changes to the system students use to  pay for lunch, which led to longer lunch lines early in school year 2012- 2013. One SFA director noted that if the lunch lines are too long or  students otherwise do not have enough time to eat, they are more likely  to look elsewhere for food or not eat at all. Other decisions at the district  or school level may have also affected school lunch participation in school  year 2012-2013. For example, one district we visited stopped allowing  high school students to leave campus during the lunch period, which the  SFA director believed helped mitigate the lunch participation declines the  district experienced. In addition, states reported through our survey that  321 SFAs in 42 states stopped participating in the National School Lunch  Program in school year 2012-2013, which directly impacted the number  of students able to participate in the program nationwide. While districts  may choose to leave the program for various reasons, such as low  student participation, twenty-seven of these states reported that the new  lunch requirements were a factor in some SFAs’ decisions not to  participate. USDA officials also noted other factors that may have  influenced lunch participation, including school closures, mergers, moves,  consolidation due to economic conditions, and issues with food service  management companies.
Although school lunch participation has declined, it is likely that  participation will improve over time as students adjust to the lunch  changes. Five of the districts we visited reported that, if the past is an  indicator, participation will improve over time as students adjust to the  new food items, and three noted the importance of nutrition education for  students and parents to help make the transition to healthier school meals  more successful. The SFA director in one district we visited that made  changes to lunches prior to school year 2012-2013 in anticipation of the  federal requirements initially experienced a decrease in participation, but  saw participation recover in the following school year. Similarly, although  the other seven districts we visited saw decreases in lunch program  participation in the first months after implementing the new requirements  in school year 2012-2013, participation increased in the majority of these  districts as the school year progressed. Nationwide, fewer states  expected student acceptance of the changes and palatability of foods to  be challenges for SFAs in school year 2013-2014 than indicated they  were challenges in school year 2012-2013, although the majority of states   In four districts we visited, SFA  still expected these areas to be difficult.directors noted that they had begun adding whole grains into their menus  before the 2012-2013 school year, and they saw student acceptance of  whole grain products improve over time. One district’s SFA director also  noted that students’ willingness to eat foods in the beans and peas  (legumes) sub-group has improved over time. When we talked with  students in the schools we visited and asked them about the lunches,  these specific foods were mentioned by some students in four of the eight  districts we visited. However, at the same time, most of the students we  spoke with indicated that they like to eat healthy and nutritious foods, and  they think school lunches generally provide such foods. Further, although  school year 2012-2013 was the first year that students nationwide were  required to take a fruit or a vegetable with their school lunches, when we  asked students what they liked about school lunch that year, students in  13 of the 17 schools we visited reported liking certain fruit and vegetable  options.
section_title: Nationwide, SFAs Faced Challenges Implementing Lunch Changes, Though Some Challenges Will Likely Diminish Over Time
subsections: section_title: Addressing Plate Waste, Managing Food Costs, and Planning Menus Challenged Many SFAs as They Implemented School Lunch Changes
paragraphs: As SFAs began implementing the new lunch requirements in school year  2012-2013, they faced several challenges implementing the lunch  changes. For example, most states reported that their SFAs faced  challenges with plate waste—or foods thrown away rather than consumed  by students—and food costs, as well as planning menus and obtaining  foods that complied with the new portion size and calorie requirements.  (See fig. 8.) The majority of states also reported that food service staff  workload and food storage or kitchen equipment were challenges for their  SFAs while implementing the new lunch requirements. The eight SFAs  we visited also experienced these challenges, although at the same  time, all eight expressed support for the goal of improving the nutritional  quality of lunches and felt the new requirements were moving in that  direction.
Addressing plate waste has been a longstanding challenge in the school  lunch program, and officials in six of the districts we visited told us they  believe plate waste increased in school year 2012-2013 because of the  new lunch requirements. Specifically, students may take the food  components they are required to as part of the school lunch but then  choose not to eat them. Although none of the districts we visited had fully  analyzed plate waste over the past few years to determine if it changed  during school year 2012-2013, SFAs we visited said that the fruits and  vegetables students are now required to take sometimes end up thrown  away. Consistent with this, in our lunch period observations in 7 of 17  schools, we saw many students throw away some or all of their fruits and  vegetables. However, in the other 10 schools, we saw students take and  eat sizable quantities of fruits and vegetables and the other lunch  components, resulting in minimal plate waste. Four of the eight SFAs we  visited mentioned that plate waste was more of an issue with the  youngest elementary school students, possibly because of the amount of  food served with the lunch and the amount of time they have to eat it. The  Institute of Medicine report that recommended the new lunch  requirements acknowledged differences in food intake among elementary  students. The report noted that the amounts of food offered under the  new recommendations may be too large for some of the younger  elementary schoolchildren because they are more likely to have lower  energy needs than older elementary schoolchildren being served the  same lunches.
Managing the food costs associated with implementing the new lunch  requirements was another challenge reported by all of the SFAs we  visited. In all eight SFAs, fruit and vegetable expenditures increased  substantially during school year 2012-2013, as compared to school year  2011-2012, consistent with the new requirements that both fruits and  vegetables be offered daily with lunches and each student take at least  one fruit or vegetable with lunch. However, increases varied among the  SFAs we visited. Several factors likely affected the extent to which these  costs increased in SFAs nationwide as they implemented the new  requirements, including the availability of produce suppliers, economies of  scale, and the amount of fruits and vegetables previously served with  lunches. Some SFA officials we spoke with also noted that fruit and  vegetable costs may vary greatly from year to year because of factors  that are difficult to plan for when budgeting, such as the weather’s impact  on growing seasons. By the end of school year 2012-2013, increased fruit  and vegetable costs and other factors had negatively impacted the overall  financial health of six SFAs we visited.
