Fraud in the Lunchroom? Federal School-Lunch Program May Not Be a Reliable Measure of Poverty

By Bass, David N. | Education Next, Winter 2010 | Go to article overview

Fraud in the Lunchroom? Federal School-Lunch Program May Not Be a Reliable Measure of Poverty


Bass, David N., Education Next


Fill it out and turn it in: that's the message thousands of school districts send parents each year when they offer applications for the federal government's National School Lunch Program (NSLP). And each year, millions of parents comply. But new data suggest that the process for verifying eligibility for the program is fundamentally broken and that taxpayers may be picking up the tab for participation by ineligible families. The NSLP, which is administered by the U.S. Department of Agriculture (USDA) at an annual cost of $8 billion, serves 31 million American children each day. The program's goal is to help low-income students succeed in public and private school classrooms by ensuring they have adequate nutrition, a mission that is compromised if substantial funds are being spent on ineligible families or the program fails to reach the neediest students.

Determining the extent of program fraud and error is important, as the entitlement is associated with other streams of federal, state, and local taxpayer dollars. Eligibility data are widely used as a proxies for poverty rates, thereby influencing funding for myriad government programs and informing both school district policies and policy research. For example, NSLP participation rates serve as the main criteria for the allocation of federal Title I funds to schools. Those schools with a higher percentage of students eligible for free or reduced-price lunch also receive a larger discount on the federal government's E-Rate program, which facilitates access to telecommunications services for schools and libraries.

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State governments dole out benefits according to free and reduced-price lunch percentages, too. The Wisconsin Department of Public Instruction, for instance, allocates $2,250 to schools for each low-income child enrolled in kindergarten through 3rd grade. The program gauges poverty using NSLP participation.

Because of the financial benefits, local school districts have a clear incentive to register as many students in NSLP as possible. Some districts encourage parents to fill out applications, even if they are not sure they qualify. One district in Chillicothe, Missouri, offered parents a $10 Wal-Mart gift card for turning in an application. "Even if you choose to pay for your child's lunches and or breakfasts, each qualified application earns $1,025 per child of state money for our school district," said Assistant Superintendent Wade Schroeder.

School districts often use free and reduced-price lunch percentages for student assignment and resource allocation as well. North Carolina's largest school district, Charlotte-Mecklenburg Schools, gives schools 30 percent more funds for every student enrolled in the entitlement. Wake County Public School System, in central North Carolina, employs a costly busing strategy to foster socioeconomic diversity in the classroom, measured in part by NSLP participation. These districts and others could be basing policy on faulty numbers if the lunch program data are not a valid indicator of socioeconomic status.

In addition, the federal government's evaluation programs routinely employ school lunch subsidies as a poverty indicator. The National Assessment of Educational Progress (NAEP), commonly known as the "Nation's Report Card," uses the scores of students eligible for the lunch program to track the performance of states in educating low-income children over time. No Child Left Behind requires that schools meet performance benchmarks for program-eligible students in order to make adequate yearly progress. Academic researchers also make use of NSLP participation data, raising the question of whether researchers could be producing skewed results if program participation is not a reliable indicator of income.

How It Works

Parents who apply for school lunch benefits, or for the smaller school breakfast program, report their yearly income on the application. …

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