July 27, 2017 2016-139
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the California Department of Education’s (Education) efforts to ensure that school food authorities—which in California are mostly school districts—comply with the federal Buy American requirement. This federal law requires school food authorities purchasing food for the School Breakfast and National School Lunch programs to purchase, to the maximum extent practicable, domestic food—that which is produced in the United States or processed in the United States substantially using food produced in the United States.
Federal data show that California has the largest share of agricultural sales of any state in the nation. Therefore, California stands to benefit significantly from compliance with the Buy American requirement. However, despite these benefits and its obligation to do so, Education has not ensured that school food authorities comply with the Buy American requirement. Specifically, Education had not monitored compliance with this federal requirement until school year 2016–17. In addition, Education’s current process for monitoring has weaknesses that have led to inadequate and inconsistent reviews of compliance with the Buy American requirement. We noted several instances in which it appeared that Education’s reviewers concluded that a school food authority complied with the Buy American requirement based on insufficient information.
In the absence of adequate oversight by Education, the six school districts we visited did not adequately address the Buy American requirement. Specifically, we found that none of the districts had adequate policies and procedures for ensuring compliance with the Buy American requirement. Further, only two of the six school districts consistently included language related to the Buy American requirement in their food procurement documents. Finally, although the U.S. Department of Agriculture (USDA) expects that school food authorities will document their reasons for purchasing foreign-sourced food products, each district we reviewed failed to adequately maintain this documentation. In total, the districts were unable to provide sufficient documentation for almost all—22 of 23—foreign-sourced food items we found during our review.
However, as Education and school food authorities improve their approach to the Buy American requirement, they will face challenges when using food product labels to verify compliance. Federal food labeling laws do not always mandate that the country of origin for food items or their ingredients be included on their labels. In fact, we found that 241 of the 375 food items we reviewed at the six school districts had labels that did not clearly identify country of origin. We recommend that the Legislature work with the California congressional delegation to petition Congress for changes that would add clarity about the origins of food products that school food authorities purchase. For example, Congress could direct the USDA to develop a certification program that would indicate whether food products were compliant with the Buy American requirement. Specifically, the USDA could develop a voluntary certification program that would allow vendors to submit information regarding the origin of food items. The USDA could then verify that information and certify food items as Buy American-compliant.
ELAINE M. HOWLE, CPA