1

Introduction

The National School Lunch Program (NSLP) and the School Breakfast Program (SBP) are federally assisted meal programs operating in public and nonprofit private schools and residential child care institutions. The programs are intended to provide nutritionally balanced, free or low-cost lunches and breakfasts to students each school day. They are key components of the nation’s food security safety net, serving tens of millions of children who might otherwise not obtain adequate nutrition.1 The Food and Nutrition Service (FNS) of the U.S. Department of Agriculture (USDA) administers both programs at the federal level. At the state level, the programs usually are administered by state education agencies, which operate them through agreements with local education agencies (LEAs), commonly known as school districts.2

Certification of students’ eligibility for free or reduced-price meals on the basis of need has historically involved substantial paperwork and

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1 This chapter draws heavily on Chapter 1 of the panel’s interim report (National Research Council, 2010).

2 “The term ‘school food authority’ (SFA) is used for local agencies administering the school meal programs (i.e., the governing body which is responsible for the administration of one or more schools and has the legal authority to operate the school meals programs in those schools), while the term ‘local educational agency’ (LEA) is used for those respon sible for the application, certification, and verification activities of the NSLP, and SBP” (U.S. Department of Agriculture/Food and Nutrition Service, 2011b:2). Because the vast major ity of participating schools are part of school districts, we use the term “school district” throughout this report to refer to local entities that enter into agreements with state agencies to operate the NSLP and SBP.



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1 Introduction T he National School Lunch Program (NSLP) and the School Breakfast Program (SBP) are federally assisted meal programs operating in public and nonprofit private schools and residential child care insti- tutions. The programs are intended to provide nutritionally balanced, free or low-cost lunches and breakfasts to students each school day. They are key components of the nation's food security safety net, serving tens of millions of children who might otherwise not obtain adequate nutrition.1 The Food and Nutrition Service (FNS) of the U.S. Department of Agriculture (USDA) administers both programs at the federal level. At the state level, the programs usually are administered by state education agencies, which operate them through agreements with local educa- tion agencies (LEAs), commonly known as school districts. 2 Certification of students' eligibility for free or reduced-price meals on the basis of need has historically involved substantial paperwork and 1This chapter draws heavily on Chapter 1 of the panel's interim report (National Research Council, 2010). 2"The term `school food authority' (SFA) is used for local agencies administering the school meal programs (i.e., the governing body which is responsible for the administration of one or more schools and has the legal authority to operate the school meals programs in those schools), while the term `local educational agency' (LEA) is used for those respon- sible for the application, certification, and verification activities of the NSLP, and SBP" (U.S. Department of Agriculture/Food and Nutrition Service, 2011b:2). Because the vast major- ity of participating schools are part of school districts, we use the term "school district" throughout this report to refer to local entities that enter into agreements with state agencies to operate the NSLP and SBP. 7

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8 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS administrative burden for schools and families. To ease the administrative burden and expand the reach of the school meals programs, since 1980 USDA regulations have allowed school districts to use special provisions for determining federal reimbursement for meals served in one or more schools in a district. Under two such special provisions, Provision 2 and Provision 3 (discussed further below), the district provides free meals to all students in the participating schools (supplementing federal funds with local funds) while taking applications at most every 4 years. Three new special provisions for providing universal free meals were autho- rized in the Healthy, Hunger-Free Kids Act of 2010. The first, the Com- munity Eligibility Option (CEO), will be permitted in schools, groups of schools, or school districts that identify at least 40 percent of students as being categorically eligible for free meals. Such identification is either through direct certification of students whose families are on lists of participants in the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), the Temporary Assistance to Needy Families (TANF) Program, or the Food Distribution Program on Indian Reservations (FDPIR), or through identification of students on other lists, including students who are homeless, foster children, and children in other specified categories (see Chapter 2 for details). The second alterna- tive allows the Secretary of Agriculture to consider use of a periodic socio- economic survey of households of schoolchildren by not more than three school food authorities (SFAs) participating in the NSLP. The third option is the topic of this report. The act authorizes the Secretary of Agriculture to consider implementing the approach recommended by this panel for using estimates from the American Community Survey (ACS) and other data sources to determine reimbursement under a new universal free- feeding provision that reduces administrative burden compared with the traditional approach of taking applications and counting meals. We call this option the ACS Eligibility Option (AEO). In 2009, prior to the authorization of the three new special provisions, FNS began investigating the feasibility of using data from the ACS in the administration of the school meals programs in lieu of collecting applica- tions. In exchange, schools or entire districts would provide free meals to all students. FNS asked the National Academies' Committee on National Statistics and the Institute of Medicine's Food and Nutrition Board to con- vene an expert panel to consider ways of using ACS data for implement- ing the AEO. This, the panel's final report, evaluates the quality of the estimates that would be needed from the ACS for an AEO, suggests key elements of a new AEO provision for consideration by FNS, and specifies a technical approach whereby school districts could determine the utility of ACS estimates for an AEO and assess whether to adopt the AEO. The panel also recommends further research and development to improve