The SFAs we visited also cited difficulties planning menus that complied  with the new requirements, including the portion size and calorie range  requirements. All eight SFAs modified or eliminated some popular menu  items because of the new portion size requirements for meats and  grains. For example, two districts stopped serving peanut butter and  jelly sandwiches as a daily option in elementary schools, and three  districts reported that they changed the burgers they served. Specifically,  one district removed cheeseburgers from elementary and middle school  lunch menus because adding cheese to the district’s burger patties would  have made it difficult to stay within the weekly meat maximums. Because  lunch entrees frequently consist of meats and grains and provide the  majority of calories in meals, the limits on meats and grains made it  difficult for SFAs to plan lunches that complied with both the portion size  and calorie range requirements. For example, in order to meet the  minimum calorie requirements, some SFAs reported that they added  foods to their menus that generally did not improve the nutritional value of  lunches, such as pudding or potato chips. Further, students or school  officials in five districts raised concerns about students being hungry after  eating lunches that complied with the new requirements, which some of  the students we spoke with attributed to the smaller entrée sizes. The  calorie range requirements caused additional difficulties in SFAs whose  districts included schools with students in both the 6-8 and 9-12 grade  groups. These SFAs faced challenges planning menus that met the  requirements for both groups because the calorie ranges for lunches   One SFA we visited planned its  served to those groups do not overlap.menus for schools serving students in both groups to generally provide a  calorie total in-between the two ranges, which is not in compliance with  requirements and may have left older students feeling hungry after lunch.
USDA temporarily provided SFAs some flexibility to help address these  challenges, and we recommended in our June 2013 testimony that the  department take additional steps. Specifically, in response to feedback  from states and SFAs regarding operational challenges caused by the  meat and grain maximums, USDA lifted the maximums temporarily—first  in December 2012 for school year 2012-2013 and then in February 2013  for school year 2013-2014. USDA indicated that they provided these  flexibilities in response to the challenges they had heard about, and they  did not see a problem making the temporary changes because the new  lunch content standards include other requirements that also limit portion  sizes. In our June 2013 testimony, we recommended that USDA  permanently remove the weekly meat and grain maximums, and in  January 2014, USDA issued regulations that remove the requirement for  SFAs to comply with these maximums. We also recommended in our  testimony that USDA provide flexibility to help SFAs comply with the lack  of overlap in the calorie ranges for the 6-8 and 9-12 grade groups. While  USDA generally agreed with the recommendation, the department has  not yet taken action to address that issue.
SFAs we visited also discussed other challenges they faced planning  lunch menus that complied with the new requirements in school year  2012-2013. For example, officials from five SFAs noted that the  requirements sometimes led them to serve meals they would not  otherwise have planned because the specific food combinations are  generally not served together as a meal. For example, one SFA served  saltine crackers and croutons with certain salads to meet the minimum  daily grain requirement and a cheese stick with shrimp to meet the  minimum daily meat requirement. Several SFA directors and school food  service managers also noted that the new requirements made it very  difficult to make substitutions if they ran out of a particular menu item,  because serving alternative food items in one day’s lunch may result in  the week’s lunches exceeding the meat or grain limits or failing to include  vegetables from all five sub-groups.
Another factor that complicated school year 2012-2013 menu planning in  the SFAs we visited was food procurement. Three of the SFAs we visited  noted that because food orders for school year 2012-2013 were placed in  the initial months of 2012—at the same time that guidance on the new  requirements was being issued—they procured foods without knowing  what was required. Consequently, one SFA ordered more meat and  poultry than was needed for the year, and another SFA inadvertently  ordered foods that were not in compliance with the new requirements.  Several SFA officials in districts we visited also mentioned that it was  difficult to obtain from vendors certain food products that met the new  requirements. For example, one SFA had difficulties obtaining the fresh  produce it wanted to serve with lunches because of the increase in  volume needed to comply with the new requirements. Further, three SFAs  had challenges obtaining grain options from vendors that met portion size  or whole grain requirements and were palatable to students. In three of  the SFAs we visited, staff were still working with vendors during the  school year to obtain food products needed to comply with requirements.  SFA officials in some of the districts we visited and representatives from a  group of food manufacturers and related industries we spoke with  indicated that they had too little time between issuance of the final  regulations and required implementation to reformulate food products to  comply with the new lunch requirements. Further, after some products  were reformulated, the temporary flexibilities that USDA provided for the  meat and grain portion size requirements left industry experiencing  difficulties forecasting demand, which led to food production, inventory,  and storage challenges. In one school we visited, food service staff  experienced related challenges at the end of school year 2012-2013, as  several items on the school’s lunch menu were no longer being produced  by vendors who were waiting for more certainty from USDA on the meat  and grain requirements.
