School Breakfast Program

High-priority program

Program level Payment Integrity results

Sponsoring agency: Department of Agriculture

The School Breakfast Program (SBP) is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It reimburses participating schools and institutions for the cost of providing meals to eligible children. SBP overpayments are primarily due to errors in determining children's eligibility for program benefits. Errors in counting and claiming meals for federal reimbursement is a secondary source of over payment. The most significant barrier to prevention is the decentralized nature of the program. Certifying children for benefits and counting meals for reimbursement are handled independently by tens of thousands of schools and school districts.

View on Federal Program Inventory

PROGRAM METRICS

$3,000 M

in FY 2021 outlays, with a

91.6%

payment accuracy rate

PROGRAM METRICS

$2,521 M

in FY 2022 outlays, with a

97.9%

payment accuracy rate

PROGRAM METRICS

$6,502 M

in FY 2023 outlays, with a

97.0%

payment accuracy rate

PROGRAM METRICS

$5,285 M

in FY 2024 outlays, with a

92.4%

payment accuracy rate

PROGRAM METRICS

$5,914 M

in FY 2025 outlays, with a

92.8%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2019 - 09/2020


    Confidence interval:

    >95%


    Margin of error:

    +/-0.0

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $167.89 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $167.89 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $84.11 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $84.11 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$84.11 M

Unknown Payment Details

Evaluation of corrective actions

To improve accuracy of eligibility determinations through increased automation and enhanced integrity features, we continue to promote statewide online NSLP/SBP application systems with integrity features such as those contained in the USDA online prototype application. FNS is also continuing to promote its data validation service (DVS), an in-house tool that was developed to improve school meals verification data integrity. The DVS has been adopted by five states and a national-level vendor is adding the DVS to its verification reporting system.

FNS supports NSLP/SBP program operators and the overall improvement of information technology systems through approximately $25 million in Technology Innovation Grants (TIGs) awarded to U.S. States and Territories annually. These grants support efforts to train, monitor, and provide technical assistance to program operators. Further, the TIGs provide non-competitive funding to State agencies administering the Child Nutrition Programs to make information technology improvements to data, accountability, and financial systems for the purposes of enhancing program efficiency and integrity.

Future payment integrity outlook

School Breakfast Program has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $4,591.11 M
Current year +1 estimated future improper payments $385.65 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 8.4 %

The program's current year improper payment and unknown payment rate of 8.4 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

NSLP and SBP do not have an administrative infrastructure for producing yearly estimates of improper payment rates and dollar values. Therefore, FNS uses its periodic Access, Participation, Eligibility, and Certification (APEC) studies to provide baseline error rate estimates for NSLP and SBP. In non-study years, FNS typically provides annual estimates using the baseline data from APEC, program administrative data, and macroeconomic indicators. Due to the Covid-19 public health emergency, not all the macroeconomic data that are required for aging the data are available, so FNS will use the point estimates from APEC.

Finally, the FNS FY 2021 Budget requested an increase in funding for the following program integrity line items to establish and maintain effective internal controls to reduce improper payments:

Child Nutrition (CN) Training and Technical Assistance— ($34,214,000 enacted in FY 2021). Effective and continual training and technical assistance is necessary to help States properly administer the Child Nutrition Programs and to ensure that States are equipped to identify and prevent fraud and abuse. This change is due to state/local index trends and a pay cost increase.

CN Payment Accuracy— ($11,427,000 enacted in FY 2021). This funding supports FNS’s robust Federal oversight, monitoring and technical assistance, which are essential to the identification, prevention and resolution of erroneous payments. This change consists of $224,000 and is due to a result of state/-local index trends and a pay cost increase.

CN Studies—($15,299,000 enacted in FY 2021). FNS conducts a variety of studies, evaluations, and related activities that respond to the needs of policy makers and managers and help ensure that nutrition assistance programs achieve their goals effectively. This line supports the critical evaluations needed for the Child Nutrition Programs, including the Federal staff needed to oversee this vital work. This change reflects $300,000 and is due to state/local index trends, and a pay cost increase.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2017 - 06/2018


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-0.0

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $32.52 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $32.52 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $20.67 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $20.67 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$20.67 M

Unknown Payment Details

Evaluation of corrective actions

FNS expects that the overall improvement of information technology systems by non-competitive Technology Innovation Grant recipients administering National School Lunch Program (NSLP)/School Breakfast Program (SBP) will improve the State Agency's ability to train, monitor, provide technical assistance, and corrective actions.
The goal of the Administrative Review & Technology grant based statewide online NSLP/SBP application systems is to improve accuracy of eligibility determinations to certify children for free, reduced price, and paid NSLP/SBP meals through increased automation and enhanced integrity features of electronic NSLP/SBP meal benefit application.
Direct certification is the process by which eligible children are certified for free meals without the need for a household application based on household participation in one or more means-tested Federal assistance programs. Direct certification is intended to reduce both household and administrative certification error in Local Education Agency processing of household applications.
As a part of the overall strategy to improve processes and technology for State agencies, FNS will distribute the funding available to improve State systems and support payment accuracy. These efforts will take place either through appropriations or the grant dollars available. Efforts may include technological advancements, direct certification improvements, and improved opportunities to support streamlined and efficient processes at the local level.

Future payment integrity outlook

School Breakfast Program has established a baseline.

The Covid-19 pandemic changed National School Lunch Program (NSLP) and School Breakfast Program (SBP) operations beginning in March 2020 that affect improper payments due to certification error, which is the primary component of NSLP/SBP improper payments. More specifically, beginning March 2020, School Food Authorities had the option to adopt waivers that allowed them to serve free meals to all participants through the NSLP’s Seamless Summer Option (SSO) or the Summer Food Service Program (SFSP) without the need for applications. FNS recognized that State Agency's and SFAs needed additional support and flexibility to continue serving meals to children while maintaining appropriate safety measures and managing the impacts of Covid-19. In School Year (SY) 2021-2022, SFAs had the option of operating SSO or NSLP/SBP and almost all SFAs (90%) chose the SSO waiver, covering approximately 98% of total meals served in FY 2021-2022. Under SSO, all participants receive free meals and SFAs do not need to conduct eligibility determinations, so certification error does not apply for SFAs that used the waiver in SY 2021-2022. As a result, it is not included in the error rate for FY22. Aggregation error, on the other hand, still applies as SFAs are still serving and counting meals.

