The Food and Nutrition Service (FNS), within the Department of Agriculture (USDA), is responsible for administering the National School Lunch Program (NSLP). Under the provisions of the program, states are reimbursed a set amount of money for each meal served under the program. In 1991 and 1992, the FNS published the results of a survey of a sample of state and local school officials to obtain information on the cost of meals. Overall, the findings suggested that the level of federal reimbursement was roughly equivalent to the national average cost to produce the meal. This document discusses: (1) a General Accounting Office review of the FNS study; (2) the ability of state food authorities (SFAs) to produce meals at or below the reimbursement rate for free meals; (3) differences in meal production costs among regions; and (4) the appropriateness of the index used by the FNS--the Food Away from Home Series--to adjust reimbursement rates. Findings verify FNS' conclusion that the federal reimbursement rate for a free meal was roughly equivalent to the national average cost to produce the meal. It is estimated that between 65 and 83 percent of the SFAs were able to produce meals at or below the amount received from two federal sources of aid. During the 1988-89 school year, reported costs were higher in the Northeast and West. Finally, the Food Away from Home Series appears to be a reasonable index. Eighteen tables and 24 figures are included. (LMI)