According to SFA staff in all eight districts we visited, the workload for  food service staff increased because of the new lunch requirements, and  officials in some of the SFAs also noted that the requirements created  new food storage and kitchen equipment challenges. School food service  staff in all eight districts noted that workload increased primarily because  of the need to prepare more fruits and vegetables each day to meet  requirements. (See fig. 9.) In two of the smallest districts we visited, the  increased workload in this area required staff reorganizations in which  staff previously responsible for baking began helping to prepare fruits and  vegetables. Staff in one SFA noted that the increased amount of time and  effort to prepare fruits and vegetables also led to morale issues when  staff saw students throw the fruits and vegetables in the trash. Further,  two SFAs that chose to increase their use of fresh produce in lunches,  rather than relying on canned or frozen products, reported that this  required more frequent deliveries of these foods because of limited food  storage capacity on-site in the schools. In one of these SFAs, the more  frequent deliveries resulted in increased costs from the supplier, and in  the other, they seemed to increase the likelihood of workplace injuries  related to unloading and lifting. In addition to the need for more food  storage space in schools, some SFAs we visited discussed new kitchen  equipment needs that resulted from the changes to the lunch  requirements, such as the need for new spoons and ladles to match the  new portion size requirements, and food choppers and other equipment  used for preparing fruits and vegetables to be served.
section_title: Some Areas Are Expected to Be Less Challenging for SFAs in the Future
paragraphs: As SFAs, food service staff, and students adjust to the new lunch  requirements, it is likely that some challenges that arose during  implementation of the new requirements in school year 2012-2013 will  become less problematic. For example, fewer states reported that they  expect menu planning, including the required portion sizes for lunch  components and calorie ranges for lunches, to challenge their SFAs in  school year 2013-2014 than reported these areas as challenges in school  year 2012-2013. Although many states expect these areas to continue  to be challenging, the flexibilities USDA recently made permanent related  to the meat and grain portion size requirements should help ease menu  planning moving forward.
As more time elapses, food manufacturers expect the availability of foods  that comply with the new requirements and are palatable to students to  increase, easing SFA challenges with food procurement and plate waste.  Food manufacturers we spoke with reported that they spent school year  2012-2013 focused primarily on reformulating food products to comply  with the new lunch requirements. They added that because of the short  timeframes between the issuance of the requirements for lunches and  implementation, they did not have as much time to focus on food  palatability, but as time elapses, they may have more time to do so.  Further, both research and the experiences of some of our site visit  districts suggest that students will likely adjust to the new lunch menus  with time, which should result in decreased plate waste. While many  states expect managing plate waste and food procurement to challenge  their SFAs in school year 2013-2014, a greater number of states reported  these areas as challenges for their SFAs in school year 2012-2013.
In contrast, other areas may continue to be challenges in the future,  including those related to costs and infrastructure. In our survey, a similar  number of states reported that they expect their SFAs will be challenged  by food costs and food storage or kitchen equipment in school year 2013- 2014 as were challenged by those areas in school year 2012-2013.  Some of the SFAs we visited also suggested that these areas will likely  be ongoing challenges. To try to remedy storage challenges, one SFA we  visited had developed plans to expand coolers and freezers on-site in  schools, which was not an option in another SFA we visited due to facility  and resource constraints. A third SFA’s plans to remodel the kitchen and  serving lines in its largest school were put on hold because of the  negative financial impact the SFA experienced in part because of the new  lunch requirements. Overall, future costs were particularly concerning to  some of the SFAs we visited. For example, officials in four SFAs  expressed concerns about remaining financially solvent after the new  requirements for school breakfasts or competitive foods are implemented,  as some expect the breakfast changes to increase costs and the  competitive foods changes to decrease revenues.
Moving forward, states and SFAs also expressed concerns about the  federally-required sodium limits for school lunches. The first of three  sodium limits must be met beginning in school year 2014-2015. Many of  the SFAs we visited noted that these limits will likely present a significant  menu planning challenge, primarily because many of the foods available  from manufacturers do not yet comply with these limits and students may  not accept foods that meet the limits. These concerns were echoed by  officials we spoke with in four states, with some noting that it will be very  difficult for food manufacturers to make foods that meet the limits and are  palatable to students. USDA has acknowledged that complying with the  new limits will be a significant challenge that will require new technology  and food products, and they have explained that these issues were  considered when the department decided to require sodium to be  reduced gradually over 10 years.
During our site visits to eight SFAs, many also expressed concerns about  the future nutrition standards for competitive foods, and these concerns  were not fully addressed in USDA’s interim final rule on the standards. At  the time of our visits, SFAs expressed concerns that certain aspects of  USDA’s proposed rule on the standards would be challenging to  implement, if finalized. For example, officials from seven of the eight  SFAs we visited expressed concerns about what they viewed as a lack of  clarity regarding how the nutrition standards for competitive food sales  administered by entities other than the SFA would be enforced. Officials  from five of the SFAs we visited also expressed concerns about the  provision that would allow states discretion to exempt certain fundraisers  from the standards, because such exemptions may result in inequitable  treatment and put the SFA at a competitive disadvantage relative to other  food sales within a school. USDA’s interim final rule on the competitive  food standards, issued in June 2013, requires school districts and SFAs  to maintain records documenting compliance with the competitive food  standards, and indicates that states and school districts will be  responsible for ensuring compliance. However, it notes that forthcoming  rules will describe state oversight requirements and fines for  noncompliance. In addition, although USDA received many comments  requesting that the department approve state decisions on fundraiser  exemptions, the interim final rule does not require USDA approval of  state decisions.
