This report responds to a requirement of PL 110-246 to assess the effectiveness of state and local efforts to conduct direct certification of children for free school meals. Under direct certification, children are determined eligible for free meals without the need for household applications by using data from other means-tested programs.

This is the third in a series of annual reports assessing administrative error associated with the local educational agency’s approval of applications for free and reduced-price school meals. 

The Improper Payments Information Act of 2002 requires all federal agencies to calculate the amount of erroneous payments in federal programs and to periodically conduct detailed assessments of vulnerable program components. This is the second wave of a program assessment of the Family Day Care Home component of USDA's Child and Adult Care Food Program. 

This is the first of a series of annual reports which will assess the administrative error associated with school food authorities’ approval of applications for free and reduced-price school meals. More than 95 percent of students who were approved for benefits on the basis of an application were receiving correct benefits, based on the information in the application files. In school year 2004/05, 3.5 percent of all students who submitted an application for free/reduced-price meal benefits had an administrative error in the processing of their applications.

The Child Nutrition and WIC Reauthorization Act of 2004 directed the Secretary of Agriculture to conduct a study of the feasibility of using computer technology to reduce over-certification, waste, fraud and abuse in the National School Lunch Program.

The NSLP offers free and reduced-price school meals to students from eligible households. Households with incomes at or below 130 percent of poverty are eligible for free meals, and households with incomes between 131 percent and 185 percent of poverty are eligible for reduced-price meals. Traditionally, to receive these benefits, households had to complete and submit application forms to schools or be directly certified. Direct certification, on the other hand, is a method of eligibility determination that does not require families to complete school meal applications. Instead, school officials use documentation from the local or state welfare agency that indicates that a household participates in AFDC or food stamps as the basis for certifying students for free school meals.

This report duplicates the precise methodology of the earlier analysis with more than 10,000 new investigations to generate an estimate for the 1996 - 1998 calendar year period.