Executive Summary

This audit was conducted to determine whether the New York City Department of Education (DOE) allocated approximately $491.4 million in federal Title I funds to the City’s public schools in accordance with applicable laws, rules, and regulations.  Title I, Part A (Title I) of the Elementary and Secondary Education Act (ESEA), as amended, provides federal financial assistance to local educational agencies (LEAs), including DOE, and schools serving high numbers or high percentages of children from low-income families to help ensure that all children meet challenging state academic standards.  According to the United States Department of Education, public schools use Title I funds to provide additional academic support and learning opportunities to their students.  The United States Department of Education allocates Title I funds to eligible LEAs based on the number of children ages 5 to 17 from low-income families residing in the LEA’s school attendance areas (geographic areas from which the students are eligible to attend a local school).

Within an individual LEA, Title I funds must be allocated to eligible school attendance areas or eligible schools based on the total number of children from low-income families in each area or school.  ESEA Title I, Part A, Subpart 1, Section 1113(c)(1).  Further, LEAs must rank school attendance areas or schools by poverty percentage.  The measurements that an LEA may use to determine the poverty percentage of a school attendance area or school include the number of children ages 5 through 17 in poverty and counted in the most recent census data, the number of children eligible for free and reduced-price lunches under the Richard B. Russell National School Lunch Act, the number of children in families receiving Temporary Assistance for Needy Families program (TANF) assistance, or the number of children eligible to receive medical assistance under the Medicaid program, or a composite of such indicators.  ESEA Title I, Part A, Subpart 1, Section 1113(a)(5).

DOE is responsible for allocating Title I funds to City schools.  DOE uses the number of students in grades K-12 eligible for free lunch to measure the poverty percentages at individual schools and to rank those schools by poverty level.  Students may qualify for free lunch in a number of ways.  First, parents or guardians may qualify based on their income and family size which they must report in either a paper-based or online School Meal Application.  Students may also qualify “categorically” for free lunch based on their housing status, or their eligibility or the eligibility of someone in their household to receive benefits from certain federally-funded assistance programs with the same or a lower household income limit as that for free lunch.

Audit Findings and Conclusions

DOE did not always properly document and determine students’ eligibility for school meals, which is the criterion that DOE uses to measure each school’s poverty percentage for the purpose of allocating Title I funds among the schools within each of the City’s five boroughs.  First, DOE did not maintain up-to-date correspondence or written agreements with the City’s Human Resources Administration (HRA), the City agency that helps administer public assistance programs.  Since data provided by HRA was used by DOE to determine that 454,013 students were “categorically” eligible to receive free school meals, DOE can not be assured that it is completely and accurately capturing the information it needs to support these eligibility determinations absent current agreements detailing how the data provided by HRA was compiled.  Second, based on our review of School Meal Applications submitted for a random sample of 150 students, DOE may have incorrectly determined the eligibility of 39 students (26 percent) to receive school meals.  Consequently, DOE may have erroneously included students who were not eligible for free school meals in its Title I poverty counts and thereby may not have properly allocated Title I funds among the public schools.

DOE also could improve its efforts to validate the Supplemental Nutrition Assistance Program (SNAP) and TANF case numbers that students’ parents or guardians provide on their School Meal Applications and to contact students’ households to obtain information needed to process incomplete applications.

Audit Recommendations

To address these issues, we make seven recommendations, including that DOE should:

  • Maintain up-to-date correspondence or written agreements with HRA that set out or confirm the manner in which SNAP, TANF, and Medicaid data that DOE uses to determine whether students are “categorically” eligible for free school meals was compiled.
  • Improve its efforts to validate the SNAP and TANF case numbers provided on students’ School Meal Applications by reviewing direct certification data or contacting local assistance-program officials, and document SNAP and TANF eligibility in the MCS System (MCS) which DOE uses to scan, store, and read applications.
  • Ensure that designated school personnel send notification letters to all households that submitted incomplete School Meal Applications instructing them to contact the SchoolFood helpdesk to provide the required information.

Agency Response

In its response, DOE agreed with or partially agreed with five of the report’s seven recommendations.  DOE did not agree with the report’s remaining two recommendations regarding “categorical” eligibility determinations made based on either the eligibility of a student’s sibling to receive benefits from certain federally-funded assistance programs, or SNAP and TANF case numbers.

DOE also noted that it “has been promoting the use of the Online School Meals Application” which “eliminates incomplete applications and reduces the risk of errors.”  The full text of DOE’s response is included as an addendum to this report.