section_title: USDA’s Assistance Efforts Were Substantial, but Certain Aspects of USDA’s Guidance May Hinder State Oversight of Compliance
subsections: section_title: USDA Provided a Substantial Amount of Guidance and Training in a Short Time, Which Was Both Useful and Challenging for States and SFAs
paragraphs: USDA provided a substantial amount of guidance and training to assist  states and SFAs in complying with the required changes to school lunch,  which states indicated was useful. According to USDA officials, the  department’s assistance effort has been unprecedented. From January  2011—the month after the Healthy, Hunger-Free Kids Act of 2010 was  enacted—through September 2013, USDA issued about 90 memos to  provide guidance to states and SFAs on the new requirements for the  content of school lunches and paid lunch equity. (See fig. 10.) Most of the  memos (85 percent) addressed the new requirements for lunch content  and nutrition standards, as well as related issues such as food  procurement and state review of SFA compliance with the lunch  requirements. The remaining 15 percent of the memos addressed the  paid lunch equity requirements. Over the past few years, USDA also  provided training through several venues to help states and SFAs  implement the changes. For example, USDA officials convened webinars  and in-person trainings for states, participated in webinars and national  conferences for SFAs, and worked with the National Food Service  Management Institute to provide additional training and resources.  USDA’s regional offices also provided training to states. In addition, as  the changes were implemented in school year 2012-2013, USDA officials  reported that they conducted an extensive amount of travel to visit school  districts around the country to see how their efforts to implement the  changes were progressing and to obtain feedback on additional  assistance needed. All states reported that USDA’s guidance and training  were useful as the new school lunch requirements were implemented.  Further, over half of the states reported that USDA’s guidance was very  useful or extremely useful, and officials from seven of the eight states we  interviewed as part of our site visits expressed appreciation for USDA’s  efforts to respond to issues that arose as changes were implemented.
In contrast, some states and SFAs noted that the relatively short  timeframes within which the lunch requirements were implemented made  it difficult to keep up with the extensive amount of guidance provided by  USDA. In the 18 months from January 2012—the month in which the final  rule on the changes to the lunch content and nutrition standards was  issued—through the end of school year 2012-2013, USDA issued 1,800  pages of guidance on these changes. Several SFAs we visited noted  that keeping up with the extensive amount of guidance was difficult during  school year 2012-2013 because they were simultaneously implementing  the lunch changes. In addition, 32 states reported through our survey that  the timing of USDA’s guidance on the new lunch requirements was a very  —a  great challenge or extreme challenge during school year 2012-2013response echoed by most of the states we spoke with as part of our eight  site visits. For example, officials in one state reported that the guidance  providing SFAs with flexibility on the meat and grain maximums was  provided too late in school year 2012-2013 to be helpful, as SFAs had  already planned menus and trained food service staff on the new meat  and grain requirements. Further, because of the fast pace with which  USDA provided guidance on the new lunch requirements, officials from  four states said that the department’s regional offices were sometimes  unable to answer state questions on the guidance. While six of the eight  states we spoke with as part of our site visits commended the efforts that  the regional offices took to help states understand the new lunch  requirements, some noted that regional offices learned about the  requirements at the same time as states. Because of this, regional office  staff were not always able to answer state questions on the guidance,  and states had to instead wait for USDA headquarters’ staff to respond.  USDA officials told us that while they recognize that the lunch changes  were defined and implemented rather quickly, this was necessary  because of the importance of improving school meals.
Almost two-thirds of states also reported through our survey that the  changes USDA made to its guidance on the lunch requirements were a  very great challenge or extreme challenge during school year 2012-2013.  According to our analysis, 40 percent of the guidance memos issued by  USDA on the new requirements for the content of school lunches and  paid lunch equity from January 2011 through September 2013 contained  new flexibilities not included in federal regulations or substantive changes  to previously issued guidance, which were to be enforced either  temporarily or permanently. (See fig. 11.) According to USDA’s general  counsel, the department felt that it was important to provide such  flexibilities to help ease the implementation process, although the  guidance is technically non-binding and does not modify statutory or  regulatory requirements. For example, USDA issued several guidance  memos from February through December 2012 that added flexibilities  related to the fruit, milk, meat, and grain components of lunches, which  had not been included in the January 2012 final regulations. Further,  some guidance memos either substantively changed or contradicted  aspects of previously issued memos. For example, in a February 2012  guidance memo, USDA indicated that frozen fruit served with lunches  was not allowed to contain added sugar after school year 2012-2013.However, in memos issued in September 2012 and June 2013, the  department indicated that fruit with added sugar would be allowed in  school years 2013-2014 and 2014-2015, respectively.SFA officials we spoke with noted that some of these changes were likely  made by USDA to respond to problems SFAs were having implementing  the new lunch requirements, the guidance changes were difficult to keep  up with and led to increased confusion about the requirements. Further,  officials in six of the states we interviewed as part of our site visits  reported that the changes USDA made to its guidance also frustrated  SFAs or complicated training on the new lunch requirements. Officials  from three states we spoke with as part of our site visits also reported that  changes might have been avoided if USDA had piloted or phased in the  new requirements more slowly, which suggests that the challenges states  and SFAs experienced because of the lack of timely and consistent  guidance from USDA in school year 2012-2013 may become less  problematic over time. USDA officials told us that their assistance efforts,  and the changes made to guidance, reflected the department’s  recognition that the process needed to be iterative, as unexpected issues  with the requirements would likely arise as the new lunch standards were  implemented in the schools.
