School Meal Programs: Competitive Foods Are Widely Available and Generate Substantial Revenues for Schools
Published: 2005-08-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Recent increases in child obesity have sparked concerns about competitive foods--foods sold to students at school that are not part of federally reimbursable school meals. The nutritional value of these foods is largely unregulated, and students can often purchase these foods in addition to or instead of school meals. In our April 2004 report on competitive foods (GAO-04-673), we reported that several states had enacted competitive food policies that were more restrictive than federal regulations. However, these policies differed widely in the type and extent of restrictions. In addition, it was unclear how and to what extent states were monitoring compliance with these policies. GAO was also asked to provide a national picture of competitive foods in schools, as well as strategies that districts and schools themselves are taking to limit the availability of less nutritious competitive foods. This report provides information from two nationally representative surveys about the prevalence of competitive foods in schools, competitive foods restrictions and groups involved in their sale, and the amounts and uses of revenue generated from the sale of competitive foods. It also provides information about strategies schools have used to limit the availability of less nutritious competitive foods, based on visits to a total of six school districts in California, Connecticut, Mississippi, Missouri, and South Carolina.
section_title: What GAO Found
paragraphs: Nearly 9 out of 10 schools sold competitive foods to students in school year 2003-2004, and the availability of competitive foods sold in middle schools and through a la carte lines has increased over the last 5 years. Schools often sold these foods in or near the cafeteria and during lunch, and the competitive foods available ranged from nutritious items such as fruit and milk to less nutritious items such as soda and candy. High and middle schools were more likely to sell competitive foods than elementary schools. Many different people made decisions about competitive food sales, but no one person commonly had responsibility for all sales in a school. In a majority of schools, district officials made competitive food policies, while school food authority directors and principals made decisions about specific sales. Other groups, such as student clubs and booster groups, also made competitive food decisions through their direct involvement in sales. Many schools, particularly high schools and middle schools, generated substantial revenues through competitive food sales in 2003-2004. Specifically, the nearly 30 percent of high schools generating the most revenue from these sales raised more than $125,000 per school. Food services, responsible for providing federal school meals, generally spent the revenue they generated through a la carte sales on food service operations. Other school groups often used revenues for student activities. The six school districts visited all recently took steps to substitute healthy items for less nutritious competitive foods. In each district, committed individuals took actions to initiate and lead change while also involving those affected. However, districts faced several barriers to change, including opposition due to concerns about revenue losses. In the districts visited, the effects of changes on revenues were often unclear because of limited data.

section_title: Letter
paragraphs: Increasing child obesity rates have recently focused attention on children’s  health and nutrition and have raised concerns about foods available in  schools that compete nutritionally and financially with federally regulated  school meal programs. The number of children who are overweight has  more than doubled, and the number of adolescents who are overweight  has more than tripled since 1980, according to the U.S. Centers for Disease  Control and Prevention (CDC). These changes are related, in part, to poor  nutrition. According to U.S. Department of Agriculture (USDA) data, more  than 60 percent of young people eat too much fat and less than 20 percent  of the recommended daily servings of fruits and vegetables. In addition to  having negative health outcomes, children with poor nutrition may have a  harder time concentrating and succeeding in school than other children.  The Surgeon General’s 2001 call to action identified schools as one of the  key settings for public health strategies to address child nutrition. Since  children spend a large portion of their day in school, providing them with  healthful food options throughout the school day can be an important step  toward good child nutrition.
The key school meal programs, the National School Lunch Program and  the School Breakfast Program, provide millions of children with nutritious  meals each school day. USDA’s Food and Nutrition Service administers  these programs through local school food authorities (SFA) and subsidizes  the meals served in local schools as long as meals meet certain nutritional  guidelines. However, other foods not provided through these programs,  typically referred to as competitive foods, are often available to children at  school. Competitive food sales can take place at a variety of venues in  schools, including vending machines, school stores, and a la carte lines in  the cafeteria, through which the SFA sells individually priced food and  beverage items. Federal restrictions concerned with the nutritional value  of competitive foods are limited. Specifically, federal regulations require  that one segment of competitive foods, defined as foods of minimal  nutritional value, not be sold to students during the breakfast and lunch  periods in food service areas.
In recent years, federal, state, and local governments have increasingly  focused on the role that competitive foods play in children’s diets. In our  April 2004 report on competitive foods, we reported that increasing  numbers of state legislatures have enacted and proposed legislation to  restrict the availability of competitive foods in schools. In addition, school  districts and schools themselves are taking steps to limit the availability of  competitive foods.
Because of your interest in further understanding issues related to  competitive foods in schools, you asked us to answer the following  questions: (1) How prevalent is the sale of competitive foods in schools  across the country, and has this prevalence changed over time? (2) Who  makes decisions about competitive food sales in schools? (3) What  amount of revenue is generated from the sale of competitive foods, and for  what purposes is the revenue used? (4) What strategies have schools used  to limit the availability of less nutritious competitive foods, what obstacles  did they face, and how have these strategies affected sales revenue?
To answer your first three questions, we obtained information through two  Web surveys, one of school principals and the other of district-level SFA  directors. To conduct our surveys, we selected a stratified random sample  from the 80,000 public schools nationwide that participate in the National  School Lunch Program, which allowed us to provide national estimates  based on school level. The surveys were administered between October  19, 2004, and February 11, 2005, with 65 percent of principals and 70  percent of SFA directors responding. The surveys asked respondents  about conditions in their schools during specific school years, primarily  2003-2004, and therefore, all years cited refer to school years. In addition,  all estimates presented from the surveys have margins of error of plus or  minus 15 percent or less, unless otherwise noted. To answer the fourth  question, we conducted site visits to 6 school districts in California  (Oakland), Connecticut (New Haven), Mississippi (McComb), Missouri  (Independence and Fort Osage), and South Carolina (Richland One),  including visits to a total of 10 schools. Our site visit localities were  selected from a group of approximately 100 districts and schools  recognized as making efforts to limit access to less nutritious competitive  foods. The 6 districts visited were also selected because it appeared that  they used different strategies to restrict competitive foods, and when  viewed as a group, they provided variation across characteristics such as  geographic location, district size, and socioeconomic status. See appendix  I for detailed information on our surveys, sampling strategy, and site visits.
We conducted our work from May 2004 through July 2005 in accordance  with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Competitive foods in schools are those foods sold to students during the  school day that are not part of the federal meal programs. These federal  programs, the National School Lunch Program (NSLP) and the School  Breakfast Program, subsidize public school meals and regulate their  nutritional content. Competitive foods, however, are only minimally  regulated at the federal level. They are typically sold a la carte in the  cafeteria, and through vending machines and school stores.
subsections: section_title: NSLP and School Breakfast Program
paragraphs: The two largest federal school meal programs, the NSLP and the School  Breakfast Program, aim to address problems of hunger, food insecurity,  and poor nutrition by providing nutritious meals to children in schools.  The NSLP, established in 1946, provides nutritionally balanced low-cost or  free lunches in participating schools to more than 28 million children each  school day, as well as reimbursement for snacks served to those through  age 18 in after-school educational and enrichment programs. Similarly, the  School Breakfast Program, permanently established in 1975, provides free  or reduced price breakfasts to more than 8 million schoolchildren daily.  At the federal level, these programs are administered by USDA’s Food and  Nutrition Service (FNS). As part of its strategic goal to improve the  nation’s nutrition and health, the department has laid out plans to increase  access to, and utilization of, these school meal programs.
In fiscal year 2004, the federal government spent over $8 billion on the  NSLP and the School Breakfast Program. FNS provides reimbursement in  the form of cash subsidies and donated commodities based on the number  of lunches and breakfasts served that meet certain federal requirements.  The meals must adhere to the Dietary Guidelines for Americans, which  include limits on total fat and saturated fat and call for diets moderate in  sodium. The meals must also meet standards for the recommended daily  allowances of calories, as well as nutrients such as protein, calcium, iron,  and vitamins A and C. Compliance with the standards is determined by  averaging the nutritional content of the meals offered over a school week.  USDA reimburses states, usually through the state departments of  education, which in turn reimburse local SFAs that operate the programs  in one or more schools.
