Welfare Reform:

Effects of Reduced Reimbursements on the Summer Food Service Program

RCED-99-20: Published: Nov 10, 1998. Publicly Released: Nov 10, 1998.

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Pursuant to a congressional request, GAO reviewed the Department of Agriculture's (USDA) Summer Food Service Program and the impacts the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 had on the program, focusing on the: (1) number and characteristics of sponsors participating in and dropping out of the program before and after the decrease in the reimbursements; (2) number of children and meals served by the program before and after the reduction; and (3) changes sponsors made to their programs as a result of the reduced reimbursements.

GAO noted that: (1) the reduction in meal reimbursements that resulted from the 1996 Welfare Reform Act had a minimal impact on the number and characteristics of the sponsors of the Summer Food Service Program; (2) since the reduction went into effect in 1997, the number of sponsors participating in the program increased by 8 percent overall, from 3,753 to 4,046; (3) the characteristics of the sponsors providing meals remained about the same between 1996 and 1997; (4) in both years, a relatively small percentage of sponsors--5 percent--served most of the children in the program; (5) most sponsors continued to be schools and camps; (6) in terms of the sponsors that dropped out after the welfare reform changes, fewer than 10 percent left the program in each of the 2 years since the reduced reimbursements have been in effect; (7) however, only a small percentage of these dropouts left because of the reduction, according to officials in the 50 states; (8) after the reduced reimbursements were mandated, USDA and some states took actions to maintain the level of participation of sponsors and children; (9) the number of children and meals served in fiscal year (FY) 1997 was greater than in previous years; (10) the total number of children participating in the program increased by over 2 percent after the reimbursements were reduced, to almost 2.3 million, in 1997; (11) the number of meals served rose by 2 percent, to over 128 million, despite a new restriction on the number of meals for which some sponsors could receive reimbursements; (12) state officials identified a small number of sponsors that left the program because of the reduced reimbursements; (13) over 820 children lost access to the program in FY 1997 because sponsors that had served them in 1996 did not participate in 1997 as a result of the reduction, and no other sponsor was available; (14) at least 780 children lost access in FY 1998; (15) other children may have lost access when continuing sponsors reduced the number of sites they operated because of the rate reduction; (16) in response to the reduced meal reimbursements, some sponsors reported making changes to their program operations; (17) even with the changes, more sponsors reported that their operating costs exceeded the amount they received in federal reimbursements in FY 1997 than in 1996; and (18) the limited impact on the number of sponsors, children, and meals served that has been observed to date is due in part to sponsors' continuing to contribute funds to offset the decreased reimbursements.

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