Due to the operational flexibilities mentioned above, data that would allow USDA to age the improper payment estimates is not available for FY22. Therefore, USDA used the aggregation error point estimate from APEC III as its measure of improper payments in NSLP and SBP. The point estimate reflects the most current assessment of error in the traditional NSLP/SBP programs, unaffected by temporary changes to the program due to Covid-19, and therefore is the most reflective rate of school meal operations in FY22.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $6,370 M
Current year +1 estimated future improper payments $134.41 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 2.11 %
Current year +1 estimated future improper payment and unknown payment reduction target 2.11 %

The program's current year improper payment and unknown payment rate of 2.11 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

USDA is committed to ensuring integrity in the School Breakfast Program (SBP) in order to protect taxpayer dollars and safeguard the meals that millions of children rely on during the school year. Therefore, USDA is reporting that it has not yet determined a tolerable rate for SBP that fully balances payment integrity risk and controls while executing the program's processes to maximum possible effect as allowed under statute. In the coming year, USDA intends on defining a tolerable rate for each program with improper payment measures.

National School Lunch Program (NSLP) and School Breakfast Program (SBP) do not have an administrative infrastructure for producing yearly estimates of improper payment rates and dollar values. Therefore, USDA uses its periodic Access, Participation, Eligibility, and Certification (APEC) studies to provide baseline error rate estimates for NSLP and SBP. In non-study years, FNS typically provides annual estimates using the baseline data from APEC, program administrative data, and macroeconomic indicators.

The Covid-19 pandemic changed NSLP and SBP operations beginning in March 2020 that affect improper payments due to certification error, which is the primary component of NSLP/SBP improper payments. More specifically, beginning March 2020, School Food Authorities had the option to adopt waivers that allowed them to serve free meals to all participants through the NSLP’s Seamless Summer Option (SSO) or the Summer Food Service Program (SFSP) without the need for applications. FNS recognized that State Agency's and SFAs needed additional support and flexibility to continue serving meals to children while maintaining appropriate safety measures and managing the impacts of Covid-19. In School Year (SY) 2021-2022, SFAs had the option of operating SSO or NSLP/SBP and almost all SFAs (90%) chose the SSO waiver, covering approximately 98% of total meals served in FY 2021-2022. Under SSO, all participants receive free meals and SFAs do not need to conduct eligibility determinations, so certification error does not apply for SFAs that used the waiver in SY 2021-2022. As a result, it is not included in the error rate for FY22. Aggregation error, on the other hand, still applies as SFAs are still serving and counting meals.

Due to the operational flexibilities mentioned above, data that would allow USDA to age the improper payment estimates is not available for FY22. Therefore, USDA used the aggregation error point estimate from APEC III as its measure of improper payments in NSLP and SBP. The point estimate reflects the most current assessment of error in the traditional NSLP/SBP programs, unaffected by temporary changes to the program due to Covid-19, and therefore is the most reflective rate of school meal operations in FY22.

FNS FY 2022 Budget requested an increase in funding for program integrity line items to establish and maintain effective internal controls to reduce improper payments.

The FNS FY 2022 Budget requested an increase in funding for the following program integrity line items to establish and maintain effective internal controls to reduce improper payments:

Child Nutrition (CN) Training and Technical Assistance—An increase of $7,284,000 for Training and Technical Assistance ($34,214,000 enacted in FY 2021).
Effective and continual training and technical assistance are necessary to help States properly administer the Child Nutrition Programs and to ensure States are equipped to identify and prevent fraud and abuse. A change of $284,000 reflects increases to state and local index trends. An additional $7 million increase is for three current law proposals.

CN Payment Accuracy—An increase of $229,000 for CN Payment Accuracy ($11,427,000 enacted in FY 2021). This funding supports FNS’ robust Federal oversight, monitoring and technical assistance, which are essential to the identification, prevention and resolution of erroneous payments. The change consists of $229,000 to match state and local index trends

CN Studies—An increase of $308,000 for CN Studies ($15,299,000 enacted in FY 2021). FNS conducts a variety of studies, evaluations, and related activities that respond to the needs of policy makers and managers and help ensure that nutrition assistance programs achieve their goals effectively. This line supports the critical evaluations needed for the Child Nutrition Programs, including the federal staff needed to oversee this vital work. The change consists of $308,000 to match state and local index trends.

CN Administrative Reviews—$10 million was provided for training and technical assistance for State agencies responsible for reviewing local school food authorities participating in the school meal programs. Local administrative reviews help ensure that school children are offered meals that meet regulatory standards and that the financial claims associated with those meals are appropriate.

Additional programmatic information

Beginning March 2020, School Food Authorities had the option to adopt waivers that allowed them to serve free meals to all participants through the National School Lunch Programs' (NSLP) Seamless Summer Option (SSO) or the Summer Food Service Program (SFSP) without the need for applications. FNS recognizes that State Agency's and SFAs need additional support and flexibility to continue serving meals to children while maintaining appropriate safety measures and managing the impacts of Covid-19. Allowing SFAs to participate under SSO during Covid-19 operations during the regular school year facilitates the safe provision of meals.

  • FY 2023 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2017 - 06/2018


    Confidence interval:

    There is no confidence level associated with the estimate


    Margin of error:

    +/-0.0

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Automation
    The School Breakfast Program (SBP) has taken the following Automation corrective actions: 1) Direct Certification with Medicaid: On July 1, 2023, Food and Nutrition Service (FNS) announced 13 new states have begun participating in the Direct Certification with Medicaid Demonstration Project for School Year 2023-2024. The total number of states participating in the demonstration project will now be 38. 2) Non-competitive Technology Innovation Grants (nTIGs): In Fiscal Year 2021, FNS released $50M in non-competitive Technology Innovation Grant (nTIG) funds for Child Nutrition State agencies to improve information technology (IT) systems. FNS continues work with grant recipients using funds to develop, improve, and maintain Child Nutrition IT systems.
    FY2022 Q4
    Completed
    Training
    The School Breakfast Program (SBP) has taken the following Training corrective actions: National training webinars: Food and Nutrition Service (FNS) held Administrative Review (AR) webinars for State agency staff, providing learning materials on how to complete ARs, including timeline, resources needed when conducting an AR (to include the oversight of eligibility), claiming, and meal pattern.
    FY2022 Q4
    Completed
    Change Process
    The School Breakfast Program (SBP) has taken the following Change Process corrective actions: Community Eligibility Provision (CEP) Proposed Rule: USDA Food and Nutrition Service published a CEP Proposed Rule on March 23, 2023. The rule proposes to lower CEP’s minimum identified student percentage (ISP) from 40% to 25% to increase program reach.
    FY2022 Q4
    Completed
    Automation
    The School Breakfast Program (SBP) plans to implement the following Automation corrective actions: 1) Food and Nutrition Service (FNS) continues to work with State agencies to develop automation and enhanced integrity features of electronic SBP meal benefit applications that will enhance the overall goal of fiscal integrity through Administrative Review and Technology grants. These features continue to improve fiscal accuracy and eligibility determinations to certify children for free or reduced price SBP meals. 2) As a part of the overall strategy to improve processes and technology for State agencies, FNS continues to distribute funding to improve State systems and support payment accuracy. These efforts continue to take place either through appropriations or the grant funds available. Efforts will include technological advancements, direct certification improvements, and improved opportunities to support streamlined automation and efficient processes at the local level.
    FY2023
    Planned
    Training
    Food and Nutrition Service expects that the overall improvement of information technology systems by non-competitive Technology Innovation Grant recipients administering School Breakfast Program (SBP), will improve the State Agency's ability to train, monitor, provide technical assistance, and resolve payment inaccuracies such as overpayments that fall outside of Agency control.
    FY2024
    Planned

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M

Overpayments are outside of the agency's control because Food and Nutrition Service (FNS) programs are state-managed federal programs. As such, program payments provided by FNS go to various State agencies (SAs), which then pass through the funds to local agencies and sponsors. The activity that gives rise to overpayments occurs at the point where local agencies and sponsors (schools and school food authorities or school districts) determine children’s eligibility for program benefits and serve meals to children. All of this activity occurs prior to the point that states submit claims to FNS for federal payment. Although FNS cannot prevent these errors, the agency does engage in extensive training, issuance of technical assistance, and post-activity audits in an effort to help states, and the local organizations under their oversight, improve program performance and limit program error.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $130.68 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $130.68 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Financial $107.16 M
Overpayments Outside Agency Control Household Size $11.76 M
Overpayments Outside Agency Control Receiving Benefits from Other Sources $11.76 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $63.72 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $63.72 M

Eligibility element/information needed Eligibility amount
Financial $56.07 M
Household Size $3.82 M
Receiving Benefits from Other Sources $3.82 M

Mitigation strategies taken Mitigation strategies planned
Automation, Change Process, Training Automation, Training

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$63.72 M

Unknown Payment Details

Evaluation of corrective actions

Food and Nutrition Service (FNS) expects that the overall improvement of information technology systems by non-competitive Technology Innovation Grant recipients administering School Breakfast Program (SBP) will improve the State Agency's ability to train, monitor, provide technical assistance, and corrective actions. The goal of the Administrative Review and Technology grant based statewide online SBP application systems is to improve accuracy of eligibility determinations to certify children for free or reduced price SBP meals through increased automation and enhanced integrity features of electronic SBP meal benefit application.
As a part of the overall strategy to improve processes and technology for State agencies, FNS will distribute the funding available to improve State systems and support payment accuracy. These efforts will take place either through appropriations or the grant funds available. Efforts may include technological advancements, direct certification improvements, and improved opportunities to support streamlined and efficient processes at the local level.

Future payment integrity outlook

School Breakfast Program has established a baseline.

The Covid-19 pandemic changed School Breakfast Program (SBP) operations beginning in March 2020 that affect improper payments due to certification error, which is the primary component of SBP improper payments. More specifically, beginning March 2020, School Food Authorities (SFAs) had the option to adopt waivers that allowed them to serve free meals to all participants through the National School Lunch Program's (NSLPs) Seamless Summer Option (SSO) or the Summer Food Service Program (SFSP) without the need for applications. Food and Nutrition Service (FNS) recognized that State Agency's (SAs) and SFAs needed additional support and flexibility to continue serving meals to children while maintaining appropriate safety measures and managing the impacts of Covid-19. In School Year (SY) 2021-2022, SFAs had the option of operating SSO or NSLP/SBP and almost all SFAs (90%) chose the SSO waiver, covering approximately 98% of total meals served in Fiscal Year (FY) 2021-2022. Under SSO, all participants receive free meals and SFAs do not need to conduct eligibility determinations, so certification error does not apply for SFAs that used the waiver in SY 2021-2022. As a result, it is not included in the error rate for FY22. Aggregation error, on the other hand, still applies as SFAs are still serving and counting meals. Due to the operational flexibilities mentioned above, data that would allow FNS to age the improper payment estimates is not available for FY22. Therefore, FNS used the aggregation error point estimate from the Access, Participation, Eligibility and Certification (APEC) III study as its measure of improper payments in SBP. The point estimate reflects the most current assessment of error in the traditional SBP, unaffected by temporary changes to the program due to Covid-19, and therefore is the most reflective rate of school meal operations in FY22.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $5,123.3 M
Current year +1 estimated future improper payments $430.36 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 8.4 %
Current year +1 estimated future improper payment and unknown payment reduction target 8.4 %

The program's current year improper payment and unknown payment rate of 2.99 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

Food and Nutrition Service (FNS) is committed to ensuring integrity in the School Breakfast Program (SBP) in order to protect taxpayer dollars and safeguard the meals that millions of children rely on during the school year. Therefore, FNS is reporting that it has not yet determined a tolerable rate for SBP that fully balances payment integrity risk and controls while executing the program's processes to the maximum possible effect as allowed under statute.

The School Breakfast Program (SBP) does not have an administrative infrastructure for producing yearly estimates of improper payment rates and dollar values. Therefore, Food and Nutrition Service (FNS) uses periodic Access, Participation, Eligibility, and Certification (APEC) studies to provide baseline error rate estimates for SBP. In non-study years, FNS typically provides annual estimates using the baseline data from APEC, program administrative data, and macroeconomic indicators.