SFAs function as the governing entities responsible for the local  administration of the federal meals programs. They are often, but not  always, responsible for school meals in an entire school district. SFAs  have some flexibility in operating their school meal programs. For  example, they may operate the programs themselves or contract with food  service management companies to perform functions such as planning and  preparing menus and selecting and buying food. All or some food  preparation may occur at on-site school kitchens or at central kitchens,  which then distribute food to satellite schools. In addition, SFAs may  select among different menu-planning approaches to comply with the  federal nutritional requirements.
SFAs receive a significant portion of their funding from federal  reimbursements that are based on the number of meals served to students  in their schools. In addition, SFAs also receive some funding from states  for program operations, and they may generate revenues by selling  competitive foods or by offering fee-based catering services. Further, SFAs  are permitted to combine costs and revenues for reimbursable meals and  nonreimbursable offerings, such as competitive foods, as long as they  maintain their nonprofit status. Therefore, if revenues from reimbursable  meals are less than the costs of producing these meals, SFAs may use  competitive food revenues to support the cost of reimbursable meals.  Likewise, if revenues from reimbursable meals are more than the costs of  producing these meals, SFAs may use these funds to support competitive  food sales.
section_title: Minimal Federal Restriction of Competitive Foods
paragraphs: Competitive foods are those foods sold in schools, during the school day,  that are not part of the federal school meal programs—that is, they  compete with the nutritionally regulated school meal programs. These  foods can range from candy and soda to pizza and popcorn to apples and  milk and are typically available in cafeteria a la carte lines, vending  machines, and school stores.
Unlike federally subsidized school meals, the sale and nutritional content  of competitive foods are largely unregulated by the federal government.  Federal regulations prohibit the sale of certain competitive foods, known  as foods of minimal nutritional value (FMNV), during meal periods in  school cafeterias and other food service areas. FMNV, as defined by  USDA, include soda, chewing gum, and hard candy, for example (see fig.  1). Other than this restriction, federal regulations do not prohibit or limit  the sale of any other competitive foods anywhere on school grounds at  any time. In contrast, from 1980 to 1983, federal regulations prohibited the  sale of FMNV anywhere in the school from the beginning of the school day  until the last meal period. In National Soft Drink Ass’n v. Block, 721 F. 2d  1348 (D.C. Cir. 1983), the Court of Appeals for the District of Columbia  overturned this regulation and construed a 1977 amendment to the Child  Nutrition Act as allowing USDA to regulate the sale of competitive foods  only in food service areas during meal periods. Following this decision,  USDA amended its regulation to limit the prohibition of these foods to  food service areas during meal periods.
According to federal regulations, states and SFAs may impose further  restrictions on all foods sold at any time throughout their schools. As of  April 2005, 28 states have made efforts to restrict the sale of competitive  foods beyond USDA regulations (see fig. 2). Five state policies do not  restrict particular food items, but instead typically address the competitive  food environment more broadly. For example, some of these states have  created committees to develop policies concerning competitive foods in  schools or have encouraged schools to find ways to improve their  competitive food environments. The remaining 23 of these state policies  place some form of specific restrictions on competitive foods, though they  differ in the type and extent of restrictions. The majority of these policies  restrict some, but not all, competitive foods and restrict foods only at  times associated with school meal periods, rather than during the entire  school day.
section_title: Recent Federal Initiatives to Promote Better Nutrition in Schools
paragraphs: The federal government has an interest in improving child nutrition in  order to promote the health and wellness of the nation’s children.  Moreover, the current child obesity trend poses public health risks  because of the relationship of obesity to serious illnesses, such as type 2  diabetes and hypertension. These illnesses can result in substantial long- term costs to society. In response, USDA has recently developed initiatives  to support school efforts to provide a healthy nutrition environment,  including competitive food sales. Beginning in 1995, USDA introduced the  School Meals Initiative for Healthy Children in an effort to improve the  nutritional quality of meals served through the NSLP and the School  Breakfast Program. That same year, in order to assist with implementation  of the School Meals Initiative, USDA launched Team Nutrition to focus on  schools and promote the nutritional health of the nation’s children. Team  Nutrition provides schools with nutrition education materials for children  and families, technical assistance materials for school food services, and  materials to build school and community support for healthy eating and  physical activity. Since 1995, USDA has also created additional resources  to help schools improve student nutrition, address competitive foods, and  foster long-term health, sometimes in collaboration with other federal  agencies (see table 1).
The Department of Health and Human Services (HHS) has also focused on  the school nutrition environment through various initiatives by CDC.  These include    an eight-component coordinated health model for schools that includes  school nutrition services as one component, and    a School Health Index designed to help schools assess their  environments and improve the effectiveness of their health and safety  policies and programs.
In addition to these efforts to support a healthy school nutrition  environment, the National Academy of Sciences’ Institute of Medicine  recently released a broad-based report on preventing childhood obesity.  Among other things, the institute recommended that the current federal  funding structure of school meals and the policies and practices of selling  competitive foods in schools be examined for improvements that would  encourage students to consume nutritious foods and beverages, and that  nutritional standards be developed and implemented for all competitive  foods sold or served in schools.
section_title: On the Horizon: School Wellness Policies and Research on Nutritional Standards
paragraphs: The Child Nutrition and WIC Reauthorization Act of 2004 requires school  districts that participate in the federal meal programs to establish local  wellness policies by the first day of the 2006-2007 school year. Congress  added this requirement, in part, in order to promote nutrition and address  child obesity by encouraging localities to provide healthy school  environments. These policies must include nutrition guidelines for all  foods available on each school campus during the school day and goals for  nutrition education and physical activity, as well as establish a plan for  measuring implementation of the local wellness policy. Further, the local  wellness policies must be developed in collaboration with the  community—including a combination of school officials, parents,  students, and the public. The act also requires that USDA, HHS—through  CDC—and the Department of Education provide technical assistance to  districts regarding wellness policies. In addition, in order to assist schools  in setting appropriate nutrition standards for foods available in schools,  Congress—through the Conference Report of the Consolidated  Appropriations Act of 2005—provided $1 million to the Institute of  Medicine. With these funds, the institute will conduct a study and provide  recommendations regarding appropriate nutritional standards for the  availability, sale, content, and consumption of all foods at school, with a  particular emphasis on competitive foods.
section_title: Almost All Schools Sold Competitive Foods in 2003-2004, and Middle School Availability Has Increased over the Last 5 Years
paragraphs: Nearly 9 out of 10 schools sold competitive foods to students in 2003-2004,  and over the last 5 years, the availability of competitive foods has  increased both in middle schools and in a la carte lines in many schools.  While competitive foods were commonly available in all school levels,  students in high schools and middle schools had greater access to these  foods than students in elementary schools. The competitive foods  available ranged from nutritious items such as fruit and milk to less  nutritious items such as soda and candy. Between 1998-1999 and 2003- 2004, the availability of competitive foods increased in middle schools, and  the volume and variety of a la carte foods sold increased in many schools.
subsections: section_title: Competitive Foods Were Available in Almost All Schools and Were More Common in High Schools and Middle Schools
paragraphs: We estimate that almost 90 percent of schools sold competitive foods to  students in 2003-2004 through one or more of the following venues: a la  carte lines, vending machines, and school stores. Considering each type  of venue individually, a majority of schools sold foods through a la carte  lines and vending machines, as shown in figure 3.
High schools and middle schools were more likely to sell competitive  foods than elementary schools. Table 2 shows the percentage of  elementary, middle, and high schools selling competitive foods through  each type of venue and through one or more venues.