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INTRODUCTION 9 the accuracy of ACS-based estimates and the availability of high-quality data with which to evaluate alternative options for reducing administra- tive burden and feeding more children under the school meals programs. OVERVIEW OF SCHOOL MEALS PROGRAMS USDA has provided assistance to elementary and secondary schools for meals served to students for more than 70 years, initially by provid- ing food commodities and later by also reimbursing school districts for a share of the cost of meals served. The National School Lunch Act, signed by President Truman in 1946, officially authorized the NSLP, although funds had previously been appropriated for more than a decade without specific legislative authority. The 1966 Child Nutrition Act expanded the program and added the SBP on a pilot basis; 1975 legislation made the SBP permanent; and 1998 legislation expanded the NSLP to include reimbursement for snacks served to students in after-school educational and enrichment programs. In 2010, the NSLP operated in more than 101,600 public and nonprofit private schools and residential child care institutions. The program sub- sidized lunches for more than 29.6 million students each school day at an annual cost to the federal government of $10.9 billion. The SBP oper- ated in more than 88,600 schools and institutions in 2010 and subsidized breakfasts for 10.8 million students each school day at an annual cost to the federal government of $2.9 billion.3 Any child at a participating school may purchase a meal through the NSLP or SBP. Students from families with incomes at or below 130 percent of the U.S. Department of Health and Human Services' (HHS') poverty guideline for their family size or who participate in certain other assis- tance programs are eligible for free meals.4 Those with incomes greater than 130 percent of the poverty guideline and less than or equal to 185 percent of the poverty guideline are eligible for reduced-price meals. For reduced-price meals, students can be charged no more than $.40 for lunch and no more than $.30 for breakfast. Students from families with 3FNS provided data for fiscal year (FY) 2010 from the National Data Bank on July 5, 2011. 4The U.S. Department of Health and Human Services' (HHS') Poverty Guidelines typically are published in January. In about March, FNS publishes the income eligibility guidelines applicable to the school meals programs. The 2011 child nutrition program income eligibility guidelines were issued March 25, 2011, and will be effective from July 1, 2011, to June 30, 2012. For 48 states and the District of Columbia, a family of four with income less than or equal to $29,055 is eligible for free meals, and with income greater than $29,055 and less than or equal to $41,348 is eligible for reduced-price meals. Income-eligibility guidelines vary by family size and are higher for Alaska and Hawaii. See http://www.federalregister.gov/ articles/2011/03/25/2011-6948/child-nutrition-programs-income-eligibility-guidelines.

