Food Assistance:

Processing of USDA Commodities Donated to the National School Lunch Program

RCED-92-67: Published: Dec 31, 1991. Publicly Released: Dec 31, 1991.

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Pursuant to a legislative requirement, GAO provided information on the processing of commodities donated by the Department of Agriculture (USDA) to states and schools participating in the National School Lunch Program, focusing on: (1) the extent to which states contract with food processing companies to process commodities into table-ready products; (2) differences in state processing requirements; and (3) schools' satisfaction with their access to processors and processor services.

GAO found that: (1) in school year 1990, states sent $77.5 million of the $624 million of donated food they received to processors; (2) although 47 states, 2 U.S. territories, and the District of Columbia entered into at least 1 processing contract during 1990, 8 states and 1 territory accounted for about 76 percent of the food sent to processors; (3) the Food and Nutrition Service (FNS) requires that commodity processing be conducted under contracts with certain mandatory requirements; (4) states develop their own processing contracts and can augment FNS requirements; (5) 43 states and the District of Columbia added a total of 589 special provisions to their contracts; (6) most special provisions fell into 12 categories and included requirements regarding providing information on substitution and conmingling of donated food, byproducts, grading, payment arrangements, quality control, inventory protection, and reporting requirements; (7) although some processors indicated that differences in state processing requirements add to processing costs and adversely affect their operations, most processors did not consider such differences to be a major problem; (8) the American Commodity Distribution Association and USDA have initiatives under way to provide additional guidance on commodity processing and to promote standardization of processor contracting forms and processor reporting requirements; (9) local school district officials were generally satisfied with their access to processors, but state officials and national associations representing local school districts differed in their level of satisfaction; and (10) local school district, state, and national officials were satisfied with processor services and a USDA study reported that 98 percent of the school districts that received processed commodities were satisfied with the end products.

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