In addition to the competitive food venues regularly available in schools,  students in some schools also were able to purchase competitive foods  through on-campus fund-raisers. For example, more than 4 out of 10  schools allowed fund-raising—such as seasonal candy sales or short-term  sales of baked goods raising revenues for school organizations—through  the sale of foods to students during the school day in 2003-2004. Such  fund-raisers were permitted in two-thirds of high schools and less than 40  percent of middle and elementary schools.
While federal regulations restrict access to FMNV—a subset of  competitive foods—in food service areas during meal periods, many types  of competitive foods are allowed to be sold in these locations at meal  times. According to our survey, competitive foods sold in 2003-2004  through a la carte lines, vending machines, and school stores were  frequently available for purchase in or near school cafeterias and during  lunch.
A la carte items were available to students in the cafeterias of schools  that offered them and were available to students during lunch in 94  percent of those schools.
One-half of schools with vending machines had machines in or near the  cafeteria, and one-third of schools with vending machines had  machines that were available to students during lunch.
Nearly half of schools with stores had such stores in or near the  cafeteria, and about one-third of schools with stores sold competitive  foods through these stores during lunch.
Although schools that sold competitive foods through a la carte lines or  school stores often sold these foods in just one physical location, schools  with vending machines typically had multiple machines available  throughout the school, ranging from 1 to 25 machines. For example, the  quarter of high schools with the most vending machines had 10 or more  machines, the top quarter of middle schools had 7 or more machines, and  the top quarter of elementary schools had 3 or more machines. Schools  generally had more beverage vending machines than snack vending  machines.
Further, in many schools, particularly high schools, beverages sold in  vending machines or elsewhere in the school were provided through an  exclusive beverage contract—a contract granting a company exclusive  rights to sell beverages to students in that school. In addition to covering  vending machine sales, these contracts may require schools to provide  beverages through the contracted company in other venues, such as  school stores or athletic event concessions. Nearly half of all schools in  2003-2004 had an exclusive beverage contract. In over a third of schools  with exclusive beverage contracts, the contracts covered 5 years or more,  with some covering at least 10 years. Nearly 75 percent of high schools,  65 percent of middle schools, and 30 percent of elementary schools had  exclusive beverage contracts.
section_title: Types of Competitive Foods Ranged from Nutritious to Less Nutritious, with High and Middle Schools Selling a Wider Variety of Items
paragraphs: Competitive foods available through a la carte lines, vending machines,  and school stores ranged from nutritious items, such as vegetables and  salad, to less nutritious items, such as soda and candy. Nutritious foods  were more frequently available through a la carte lines than through  vending machines and school stores. For example, as shown in table 3, we  estimate that many of the types of foods commonly available through a la  carte sales were nutritious foods and beverages, such as fruit and milk.
However, types of less nutritious items, such as sweet baked goods and  salty snacks not low in fat, were also available through a la carte lines in at  least one-third of schools. Furthermore, many of the types of foods  commonly available through vending machines and school stores were  less nutritious ones, such as soda and salty snacks.
In addition, our data suggest that students may have had increased access  to more types of competitive foods as they progressed from elementary  school to middle school and high school. While nutritious foods were  commonly available in schools of each level, students in high schools and  middle schools had access to a greater variety of types of less nutritious  foods than students in elementary schools. For example, salty snacks,  sweet baked goods, soda, and candy were available in at least one-third of  high schools and middle schools with competitive foods but in less than  one-third of such elementary schools, as shown in table 4.
section_title: Over the Last 5 Years, the Availability of Competitive Foods Sold in Middle Schools and through a la Carte Lines Increased
paragraphs: According to our survey, the availability of competitive food venues in  middle schools increased during the period between 1998-1999 and 2003- 2004.
The percentage of middle schools offering competitive foods through a  la carte lines, vending machines, or school stores increased from 83 to  97 percent during this time period.
The percentage of middle schools with exclusive beverage contracts  increased between 1998-1999 and 2003-2004.
The number of vending machines per school increased between 1998- 1999 and 2003-2004 in more than one-third of middle schools that had  vending machines. In addition, the number of vending machines per  school increased in more than half of high schools that had vending  machines.
In addition, the availability of a la carte items, particularly the volume sold  and the variety available for purchase, increased between 1998-1999 and  2003-2004 in many schools.
The volume of a la carte items sold—that is, the overall amount of all a  la carte items sold—increased in more than two-thirds of high schools,  more than half of middle schools, and nearly one-third of elementary  schools that had a la carte sales.
The variety—that is, the number of different types—of a la carte items  available to students increased in about one-half of all schools that had  a la carte sales.
According to SFA directors, reasons for the increases in a la carte volume  and variety between 1998-1999 and 2003-2004 included responding to  student demand, providing more nutritious foods, making foods more  appealing to students, and generating additional revenue for the food  service.
Aside from increases in the availability of competitive foods sold in middle  school and through a la carte lines, we did not find that the availability of  competitive foods in schools changed considerably during the period  between 1998-1999 and 2003-2004. For example, according to our survey,  there have not been considerable changes in the percentage of high  schools or elementary schools offering competitive foods through a la  carte lines, vending machines, or school stores during this time period.  Further, in a majority of all schools with school stores or vending  machines, the number of different types of food offered for sale through  these venues stayed the same.
section_title: Many People Made Decisions about Competitive Food Sales, but No One Person Commonly Had Responsibility over All Sales in a School
paragraphs: Many people, including district and school officials as well as members of  groups selling foods in schools, made decisions about competitive food  sales, but no one person consistently had responsibility for all competitive  food sales at the school level. The decisions ranged from broad policies  about the school nutrition environment to decisions about which foods to  sell at a specific venue or event. In 2003-2004, a majority of schools had  policies in place that restricted competitive food sales to students, and  these policies were often set at the district level by superintendents and  school boards. Regarding the actual selection and sale of competitive  foods in schools, SFA directors were commonly involved in decisions  related to a la carte sales, while principals often had final approval over  other competitive food sales. In addition, many different groups were  directly involved in selling competitive foods in schools in 2003-2004, and  these groups could make decisions about which foods to sell and when to  make them available. The number and variety of groups involved in these  sales typically increased as the school level increased.
subsections: section_title: District and School Officials Made Decisions about Competitive Food Policies
paragraphs: According to principals, an estimated 60 percent of schools had written  policies in place that restricted competitive foods accessible to students in  2003-2004, and most often, districts enacted those policies (see fig. 4). In  contrast, 40 percent of schools had no such policies.
In addition to superintendents and school boards that were involved in  making these competitive food policy decisions for a district, both SFA  directors and school principals commonly made policy decisions about  actual food sales at the school level, resulting in no one person having  responsibility over all sales. Specifically, district SFA directors often made  ongoing decisions about policies affecting the school nutrition  environment. For example, SFA directors provided many of the foods  available to students through their administration of the federal meal  programs and typically decided which foods to serve through school a la  carte sales. In addition, SFA directors were also often concerned with  other competitive food sales in the schools, such as those through vending  machines, school stores, and fund-raising sales. According to our survey,  84 percent of SFA directors in 2003-2004 considered addressing the  competitive food environment in schools to be part of their  responsibilities. More than three-quarters of those directors considered it a  priority.
Moreover, principals also made decisions about competitive food policies  in their schools. For example, as shown in figure 4, aside from the more  than three-quarters of schools with competitive food policies developed by  their districts, school principals enacted policies in conjunction with their  districts in an additional 10 percent of schools and enacted their own  policies in another 2 percent of schools with policies. Regarding  operational decisions, principals in more than half of schools with  competitive food sales reported in our survey that they provided final  approval over the foods and beverages sold through vending machines,  school stores, and fund-raisers in their schools. Also, similar to SFA  directors, principals in a majority of schools reported that they considered  addressing the competitive food environment one of their responsibilities.
section_title: Many Different Groups Were Directly Involved in Deciding What to Sell and Selling Competitive Foods
paragraphs: In addition to the district and school officials involved in decisions related  to competitive food policy, myriad individuals and groups were directly  involved in the sale of competitive foods. These groups could make  decisions about which specific foods to sell to students and when to  conduct sales. During 2003-2004, groups such as students, parent-teacher  associations, and booster groups—in addition to SFA directors and school  principals—were most commonly involved in sales, according to our  survey.
