Audit: Kansas at-risk funding tied to free-lunch count may be inflated by tens of millions

Heidi Zimmerman, principal auditor at Legislative Post Audit, told the Committee on Welfare Reform on Jan. 20, 2026, that "the number of free lunch students used for determining at risk funding appears to be significantly more than the number of students who may be eligible for the free lunch program." She presented methods and caveats after giving that short answer.

Zimmerman explained how the National School Lunch Program determines eligibility: students can qualify automatically through participation in federal benefit programs such as SNAP, TANF or Medicaid, by being in foster care, or through the community eligibility provision (CEP); other students qualify by submitting the federal free-lunch application reporting household income. In Kansas, the state's at-risk funding is largely allocated based on the number of students counted as eligible for free lunch.

To test whether application-based counts reflected true eligibility, auditors compared information from a random sample of applications to Kansas Department of Revenue tax records and Department of Labor wage data when available. Zimmerman said auditors found that, among the applications they could verify, a substantial share did not appear to meet the income test. "We estimate that between 54% to 72% of all applicants were likely ineligible," she said, adding that projection corresponds to "about 18,000 to about 25,000 students." The report cites a 95% confidence interval and lists timing and household-size verification as important caveats.

The audit also estimated the fiscal impact. After accounting for students who may have been eligible but did not apply, Zimmerman told the committee the state "likely overpaid by about $38,000,000 to $52,000,000 to $53,000,000 in the 24 school year." She emphasized several caveats: the application is a snapshot in time while tax and wage records cover a calendar year, auditors could not always verify household size, and inability to locate tax or wage records for some applicants limited verification.

Committee members and auditors discussed why the picture is complex. Zimmerman's presentation noted that directly certified students—those identified by data shared from agencies such as the Department for Children and Families (DCF) or KDHE—have grown from about 46% in 2021 to about 79% in 2024. That shift is in part due to the addition of Medicaid to direct certification in 2022'23, a change Frank Harwood, deputy commissioner at the Kansas Department of Education (KSDE), confirmed as "relatively new within the last few years." Harwood said the increase in direct certification did not correspond to a large jump in total free-lunch eligibility because many students who applied were simply moved into the directly certified category.

Auditors also pointed to federal verification limits that constrain districts. As Zimmerman explained, when families submit a National School Lunch Program application "district officials must make an initial determination of eligibility based solely on the information provided on the application," and federal rules allow districts to verify only a small share of applications. "A district must verify either 3% of the applications, or 3,000 applications, whichever is less," she said. Auditors told the committee that KSDE and school districts lack systems to independently verify the accuracy of DCF's direct-certification lists.

Committee members pressed on practical implications: who received overpayments (districts received at-risk funds tied to the counts), whether districts face clawbacks (auditors said school districts are not typically required to return at-risk funds once paid), and whether the state can impose additional verification for the at-risk portion of funding. Harwood said states cannot add verification steps that would be performed using federally funded staff or systems; implementing a separate state verification system would require new funding and a different process.

Zimmerman closed by reiterating the main takeaways: much of the accuracy of the free-lunch count depends on multiple agencies and district actions; application-based income information is self-reported and largely unverifiable beyond a small federally mandated sample; and programs that operate primarily on self-reported income with limited verification "are inherently at high risk of fraud, waste, and abuse." She recommended the legislature consider whether the free-lunch count remains an appropriate measure for distributing at-risk funding.

The committee heard the KSDE deputy commissioner's explanation of CEP reimbursement mechanics and timing constraints (applications cannot be sent before July 1; at-risk funding is based on the Sept. 20 count date and verifications happen Oct. 1). Members asked follow-up questions about household surveys used for CEP counts, summer meal participation, and how verification nonresponse affects outcomes.

The committee noted follow-up post-audit reports on SNAP and TANF recipient verification were expected soon and adjourned.

The audit's full report and KSDE written testimony were left with the committee for further review.