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Legislative audit finds many paper free‑lunch applications may be ineligible, raising questions about at‑risk funding
Summary
A Legislative Post Audit report found that a sampled review of paper free‑lunch applications suggests 54%–72% of applicants may not meet income criteria, projecting 18,000–25,000 students and a possible $38 million–$53 million overpayment in 2024; auditors urged the Legislature to reconsider tying at‑risk funding to free‑lunch counts.
Heidi Zimmerman, principal auditor at Legislative Post Audit, told the House Committee on K‑12 Education Budget that the number of free‑lunch students used to allocate at‑risk funding "appears to be significantly more than the number of students who may be eligible for the free lunch program."
Zimmerman said auditors used a random sample of students and income records to test eligibility and found that, among paper applications they could verify, 68 of 108 did not appear to meet the income threshold. Projecting the sample to the statewide population of applicants, the audit estimated that between 54% and 72% of paper applicants were likely ineligible — roughly 18,000 to 25,000 students — with a 95% confidence interval.
The audit estimated that, after accounting for students who may have been eligible but did not apply, the state likely overpaid about $38 million to $53 million in at‑risk funding for the 2024 school year. Zimmerman emphasized methodological caveats: free‑lunch applications are a snapshot at enrollment while tax and wage records cover a whole year, direct certification increased sharply (from 46% in 2021 to 79% in 2024, largely because Medicaid became a direct‑cert criterion), and auditors could not verify most directly certified students because that information is maintained by other agencies.
"Federal rules significantly limit school districts' ability to verify household income for those students who apply through an application," Zimmerman said, noting districts typically verify either 3% of applications or 3,000 applications, whichever is less. She recommended the Legislature consider whether at‑risk funding should continue to be allocated based on the free‑lunch count.
Legislators pressed for context. Representative McNorton asked about statistical validity; Zimmerman said a random sample of more than 30 is statistically usable and the broader 108‑case sample explains the wide 54%–72% range. Committee members asked about overlaps between free‑lunch counts, community eligibility participation, and the high‑density at‑risk threshold, and whether changing the funding trigger would conflict with prior court rulings. A staff reviser and legal research were requested for follow‑up.
Dr. Harwood of the Kansas State Department of Education responded that the funding formula "did exactly what it was supposed to do" under current statute and that, as implemented in the past, there was "no overpayment" relative to that formula; he also noted districts and KSDE have limited ability to independently verify direct‑certified students.
The committee asked for additional data and briefings; Legislative Post Audit said it will accept audit requests and the committee signaled it may ask for a task force or further study of alternative indicators for identifying students genuinely at risk.
The committee took no formal vote on policy changes at the hearing. Members were given materials and invited to submit specific language before the next meeting.