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10 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS incomes over 185 percent of the poverty guideline pay full price, although their meals are still subsidized to some extent. School districts set their own prices for full-price meals but must operate their meal services as nonprofit programs. Most of the support USDA provides to schools in the NSLP and SBP comes in the form of a cash reimbursement for each meal served. As a result, schools must count and report the number of qualified meals5 by eligibility category (free, reduced-price, or full-price). 6 To determine students' eligibility for free or reduced-price meals each year, school districts must publicize the availability of those meals and accept applications by interested families. School districts must also con- duct verification studies of samples of applications to determine the accu- racy of the information that was provided and the eligibility status based on that information. In addition, school districts, usually through their state education agency, are required to work with other program agencies to directly certify students who are categorically eligible--that is, auto- matically eligible for free school meals because their families are enrolled in another assistance program, including SNAP, TANF, and FDPIR.7 The families of categorically eligible students who are not directly certified can also establish their eligibility for free meals by providing a SNAP, TANF, or FDPIR case number on an application. For many years, federal, state, and local officials have been con- cerned about the burden of eligibility determination, verification, and meal counting, not only because of the time and resources required but also because of the potential to discourage participation by families whose children would be eligible for free or reduced-price meals. One problem with the current process is the time required in the school cafeteria line to ascertain each child's eligibility status, which adds to program costs and the time each child spends in the lunch line. Another factor that potentially discourages participation is the perceived stigma of distin- guishing between students who receive free or reduced-price meals and those who must pay full price. While overt identification of students receiving free or reduced-price meals is prohibited, an FNS study (U.S. 5A qualified meal is one that satisfies the nutritional guidelines of the school meals pro- grams; see Institute of Medicine (2009). 6Reimbursement rates for school lunches during school year 2011-2012 are $.26 for full- price lunch, $2.37 for reduced-price lunch, and $2.77 for free lunch for schools with less than 60 percent of students eligible for free or reduced-price meals in 2009-2010. If their free or reduced-price percentage was 60 percent or more, they are eligible for an additional $.02 per meal for each category. See http://www.fns.usda.gov/cnd/Governance/notices/ naps/NAPs11-12.pdf. 7The 2004 Child Nutrition and WIC Reauthorization Act required that all school districts establish a system of direct certification of students from households that receive SNAP benefits by school year 2008-2009.

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INTRODUCTION 11 Department of Agriculture/Food and Nutrition Service, 1994a) suggested that perceived stigma is a major factor in nonparticipation. The study observed that perceived stigma generally is more of an issue with high school than with elementary school students, with middle school students being in a transition stage. More recently, Mirtcheva and Powell (2009:485) confirmed that "stigma or possibly peers, affected participation [in the NLSP]. Neighborhood and school contextual variables had significant effects on school lunch take-up and the results differed between high school and elementary/middle school students." As noted earlier, to reduce administrative costs and expand participa- tion, federal regulations issued in 1980 permitted individual schools to use one of two special provisions--Provisions 18 and 2--designed to reduce paperwork and administrative burden in the school meals programs; in 1995, Provision 3 was added. Provisions 2 and 3 require that schools offer free meals to all participating students in exchange for collecting applica- tions from students' families (and using direct certification) and count- ing meals served by category at most once every 4 years. Then, for the duration of use of either provision, schools count the total meals served daily and claim reimbursement by category using the information from the last year in which applications were taken and meals were counted by category.9 In 2004, the Child Nutrition and WIC Reauthorization Act (Public Law 108-265) expanded the opportunity to use Provision 2 or 3 to schools or groups of schools. In 2010, the Healthy, Hunger-Free Kids Act established a new special provision--the CEO--that allows schools to provide universal free meals. The CEO has been implemented as a pilot program in three states--Illi- nois, Kentucky, and Michigan--during school year 2011-2012. In 2014- 2015, all states will be eligible to participate. The states identified qualified school districts as those with at least one school eligible to participate. A school is eligible to participate if the total number of identified students (categorically eligible according to state or local lists, not applications) constitutes 40 percent or more of enrolled students. Whether a qualified school district will choose to participate in the CEO is up to the district. The total reimbursement to the district under the CEO is the sum of two components. The first is the product of the number of meals served, the reimbursement rate for free meals, the percentage of enrolled stu- 8Provision 1 requires recertification every 2 years and may be used only by schools that have at least 80 percent of students eligible for free or reduced-price meals. Provision 1 does not involve providing free meals to all students. 9Provision 2 uses meal counts in the current year and claiming percentages from the base year to determine reimbursement, while Provision 3 uses meal counts in the base year and adjustments for enrollment and number of operating days in the current year to determine reimbursement. More detailed information about these provisions is provided in Chapter 2.