In order to establish and maintain internal controls in the School Breakfast Program (SBP), Food and Nutrition Service (FNS) has requested the following budget increases to the Child Nutrition Block, of which SBP is included (Source: 2023 USDA Explanatory Notes - Food and Nutrition Service):

(14) An increase of $11,782,000 for Training and Technical Assistance ($34,214,000 estimated in FY 2022). Effective and continual training and technical assistance are necessary to help States properly administer the Child Nutrition Programs (CNPs) and to ensure States are equipped to identify and prevent fraud and abuse. A change of $808,000 is due to pay cost and a change of $974,000 reflects increases to state and local index trends.
An additional $10 million increase is for three current law proposals:
• The first current law proposal increases funding by $3 million for Child Nutrition Customer Service and Integration. While FNS provides tools, training, and resources to help state and local operators deliver specific programs, both within and beyond FNS. Because this is a cross-program proposal, the costs of this initiative are being shared with the SNAP, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Nutrition Program Administration (NPA) accounts. The full proposal can be referenced for more detail under the NPA section of this document.
• The second proposal is for $6 million for FNS to restore the ability to provide timely program technical support. This proposal addresses ability to better respond to state and local policy and operational issues and questions. Please refer to the “Restore FNS’ Ability to Provide Timely Program Technical Support” current law proposal for more details.
• The third proposal is for $1 million and is for more dedicated grants management and contract resources. Currently FNS manages 700 active CNP grants and expects to award another $100 million in new grants to States, tribes, schools and districts, non-profit organizations, and agricultural producers in
FY 2023. The proposal, entitled, “Provide Dedicated Staff for Development, Management and Oversight of Program Specific Grant Programs and Procurements” addresses this need and can be referenced further within this document.

(15) An increase of $5,706,000 for Child Nutrition (CN) Studies ($15,299,000 estimated in FY 2022). FNS conducts a variety of studies, evaluations, and related activities that respond to the needs of policy makers and managers and help ensure that nutrition assistance programs achieve their goals effectively. This line supports the critical evaluations needed for the CNP, including the federal staff needed to oversee this vital work. The change consists of $87,000 for pay costs, $619,000 to match state and local index trends, and $5 million for a current law proposal titled, “Feasibility study for a national system for State reviews of CNPs,” to complete a feasibility study for a national system for State reviews of CNPs.

(16) An increase of $888,000 for CN Payment Accuracy ($11,427,000 estimated in FY 2022). This funding supports FNS’ robust Federal oversight, monitoring and technical assistance, which are essential to the identification, prevention and resolution of erroneous payments. The increase consists of $462,000 to match state and local index trends and $426,000 due to pay cost.

Additional programmatic information

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2017 - 06/2018


    Confidence interval:

    There is no confidence level associated with the estimate


    Margin of error:

    +/-0.0

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Automation
    Non-competitive Technology Innovation Grants (nTIGs) In Fiscal Year (FY) 2024, the Food and Nutrition Service (FNS) released $50M in non-competitive Technology Innovation Grant (nTIG) funds for child nutrition (CN) State agencies to improve Information Technology (IT) systems. FNS continues its work with grant recipients who are using funds to develop, improve, maintain CN IT systems. Data Validation Service (DVS) Encourage state agency adoption of FNS-developed data validation service FNS modified its process of reviewing state agency management of the National School Lunch Program (NSLP) to encourage adoption of a FNS-developed tool to reduce error in the reporting of NSLP administrative data. The tool, the DVS is an Application Programming Interface (API) that States can include in their platforms for collecting data from their school districts. The DVS provides real-time edit checks and error messages to school districts as they submit data to their States.
    FY2024 Q4
    Completed
    Change Process
    Community Eligibility Provision (CEP) Expansion Through a rulemaking effective October 26, 2023, the Food and Nutrition Service (FNS) lowered the eligibility threshold for school participation in the CEP from an Identified Student Percentage (ISP) of 40% to 25%. FNS research shows that schools participating in CEP have notably lower certification error than schools that do not participate. Based on these findings, FNS expects that increased CEP eligibility will correspond with a rise in CEP participation, a reduction in certification error, and a reduction in improper payments. Because the rule was published after the CEP election date for School Year (SY) 2023-2024, we expect that the full magnitude of decreases in improper payments resulting from this change will not fully be observed until SY2024-2025. FNS released supporting guidance material, including a fact sheet, published February, 2024. Progress on Access, Participation, Eligibility, and Certification (APEC) IV FNS is engaged in research related to integrity in the National School Lunch Program(NSLP)/School Breakfast Program (SBP). APEC IV has completed data collection and will soon move on to analyzing data to establish an NSLP/SBP improper payment (IP) rate. With this update to the APEC study series, FNS will be able to use a new baseline estimate for IP in NSLP and SBP, improving our projected error rates by starting with a more recent, more accurate starting point. The study also includes a component that examines integrity features of online applications. From this sub-study, FNS aims to gain clarity on quality of data collected in online applications used by students and families who apply for free and reduced-price meals. Child Nutrition (CN) Integrity Rule FNS expects the rule’s provisions to strengthen the administration of CN programs at all levels, through enhanced oversight and enforcement tools designed to help FNS and State administering agencies to reduce program error of all types, resulting in more efficient operations and improved compliance with program requirements. Of particular importance to the NSLP and SBP, the rule allows states to adopt a 5-year administrative review cycle for School Food Authorities (SFAs); previously States reviewed SFAs a minimum of once every three years. States that adopt a review cycle longer than three years must establish and apply risk-based criteria to select SFAs for targeted follow-up reviews. This change allows States to direct limited resources where attention is needed most. FNS released guidance on the updated review cycle December, 2023. The rule also formalizes a framework for developing, testing, and introducing integrity-focused process improvements to address IP challenges that cannot be remedied through monitoring alone. Direct Certification with Medicaid Demonstration (DC-M) FNS approved 5 new states to participate in the DC-M Projects for school year (SY) 2024-2025. Once the 5 new states implement the DC-M matching, the total number of states participating in DC-M will be 43. FNS research confirms that participation in DC-M improves program integrity by replacing the traditional household application for school meal benefits with an automated data match against existing household income records.
    FY2024 Q3
    Completed
    Training
    The Food and Nutrition Service (FNS) will provide guidance and technical assistance to those states and local education agencies (LEA) that are interested in choosing or have already chosen to take advantage of the newly lowered the minimum Identified Student Percentage (ISP) that expands access to the Community Eligibility Provision (CEP). Lowering the minimum ISP gives states and LEAs greater flexibility to offer no-cost meals to all enrolled students. Electing CEP is a voluntary decision made by LEAs based on their unique student populations, and FNS understands that lowering the minimum ISP will result in more schools being eligible for CEP. However, it is essential to ensure financial viability for newly eligible schools electing CEP at lower ISPs. FNS's guidance and technical assistance will help LEA decisionmakers consider student nutrition, educational, administrative, and financial factors prior to electing CEP. FNS will provide technical assistance to State agencies and coordinate with Centers for Medicare & Medicaid Services when needed to help ensure their readiness to conduct successful, accurate projects, and understand reporting requirements. Communication with State agencies will continue through implementation and early period of matching activities.
    FY2025
    Planned
    Change Process
    As the Food and Nutrition Service (FNS) receives the preliminary results, it will be able to review this first measure of program error since the COVID pandemic, when all meals were served free regardless of family income. Now that schools have returned to using the National School Lunch (NSLP) and School Breakfast Program (SBP) for determining household eligibility, serving healthy, nutritious meals, and claiming reimbursement for those meals, FNS is especially interested in Access, Participation, Eligibility, and Certification (APEC) IV's results to help understand current NSLP/SBP operations as opposed to using pre-COVID improper payment baseline.
    FY2025
    Planned

