A state Department of Agriculture and Markets’ (Ag & Markets) initiative to reimburse school districts at a higher rate if at least 30% of the costs for lunch is spent on eligible New York produced and processed food is growing, but it could better meet its objectives if some administrative burdens were addressed, according to an audit by state Comptroller Thomas P. DiNapoli.

“The 30% New York school lunch program has an excellent goal, to provide healthy, locally produced food to New York school children while supporting our local farms and agricultural economy,” said DiNapoli. “But there’s room to do better to expand on the good work of the Department of Agriculture and Markets by reducing the red tape that discourages school districts from participating in this important initiative.”

In 2018, New York enacted an additional state reimbursement for school lunch programs that spend at least 30% of their food costs on New York State sources, called the “30% NYS Initiative.” The program increases the reimbursement schools receive for lunches from 5.9 cents to 25 cents per meal. Eligible School Food Authorities (SFAs) that administer lunch programs must apply annually to Ag & Markets to receive the higher reimbursement which the State appropriates $10 million annually to support.

Auditors found that of the 762 SFAs outside New York City eligible to participate, only 73 (10%) were approved for reimbursement in the 2024-25 school year, drawing just $2.9 million (29%) of the program’s appropriation. That’s up from 51 that were approved in 2022-23 school year but still leaves $7.1 million sitting unused.

In response to a survey of SFA officials, the most common reason cited for the low participation was the administrative burden of having to account for school lunch costs separately from the district’s other food costs, such as breakfast or snacks, followed by difficulty sourcing eligible products from farms and distributors, and concerns over the cost of eligible products.

The audit found Ag & Markets could reduce some of the barriers to program participation and improve access to eligible foods by connecting SFAs with suppliers and distributors or developing other resources to assist with sourcing eligible foods. Auditors also found the application process could be improved if Ag & Markets required SFAs to include support for a district’s total annual food costs incurred, which would allow the department to verify the 30% calculation necessary to determine eligibility during the application process.

Auditors recommended Ag & Markets take steps to improve participation in the program by increasing outreach and assistance efforts and developing and maintaining information to help SFA’s with identifying and purchasing eligible food. Auditors also suggested that Ag & Markets provide guidance to SFAs and standardize and streamline documentation requirements.

In response, Ag & Markets agreed with the recommendations and outlined steps it has taken to address the findings and improve participation, including creating a planning calculator for SFAs and requiring total food costs during the application stage.