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12 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS dents who are identified divided by 100, and a factor specified by law/ regulation (currently 1.6).10 The second component is the product of the number of meals served, the reimbursement rate for full-price meals, and 1 minus the product of the percentage of enrolled students who are identified divided by 100 and the factor. Districts that participate must conduct direct certification every 4 years, but may conduct direct certifica- tion more frequently. Provisions 1, 2, and 3 and the CEO are discussed in more detail in Chapter 2. While one in eight school districts had adopted Provision 2 and another 1 percent had adopted Provision 3 as of 2004-2005,11 program operations under these provisions can be challenging. At the end of 4 years, when it is time to apply for an extension or establish a new base year, many schools have lost some of the institutional knowledge about procedures needed to process applications, and families are no longer accustomed to completing the application form. FNS would like to develop new methods for reducing the administra- tive burden on schools and families and making it easier for more low- income students to participate in the school meals programs. The AEO is one possible approach to accomplishing this objective. If ACS-based estimates could be developed reliably for attendance areas for schools, groups of schools, or entire districts, it might be possible to eliminate entirely the need for schools to determine eligibility on a case-by-case basis every year or once every few years, and more schools and districts might choose to provide free meals to all of their students. CHARGE TO THE PANEL In response to a request from FNS, a panel of experts, convened by the Committee on National Statistics and the Food and Nutrition Board, studied technical and operational issues involved in using the ACS and other information to provide small-area estimates of students who are eligible for free and reduced-price school meals. These estimates would provide "claiming percentages" by which USDA would reimburse school districts for providing free meals to all students attending speci- fied schools. The charge to the panel states: The panel will consider the ability of the ACS to provide estimates for school attendance areas, built by aggregating sampled values for census 10For purposes of reimbursement, the percentage of identified students times 1.6 is capped at 100 percent. 11According to U.S. Department of Agriculture/Food and Nutrition Service (2007a:47, vol. I), 12.9 percent of schools reported using Provision 2 and 1.3 percent Provision 3 in a nationally representative survey conducted during school year 2004-2005.

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INTRODUCTION 13 blocks and applying sampling weights. It will consider the quality of these estimates in terms of sampling variability, reporting error, timeli- ness, and other features that may affect their fitness for use, and how they might be used in combination with estimates from other data sources, such as the Census Bureau's Small Area Income and Poverty Esti mates Program (SAIPE) and administrative records. It will also address the process by which school districts and USDA can best obtain needed ACS estimates from the Census Bureau and the effects that expanding free school meals may have on participation in meal programs. The panel conducted its work in two phases and issued two reports during a 36-month period: (1) the panel's interim report (National Research Council, 2010), released at the end of year one, outlined methods for developing ACS-based estimates and the panel's plan for evaluating those estimates; and (2) this, the panel's final report, presents conclusions and recommendations concerning a method for making use of the ACS to implement the AEO. The Committee on National Statistics obtained input during the project as needed from the Food and Nutrition Board. STUDY APPROACH In addition to considering the issues explicitly identified in its charge, the panel examined the quality and comparability of administrative data concerning school district enrollment and percentages of students certi- fied as eligible for free and reduced-price meals; compared the definitions of eligible students in the school meals programs against the combination of ACS variables that best approximates those definitions; and evaluated model-based eligibility estimates12 provided by the U.S. Census Bureau. These assessments and evaluations led the panel to formulate several research recommendations. The panel began its work by learning about the school meals pro- grams from FNS and about the ACS, SAIPE model-based estimates, and geographic issues from the U.S. Census Bureau. We gathered information about the School Attendance Boundary Information System (SABINS), a database of school attendance boundaries developed with funding from a National Science Foundation grant, and worked with the principal investigator, Dr. Salvatore Saporito, to develop attendance boundaries for schools in the districts we selected for case studies. We learned about assessments of the accuracy of ACS data from researchers and principal data users and about work on the impact of income variability on eligi- bility for school meals from the Economic Research Service, USDA. We 12The model based-estimates provided by the Census Bureau are described in more detail in Chapter 3 and Appendix C.