section_title: USDA Has Emphasized State Assistance to SFAs, but USDA Guidance Changes and Gaps May Hinder State Oversight of SFA Compliance
paragraphs: While SFAs transition to the new lunch requirements, USDA has  emphasized the importance of state assistance in helping SFAs comply.  According to the Standards for Internal Control in the Federal  Government, federal agencies should have policies and practices in  place to provide reasonable assurance that programs are operated in  compliance with applicable laws and regulations. To this end, USDA  officials told us that they directed states to work with SFAs to achieve  compliance with the new lunch requirements during school year 2012- 2013. Nationwide, 45 states reported that they used the additional  administrative funds they received for fiscal year 2013 to conduct training  for SFAs and provide technical assistance to SFAs. In addition, many  states reported using these funds to certify SFA compliance with the new  meal requirements and conduct required validation reviews of a sample of  those certified. Officials in all eight of the states we spoke with as part of  our site visits reported that they provided extensive guidance and  assistance to SFAs to help them understand and implement the new  lunch requirements and become certified as in compliance with the  requirements.
Although SFAs likely needed and benefited from state assistance as they  worked to implement the new lunch requirements, USDA’s emphasis on  assistance, combined with new financial incentives for compliance, may  have led to incomplete identification and documentation of SFA  noncompliance. For many years, states have conducted administrative  reviews of SFAs and observed lunches in schools in order to assess SFA  compliance with federal requirements. In the past, USDA consistently  noted the importance of these reviews for ensuring the integrity of the  National School Lunch Program, as the review process requires that  noncompliance be addressed. Under this process, instances of SFA  noncompliance are required to be documented and lead to a corrective  action plan and follow-up to ensure issues are addressed. In addition, the  documentation of issues has also provided federal and state officials with  information on areas for which additional assistance may be needed  across SFAs. During school year 2012-2013, however, states were  generally not required to conduct administrative reviews. Rather, states  were to assist SFA efforts to comply with the new lunch requirements.  Further, states were required to provide SFAs certified as in compliance  with the new requirements an extra 6 cents of federal reimbursement for  each lunch served and conduct on-site validation reviews in a sample of  the certified SFAs. USDA officials reported that they considered the  added funds to be an important way to offset the extra costs SFAs  incurred as they made the required changes to lunches. However, while  the certification and validation process likely helped SFAs understand the  new requirements and obtain the additional reimbursement to help with  compliance, unlike the administrative review process, states were not  required to fully document issues of noncompliance they identified. For  example, officials in two states we spoke with noted that USDA instructed  them to work with SFAs during the certification process and during  validation reviews of those certified, rather than strictly enforce  requirements. This is consistent with USDA’s guidance, which  emphasized the provision of assistance during the certification process  and validation reviews to help SFAs become compliant. However,  because states were generally not required to document noncompliance  issues that arose during the certification process or validation reviews,  SFAs may not have developed or documented corrective action plans  taken to address them. As a result, SFAs may not have adequate  information on the types of ongoing compliance issues and the need to  take corrective actions. Moreover, USDA has limited information on the  extent to which SFAs are facing similar difficulties complying with the new  requirements, which could be the focus of future federal technical  assistance efforts.
National data, as well as our conversations with states and visits to  schools, suggest that some instances of SFA noncompliance may not  have been fully documented while the new lunch requirements were  being implemented. We and others have reported that SFAs experienced  significant challenges implementing the new lunch requirements during  school year 2012-2013, and several state officials we spoke with as part  of our site visits told us that SFAs often needed a lot of state assistance  to move forward with the new requirements, also suggesting that SFAs  faced significant challenges fully complying. However, national data  suggest that these challenges affected few SFAs’ certifications. Specifically, 82 percent of SFAs nationwide applied to be certified as in  compliance with the new lunch requirements during school year 2012- 2013,National data on the results of state validation reviews of SFAs show  similar outcomes, as 1 percent of SFAs had the extra federal  reimbursement stopped by their states because of noncompliance issues  found during these reviews. When reviewing the certification and  validation results by state, we found that 25 states did not deny any SFAs  that applied for certification and validated all SFAs reviewed. While states  reported that they were unable to validate compliance in an additional 4  percent of SFAs reviewed nationwide, states did not stop these SFAs  from continuing to receive the extra federal reimbursement, possibly   and states denied 1 percent of SFAs that applied. (See fig. 12.)
Because the certification and validation process did not require states to document  issues of noncompliance, the extent to which noncompliance issues occurred in SFAs is  unknown. because of changes in USDA guidance during school year 2012-2013.  One state told us that it interpreted USDA’s guidance to mean that the  state should not stop an SFA from receiving the extra federal  reimbursement even when it was unclear if issues of noncompliance  found during a validation review would be fully addressed by the SFA. In  another state, we obtained evidence that some of the lunch menus in an  SFA we visited may not have been fully in compliance with the new  requirements, though the SFA was certified and validated, and in two  additional certified SFAs we visited, we observed practices in schools that  were inconsistent with the new requirements.SFAs we visited had been certified to be in compliance with the new  requirements at the time of our site visits, the possible noncompliance  issues in three of these five SFAs indicate the difficulty of ensuring proper  implementation of the lunch changes in all of an SFA’s schools,  particularly during the first year that changes were required.
section_title: Conclusions
paragraphs: The Healthy, Hunger-Free Kids Act of 2010 required that nutrition  standards for school lunches be updated to help reduce childhood obesity  and improve children’s diets, and evidence suggests that lunches served  are now better designed to meet those goals. Although some decreases  in student lunch participation and challenges for SFAs occurred in the first  year that the lunch changes were implemented, these outcomes are likely  related to the substantial scale of the changes and the short time in which  they were implemented. As a result, both participation and many of the  challenges SFAs faced initially are expected to improve with the passage  of time as students and SFAs adjust to the new lunch requirements.