The number of groups involved in sales typically increased as the school  level increased. For example, three or more different groups were much  more likely to be involved in competitive food sales in high schools than in  middle and elementary schools in 2003-2004 (see fig. 5).
The groups directly involved in sales varied by school level. In elementary  schools, the SFA/school food service and student associations/clubs were  commonly involved in sales. In middle schools, in addition to these  groups, school officials/administrators were most commonly involved. In  high schools, where the greatest number of competitive food venues was  typically available, these three groups and a variety of others were directly  involved in sales. Consequently, within a high school that has a number of  competitive food sales occurring simultaneously, a student at lunchtime  could be faced with many different food options sold by a variety of  different groups through several venues (see fig. 6).
section_title: Many Schools Raised a Substantial Amount of Revenue through Competitive Food Sales and Used It to Support Food Service Operations and Student Activities
paragraphs: Many schools generated substantial revenue through competitive food  sales in 2003-2004, often using this revenue to support food service  operations and student activities. High schools and middle schools  generally raised more revenue from competitive food sales than  elementary schools, reflecting the greater availability of competitive foods  in high and middle schools. Across all competitive food sales, food  services generated more revenue than other school groups, largely  through a la carte sales. Some food service directors said they relied on  this revenue to support overall food service operations, while other school  groups primarily used their competitive food revenues to fund student  activities.
subsections: section_title: Total Competitive Food Revenue Varied by School Level From More than $125,000 in Some High Schools to More than $5,000 in Some Elementary Schools
paragraphs: Many schools generated a substantial amount of revenue through  competitive food sales in 2003-2004. Total revenue generated through  competitive food venues varied by school level, reflecting, among other  things, the greater availability of competitive foods in high schools and  middle schools than in elementary schools. In particular, we estimate that  about 30 percent of all high schools generated more than $125,000 per  school through competitive food sales in 2003-2004, while about 30  percent of all elementary schools generated more than $5,000 per school  through these sales (see fig. 7). These estimates of total competitive food  revenue are conservative, as they are based on the sum of the minimums  of specified revenue ranges. Therefore, many schools likely generated  more total revenue from competitive food sales than our analysis reflects.
section_title: Food Services Generated More Revenue through These Sales than Other School Groups, with Food Services Using Revenue for Their Operations and Other School Groups Using Revenue for Student Activities
paragraphs: Across all competitive food sales, food services generated more revenue  than other school groups, such as school administrators, student  associations, and booster groups. Specifically, food services generated a  greater amount of revenue through a la carte sales than through any other  type of competitive food sale. Other school groups raised a greater amount  of revenue through exclusive beverage contracts than through any other  type of competitive food sale. In addition to raising varying amounts of  competitive food revenues through different types of sales, food services  and other school groups generally used their revenues for different  purposes.
subsections: section_title: Food Services
paragraphs: The revenue food services generated through a la carte sales was  substantial in many schools. For example, we estimate that 40 percent of  high school food services and nearly a quarter of middle school food  services selling competitive foods through a la carte lines generated more  than $50,000 per school through these sales in 2003-2004. Furthermore,  food services in 20 percent of high schools selling a la carte items  generated more than $125,000 per school through a la carte sales, as  shown in figure 8.
Food services typically used their substantial a la carte revenue to support  overall food service operations, supplementing revenue earned through  the sale of school meals. According to our survey of SFA directors, in  2003-2004, food services in 40 percent of schools earned less revenue than  they spent, generating a loss, and food services in an additional 20 percent  of schools broke even. Food services in the remaining 40 percent of  schools generated more revenue than they spent in 2003-2004, yielding a  gain. From the data we collected, it is not clear what proportion of this  food service revenue came from federal reimbursement for meals served  and what proportion came from revenue generated through competitive  food sales. In our previous work, we found that food services in some  states had a small but increasing shortfall in total revenue compared with  expenses between school years 1996-1997 and 2000-2001 and that a la  carte sales had become an increasingly important source for augmenting  total food service revenue. Moreover, some SFA directors told us in  survey comments for this study that they sold competitive foods in order  to maintain balanced budgets. For example, one food service director  commented that the food service would not be able to maintain a balanced  budget without the substantial revenue generated through a la carte sales.  Another commented that the district food service generated nearly half of  its revenue through competitive food sales.
section_title: Other School Groups
paragraphs: Other school groups raised more revenue through exclusive beverage  contracts than through any other type of competitive food sales. In  particular, we estimate that school groups in nearly one-quarter of high  schools with exclusive beverage contracts generated more than $15,000  per school through these contracts in 2003-2004, as shown in figure 9.  However, it is important to note that 15 percent of high school principals  did not know how much revenue exclusive beverage contracts generated  for their schools in 2003-2004.
Exclusive beverage contracts also provided some schools with noncash  benefits—goods and services such as athletic scoreboards and in-kind  support of school events. In particular, nearly 30 percent of schools of all  levels selling competitive foods through exclusive beverage contracts  received noncash benefits. Nearly one-third of those schools received  athletic equipment, facilities, or uniforms, and a small number of schools  also received support for assemblies and programs, scholarships, and  personal items for students and school staff, such as cups and coolers. The  value of those items was sometimes considerable: in one-quarter of those  schools receiving noncash benefits through exclusive beverage contracts  in 2003-2004, the benefits were worth more than $5,000 per school.
School groups other than food services most commonly used their  competitive food revenues to support student activities such as field trips  and assemblies, as shown in figure 10. Similarly, groups in many schools  spent competitive food revenues on athletic equipment, facilities, or  uniforms. However, some used revenues to meet school needs such as  expenses associated with general school overhead or with textbooks and  school supplies.
section_title: School Districts We Visited Substituted Healthy Competitive Foods for Less Nutritious Items while Overcoming Obstacles to Change, and the Effects on Revenue Were Unclear
paragraphs: The six school districts we visited all recently took steps to substitute  healthy competitive foods for less nutritious items while overcoming  several obstacles to change, and in the end, the effects of these changes on  revenue were unclear. Although the districts we visited increased the  availability of healthy competitive foods and decreased less nutritious  items through differing approaches, perseverant and committed  individuals took actions in each district to initiate and lead the process of  change while also taking steps to involve and obtain support from those  affected. At the same time, officials noted that they faced several barriers  to making changes, including concerns about potential revenue losses,  among others. Concerning the effects of changes on sales revenues, none  of the districts we visited had sufficient data to examine these effects, and  few had planned for these effects before implementing changes.  Regardless of the limited data on revenue, many officials expressed strong  concerns about potential revenue losses largely because competitive food  sales have provided a source of flexible funding used for a wide variety of  purposes.
subsections: section_title: School Districts We Visited Substituted Healthy Competitive Foods for Less Nutritious Items
paragraphs: Though the six school districts we visited varied in terms of  socioeconomic status, student population size, and geographic location,  they were all able to take steps to restrict the availability of less nutritious  competitive foods in their schools. Further, rather than just remove less  nutritious competitive foods from their schools, these districts continued  to offer competitive foods to students by substituting healthy fare for the  items removed. In addition, these districts all took steps beyond current  federal and state competitive food regulations, and while there were  differences in the details of changes, most districts’ changes had similar  characteristics. Specifically, most, if not all, of the districts we visited    made changes to competitive foods in all of the schools in their  districts, rather than changes only to certain schools, such as  elementary;    made changes to the availability of competitive foods throughout the  entire school day, rather than limiting availability only during certain  hours of the day;    made changes to the availability of competitive foods in each of the  venues through which they were sold, including fund-raising;and,    made simultaneous changes to foods served through school meal  programs.
