The Auditor-General has issued a warning over the government's school lunch scheme, raising concerns about procurement decisions including the awarding of a multimillion-dollar contract to Compass Group despite the company's controversial history, RNZ reports.

The warning, published on 30 June 2026, also covers the School Lunch Collective, which was signed to a government contract and subsequently received an additional $18 million to meet nutrition standards for Year 9 students.

The school lunch programme has its roots in Ka Ora, Ka Ako, introduced in 2020 to provide free meals to students at low-decile schools. The Ministry of Education's own reporting, updated in late 2025, records schools describing the programme as making a positive difference — reducing hunger and supporting attendance and wellbeing. An impact evaluation published in 2022 similarly examined attendance outcomes and found measurable effects.

Budget 2024 allocated $478 million to the programme, with Ministers framing the package as delivering more meals for less money through a restructured model. That restructure included an interim delivery arrangement scheduled for rollout during 2025, intended to bridge to a longer-term contracting framework.

It is within that contracting framework that the Auditor-General's concerns now sit. The office's oversight function covers whether public money is spent with proper authority and in accordance with good procurement practice — so a warning at this level is a formal signal to the responsible Minister and agency, not an advisory note. The specific issues identified — Compass Group's selection despite a contested track record, and the School Lunch Collective receiving an $18 million top-up after contract signature — point to questions about how suppliers were assessed and whether variations were managed within normal constraints.

Compass Group is a global contract catering company with a significant presence in New Zealand's public sector. The nature of its "controversial history" referenced in the Auditor-General's findings has not been detailed in the publicly available material to date, but the fact that the office singled out its selection as warranting scrutiny suggests the due-diligence process will now face close examination.

The School Lunch Collective top-up is a separate thread. Post-contract variations of that scale — $18 million to meet a nutrition standard that should, in principle, have been specified before award — raise straightforward questions about scope definition and contract management. Whether those standards shifted after award, or were inadequately specified from the outset, is likely to be central to any follow-up inquiry.

For officials and Ministers working the public procurement space, the Auditor-General's intervention is a reminder that value-for-money framing in Budget announcements does not substitute for clean process. The $478 million allocation gives the programme political and fiscal weight; the procurement irregularities the Auditor-General has identified mean that weight will now be scrutinised from a different angle. Select committee attention — most likely from the Finance and Expenditure Committee or the Education and Workforce Committee — is the probable next step, with officials from the Ministry of Education and the Treasury likely to be called to account for how contracts were structured and varied.