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M

Overpayments are outside of the agency's control because Food and Nutrition Service (FNS) programs are state-managed federal programs. As such, program payments provided by FNS go to various State agencies (SAs), which then pass through the funds to local agencies and sponsors. The activity that gives rise to overpayments occurs at the point where local agencies and sponsors (schools and school food authorities or school districts) determine children’s eligibility for program benefits and serve meals to children. All of this activity occurs prior to the point that States submit claims to FNS for federal payment. Although FNS cannot prevent these errors, the agency does engage in extensive training, issuance of technical assistance, and post-activity audits in an effort to help States, and the local organizations under their oversight, improve program performance and limit program error.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $305.96 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $305.96 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Financial $152.98 M
Overpayments Outside Agency Control Household Size $76.49 M
Overpayments Outside Agency Control Receiving Benefits from Other Sources $76.49 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $95.97 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $95.97 M

Eligibility element/information needed Eligibility amount
Financial $47.99 M
Household Size $23.99 M
Receiving Benefits from Other Sources $23.99 M

Mitigation strategies taken Mitigation strategies planned
Automation, Change Process Change Process, Training

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$95.97 M

Unknown Payment Details

Evaluation of corrective actions

Process Change - Community Eligibility Provision (CEP) Expansion
The Food and Nutrition service (FNS) expects that increased CEP eligibility will correspond with a rise in CEP participation, a reduction in certification error, and a reduction in improper payments. Because the rule was published after the CEP election date for School Year (SY) 2023-2024, we expect that the full magnitude of decreases in improper payments resulting from change will not fully be observed until SY2024-2025.
Progress on Access, Participation, Eligibility, and Certification (APEC) IV
With this update to the APEC study series, FNS will be able to use a new baseline estimate for improper payments in the National School Lunch Program (NSLP) and School Breakfast Program (SBP), improving our projected error rates by starting with a more recent, more accurate starting point. The study also includes a component that examines integrity features of online applications. From this sub-study, FNS aims to gain clarity on quality of data collected in online applications used by students and families who apply for free and reduced-price meals.
Child Nutrition (CN) Integrity Rule
FNS expects the rule’s provisions to strengthen the administration of CN programs, at all levels, through enhanced oversight and enforcement tools designed to help FNS and state administering agencies to reduce program error of all types, resulting in more efficient operations and improved compliance with program requirements. Of particular importance to the NSLP and SBP, the rule allows states to adopt a 5-year administrative review cycle for School Food Authorities (SFAs); previously States reviewed SFAs a minimum of once every three years. States that adopt a review cycle longer than three years must establish and apply risk-based criteria to select SFAs for targeted follow-up reviews. This change allows States to direct limited resources where attention is needed most.
The rule also formalizes a framework for developing, testing, and introducing integrity-focused process improvements to address improper payment challenges that cannot be remedied through monitoring alone.
Direct Certification with Medicaid (DC-M)
Direct certification is the process by which eligible children are certified for free meals without the need for a household application based on household participation in one or more means-tested Federal assistance programs. Direct certification is intended to reduce both household and administrative certification error in Local Education Agency (LEA) processing of household applications.
Automation - Non-competitive Technology Innovation Grants (nTIGs)
FNS expects that the overall improvement of information technology systems by nTIG recipients administering NSLP will improve the State's ability to train, monitor, provide technical assistance, and corrective actions.
Encourage state agency adoption of FNS-developed data validation service
FNS modified its process of reviewing state agency management of the NSLP to encourage adoption of an FNS-developed tool to reduce error in the reporting of NSLP administrative data. The tool, the Data Validation Service (DVS) is an Application Programming Interface (API) that States can include in their platforms for collecting data from their school districts. The DVS provides real-time edit checks and error messages to school districts as they submit data to their States.

Internal Process:
Community Eligibility Provision (CEP) Expansion targets certification error. The Food and Nutrition Service (FNS) research shows that schools participating in CEP have notably lower certification error than schools that do not participate.
The Fourth Access, Participation, Eligibility, and Certification Study (APEC IV) will update the improper payment (IP) baseline for both the National School Lunch Program (NSLP) and the School Breakfast Program (SBP) upon completion. From this integrity study series, FNS is able to better monitor impacts of prior corrective actions as well as identify areas of opportunity for additional corrective actions or other integrity-focused program improvements.
The Child Nutrition (CN) Integrity Rule’s change allows states to adopt a 5-year administrative review cycle for School Food Authorities (SFAs). States may elect for the longer cycle by first establishing a risk-based criteria to select SFAs for targeted follow-up reviews. This change allows states to direct limited resource where attention is needed most. Further, the rule’s provisions strengthen the administration of child nutrition programs, at all levels, through enhanced oversight and enforcement tools designed to help FNS and State agencies to reduce program error of all types, resulting in a more efficient operation and improved compliance with program requirements.
FNS research confirms that participation in Direct Certification with Medicaid (DC-M) improves program integrity by replacing the traditional household application or school meal benefits with an automated data match against existing household income records. Direct certification is the process by which eligible children are certified for free meals without the need for a household application based on household participation in one or more means-tested Federal assistance programs. Direct certification is intended to reduce both household and administrative certification error in Local Education Agency (LEA) processing of household applications.
Automation:
States administering the NSLP and SBP that are recipients of the non-competitive Technology Innovation Grants strengthen their overall information technology (IT) systems. These actions improve those State agencies’ ability to provide effective training, monitoring, provide technical assistance, and develop effective corrective actions.
FNS modified its process of reviewing State agency management of the NSLP to encourage adoption of the FNS-developed Data Validation Service (DVS) that improves the quality of NSLP certification, eligibility, and verification data. The DVS is an Application Programming Interface (API) that states can include in their existing reporting platforms to improve data quality in real time while School Food Authorities (SFAs) are reporting their Verification Collection Report results.