Regarding districts’ efforts to increase the availability of healthy  competitive foods, as they defined them, all of the districts we visited  recently took steps to make water and juice more available to students in  their schools. For example, districts and schools often replaced soda in  their vending machines with bottled water and juices with higher  concentrations of real fruit juice. Further, several districts also replaced  fried potato chips with baked potato chips, and packaged desserts with  granola bars or similar items. Several districts also increased the variety of  flavored milk available in schools to encourage milk consumption.
All of the districts we visited also took steps to restrict less nutritious  items. The specific types of competitive foods restricted varied by district,  with two of the districts limiting the availability of primarily soda and  candy, and four districts limiting the availability of competitive foods high  in sugar and fat. In these districts, different criteria were used by each  district to define foods high in sugar and fat. For example, in Fort Osage,  all competitive foods must be low-fat (no specified percentage) and  cannot have sugar listed as the first ingredient, while in Richland One, all  competitive foods must contain less than 40 percent sugar (or other  sweeteners) and less than 8 grams of fat per 1 ounce serving. In the other  two districts, New Haven and Independence, formulating specific nutrition  criteria has been an ongoing process.
In addition to making changes to the types of competitive foods sold in  schools, all of the districts we visited also made similar changes to  increase healthy foods available through school meals. For example, SFAs  in both Independence and Oakland recently removed deep fryers from  school cafeterias, and they now bake all foods. In Richland One, the SFA  decided to implement stricter standards for school meals than those  required by the federal government. Specifically, Richland One requires  school meal menus to meet the federal requirements for nutrients, fat, and  sugar intake on a daily basis, rather than averaging the nutritional value of  meal components over the course of a week. In addition, several SFA  directors stated that they would like to introduce a greater variety of fresh  fruits and vegetables into school meal menus. However, they also  expressed their opinion that the federal school meal reimbursement is  insufficient to provide these items more frequently.
section_title: Individuals Who Initiated and Led Change Also Obtained the Support of Multiple Groups
paragraphs: While the characteristics of the six districts we visited differed, as well as  the process of change in each, districts typically noted several key  components to their success. These key components included an  enthusiastic initiator of change, leadership by dynamic and committed  individuals, and support from groups directly affected by changes, such as  teachers, parents, and students. Overall, those involved in the process of  change agreed on the importance of improving student nutrition and  health and directing resources and energy toward achieving this goal. As  shown in table 5, the types of individuals and groups involved in the  process of change varied across the districts visited and often included  individuals from the district, school, and community.
As shown in table 5, in the districts we visited, initiators of change  sometimes came from within the ranks of district staff and sometimes  from the community, while leaders of change often were district or school  staff. In some districts, one person or group acted as both the initiator and  leader of change, while in other cases, the initiator pushed the idea of  changing competitive foods forward and then the leader took over  implementation of the changes. For example, in several districts, the  superintendent or SFA director initiated and led changes to competitive  foods because of concerns about both student nutrition and competition  with the school food service. In another district, changes were initiated  and led largely by a middle school principal and a physical education  teacher. In contrast, in New Haven, a local pediatrician who was also the  district’s medical adviser initiated change to competitive foods, and then a  committee of district staff, school staff, and community members took  over leadership of changes. In all of the districts we visited, a strong leader  helped formulate new policies, reached out to parties affected by changes,  and ensured that policies were implemented.
While competitive food changes were often initiated and led by a few  individuals, all six districts realized that changes would be successful only  with the involvement of a variety of people in the process in order to  ensure their support for the changes and help sustain changes. To address  this need, some districts, such as Oakland and New Haven, convened  formal committees to provide recommendations on school nutrition and  health issues. In other districts, leaders took steps to reach out  individually to those parties affected by changes, such as school  principals, teachers, and students, to obtain support before their  enactment. This support was also instrumental to sustaining changes. For  example, the McComb superintendent noted that successful  implementation of the district’s coordinated school health program  required both leadership as well as substantial community involvement,  including input from school officials and teachers, parents, and health  providers in the community. The involvement of these groups in  formulating changes helped ensure continued commitment and support of  the changes.
In addition to obtaining the support of a variety of groups before  implementing changes, many districts noted that obtaining student  acceptance of the changes was particularly important to the success of  change. To that end, some districts held nutrition and health fairs to  distribute related information to students and the broader community, and  others involved students in taste testing and voting on the foods they  preferred. For example, middle school students and parents in Fort Osage  taste-tested healthy competitive foods during parents’ night and the  school’s open house. In other districts, student feedback on policy  changes was sought by officials before their implementation, sometimes  by consulting the district’s student advisory council.
section_title: Districts Faced Several Barriers to Changing Competitive Foods, Including Schools’ Concerns about Revenue Losses
paragraphs: While the districts we visited all noted several key components to  successful change, they also cited several barriers to implementing  changes to competitive foods that they had commonly faced. In particular,  officials in almost all of the districts visited cited opposition because of  concerns about future revenue losses as a barrier to changing the  availability of competitive foods. In these cases, school principals most  frequently expressed these concerns because competitive food revenues  often provided discretionary money that was otherwise unavailable to  fund a variety of projects and needs at the school level.
In addition, a lack of information on other districts’ efforts to make  changes to competitive foods and a lack of nutritional guidelines for these  foods were also barriers to change in the districts we visited. While a  majority of the districts visited implemented their own changes to  competitive foods without knowledge of the steps taken by other districts  to make such changes, officials in Richland One and Oakland conducted  their own research on other state and district competitive food policies in  order to learn from the experiences of others. Related to this, officials in  Independence, Fort Osage, and New Haven noted that the lack of agreed- upon nutrition guidelines for competitive foods was an obstacle to change  because they had to independently develop their own nutrition standards.  From our observations during these visits, the absence of a clear set of  standards defining healthy and less nutritious foods can create a problem  for districts making changes to competitive foods as continual debates and  disagreements on such standards may slow the process of policy  formation, particularly when many groups are involved in the process.
Several districts mentioned additional barriers to making changes, such as  determining the full extent of competitive food sales in schools and the  groups involved in sales. For example, the SFA director in Independence  noted that the district’s delay in developing nutrition standards for  competitive foods was largely due to the difficulty of compiling a full  picture of all competitive food sales occurring in schools. Related to this,  given the number of groups that can be involved in these sales in each  school, and the lack of clear roles and responsibilities in this environment,  she noted that it has been difficult to determine the full extent of groups  involved in sales across the district. She emphasized that it is important  for the groups that have a stake in the revenues generated by these sales to  be involved in discussions concerning competitive food policy in order to  obtain support for the policy and successful implementation of changes.
Some districts also noted that the need to continually monitor  implementation of competitive food changes at the school level can be an  obstacle to change. Officials in both Oakland and Richland One stated that  monitoring adherence to their competitive food policies at the school level  has been difficult but is necessary to effective implementation. Even when  school-level groups were involved in the process of developing changes,  monitoring policy implementation was difficult because of the  involvement of many groups in competitive food sales. In Richland One,  the SFA director noted that she often relies on observances by food  service staff working in the schools to ensure that the policy is being  followed by all groups selling competitive foods. Our own observations of  the school food environment during our visits to schools support the  conclusion that districts have difficulty monitoring the implementation of  policies, as we noticed a few deviations from district competitive food  policies in some schools. Even though school officials often seemed  devoted to the goal of improving the nutritional quality of foods available  in their schools, they typically faced many competing priorities during the  school day. Further, in many schools, it was unclear who was responsible  for ensuring that policies were effectively implemented.
Food service staff in Fort Osage and New Haven stated that the difficulty  of finding healthy foods that both meet district nutrition goals and appeal  to students was also a barrier to making changes to competitive foods.  They noted that some healthy foods students found appealing were  unavailable from vendors, while in other instances, the healthy foods  available were too expensive to sell to students. This sentiment was  echoed by students in several districts, as they expressed their opinions  that some of the newly introduced healthy foods, such as bottles of  flavored milk or juice, were too costly to purchase as part of their lunch.  In contrast to districts that mentioned problems obtaining new healthy  products from vendors, several districts noted that they were able to work  within their exclusive beverage contracts to obtain healthier beverages to  serve to students. However, at least one mentioned that the major soft  drink company with whom the district had a contract offered few nonsoda  options.
