Using the performance obligation/no performance obligation model, in terms of classification, does the transaction involving the school district's participation in the National School Lunch Program contain a performance obligation or not? What is the basis for your answer?

The example involves a public school cafeteria serving lunch. Some students pay full price for their food, but others receive lunch for a reduced price or for free under the federal National School Lunch Program. For simplicity's sake, let's assume the school cafeteria meets all nutritional requirements to qualify for National School Lunch Program - all it needs to do now is serve the lunches. The grant is expenditure driven - when the school district proves the reduced price and free meals have been provided, the federal government owes it a grant payment. (Again, ignore the part of the program that involves school districts receiving free food products from the USDA to use in the meals.)