Federal Lunch Program.
In "Fraud in the Lunchroom?" (check the fads, Winter 2010), David Bass presents evidence of substantial error in students' eligibility for free or reduced-price school meals through the National School Lunch Program (NSLP), citing a recent Mathematica study that found most errors result from misreporting of household income. The title of Mr. Bass's article implies that these errors may be intentional.
Our research suggests that fraud is not a major factor in explaining errors. Households that fail to respond to a district's request for income verification are not necessarily engaging in fraud. We examined a randomly selected set of households that did not respond, finding that most were eligible for free or reduced-price meals. In the Access, Participation, Eligibility, and Certification (APEC) study, we found that, in more than 40 percent of household misreporting errors, parents overreported, rather than under-reported, their income. If fraud were rampant, we would have expected much less of this type of error. Instead, we believe that most errors are unintentional: parents do not understand which household members should be included, forget about a minor income source, report net instead of gross income, or incorrectly enter the frequency of income receipt.
Even if fraud is minimal, the resulting costs to taxpayers are substantial. How might policymakers respond? We caution against requiring income documentation from all applicants. As Mr. Bass notes, our research showed that a test of this approach not only failed to reduce benefit receipt for ineligible households, but also reduced benefit receipt for eligible households.
A simple approach that could reduce error by one-third would eliminate the distinction between free and reduced-price benefits, since much program error results from misclassification. We could also build on current federal initiatives such as direct certification to improve NSLP certification accuracy. Under this policy, now required in all districts, households receiving benefits from other federal programs with more rigorous income-verification requirements are automatically eligible for NSLP. The U.S. Department of Agriculture is also considering using existing surveys to estimate the proportion of eligible children in selected schools, and then developing school-wide reimbursement rates. This would eliminate the need for districts to certify households through the current process.
Senior Fellow Mathematica Policy Research