Audit finds Kansas free-lunch counts may overstate at-risk student totals; committee schedules bill hearing

Heidi Zimmerman, principal auditor for the legislative post-audit division, told a legislative committee the number of students the state counts as eligible for free lunch — and 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 summarized a verification exercise from the office’s 2024 audit of the National School Lunch Program in Kansas. Auditors reviewed a statistically valid sample of 122 students from 55 districts who had qualified for free lunch by submitting a household application and sought income corroboration through Kansas Department of Revenue tax records and Department of Labor wage files. Of the 108 applicants for whom auditors could find income records, 68 “did not appear to meet the income eligibility for free lunch,” Zimmerman said. Projecting those results, the audit estimates that between 54% and 72% of all applicants who qualified by application were likely ineligible — roughly 18,400 to 24,600 students.

“That means the financial information that we could find exceeded the income threshold for the size of that household,” Zimmerman said, adding the sample produces a 95% confidence interval for the estimate.

The auditors estimated the state likely overpaid about $38 million to $53 million in at-risk funding for the 2024 school year after accounting for an estimated ~3,200 students who may have been eligible but did not apply. Zimmerman also said auditors estimated a smaller federal cost of about $14 million tied to reimbursements, but emphasized the audit primarily addressed at-risk funding on the state side.

The audit traced several pathways that lead students to be counted as free-lunch-eligible. Students can qualify via direct certification — for example, when DCF reports household participation in SNAP, TANF, Medicaid, or foster care — by submitting a household application reporting income at or below 130% of the federal poverty level, or because their school participates in the Community Eligibility Provision (CEP), which allows a qualifying school to serve free meals to all enrolled students. Zimmerman said direct certification in Kansas rose from 46% in the 2021 school year to 79% in 2024, and that only about 13% of schools eligible for CEP opted into the program in 2024 despite roughly three-quarters of schools qualifying based on prior-year direct-certification shares.

The audit includes important caveats. Zimmerman cautioned that an application is a snapshot in time while tax returns and wage records reflect annual income; some households may have been eligible when they submitted an application but had higher annual income. She also stressed that an apparent ineligibility is not necessarily fraud: “Fraud requires willful deception,” she said, and errors or timing differences can explain some mismatches.

Federal program rules limit verification options available to districts, Zimmerman told the committee. USDA rules generally require districts to verify either 3% of approved applications or 3,000 applications, whichever is less, and auditors said districts and KSDE lack an independent system to verify household income for most applicants. Districts may pursue additional checks “for cause,” Zimmerman said, but those reviews are exceptions and must meet program-specific standards.

Committee members pressed for explanations for discrepancies between Census-based poverty estimates and the state’s free-lunch totals; Zimmerman said the Census provides estimates at different thresholds and that multiple factors — reporting error, program rules, and undercounts — could contribute but the audit could not fully reconcile the difference.

The committee’s chair reminded members that a bill hearing is scheduled for tomorrow on proposed legislation to require verification of free-lunch eligibility (bill 26RS2974 was introduced at the meeting to compel DCF to comply with federal data requests). The chair invited members to file amendments quickly. The committee adjourned without taking a vote on any amendment.

The audit’s next procedural impact is the scheduled bill hearing; the committee will consider whether to pursue statutory changes that could alter verification authority or data-sharing among state agencies.