"We were charging for pest control and garbage removal -- primarily garbage removal," she said. "That's allowed, but we had to document that garbage removal and pest control were only for cafeterias, and our budget is not set up that way."
The report says that SFUSD was "forced to repay" $369,000. That didn't happen, said Blythe.
To comply with the accounting requirement, which took place in 2011, the district paid for the garbage removal and pest control from another fund, said Blythe. It didn't have to repay the $369,000, but instead used it for a purpose that it could show was specific to the cafeterias.
San Francisco serves about 33,000 free meals to students every day, and about 62 percent of the students qualify for them, said Blythe.
Far from depriving children of lunches, the district spent $2 million more than it got reimbursed on the free meals, she said.
Here's more about the report from the Associated Press:
SAN FRANCISCO (AP) — California school districts have misspent tens of millions of dollars intended to provide subsidized meals to low-income students, according to a state Senate report released Wednesday.
The California Department of Education recently ordered eight districts to repay about $170 million to programs that offer free and reduced-price lunches and breakfasts, according to the investigation by the Senate Office of Oversight and Outcomes.
In most cases, the cash-strapped districts used the misappropriated funds to pay for other expenses, such as salaries and equipment, according to the report, titled "Food Fight: Small team of state examiners no match for schools that divert student meal funds."
The cafeteria fund diversions have led to cost-cutting measures, such as shorter lunch periods, inadequate staffing and serving processed foods instead of fresh fruits and vegetables, the report said.
The cases mentioned in the report may only represent a fraction of misappropriated meal money in California because the state doesn't have the resources to monitor how its nearly 3,000 school districts spend their cafeteria funds, the report said. Most of the investigations were prompted by whistleblowers.
Chief Deputy Superintendent Richard Zeiger said Wednesday that the Department of Education plans to hire and train more staff members to monitor district meal programs and conduct more frequent reviews later this year.
"Our goal is to be sure every dollar set aside to feed California's children is spent for that purpose, and that purpose alone," Zeiger said in a statement. "From my point of view, they are literally taking food out of the mouths of kids."
The department ordered the Los Angeles Unified School District to repay $158 million to its cafeteria fund after state officials found misappropriations and unallowable charges, according to the report.
The Los Angeles district, the nation's second largest, said in a statement Wednesday that it has been working with state education officials to "ensure full compliance to federal and state guidelines. All disputed costs for the years in question have been adjusted accordingly."
The Department of Education also ordered repayments, ranging from $369,000 to $5.6 million, from the Baldwin Park, Centinela Valley, Compton, Oxnard, San Diego, San Francisco and Santa Ana districts. Another six districts were ordered to repay smaller amounts.
The San Diego and Santa Ana districts are challenging the department's findings.
California school districts provide 2.4 million free and reduced-price meals every day. The U.S. Department of Agriculture provides more than $2 billion a year in meal subsidies to California, which provides an additional $145 million.