Report No. 90-2
The National School Lunch Act provides federal assistance to public and private schools so that all school children can have nutritious meals. Participating schools must agree to serve free or reduced-price lunches to students who fall within certain income guidelines and to not identify or discriminate against these students in any way.
In Hawaii, the school lunch program is administered by the School Food Services Branch of the Department of Education. With a staff of over 800, the branch served over 21 million lunches during the 1988-89 school year, of which about 32 percent were free or for a reduced price. All student meals are subsidized by state and federal funds. The cost of a school lunch in FY 1988-89 was $1.87, but paying students are charged only 45 cents for the meal, and students eligible for a reduced-price meal are charged 20 cents. The federal government reimburses the State about $20 million per year, almost half the cost of the school food services program. General fund appropriations and monies from paying students make up the other half.
This audit assessed the effectiveness of the Department of Education's operation of the free and reduced-price lunch program. A financial audit of the School Food Services Program was also performed by Coopers & Lybrand. We found that the free and reduced-price lunch program was not as effective as it could be. There is a sharp decline in participation after elementary school. It appears that as students get older they do not want to be identified as recipients of free and reduced-price meals because they associate this with being on welfare.
Many children entitled to free or reduced-priced meals are not participating in the program. Participation could increase if the Department of Education improved the promotion of the program by following up on students eligible to receive support and made schools comply with federal and state requirements to protect the anonymity of participating students.
The School Food Services Branch is not adequately monitoring cafeteria cash receipts.
Coopers & Lybrand found that the financial statements of the School Food Services Program presented fairly as of June 30, 1989, the financial position of the program's special revenue funds and the results of operations of the program's general fund accounts and special revenue funds.
1. The Department of Education should require schools to comply with the anti-discrimination provisions of the National School Lunch Act. The department should ensure that schools protect the anonymity of students entitled to free and reduced-price lunches, particularly when distributing and selling tickets and serving lunches.
2. The department should look at the level of student participation and take steps to improve it.
3. The department should require schools to inform parents and students that pre-paid tickets are available for all school meals (free, reduced-price, and regular-price) and to encourage students to use them. The department should consider offering incentives for purchasing pre-paid tickets.
4. The Legislature should consider a "universal free lunch program" for all students. It should require the department to do a cost analysis and develop a plan for implementing such a program.
5. District supervisors should strengthen their monitoring of cafeteria cash receipts by taking steps to ensure that cash variances are accurately and properly reported.
The Board of Education and the Department of Education both responded that they concur with the findings and recommendations in the report and will take appropriate measures to improve the program.