In addition, districts also faced the challenge of educating students about  healthy eating and encouraging students to change their behavior by  choosing healthy foods. In several of the districts, schools reported  providing students with nutrition information and education, sometimes  through classroom lessons, posters, and programs and activities to  promote healthy eating. During our visits, students we spoke with  frequently demonstrated their understanding of the importance of healthy  eating, and some noted that they would like to see the addition of certain  healthy foods to school offerings, such as a greater variety of fresh fruits  and vegetables. In addition, several middle school students in Fort Osage  and New Haven explained that after changes were made to competitive  foods and they began to learn more about good nutrition in their schools,  they went home and talked to their parents about these issues. However,  experts agree that it is more difficult to change behavior than to educate  individuals. Related to this, high school students in most of the districts  we visited mentioned that some students continue to purchase less  nutritious foods before school and after school from neighborhood stores  and restaurants. In addition, during our visits to schools, we observed  students eating a wide range of both healthy and unhealthy items during  lunch, with younger students being more likely to eat healthy foods than  high school students.
As part of their role in helping districts develop wellness policies that  address, among other things, school nutrition, USDA has recently taken  several steps that may help districts overcome some of these barriers. In  March 2005, USDA, in partnership with HHS/CDC and the Department of  Education, sent a letter to state superintendents, district superintendents,  and SFA directors describing the wellness policy requirements. Through  this letter, the agencies offered to provide technical assistance to districts,  and they also provided information on online resources available at the  federal level to help districts develop their policies. Specifically, these  agencies, in collaboration with several food and nutrition organizations,  have begun to compile resources that will provide districts with  information on state and local efforts to make changes to the school health  and nutrition environment, including examples of nutrition standards used  by states and localities that have already developed competitive food  policies. In addition to online resources, these three agencies recently  released Making it Happen! School Nutrition Success Stories, a  publication that describes local efforts to address the school nutrition  environment, in order to assist districts as they move forward with their  own changes.
section_title: The Effects of Changes to Competitive Foods on Revenues Were Often Unclear because of Limited Data; Nonetheless, Many Officials Expressed Concerns about Revenue Losses
paragraphs: In the districts we visited, reliable data on how changes to competitive  food sales affected revenues were typically unavailable. Schools and  districts often did not maintain detailed revenue records to enable the type  of analyses needed to parcel out the direct effects of competitive food  changes on revenues. Nonetheless, most schools and districts were able to  provide partial data on revenue changes for specific venues, and these  limited data suggest that districts experienced mixed revenue effects.  Several schools we visited appear to have lost revenue from competitive  food sales after they made changes, while at least one may have increased  revenue. For example, after increasing the availability of healthy a la carte  foods and restricting less nutritious items, SFA directors in both  Independence and Richland One recorded decreases in a la carte sales. In  contrast, a middle school in McComb reported that after removing soda  from beverage vending machines and changing the policy regarding the  times sales were allowed, vending revenues increased. However, these  data did not account for other factors that may also have affected  revenues.
While the limited data available suggest that school districts experienced  mixed revenue effects after implementing competitive food changes, they  also illustrate the difficulty of tracking these effects. Because the  competitive food environment is complex, sometimes involving many  sales and many groups, the effects of changes on revenues are often  complicated and may differ for each group involved in sales. Some groups  may benefit from changes, others may lose. For example, in Fort Osage,  when the middle school decided to remove all less nutritious competitive  foods available in the school and replace them with healthy items, it also  simultaneously decided to stop using outside vendors to supply its vending  machines. Subsequently, the district SFA took over operation of the  middle school’s vending machines, and as a result, vending revenue began  to accrue to the SFA instead of school administrators. While the SFA  director was unable to compare the revenue before changes with that  generated after changes, she reported that the machines were self- supporting. In this instance, because of the changes made to competitive  foods and their sale, school administrators lost a source of revenue while  the SFA gained one.
In addition to the challenge of understanding the revenue effects of  competitive food changes on different groups in schools, the relationship  between changes in a la carte sales and school meal participation adds  complexity. Although food service programs rely on reimbursement for  school meal participation as a primary source of funding, officials often  cite the importance of using additional revenue from a la carte sales to  balance their budgets. Therefore, officials take risks when they make  changes to the competitive foods available in schools, because changes  may affect revenues from these sales and they may also affect school  meals participation. In the districts we visited, competitive food changes  were often accompanied by increased school meals participation. In four  districts, federal reimbursements for meals subsequently increased,  benefiting the SFA, and in at least one instance, this increase more than  made up for food service losses in competitive food sales. While Richland  One reported losing approximately $300,000 in annual a la carte revenue  after implementing changes, school lunch participation and subsequent  federal reimbursements increased by approximately $400,000 in the same  year.
Despite the lack of conclusive data on revenue effects, district and school  officials often expressed strong concerns about potential revenue losses.  Because food services often operate on tight budgets and use competitive  food revenues to support their operations, they take the risk of losing  important revenues when they make changes to these foods. In addition,  principals frequently stated that competitive food revenues are used at the  school level as discretionary funding, and they do not typically have other  sources of flexible funding available to use for the wide variety of  purposes toward which competitive food revenues are directed.  Therefore, when making changes to competitive foods, principals also risk  losing what is an oftentimes important source of funding. For example, in  the schools we visited, many principals reported using competitive food  revenues for student activities and classroom supplies, and some reported  using these revenues to support school dances and assist needy students.
Although data on revenue effects were limited and complicated by the  complex competitive food environment in the districts we visited, some  districts tried to lessen adverse revenue effects by the process through  which changes to competitive foods were implemented. Specifically, a few  districts and schools reported taking incremental steps to change  competitive foods in order to mitigate the severity of the effects on  revenue. For example, in one Independence high school, incremental  changes were being made to beverage vending machines to phase in juice  and water and phase out soda over a span of several years. The high  school principal reported that the school was conducting this change  slowly in order to avoid surprising students with sudden changes and to  maintain revenue. In addition, a few schools noted that their efforts to  include students in decisions about changing food offerings may have  helped ensure that the new foods would be accepted by students and  mitigate the effects on revenues. However, many of the districts we visited  did not fully plan for the effects on sales revenues when they were  considering changes to competitive food policy, and several recognized  that efforts to do so would have likely eased the implementation of  policies. Moreover, some principals reported that their schools were able  to find ways to support projects previously funded with competitive food  sales after changes were implemented. For example, in several districts,  principals reported that after restrictions on fund-raiser food sales were  implemented, groups sold nonfood items like wrapping paper and candles,  and also raised funds by providing services, such as car washes.
In the publication Making it Happen! School Nutrition Success Stories,  key contacts in selected schools reported similar mixed revenue results  from their efforts to improve the school nutrition environment. Of the  group of schools that reported on revenue changes, some experienced  increases in revenue while others reported decreases or no change. These  schools used approaches similar to those in the schools we visited, such as  replacing less nutritious food with more nutritious choices, obtaining  input from the students, and using marketing to encourage students to  make healthy choices. In addition, several of the schools reported  increases in school meal participation.
section_title: Concluding Observations
paragraphs: Our nation’s schools are uniquely positioned to positively influence the  eating habits of children, yet almost all schools sell readily available foods  that are largely unregulated by the federal government in terms of  nutritional content. While not all of these competitive foods are unhealthy,  many are. Although schools cannot be expected to solve the current  problems with child nutrition and growing obesity alone, many states and  districts have begun efforts to improve the nutritional environments in  their schools.
As districts across the country develop their required wellness policies by  school year 2006-2007, they will likely face decisions and challenges  similar to those of the districts we studied and may benefit from their  lessons learned. Although each district took a different approach, all of  them recognized the value of including those parties affected by the  changes, such as parents, teachers, and other community members, when  developing new policies. In addition, they recognized that students are the  ultimate consumers of competitive foods and took steps to consider their  opinions.
