Auditor-General flags concerns over school lunch scheme contracts

The Auditor-General has raised concerns about how the government awarded contracts for its school lunch scheme, RNZ reports. The warning, issued on 30 June 2026, focuses on two contracts: one with Compass Group, a large catering company, and another with the School Lunch Collective, which received an additional $18 million after the contract was signed.

The programme and its background

The school lunch programme started as Ka Ora, Ka Ako in 2020. It provided free meals to students at low-decile schools — those in lower-income areas. Schools report it has made a real difference, reducing hunger among students and supporting attendance and wellbeing, according to the Ministry of Education's own reporting updated in late 2025. An impact evaluation from 2022 found the same — measurable improvements in attendance.

Budget 2024 allocated $478 million to the programme. Ministers said the money would deliver more meals for less money by restructuring how the programme was run. The restructure included a temporary delivery arrangement during 2025 while the government designed a longer-term contracting model.

What the Auditor-General found

The Auditor-General's role is to check whether public money is spent properly and according to good procurement practice. A formal warning at this level is a signal to the responsible Minister and ministry — not just casual feedback. Think of it like a red flag that says: we need to look more closely at how you did this.

The office identified two specific issues. First, Compass Group was awarded a multimillion-dollar contract despite a contested track record. The Auditor-General did not detail the nature of the company's "controversial history" in the publicly available material, but singling it out suggests the due-diligence process — the checks the government should have done before awarding the contract — will face scrutiny.

Second, the School Lunch Collective received an $18 million top-up after the contract was already signed. This raises straightforward questions: were nutrition standards properly specified before the contract was awarded, or did they shift afterward? An $18 million variation after the fact suggests something was not clear at the start.

What happens next

When the Auditor-General issues this kind of formal warning, it usually means Parliament's watchdog committees will take notice. The Finance and Expenditure Committee or the Education and Workforce Committee are likely to call officials from the Ministry of Education and the Treasury to explain how the contracts were structured and why they were changed. The broader context here is that announcing "better value for money" in a Budget does not substitute for clean procurement process — the government still needs to do the homework properly beforehand and manage contracts correctly once they are signed.