Internal Process:
Community Eligibility Provision (CEP) Expansion targets certification error. The Food and Nutrition Service (FNS) research shows that schools participating in CEP have notably lower certification error than schools that do not participate.
The Fourth Access, Participation, Eligibility, and Certification Study (APEC IV) will update the improper payment (IP) baseline for both the National School Lunch Program (NSLP) and the School Breakfast Program (SBP) upon completion. From this integrity study series, FNS is able to better monitor impacts of prior corrective actions as well as identify areas of opportunity for additional corrective actions or other integrity-focused program improvements.
The Child Nutrition (CN) Integrity Rule’s change allows states to adopt a 5-year administrative review cycle for School Food Authorities (SFAs). States may elect for the longer cycle by first establishing a risk-based criteria to select SFAs for targeted follow-up reviews. This change allows states to direct limited resource where attention is needed most. Further, the rule’s provisions strengthen the administration of child nutrition programs, at all levels, through enhanced oversight and enforcement tools designed to help FNS and State agencies to reduce program error of all types, resulting in a more efficient operation and improved compliance with program requirements.
FNS research confirms that participation in Direct Certification with Medicaid (DC-M) improves program integrity by replacing the traditional household application or school meal benefits with an automated data match against existing household income records. Direct certification is the process by which eligible children are certified for free meals without the need for a household application based on household participation in one or more means-tested Federal assistance programs. Direct certification is intended to reduce both household and administrative certification error in Local Education Agency (LEA) processing of household applications.
Automation:
States administering the NSLP and SBP that are recipients of the non-competitive Technology Innovation Grants strengthen their overall information technology (IT) systems. These actions improve those State agencies’ ability to provide effective training, monitoring, provide technical assistance, and develop effective corrective actions.
FNS modified its process of reviewing State agency management of the NSLP to encourage adoption of the FNS-developed Data Validation Service (DVS) that improves the quality of NSLP certification, eligibility, and verification data. The DVS is an Application Programming Interface (API) that states can include in their existing reporting platforms to improve data quality in real time while School Food Authorities (SFAs) are reporting their Verification Collection Report results.

Internal Process:
Community Eligibility Provision (CEP) Expansion targets certification error. The Food and Nutrition Service (FNS) research shows that schools participating in CEP have notably lower certification error than schools that do not participate.
The Fourth Access, Participation, Eligibility, and Certification Study (APEC IV) will update the improper payment (IP) baseline for both the National School Lunch Program (NSLP) and the School Breakfast Program (SBP) upon completion. From this integrity study series, FNS is able to better monitor impacts of prior corrective actions as well as identify areas of opportunity for additional corrective actions or other integrity-focused program improvements.
The Child Nutrition (CN) Integrity Rule’s change allows states to adopt a 5-year administrative review cycle for School Food Authorities (SFAs). States may elect for the longer cycle by first establishing a risk-based criteria to select SFAs for targeted follow-up reviews. This change allows states to direct limited resource where attention is needed most. Further, the rule’s provisions strengthen the administration of child nutrition programs, at all levels, through enhanced oversight and enforcement tools designed to help FNS and State agencies to reduce program error of all types, resulting in a more efficient operation and improved compliance with program requirements.
FNS research confirms that participation in Direct Certification with Medicaid (DC-M) improves program integrity by replacing the traditional household application or school meal benefits with an automated data match against existing household income records. Direct certification is the process by which eligible children are certified for free meals without the need for a household application based on household participation in one or more means-tested Federal assistance programs. Direct certification is intended to reduce both household and administrative certification error in Local Education Agency (LEA) processing of household applications.
Automation:
States administering the NSLP and SBP that are recipients of the non-competitive Technology Innovation Grants strengthen their overall information technology (IT) systems. These actions improve those State agencies’ ability to provide effective training, monitoring, provide technical assistance, and develop effective corrective actions.
FNS modified its process of reviewing State agency management of the NSLP to encourage adoption of the FNS-developed Data Validation Service (DVS) that improves the quality of NSLP certification, eligibility, and verification data. The DVS is an Application Programming Interface (API) that states can include in their existing reporting platforms to improve data quality in real time while School Food Authorities (SFAs) are reporting their Verification Collection Report results.

Future payment integrity outlook

School Breakfast Program has established a baseline.

The Food and Nutrition Service (FNS) ages the certification and aggregation error point estimates from the most recent integrity study, the Access, Participation, Eligibility, and Certification (APEC) study, which was conducted in School Year (SY) 2017-2018.  With the post-COVID return to regular operations in State agencies (SAs) and School Food Authorities (SFAs) administering and operating National School Lunch Program (NSLP) and School Breakfast Program (SBP), FNS has the necessary data to age the point estimates produced in the study to report more accurate improper payment estimates for SY2023-2024.  Until the next year's data becomes available, FNS also uses the current year's estimate for the projected year.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $6,141 M
Current year +1 estimated future improper payments $467.05 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 7.61 %
Current year +1 estimated future improper payment and unknown payment reduction target 7.61 %

The program's current year improper payment and unknown payment rate of 7.61 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

Food and Nutrition Service (FNS) is committed to ensuring integrity in the School Breakfast Program (SBP) in order to protect taxpayer dollars and safeguard the meals that millions of children rely on during the school year. Therefore, FNS is reporting that it has not yet determined a tolerable rate for SBP that fully balances payment integrity risk and controls while executing the program's processes to the maximum possible effect as allowed under statute.

The School Breakfast Program (SBP) does not have an administrative infrastructure for producing yearly estimates of improper payment rates and dollar values. Therefore, Food and Nutrition Service (FNS) uses periodic Access, Participation, Eligibility, and Certification (APEC) studies to provide baseline error rate estimates for SBP. In non-study years, FNS typically provides annual estimates using the baseline data from APEC, program administrative data, and macroeconomic indicators.