Because districts reported they typically lacked a source of recommended  nutrition standards for competitive foods in schools, officials were faced  with difficult decisions about the criteria they would use to determine  which foods were considered adequately nutritious to offer. The technical  assistance available from FNS, including multiple examples of nutrition  standards developed by other districts, as well as the Institute of  Medicine’s forthcoming recommendations on nutritional standards for  foods in schools, should help district efforts to address this issue.
In addition, given the multiple groups that rely on sales of competitive  foods for revenue, districts may choose to consider the possible revenue  effects of changes in food offerings as they develop and implement new  policies. Since competitive food revenues are often critical to food service  operations and provide principals with flexible funds relied on for a  multitude of discretionary purposes, making changes to competitive foods  entails risks for both groups. Districts we visited took varied steps that  may mitigate potential revenue changes, such as substituting healthy foods  for less healthy ones instead of removing all competitive foods, asking  students to taste and approve the more nutritious foods, offering alternate  means for fund-raising, or implementing change gradually. Lack of support  from the groups that use revenue from competitive food sales can scuttle  policy changes. Furthermore, the lack of a single person responsible for  the presence and sale of competitive foods in schools complicates efforts  to ensure that new policies will be implemented as intended and  maintained over time. Despite the complex food environment in schools,  new wellness policy requirements and USDA’s efforts to provide technical  assistance to districts will provide an opportunity for districts to plan and  implement changes that recognize the needs of the various groups and  assign individuals with responsibility for consistent and sustained  implementation.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the U.S. Department of Agriculture  for review and comment. On June 17, 2005, FNS officials provided us with  their oral comments. The officials stated that they were in general  agreement with the findings as presented in the report and offered  technical comments that we have incorporated as appropriate. In addition,  the officials reiterated that the 1983 court decision in National Soft Drink  Ass’n v. Block is significant because they believe it severely limits USDA’s  ability to restrict the sale of competitive foods. FNS officials pointed out  that prior to this ruling, USDA regulations prohibited the sale of FMNV  anywhere in the school from the beginning of the school day until the last  meal period. Following the decision, USDA restricted the sale of FMNV  only in food service areas during meal periods. We agree that this ruling  limited USDA’s ability to regulate competitive food sales as to time and  place. However, we believe the department has the authority to expand  the definition of FMNV to include additional foods with limited nutritional  value. Doing so could further limit the types of these foods available in the  cafeteria during meal times.
Second, officials discussed what is known about the use of revenue from  competitive food sales and reimbursable meals compared to their costs.  We did not determine if revenues generated by competitive food sales  were sufficient to cover the actual cost of the competitive foods sold.  The  officials stressed that the 1994 School Lunch and Breakfast Cost Study,  the last definitive study of cost and revenue in the NSLP and the School  Breakfast Program, found that regardless of size, most school food  authorities failed to generate enough revenue to cover the reported costs  of nonreimbursable food sales. The mean reported revenue-to-cost ratio  was 71 percent for the study period. The officials noted that this would  equate to a loss of 41 cents for every dollar received from the sale of  nonreimbursable foods. Further, this revenue-to-cost ratio did not include  all costs for school food service operations, such as uncharged labor costs,  indirect costs, and utilities. If these were included, the revenue to cost  ratio would generate even higher losses. FNS informed us that they are in  the process of contracting for a new school meal cost study.
We agree with FNS that our report focused on revenues generated by  competitive food sales and that we did not determine if revenues  generated by competitive food sales were sufficient to cover the actual  cost of the foods sold. However, our report and others have shown that  the availability of competitive foods, and particularly a la carte items, has  increased over time. In addition, the Cost Study’s definition of  nonreimbursable meals included food sales such as adult meals and  special functions, as well as competitive foods, and therefore, it is unclear  how each of these types of sales contributed to the mean reported  revenue-to-cost ratio. Absent more current information on the actual costs  and revenues of providing competitive foods and reimbursable school  meals, we believe it is difficult to know whether the results of the 1994  study are applicable today.
As agreed with your offices, unless you release the report's contents  earlier, we plan no further distribution of it until 30 days from its issue  date. We will send copies of this report to the Secretary of Agriculture,  appropriate congressional committees, and other interested parties. In  addition, the report will be available at no charge on GAO’s Web site at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (415) 904-2272 or bellisd@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors to this report are listed in appendix II.
section_title: Appendix I: Scope and Methodology
paragraphs: To obtain nationally representative information on competitive food  availability, policies, decision makers, groups involved in their sale, and  revenues generated by their sale, we conducted two Web-based surveys. In  addition, to gather information on strategies used by school districts to  restrict less nutritious competitive foods in their schools, we visited six  school districts. Further, to inform the design of our study, we spoke with  staff at the U.S. Department of Agriculture (USDA) as well as the Centers  for Disease Control and Prevention (CDC). We also interviewed numerous  researchers and organizations that have been involved with child nutrition  and school health environment issues in recent years.
subsections: section_title: Surveys
paragraphs: To better understand competitive foods in the school environment, we  designed and administered two Web-based surveys. For a random sample  of schools, we administered one survey to each school’s school food  authority (SFA) director and a second survey to each school’s principal.  We chose to survey these officials because we believed they would be the  most knowledgeable sources on competitive food issues in schools. The  surveys were conducted between October 19, 2004, and February 11, 2005.  We defined competitive foods as all foods or beverages sold to students on  school grounds during the school day that are not part of federally  reimbursable school meals.
While neither survey asked questions about the full range of competitive  food issues, together the two surveys were designed to provide a broad  picture of the competitive food environment. Both Web surveys contained  school background, a la carte, (beverage and snack) vending machine, and  school store and snack bar sections. However, each survey had unique  sections as well. The SFA directors’ survey included sections that asked  questions about the SFA, the school food service, and school meals  participation. The principals’ survey included unique sections on school  and district policies for competitive foods, including fund-raising and  exclusive beverage contracts.
A majority of the survey questions asked both SFA directors and principals  to consider school year 2003-2004. To gain a sense of change for certain  competitive food issues, a few questions asked SFA directors and  principals to consider school year 1998-1999 alone, make comparisons  between these reporting periods (1998-1999 versus 2003-2004), or consider  change in specific competitive food issues over the entire time of these  reporting periods (from 1998-1999 to 2003-2004).
subsections: section_title: Population
paragraphs: The target population consisted of all public schools in the 50 states and  the District of Columbia that participated in the National School Lunch  Program (NSLP) for the 2003-2004 school year. We used the Department of  Education’s Common Core of Data (CCD) Public Elementary/Secondary  School preliminary file for the 2002-2003 school year as a basis for defining  our population. On the basis of our review of these data, we determined  this source to be adequate for the purposes of our work.
To define our sampling frame, we removed schools from the CCD that  were permanently or temporarily closed; not yet operational; special  education, vocational education, or alternative/other; run by the  Department of Defense or Bureau of Indian Affairs; or located in American  Samoa, Guam, Northern Marianas, Puerto Rico, or the Virgin Islands. From  this analysis, we obtained a sampling frame consisting of 85,569 regular  public schools in the 50 states and the District of Columbia. However,  consistent information specifically identifying a school’s participation in  the NSLP was not available in the CCD.
section_title: Sample Design and Errors
paragraphs: The sample design for the Web surveys was a stratified random probability  sample of 656 schools that allows for estimates to be calculated for each  school level (elementary, middle, and high). We stratified by school level,  census region, and rural status, and we produced estimates by school  level. With this probability sample, each school in the population had a  known, nonzero probability of being selected. Each selected school was  subsequently weighted in the analysis to account statistically for all the  schools in the population, including those that were not selected. Because  each school was randomly chosen, some SFA directors had more than one  school under their responsibility selected for our study, and they were  therefore asked to complete a separate survey for each school.