Since the act was passed, USDA has focused on the provision of  assistance to help SFAs comply with the new requirements. While this  emphasis may have been needed given the scope of the changes and  the short timeframe for implementation, it alone will not ensure that  students nationwide are being served healthier school lunches. Rather,  only when government assistance is combined with an emphasis on  program integrity will it be possible to ensure that healthier school lunches  are served nationwide. The administrative review process has long been  key to both addressing issues of noncompliance in the National School  Lunch Program and ensuring that federal and state governments have  information on areas for which they should target additional assistance to  SFAs to improve program compliance. However, even with this process in  place, program errors resulting from lunches that did not comply with  requirements being served to students have been a long-standing issue.  The substantial changes to the lunch requirements, combined with the  delays and changes made in federal guidance while the requirements  were being implemented, as well as temporary changes to the process  through which states reviewed SFA compliance, increase the likelihood  that lunches served to students may not meet all of the requirements. In  addition, while USDA has developed a new administrative review  process, which includes new requirements related to SFA financial  management, the review process will not be effective without state  understanding of all of the requirements they are responsible for  overseeing. Further, because the Healthy, Hunger-Free Kids Act of 2010  included two new provisions that relate to SFA financial management— those addressing paid lunch prices and revenue from foods sold outside  of the school meals programs—without effective oversight of SFA  financial management by states, neither states nor the federal  government will have assurance that SFAs are correctly implementing  these requirements. As new requirements are added this year and in the  future for the School Breakfast Program and competitive foods, timely  and consistent USDA guidance combined with an effective administrative  review process are all vital to ensuring successful implementation of the  changes to school food and achieving the laudable goal of improving  schoolchildren’s diets and health.
section_title: Recommendations for Executive Action
paragraphs: To improve program integrity, as USDA moves forward with its new  administrative review process, we recommend that the Secretary of  Agriculture direct the Administrator for the Food and Nutrition Service to  take the following actions:  clarify to states the importance of documenting compliance issues  found during administrative reviews and requiring corrective actions to  address them, and continue efforts to systematically assess all states’ needs for  information to improve their ability to oversee SFA financial  management and provide assistance to meet identified needs.
section_title: Agency Comments
paragraphs: We provided a draft of this report to USDA for review and comment. In  oral comments, the Senior Policy Advisor to the Deputy Administrator for  Child Nutrition Programs and other USDA officials generally agreed with  our recommendations. These officials also noted that they consider the  emphasis on technical assistance associated with school meals  implementation in school year 2012-2013 appropriate given that the new  meal patterns represented a major transition for local program operators.  They also indicated their belief that the level of review associated with the  6-cent certification process, including detailed review of meal pattern  documentation and on-site reviews of at least 25 percent of certified  SFAs, provides a solid foundation for ongoing oversight of compliance  moving forward. Officials also expressed their belief that the new  administrative review process, which they developed in collaboration with  states, is an effective and efficient monitoring process that will improve  program integrity. Further, they noted that their ongoing efforts to assist  state efforts to properly implement the new process will help ensure that  states are able to effectively review all required areas, including SFA  financial management. We agree that the new administrative review  process, if properly implemented, could improve program integrity, and as  we discuss in the report, we agree that the emphasis on technical  assistance likely benefited SFAs as they transitioned to the new lunch  requirements. However, we continue to believe that the changes made in  oversight requirements during school year 2012-2013 may have left  USDA without key information on compliance issues SFAs faced when  implementing the changes and may have created confusion among states  as to the importance of consistently documenting noncompliance for  program integrity. While we also remain concerned that the change in  oversight requirements during school year 2012-2013 and the  department’s continued emphasis on state assistance to SFAs moving  forward may inadvertently undercut the effectiveness of the new review  process, we see opportunities for USDA to address these issues.  Specifically, as USDA continues its efforts to communicate and  collaborate with states during their implementation of the new review  process, the department is well-positioned to emphasize the importance  of documenting noncompliance for effective program oversight and to  provide states with the information they need to effectively review all  required areas. USDA officials also provided technical comments, which  we incorporated into the report as appropriate.
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section_title: Appendix I: Scope and Methodology
subsections: section_title: U.S. Department of Agriculture (USDA)
subsections: section_title: Participation Data
paragraphs: To assess trends in school lunch participation, we analyzed USDA’s  national data on meals served in the National School Lunch Program  from school year 2000-2001 through school year 2012-2013. Each  month, states report to USDA on the FNS-10 form the number of lunches  served by category of student—free, reduced-price, and paid—as well as  average daily lunches served to all students. These data are used to  determine federal reimbursement payments to states. Additionally, in  October of each school year, states report to USDA the total number of  students enrolled in schools with the National School Lunch Program, as  well as the total number of students approved for free and reduced-price  meals in that month. Subtracting these students from the total enrolled  students provides the number of students required to pay full price for  their meals, if they choose to buy them, in schools with the National  School Lunch Program.