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14 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS listened to presentations from the Government Accountability Office con- cerning its evaluations of the school meals programs and learned about the ACS group quarters data and plans for the future of the ACS from the Census Bureau. We sought information about administrative data from FNS and the National Center for Education Statistics (NCES) concerning the number of schools in districts, enrollment, percentages of students certified as eligible for free meals, and percentages certified as eligible for reduced-price meals. We compared these data and found that although they are frequently consistent, they conflict more often than we expected. The panel collected a considerable amount of data to support the study. Five case study districts--Austin, Texas; Chatham County, Georgia; Norfolk, Virginia; Omaha, Nebraska; and Pajaro Valley, California--were recruited to provide detailed information concerning school attendance area boundaries, enrollment, number of children certified as eligible for free meals, and number certified as eligible for reduced-price meals, as well as number of meals served by eligibility category. The case study districts were chosen from medium-sized and large enrollment districts in which at least 25 percent of schools had free and reduced-price eligibil- ity percentages greater than 75 percent, and at least 25 percent of schools had free and reduced-price eligibility percentages less than 50 percent. Because these districts have a substantial number of schools where the AEO is likely to be too expensive to implement (free and reduced-price percentage less than 50 percent) and a substantial number of schools where the AEO may be economically viable (free and reduced-price per- centage greater than 75 percent), we thought these districts might rep- resent those that would be interested in the AEO for a group of schools rather than the entire district. The panel also worked with the Census Bureau and NCES to obtain ACS estimates and standard errors prepared according to our specifica- tions (see Appendix D) for public school enrollment and percentage of students eligible for free, reduced-price, and full-price meals for all school districts in the country and for schools with attendance boundaries in the case study districts. In addition, the Census Bureau provided model-based estimates for percentages eligible for free and for reduced-price meals. We conducted extensive data analysis in formulating our conclusions. The panel also conducted a workshop with school food authority directors from our case study districts, school food authority directors from districts with experience in using Provision 2, and one state repre- sentative. The purpose of the workshop was to help us understand local issues pertaining to a potential new provision such as the AEO, and to learn what information school districts would need to help them decide whether to adopt such a new provision. We also conducted a survey of

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INTRODUCTION 15 districts that had implemented Provision 2 or 3 to obtain information about their reaction to these special provisions. ORGANIZATION OF THE REPORT Chapter 2 provides background on the school meals programs and examines quality issues associated with the programs' operations. Chap- ter 3 describes the panel's technical approach; it summarizes the frame- work used to evaluate estimates, describes the data collected, and outlines the analyses conducted. Chapter 4 provides the results of the panel's analysis. It addresses the evaluation of systematic differences between ACS estimates and administrative data and the reasons for these dis- crepancies. It considers the precision of the estimates and relates that precision to year-to-year variation that school districts might expect when using the ACS and to year-to-year variation as observed in administra- tive data (an indication of the variation in reimbursement that school districts experience now). Chapter 4 also considers the impact of using the lagged data available from the ACS to determine reimbursement. Further, it provides an analysis (based on the limited data available) of differ- ences in reimbursement that might be expected when using eligibility estimates to define claiming percentages instead of using the traditional participation-based claiming percentages. Chapter 5 provides the panel's approach to developing and implementing a new provision based on the ACS (the AEO). It addresses how and where the AEO might be imple- mented now, as well as issues FNS should consider for future refinement of the AEO. Chapter 6 provides recommendations for future research and the provision of improved data by FNS, NCES, and the Census Bureau. Appendix A is a glossary of acronyms and terms used in the report. Appendixes B through G provide technical detail, while Appendix H contains biographical sketches of the panel members.