Public Education:

Commercial Activities in Schools

HEHS-00-156: Published: Sep 8, 2000. Publicly Released: Sep 14, 2000.

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Cynthia Maher Fagnoni
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Office of Public Affairs
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Pursuant to a congressional request, GAO provided information on commercial activities in public schools, focusing on: (1) laws, regulations, and policies that regulate commercial activities in schools; and (2) the nature and extent of these activities.

GAO noted that: (1) state laws and regulations governing commercial activities in public schools are not comprehensive; (2) nationwide, only general laws and regulations that apply to all businesses or that govern school finance usually cover school-based commercial activities; (3) however, 19 states have statutes or regulations that address school-related commercial activities, but in 14 of these states, statutes and regulations are not comprehensive and permit or restrict only specific types of activities; (4) in most states, local school officials are responsible for making decisions about commercial activities; (5) no single source of information about local school board policies exists, and policies varied greatly in the districts GAO visited; (6) GAO found no policies that specifically addressed market research activities; (7) the visibility, profitability, and type of commercial activities varied widely, and the high schools GAO visited had more commercial activities than middle or elementary schools; (8) product sales--primarily the sale of soft drinks by schools or districts under exclusive contracts and short-term fundraising sales-- were the most common and lucrative type of commercial activity at the schools GAO visited although they represented a very small percentage of the districts' budgets; (9) the most visible examples of direct advertising appeared on soft drink vending machines and high school scoreboards; (10) although some high school sports facilities displayed banners and signs with the names of businesses that had contributed to sports programs, several placed these signs to acknowledge donations rather than in exchange for them; (11) advertisements were delivered through the media in some schools; (12) GAO observed indirect advertising in all the schools, yet its presence was usually limited and subtle; (13) none of the schools GAO visited reported engaging students in market research, although one principal said he has been approached about doing research; (14) often the values of school board members, district officials, and parents determine whether an activity is controversial or not, rather than the nature of the activity; and (15) because most of the decisions are made at the local level, varying preferences of local officials result in different levels of commercial activities across districts and across schools in the same districts.