An increase of $19,489,000 and 42 Full-Time Equivalent (FTE) in Training and Technical Assistance ($45,996,000 and 59 FTE available in 2024). Effective and continual training and technical assistance are necessary to help States properly administer the Child Nutrition (CN) Programs and to ensure States are equipped to identify and prevent fraud and abuse. This includes a total of $17.1 million for current law proposals, $3.8 million of which is for a 2025 proposal and $13.3 million is for 2024 re-proposals. The requested increase includes $3.8 million and 19 staff to support the 2025 Current Law Proposal: Increase Funding for Summer Electronic Benefit Transfer (EBT) Implementation, $1.3 million and 7 staff to support the 2024 Current Law Re-proposal: Federal Administration of Summer EBT. Both current law proposals support Federal implementation and oversight of the new Summer EBT program. The balance of the 2024 Current Law Re-proposal: Federal Administration of Summer EBT is split between the CN Payment Accuracy and Training and Technical Assistance budget lines. The next current law proposal is for $10 million and 16 staff to support the 2024 Current Law Re-proposal: Increase Training and Technical Assistance, which enhances the Food and Nutrition Service’s ability to provide critical training, technical assistance, and oversight to ensure program integrity and compliance with Federal law and regulations for child nutrition in both national and regional offices. The fourth current law proposal for $2 million is to support the 2024 Current Law Re-proposal: Enterprise Risk Management: helps with approaches in FNS strategic planning and program operations. The remaining increase is due to inflation and 2025 pay cost.
An increase of $2,743,000 in CN Studies ($21,005,000 and 13 FTE available in 2024).
FNS conducts a variety of studies, evaluations, and related activities that respond to the needs of policy makers and managers and help ensure that nutrition assistance programs achieve their goals effectively, which include improving public health, nutrition, and equity. This program line supports the critical evaluations needed for the CN Programs, including the Federal staff needed to oversee this vital work. The request includes $2 million for the 2025 Current Law Proposal: Research on the U.S. Territories. The remaining increase is due to inflation and 2025 pay cost.
An increase of $9,248,000 and 28 FTE in CN Payment Accuracy ($12,315,000 and 72 FTE available in 2024).
This funding supports FNS’s robust Federal oversight, monitoring, and technical assistance, which are essential to the identification, prevention, and resolution of erroneous payments. This includes a total of $8.2 million for current law proposals: $4 million and 20 staff to support the 2025 Current Law Proposal: Investment in Regional Financial Management for Program Integrity, which helps regional Grants Management and Administrative Services (GMAS) Staff across CN Program accounts. The next current law proposal is for $3 million to support the 2024 Current Law Re-proposal: Strengthen the Child and Adult Care Food Program (CACFP) Program Integrity, which will spread through a variety of activities including data mining and a technical assistance support center designed to support States in identifying and addressing program integrity risks. The third current law is for $1.2 million and 8 staff to support the 2024 Current Law Re-proposal: Federal Administration of Summer EBT. The balance of the 2024 Current Law Re-proposal: Federal Administration of Summer EBT is split between the CN Payment Accuracy and Training and Technical Assistance budget lines. The remaining increase is due to inflation and 2025 pay cost.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

Program sponsors and operators have binding agreements with the administering State Agencies (SAs) to operate Food and Nutrition Service (FNS) School Breakfast Program (SBP) according to all program rules. SAs have binding agreements with FNS to administer the Federal programs in accordance with applicable regulations, guidance, and instructions. FNS has a robust review process that includes state-level review of local program operators and FNS-level reviews of SAs to ensure program integrity in SBP. Additionally, at the federal level, senior executives are held responsible for program oversight and integrity via the annual strategic planning process and performance system.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2017 - 06/2018


    Confidence interval:

    There is no confidence level associated with the estimate


    Margin of error:

    +/-0.0

Causes

-Financial-
National School Lunch Program (NSLP) and School Breakfast Program (SBP) improper payments stemming from failure to access data in the Financial category relate to errors that occur when claims for reimbursement are prepared prior to submission to the State Agency (SA). Meal counts from individual points of service are consolidated at individual schools. Meal counts from individual schools are submitted to School Food Authorities (SFAs), which are then consolidated again before a claim for reimbursement is submitted from SFAs to SAs. Aggregation error occurs when incorrect meal counts are recorded, transmitted, or aggregated at any level (school, SFAs). SAs then report aggregated claims data to the Food and Nutrition Service (FNS). Improper payments with a Financial sub root cause can also stem from the SFA’s lack of access to accurate household income data. Families self-report household income on applications that are submitted to local school districts, and districts use that information to determine eligibility for free or reduced price meals. Self-reported household income in combination with household size determines eligibility for program benefits based on annual Income Eligibility Guidelines.
-Household Size-
Like household income, household size is self-reported on school meal applications. Applications are submitted to local school districts, and districts use that information, combined with household income, to determine household eligibility for school meals, based on annual Income Eligibility Guidelines.
-Receiving Benefits from Other Sources-
NSLP and SBP eligibility can also be determined based on receipt of other benefits. Households self-report information on benefits received from other sources on school meals applications. Some benefits received from other sources can confer categorical eligibility for free meals. In other cases, program staff must use self-reported income, including benefits received from other sources, to determine program eligibility based on annual Income Eligibility Guidelines.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.0 M
Amount of overpayments outside the agency's control $324.72 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $324.72 M

Underpayment root cause Underpayment amount
Amount of underpayments $103.49 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $103.49 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $0.0 M

