This report summarizes the results of the school year 2007-08 application verification process for the National School Lunch Program and School Breakfast Program. 

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

The purpose of this pilot was to test possible methods that could lead to valid estimations of the number of meals served by family day care homes. The estimated number of meals served can be used to develop estimates of over- and under-counts of meal claims that result in erroneous payments.

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 third wave of a program assessment of the Family Day Care Home component of USDA's Child and Adult Care Food Program. 

FNS proposed to select a random sample of sponsoring organizations and, from each, use a random selection of the sponsor’s monitoring visits of family day care homes. Using these data, FNS would compare the number of meals claimed with the number of children observed at the time of the visit.

Program errors and the risk of erroneous payments in the National School Lunch Program (NSLP) and School Breakfast Program (SBP) continue to be a concern. Slightly more than one in five students were certified inaccurately or erroneously denied benefits in school year (SY) 2005-06. New data estimates the gross cost of school meals erroneous payments due to certification error at about $935 million while other operational errors represent about $860 million. 

This is the second in a series of annual reports assessing administrative errors associated with school food authorities’ approval of applications for free and reduced-price school meals. In school year 2005/06, more than 96 percent of students who were approved for meal benefits on the basis of an application were receiving the correct level of meal benefits, based on the information in the application

files. 

In 1991 and 1998, FNS conducted national studies of WIC vendors to determine the extent of vendor violation of program rules. After the 1998 study, FNS issued regulations to correct vendor practices. The 2005 study replicates the 1998 study to determine whether the regulations were effective, and to measure the frequency of vendor violations and the degree to which vendors charge accurate prices for WIC transactions.