What is your view on the student's response? Please see below.

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.)

Student's Response: Yes, the transaction of providing free lunch to students does contain a performance obligation. The goal is to provide free lunches to those students who are at a disadvantage. In order to do that the school/ district in question must show proof. They are obligated to identify the group of students whose families meet the specific eligibility criteria and provide those students with lunch service in order to satisfy the NSLP grant requirements.