This three-meal allowance is a change in the program made by the Welfare Reform Act. Number and Characteristics of Sponsors Participating in and Dropping Out of the Program Since the Reimbursements Were Reduced

Since the reduced reimbursements went into effect in 1997, the number of sponsors participating in the program has increased by 8 percent overall. Of those sponsors leaving the program, fewer than 10 percent left in each of the 2 years, and of these sponsors, few left because of the rate reduction, according to state officials. In both years, a small percentage of the sponsors provided most of the meals. Few Sponsors Left Because of the Reduced Reimbursements

After the first year’s experience with the reduced reimbursements, both USDA and some state officials expressed concern that more sponsors would drop out of the program in the future than did in 1997 because of the reduced rates. Some Children Lost Access to the Program

Despite the overall increase in the number of children served between 1996 and 1997, some children lost access to program benefits because the sponsors serving them dropped out, and the children were not served by other sponsors. Other children may have lost access when continuing sponsors reduced the number of sites they operated because of the rate reduction. The Number of Meals Served Increased Slightly

The number of meals served by sponsors increased by over 2 percent—from over 125 million meals in fiscal year 1996 to over 128 million meals in 1997—the year after the reimbursements were reduced. Nevertheless, more sponsors reported operating costs that exceeded their reimbursements in 1997 than in 1996. The limited impact on the number of sponsors, children, and meals served that has been observed to date is due in part to sponsors’ continuing to contribute funds to offset the decreased reimbursements. Major contributors to this report are listed in appendix V.

Objectives, Scope and Methodology

Because of questions raised about the impact that the reduction in the meal reimbursement rate might have had on the Summer Food Service Program, the Chairman of the House Committee on Education and the Workforce asked us to report on (1) the number and characteristics of sponsors participating in and dropping out of the program before and after the decrease in reimbursements, (2) the number of children and meals served by the program before and after the reduction, and (3) the changes sponsors made to their program as a result of the reduced reimbursements. We conducted in-depth, in-person interviews with these sponsors to determine the changes they had made to their programs in response to rate reductions. Information on the Dropout Rates for Various Types of Sponsors in Fiscal Years 1996 and 1997

This appendix provides information for 1996 and 1997 on the total number of sponsors and the percent of sponsors that dropped out of the program in terms of the (1) number of children served, (2) number of meals served, and (3) type of sponsor.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Agriculture's (USDA) Summer Food Service Program and the impacts the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had on the program, focusing on the: (1) number and characteristics of sponsors participating in and dropping out of the program before and after the decrease in the reimbursements; (2) number of children and meals served by the program before and after the reduction; and (3) changes sponsors made to their programs as a result of the reduced reimbursements.

What GAO Found

GAO noted that: (1) the reduction in meal reimbursements that resulted from the 1996 Welfare Reform Act had a minimal impact on the number and characteristics of the sponsors of the Summer Food Service Program; (2) since the reduction went into effect in 1997, the number of sponsors participating in the program increased by 8 percent overall, from 3,753 to 4,046; (3) the characteristics of the sponsors providing meals remained about the same between 1996 and 1997; (4) in both years, a relatively small percentage of sponsors--5 percent--served most of the children in the program; (5) most sponsors continued to be schools and camps; (6) in terms of the sponsors that dropped out after the welfare reform changes, fewer than 10 percent left the program in each of the 2 years since the reduced reimbursements have been in effect; (7) however, only a small percentage of these dropouts left because of the reduction, according to officials in the 50 states; (8) after the reduced reimbursements were mandated, USDA and some states took actions to maintain the level of participation of sponsors and children; (9) the number of children and meals served in fiscal year (FY) 1997 was greater than in previous years; (10) the total number of children participating in the program increased by over 2 percent after the reimbursements were reduced, to almost 2.3 million, in 1997; (11) the number of meals served rose by 2 percent, to over 128 million, despite a new restriction on the number of meals for which some sponsors could receive reimbursements; (12) state officials identified a small number of sponsors that left the program because of the reduced reimbursements; (13) over 820 children lost access to the program in FY 1997 because sponsors that had served them in 1996 did not participate in 1997 as a result of the reduction, and no other sponsor was available; (14) at least 780 children lost access in FY 1998; (15) other children may have lost access when continuing sponsors reduced the number of sites they operated because of the rate reduction; (16) in response to the reduced meal reimbursements, some sponsors reported making changes to their program operations; (17) even with the changes, more sponsors reported that their operating costs exceeded the amount they received in federal reimbursements in FY 1997 than in 1996; and (18) the limited impact on the number of sponsors, children, and meals served that has been observed to date is due in part to sponsors' continuing to contribute funds to offset the decreased reimbursements.