The Office of the Virgin Islands Inspector General has issued the audit of the Department of Education’s (Education) claims and reimbursement procedures for the School Lunch Program. The audit objectives were to: (i) determine whether the School Food Authorities (Authorities) have effective internal controls in place to ensure that districts’ meals offered and served comply with USDA nutrition and pattern requirements; (ii) assess whether the Authorities had sufficient internal controls to ensure that meal claims for reimbursement were completely and accurately reported; (iii) determine whether performance measures were established to ensure that decreases in claims were promptly assessed and corrective actions were taken; and, (iv) determine whether the Authorities have pursued opportunities for the districts to receive additional federal funds to help support the School Lunch Program. We found that within Education, there was a pervasive culture of non-compliance with federal regulations that govern the reimbursement of meals served in the Virgin Islands school system. Specifically, our audit found that: (i) federal reimbursement and entitlement food decreased during 2013 to 2015 school years; (ii) internal controls were not established to ensure that meal reimbursement claims were accurate and met federal guidelines; (iii) Education officials did not effectively maximize opportunities to obtain additional federal funds to sustain the School Lunch Program; and, (iv) Education officials did not ensure that meals offered and served complied with USDA nutrition and pattern requirements. We attributed these conditions to the reduction in student participation in the school meal program. As well as, Education officials: (i) not implementing recommended strategies to boost student participation; (ii) not establishing policies and procedures; (iii) not addressing the problem of poorly trained employees and understaffing; (iv) turning a blind eye to obvious non-reimbursable meal claims; (v) being placed in a position of a conflict of interest; (vi) continued non-compliance with federal regulations; and, (vii) not ensuring the availability and correct serving of menu items. As result: (i) over the three academic school years of our audit scope, there has been a funding loss of $1.7 million dollars; (ii) over 95,000 meals were improperly claimed, with anywhere from $32,000 to $259,000 in funds being placed in jeopardy of repayment to the USDA; (iii) unnecessary pressure may be placed on the territory’s local funds budgeted for the School Lunch Program; (iv) the territory lost certification that resulted in the loss of $206,000 in additional reimbursements; and, (v) students did not always receive the recommended daily nutritional supplement to aid in their academic performance and maintain good health. To view the report, click here.