1.) APEC estimated th approximately $860 million in improper payments occurred in the school  lunch and breakfast programs due to meal counting and claiming errors  during school year 2005-2006. States and SFAs Conduct Reviews, but Meal Counting and Claiming Errors Persist

		Gaps in State and SFA Review Requirements Limit Their Effectiveness

Although states conduct program integrity reviews of the meal programs,  oversight of the breakfast program is limited. While all states reported through our  survey that they conduct these reviews, 21 states reported that they do not  include the breakfast program in reviews. However, like state reviews, SFAs are not  required to review the breakfast program (see fig. Several of the SFAs we visited  had the same errors identified during consecutive state and SFA reviews. States and SFAs identified several factors that hinder efforts to address  meal counting and claiming errors. USDA Has Taken Some Actions to Improve State Monitoring, but Has Not Focused on Oversight of Meal Counting and Claiming

		USDA Recently Took Some Steps to Update, Strengthen, and Increase the Number of State Reviews

In 2008, USDA released an updated form for states to use when conducting  state administrative reviews through the coordinated review effort. Since fiscal year 2005, USDA has also provided annual grants to, in part,  support state efforts to conduct additional reviews of meal counting and  claiming and certification procedures in SFAs that have a high level of, or  high risk for, administrative error in the school meal programs. Other recent USDA efforts may also help identify and address meal  counting and claiming errors in the school meal programs. USDA Has Not Focused Its Own Oversight Efforts on Identifying or Addressing Meal Counting and Claiming Errors

USDA’s oversight efforts have not directly focused on identifying or  addressing meal counting and claiming errors. Officials  in some of the regional offices could not provide us with information on  the extent of meal counting and claiming errors in the states they oversee. USDA also collects annual data on findings from state administrative  reviews of SFAs, but it does not use these data to assess meal counting  and claiming errors. These data include several pieces of information  about meal counting and claiming errors in SFAs reviewed by states, such  as the number of lunches observed that were erroneously counted as  reimbursable because they did not meet federal menu planning and  nutrition requirements and the value of over-claims resulting from meal  counting and claiming errors. In addition, to assist federal efforts to target resources to states and SFAs  at the greatest risk for these errors, we recommend that the Secretary of  Agriculture:    Develop procedures for using state administrative review data reported to  FNS to assess risks and target oversight efforts associated with meal  counting and claiming errors, and modify the FNS form on which states  report the data so that it includes identification of which SFAs were  reviewed each year and information from School Breakfast Program  reviews. This study provided  the first national picture of improper payments in the National School  Lunch Program and School Breakfast Program related to cashier/meal  counting errors and aggregation/meal claiming errors. The  survey included questions about the extent to which states have identified  meal counting and claiming errors within their SFAs, state and SFA  processes to identify and reduce errors, related state assistance provided  to SFAs, challenges states and SFAs have experienced in identifying and  reducing errors, and support provided by FNS to help states and SFAs  address errors.
Why GAO Did This Study

In fiscal year 2008, the National School Lunch Program and School Breakfast Program provided meals to 30.9 million and 10.5 million children, respectively. Recently, the U.S. Department of Agriculture (USDA) issued the first estimate of improper payments due to meal counting and claiming errors in these programs, which was approximately $860 million (8.6 percent of federal program reimbursements) in school year 2005-2006. These errors include: (1) cashier errors, such as those made in determining if a meal meets the federal menu planning and nutrition requirements (meal counting), and (2) aggregation errors made when officials count and total meals for federal reimbursement (meal claiming). GAO was asked to review (1) actions taken by states and school food authorities (SFA) to identify and address meal counting and claiming errors; and (2) actions taken by USDA to help states and SFAs identify and address meal counting and claiming errors. GAO's steps included analyzing data on state administrative reviews of SFAs; surveying all states; conducting site visits; and interviewing federal, state, and SFA officials.

What GAO Found

Although states and SFAs conduct program integrity reviews of the school meal programs, gaps in federal requirements for these reviews limit their effectiveness at identifying meal counting and claiming errors. States and SFAs are generally not required to review the School Breakfast Program, and 21 states reported through GAO's survey that they do not review the breakfast program. However, USDA estimates that the percentage of meal counting and claiming errors is higher in the breakfast program than the lunch program. Further, some states reported that SFA reviews of the meal programs are ineffective at identifying and reducing errors, which may be due, in part, to the self-assessment design of these reviews. When state and SFA reviews identify errors, meal counting and claiming errors persist. For example, in several SFAs that GAO visited, the same errors were identified during consecutive reviews. States and SFAs identified multiple factors that hinder efforts to address these errors, such as staff turnover, inadequate training, and school policies that complicate meal service. USDA has taken some actions to improve state reviews of SFAs, but it has not directly focused on oversight of meal counting and claiming. USDA recently provided new review forms and nationwide training to strengthen state reviews and also simplified the application process for state grants to conduct additional reviews of SFAs. However, USDA has not targeted its oversight efforts to identify or address meal counting and claiming errors. For example, USDA regional offices' reviews of state administration of the school meal programs do not focus on these errors, and some regional officials could not provide information on the extent of these errors in the states they oversee. USDA also has not updated its meal counting and claiming manual since it was first issued in 1991. Further, while USDA collects annual data on findings from state reviews of SFAs, the agency has not used these data for oversight purposes or to assess risks associated with meal counting and claiming errors.