Although USDA does not collect additional data on the number of  students participating in the program each month, the department uses  the lunch data it collects to determine the number of students participating  in the program. Specifically, USDA adjusts the data on average daily  lunches served each month upward to help account for students who  participated in the program for a number of days less than all days in the  month. To make this adjustment, USDA uses an estimate of the  proportion of students that attend schools daily nationwide.
To analyze participation in the National School Lunch Program, we  reviewed USDA’s data on meals served and students enrolled, as well as  the department’s methodology for determining student participation, and  determined these data and the method to be sufficiently reliable for the  purposes of this report. Specifically, we interviewed USDA officials to  gather information on the processes they use to ensure the completeness  and accuracy of the school lunch data, reviewed related documentation,  and compared the data we received from the department to its published  data. To determine school year participation from these data, we relied on  9 months of data—September through May—for each year. To  determine the participation rate, we divided the number of students  participating per month by the total number of students enrolled in  schools with the program. We followed the same approach to determine  the participation rates for students receiving free and reduced-price  lunches, as well as those who paid full price for their lunches.
section_title: Guidance Documents
paragraphs: To understand the scale and scope of assistance USDA has provided to  states and SFAs, we analyzed guidance memos USDA issued from  January 2011—the month after the Healthy, Hunger-Free Kids Act was  enacted—through September 2013. We reviewed all guidance memos  issued to states during this time period and further analyzed those that  provided guidance addressing the new requirements for the content of  school lunches, including related issues such as food procurement and  state review of SFA compliance with the lunch content requirements, as  well as those addressing the paid lunch equity requirements. These  memos included the department’s policy and technical assistance  memos, as well as other relevant guidance memos that were not  designated in one of those categories. For guidance memos that were  released in multiple versions, we considered each version to be a  separate piece of guidance.their primary topic and analyzed their content to determine whether they  clarified regulations, provided new flexibilities related to requirements  included in federal regulations, or substantively changed previously- issued guidance. We also assessed the number of pages included in  each document, defined as the number of digital pages for each guidance   We categorized the guidance memos by  document, including attachments. In the case of spreadsheet files, we  counted each worksheet within the file as a single page. We did not  conduct an independent legal analysis of these guidance memos.
section_title: Survey of States
paragraphs: To obtain information on state efforts related to implementation of the new  school lunch content and nutrition requirements, we conducted a national  survey of state child nutrition directors who oversee the National School  Lunch Program in the 50 states and the District of Columbia. We  administered our Web-based survey between June and July 2013, and all  state directors responded. The survey included questions about SFA  challenges with the new lunch requirements, state use of administrative  funds, and USDA assistance to states. The survey also requested data  on SFAs and schools participating in the program, SFAs that left the  program in school year 2012-2013, and state certification and validation  of SFAs in compliance with the new requirements.
Because separate agencies oversee the administration of the National  School Lunch Program in public and private schools in five states, we  surveyed both agencies in each of these states. These five states are  Arkansas, Colorado, Georgia, Oklahoma, and Virginia. In two of these  states, separate state agencies oversee public and private schools  administering the program, while in the remaining three, private schools  administering the program are overseen by the relevant FNS regional  office. For these five states, when analyzing survey results for questions  with numerical responses, we combined the answers from entities  overseeing both public and private schools in order to represent the state  as a whole. For all other questions, such as those concerning SFA  challenges with the lunch requirements, we reported responses from the  agency overseeing the program in public schools because those  agencies represented the majority of schools with the program in these  states.
Because this was not a sample survey, there are no sampling errors.  However, the practical difficulties of conducting any survey may introduce  nonsampling errors, such as variations in how respondents interpret  questions and their willingness to offer accurate responses. We took  steps to minimize nonsampling errors, including pretesting draft  instruments and using a Web-based administration system. Specifically,  during survey development, we pretested draft instruments with child  nutrition directors from three states (Louisiana, Texas, and Virginia) in  May 2013. We selected the pretest states to provide variation in state  school lunch program characteristics and geographic location. In the  pretests, we were generally interested in the clarity, precision, and  objectivity of the questions, as well as the flow and layout of the survey.  For example, we wanted to ensure definitions used in the surveys were  clear and known to the respondents, categories provided in closed-ended  questions were complete and exclusive, and the ordering of survey  sections and the questions within each section were appropriate. We  revised the final survey based on pretest results. Another step we took to  minimize nonsampling errors was using a Web-based survey. Allowing  respondents to enter their responses directly into an electronic instrument  created a record for each respondent in a data file and eliminated the  need for and the errors associated with a manual data entry process. To  further minimize errors, programs used to analyze the survey data were  independently verified to ensure the accuracy of this work.