Prevention

-Change Process-
Community Eligibility Provision (CEP) Assistance:
The Food and Nutrition Service (FNS) provides technical assistance for states wanting to adopt CEP. FNS has also developed a series of resources for states, school districts, and schools on CEP including introductory webinars, written materials, and trainings. FNS research shows that through eliminating applications, CEP schools have lower certification error and improper payments relative to non-CEP schools. The CEP threshold decrease occurred in October of 2023 and FNS continues to provide assistance on CEP adoption.
Progress on Access, Participation, Eligibility, and Certification IV (APEC):
FNS is engaged in research related to integrity in the National School Lunch Program (NSLP) and School Breakfast Program (SBP). The fourth APEC Study completed data collection in School Year (SY) 2023-2024 and the contractor is preparing the data for FNS. With this update to the APEC study series, FNS will be able to use a new baseline estimate for improper payments in NSLP and SBP, improving the projected error rates by starting with a more recent starting point. The study also includes a component that examines integrity features of online applications. From this sub study, FNS aims to gain clarity on quality of data collected in online applications used by students and families who apply for free and reduced-price meals. FNS expects to publish the study in July 2026.
Direct Certification with Medicaid (DC-M):
DC-M allows state child nutrition agencies to partner with their Medicaid state agencies to certify children without application for free or reduced-price school meal benefits. This process reduces certification error, and by extension, improper payments. Six states opted into the FNS DC-M demonstration project for SY 2024-2025, including Idaho, Maine, New Jersey, North Dakota, Rhode Island, and most recently Arkansas. This brings the total number of states participating to 44.
-Automation-
Non-competitive Technology Innovation Grants (nTIGs):
In FY 2025, FNS released $28 million in nTIG funds for child nutrition state agencies to improve information technology (IT) systems. FNS works with grant recipients who are using nTIG funds to develop, improve, and maintain child nutrition IT systems. FNS expects that the overall improvement of IT systems by nTIG recipients administering NSLP will improve the state agency's ability to train, monitor, provide technical assistance, and complete corrective actions.
Encourage state agency adoption of FNS -developed data validation service (DVS):
FNS modified its process of reviewing state agency management of the NSLP/SBP to encourage adoption of a FNS -developed tool to reduce error in the reporting of NSLP/SBP administrative data. The tool, the DVS, is an application programming interface (API) that states can include in their platforms for collecting data from their school districts. The DVS provides real-time edit checks and error messages to school districts as they submit data to their states.
FY 2025 Child Nutrition State Agency Conference:
This conference served as a forum for information exchange across states on topics including but not limited to enhancing program integrity. A general session was specifically dedicated to program integrity, and it covered topics like improper payment measurement and fraud investigations. The conference provided the opportunity for state and local agencies to participate in technical training, share best practices or lessons learned, and expand program knowledge.
The Food and Nutrition Service (FNS) has established through the Access, Participation, Eligibility, and Certification (APEC) studies that replacing an application-based certification system with a direct certification system (which includes the direct certification-based Community Eligibility Provision (CEP)) is very effective at reducing certification error. That same research (APEC) does not point to other major deficiencies in the current structure of the program that are driving error.
The research supports the measured approach that FNS is taking in corrective action plans: continued incremental investments aimed at refining and strengthening direct certification (through non-competitive Technology Innovation Grants (nTIGS), Direct Certification with Medicaid (DC-M) and CEP technical assistance, sharing best practices at state agency conferences, etc.). Those incremental investments are the right approach for an error rate that is shrinking because FNS understands root causes and has been investing in the right strategies for years. APEC does not point to other root causes that would call for a significant change in the current approach or a major new investment in an entirely different set of remedies.

The Food and Nutrition Service (FNS) relies on the Access, Participation, Eligibility, and Certification (APEC) studies, which are periodic nationally representative studies measuring improper payments in school meals, to produce estimates of erroneous payments. Because of the scope and cost of such studies, it is more prudent to repeat it on a multi-year cycle. The current study that the estimates are based on, APEC III, collected data in school year 2017-2018. FNS's estimation model for improper payment reporting uses the study's estimates as the baseline and incorporates current administrative data to bring the estimates up to date and representative of the reporting year.
Due to the periodic nature of improper payment estimation of the National School Lunch Program and School Breakfast Program, FNS places priority on updating the APEC study series as a corrective action. While other corrective actions target improper payment reduction in a more direct manner, FNS is unable to quantify the effects of these actions without a new baseline. As such, collecting and analyzing newer data in APEC IV is essential for assessing the adequacy of current and past actions, as well as informing FNS for new potential future corrective actions.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Automation, Change Process Automation, Change Process
Underpayments Automation, Change Process Automation, Change Process

Eligibility element/information needed Description of the eligbility element/information
Financial The financial position or status of a beneficiary, recipient, or their family
Household Number of family members in a household
Receiving Benefits from Other Sources Beneficiary or recipient is receiving benefits from an additional source

Additional information

Reduction target

6.81 %

The Food and Nutrition Service (FNS) has a comprehensive system of internal controls that include State Agency (SA)-led Administrative Reviews (ARs)of sponsors, FNS-led Management Evaluations (MEs) of SAs, and various meal claim validation checks conducted by sponsors, SAs and FNS. FNS, the states, and sponsors developed these controls over many years. FNS periodically evaluates and adjusts its AR and ME processes in response to evolving risk in the programs. FNS believes that these controls, a combination of on-site reviews, off-site reviews of documentation, and automated edits checks, are the right tools to identify program error that leads to improper payments. These are resource-intensive processes. However, FNS believes that the agency, the SAs, and sponsors have adequate human capital and information system resources to carry them out effectively. Federal reimbursement for state administrative expenses (SAE), federal grants for state technology projects (Technology Innovation Grants or TIGs), and the federal budget for child nutrition payment accuracy, among other resources, fund these systems and oversight activities.

-Training and Technical Assistance-
The 2026 USDA Budget Explanatory Notes for the Food and Nutrition Service (FNS) assumes $53,212,000 for Training and Technical Assistance. Effective and continual training and technical assistance are necessary to help states properly administer the Child Nutrition Programs and to ensure states are equipped to identify and prevent fraud and abuse. The increase is due to inflation. The decrease in full-time equivalent (FTEs) is focused on restructuring the workforce and seeking efficiencies in operations.
-Child Nutrition Studies-
The Budget for FNS assumes $21,918,000 to conduct a variety of studies, evaluations, and related activities that respond to the needs of policy makers and managers and help ensure that nutrition assistance programs achieve their goals effectively, which include improving public health, and nutrition. This program line supports the critical evaluations needed for the Child Nutrition Programs, including the Federal staff needed to oversee this vital work. The increase is due to inflation. The decrease in FTEs is focused on restructuring the workforce and seeking efficiencies in operations.
-Child Nutrition Payment Accuracy-
The Budget for FNS assumes $16,189,000 to support the FNS's robust Federal oversight, monitoring, and technical assistance, which are essential to the identification, prevention and resolution of erroneous payments. The increase is due to inflation. The decrease in FTEs is focused on restructuring the workforce and seeking efficiencies in operations.

Program sponsors and operators have binding agreements with the administering State Agencies (SAs) to operate Food and Nutrition Service (FNS) School Breakfast Program (SBP) according to all program rules. SAs have binding agreements with FNS to administer the Federal programs in accordance with applicable regulations, guidance, and instructions. FNS has a robust review process that includes state-level review of local program operators and FNS-level reviews of SAs to ensure program integrity in SBP. Additionally, at the federal level, senior executives are held responsible for program oversight and integrity via the annual strategic planning process and performance system.

$103.49 M