Because we surveyed a sample of schools, our results are estimates of a  population of schools and thus are subject to sample errors that are  associated with samples of this size and type. Our confidence in the  precision of the results from this sample is expressed in 95 percent  confidence intervals, which are expected to include the actual results in 95  percent of the samples of this type. We calculated confidence intervals for  this sample based on methods that are appropriate for a stratified  probability sample.
Through a telephone survey of the schools selected in our sample, we  determined the number of schools selected in our sample that participated  in the NSLP. We estimate that 80,245 (94 percent) schools in our  population participated in the NSLP. All estimates produced from the  sample and presented in this report are for the estimated target population  of 80,245 schools that participated in the NSLP. All percentage and  numerical estimates included in this report have margins of error of plus  or minus 15 percentage points or less, except for those shown in table 6.
We took steps to minimize nonsampling errors that are not accounted for  through statistical tests, like sampling errors. Nonsampling errors could  figure into any data collection effort and involve a range of issues that  could affect data quality, including variations in how respondents interpret  questions and their willingness to offer accurate responses.
In developing the Web surveys, we conducted several pretests of draft  instruments. We held pretest discussions of the principals’ survey with  staff and members of the National Association of Elementary School  Principals and the National Association of Secondary School Principals.  We pretested the SFA survey with members of the American School Food  Service Association (now known as the School Nutrition Association). In  addition, both surveys were also pretested during a preliminary visit to the  SFA and an elementary school in Fairfax County, Virginia. All pretests  were conducted between July and September 2004.
For the survey pretests, we were generally interested in the clarity of the  questions and the flow and layout of the surveys. 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 the survey sections and the  questions within each section was appropriate. On the basis of our  pretests, the Web instruments underwent some slight revisions.
After the survey was closed, we also made comparisons between select  items from our competitive food Web-based survey data and other  national-level data sets. Our comparisons found our survey data were  reasonably consistent with the external sources. Of the basis of our  comparisons, we believe our survey data are sufficient for the purposes of  our work.
Using Web-based surveys also helped remove error in our data collection  effort. By allowing respondents to enter their responses directly into an  electronic instrument, this method automatically created a record for each  respondent in a data file and eliminated the need for and the errors (and  costs) associated with a manual data entry process. To further minimize  errors, programs used to analyze the survey data and make estimations  were independently verified to ensure the accuracy of this work.
section_title: Response Rates
paragraphs: For each school in our sample, we attempted to obtain valid e-mail  addresses for the principal and the SFA director. For the 656 schools in  our sample, we obtained valid e-mail addresses for 489 principals and 455  SFA directors. We administered the surveys to those groups, and we  received completed surveys from 70 percent of the SFA directors and 65  percent of the principals who received the surveys. The response rates for  our sample of 656 schools, including those officials we were unable to  contact, were 51 percent for both principals and SFA directors, excluding  the 26 non-NSLP schools. We received responses from both the SFA  director and the principal for the same school (matched responses) for 192  schools (30 percent of schools that participated in the NSLP in our  sample). Tables 7 and 8 summarize the population and sample by school  level for the SFA director and principal surveys respectively.
While the majority of our estimates are calculated based on survey  responses from either the SFA directors’ survey or the principals’ survey,  we used the matched responses (192 schools) to calculate the total  combined minimum revenue estimates. Specifically, the amount of  revenue earned from each competitive food venue within a school was  reported by SFA directors and principals in multiple ranges. For example,  SFA directors reported revenue generated by food services through  competitive food sales, such as a la carte sales, and principals reported  revenue generated by all other competitive food sales in the school. To  estimate the combined competitive food revenue for a school, we defined  the minimum for each of the school’s venues as the lower bound of the  revenue range reported by SFA directors and principals. We then summed  the minimum revenue across all venues for each school.
section_title: Survey Nonresponse Issues
paragraphs: Another type of nonsampling error is nonresponse or, in the case of our  work, those SFA directors and principals from schools in our sample who  did not provide a complete survey. To increase survey responses, after the  Web surveys were initially deployed, we made several follow-ups with  nonrespondent SFA directors and principals via e-mail and phone to  remind them of their respective surveys.
After the surveys were closed, we analyzed each set of survey respondents  (SFA directors, principals, and the matched responses) to determine if  there were any differences between the responding schools, the  nonresponding schools, and the population. We performed this analysis  for four characteristics—total number of students enrolled, total number  eligible for free lunch, total number eligible for reduced price lunch, and  total number eligible for either free or reduced price lunch. We determined  whether sample-based estimates of these characteristics compared  favorably with the known population values, and we also tested the  differences of the estimates for survey respondents and nonrespondents.  We performed this analysis for all schools and separately for each school  level (high, middle, and elementary). For each set of survey respondents,  the population value for all of the characteristics we examined fell within  the 95 percent confidence intervals for the estimates. We also determined  that there were no significant differences between estimates from the  respondents and nonrespondents.
Additionally, we compared the distribution of several demographic  variables, including region, school level, and rural status, for survey  respondents and nonrespondents. On the basis of this analysis, we found  no significant distributional differences between respondents and  nonrespondents. Although the characteristics were selected because they  may be related to other school characteristics asked for on our surveys,  we do not know the extent to which the respondents reflect the  population characteristics for our specific survey questions. On the basis  of both sets of analyses, we chose to include the survey results in our  report and produce sample-based estimates to the population of schools  that participated in the NSLP.
section_title: Site Visits
paragraphs: To gather information on local efforts to restrict the availability of less  nutritious competitive foods, we conducted site visits to six districts  between September 21 and December 9, 2004. The districts visited  included Independence School District (Independence, Missouri), Fort  Osage R-1 School District (Independence, Missouri), New Haven Public  Schools (New Haven, Connecticut), Richland County School District One  (Columbia, South Carolina), Oakland Unified School District (Oakland,  California), and McComb School District (McComb, Mississippi). We  selected these districts from a list of approximately 100 districts and  schools recognized as making efforts to restrict access to less nutritious  competitive foods. This list was compiled by reviewing recently released  reports, studies, and articles that described local efforts to make changes  to competitive foods. The six districts visited were selected because they  used different strategies to restrict competitive foods, and when viewed as  a group, they provided variation across characteristics such as geographic  location, district size, and socioeconomic status.
During the site visits, we interviewed district officials, including the  superintendent and SFA director, as well as visited one or two schools  within each district. At the schools, we interviewed principals, food  service staff, and health and physical education teachers, as well as others  involved with the school food environment. From these interviews, we  gathered information on the district and school food environment,  strategies used to restrict competitive foods, individuals and groups  involved in implementing changes, facilitators and barriers to change,  revenues generated by competitive foods, ongoing efforts, students’  reactions to changes, and opinions on the school wellness policies  mandated in the 2004 Child Nutrition and WIC Reauthorization Act. In  addition to our interviews with district and school officials, we also met  with students to collect their opinions regarding nutrition and healthy  eating, competitive foods in schools, and school meals. Further, we  observed at least one lunch period in each school visited, in order to better  understand the school nutrition environment and the choices students  make at lunch.
section_title: Appendix II: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: Kay E. Brown, Assistant Director, and Rachel Frisk, Analyst in Charge,  managed this assignment and made significant contributions to all aspects  of this report. Marissa Jones, Avani Locke, Kevin Jackson, and Jim Ashley  also made significant contributions to this report. In addition, Daniel  Schwimer assisted in the legal analysis, Amber Edwards assisted in the  analysis of local efforts to restrict competitive foods across the country,  and Susan Bernstein assisted in the message and report development.
section_title: Related GAO Products
paragraphs: Commercial Activities in Schools: Use of Student Data is Limited and  Additional Dissemination of Guidance Could Help Districts Develop  Policies. GAO-04-810. Washington, D.C.: August 20, 2004.
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 Meal 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.
School Meal Programs: Revenue and Expense Information from Selected  States. GAO-03-569. Washington, D.C.: May 9, 2003.