While we did not fully validate specific information that states reported  through our survey, we took several steps to ensure that the information  was sufficiently reliable for the purposes of this report. For example, we  reviewed the responses and identified those that required further  clarification and, subsequently, solicited follow-up information from those  respondents via email and phone to ensure the information they provided  was reasonable and reliable. In our review of the data, we also identified  and logically fixed skip pattern errors for questions that respondents  should have skipped but did not. On the basis of these checks, we  believe our survey data are sufficiently reliable for the purposes of our  work.
section_title: Site Visits
paragraphs: To gather information from the local level on implementation of the new  lunch content and nutrition requirements, we conducted site visits to eight  school districts across the country between March and May 2013. The  school districts we visited were: Caddo Parish Public Schools (LA),  Carlisle Area School District (PA), Chicago Public Schools (IL), Coeur  d’Alene School District (ID), Fairfax County Public Schools (VA), Irving  Independent School District (TX), Mukwonago Area School District (WI),  and Spokane Public Schools (WA). We selected these school districts  because they provided variation across geographic location, district size,  and certain characteristics of the student population and district food  services. For example, the proportion of students eligible for free and  reduced-price lunches and the racial and ethnic characteristics of the  student population varied across the districts selected. Further, we  selected districts with different food service approaches, including some  that generally prepared school lunches in one central kitchen before  delivering them to schools, some that prepared lunches in kitchens on- site in each school, and others that used alternative approaches for lunch  preparation. Seven of the school districts we visited managed their own  food service operations, while one district contracted with food service  management companies. We relied on the U.S. Department of  Education’s Common Core of Data, which provides information on public  schools, to ensure selected districts met several of our criteria. As a  result, all of the districts we selected for site visits were public, although  non-profit private elementary and secondary schools, as well as  residential child care institutions, also participate in the National School  Lunch Program.
In each district, to gather information on local level implementation of the  new lunch requirements, we interviewed the SFA director, as well as  other key district-level SFA staff and food service staff in at least two  schools. During these interviews, we collected information about lunch  participation trends; challenges, if any, implementing the new lunch  requirements; and USDA and state assistance with the changes. To  select the schools we visited in each district, we worked with the SFA  director to ensure the schools included students of differing grade levels  in order to capture any relevant differences in their reactions to the new  lunch requirements. In each school, we observed lunch—including  students’ food selections, consumption, and plate waste—and, when  feasible, interviewed students and school staff to obtain their thoughts on  the lunch changes. We also interviewed the eight state child nutrition  program directors overseeing these districts to gather information on  statewide lunch participation trends; SFA challenges, if any; and USDA  and state assistance with implementation of the changes. Following the  site visits, in late summer 2013, we obtained school lunch participation  data for school years 2008-2009 through 2012-2013 and information  about school year 2012-2013 finances from the eight SFA directors. We  cannot generalize our findings from the site visits beyond the school  districts we visited.
section_title: Appendix II: Federal Requirements for the Content of School Lunches
subsections: section_title: Previous Requirements
paragraphs: Under the previous federal requirements for the content of school  lunches, SFAs could choose to use one of five approved approaches to  plan their menus. Three of these approaches focused on nutrient  requirements and, aside from milk, did not specify food components or  portion size requirements. Under the two remaining approaches,  Traditional and Enhanced Food-Based Menu Planning, schools had to  comply with specific food component and portion size requirements, as  well as nutrient requirements. See tables 1 through 4 for details of the  previous Food-Based Menu Planning approaches.
section_title: Current Requirements
paragraphs: Following passage of the Healthy, Hunger-Free Kids Act of 2010, USDA  updated federal requirements for the content of school lunches and  required all SFAs to use the same approach for planning lunch menus— Food-Based Menu Planning. In the January 2012 final rule on these  changes, USDA noted that over 70 percent of program operators were  already using the Food-Based Menu Planning approach to plan their  lunch menus. See table 5 for details of the current lunch content and  nutrition requirements.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Kay E. Brown, (202) 512-7215 or brownke@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Rachel Frisk and Kathy Larin  (Assistant Directors), Robert Campbell, Jean McSween, Dan Meyer,  Christine San, and Zachary Sivo made key contributions to this report.  Also contributing to this report were James Bennett, Nora Boretti, Jessica  Botsford, Sheila McCoy, Paul Schearf, and Almeta Spencer.
section_title: Related GAO Products
paragraphs: School Lunch: Modifications Needed to Some of the New Nutrition  Standards. GAO-13-708T. Washington, D.C.: June 27, 2013.
School Meal Programs: More Systematic Development of Specifications  Could Improve the Safety of Foods Purchased through USDA’s  Commodity Program. GAO-11-376. Washington, D.C.: May 3, 2011.
School Meal Programs: Improved Reviews, Federal Guidance, and Data  Collection Needed to Address Counting and Claiming Errors.  GAO-09-814. Washington, D.C.: September 9, 2009.
School Meal Programs: Changes to Federal Agencies’ Procedures Could  Reduce Risk of School Children Consuming Recalled Food. GAO-09-649.  Washington, D.C.: August 20, 2009.
School Meal Programs: Experiences of the States and Districts That  Eliminated Reduced-price Fees. GAO-09-584. Washington, D.C.: July 17,  2009.
Meal Counting and Claiming by Food Service Management Companies in  the School Meal Programs. GAO-09-156R. Washington, D.C.: January  30, 2009.
School Meals Programs: Competitive Foods Are Widely Available and  Generate Substantial Revenues for Schools. GAO-05-563. Washington,  D.C.: August 8, 2005.
Nutrition Education: USDA Provides Services through Multiple Programs,  but Stronger Linkages among Efforts Are Needed. GAO-04-528.  Washington, D.C.: April 27, 2004.
School Meals Programs: Competitive Foods Are Available in Many  Schools; Actions Taken to Restrict Them Differ by State and Locality.  GAO-04-673. Washington, D.C.: April 23, 2004.
School Lunch Program: Efforts Needed to Improve Nutrition and  Encourage Healthy Eating. GAO-03-506. Washington, D.C.: May 9, 2003.