Summary: Commercial activities in U.S. public elementary and secondary schools have been increasingly visible during the past decade, a period characterized by tight school budgets. As visibility has increased, so have concerns about commercial activities that generate cash, equipment, and other types of assistance and their potential effects on students. Commercial activities include the sale of products; direct advertising on school property; indirect advertising, such as corporate sponsorship of educational materials or teacher training; and market research. Despite growing concerns, little is known about the laws and policies that govern commercial activities in U.S. schools. GAO found that state laws and regulations governing commercial activities in public schools are not comprehensive and that, in most states, local school officials are responsible for making decisions about commercial activities in the public schools. Only five states have comprehensive laws. The visibility, profitablity, and type of commercial activities allowed in public schools vary widely, with high schools having more commercial activities than middle or elementary schools. Product sales--primarily soft drink sales under exclusive contracts and short-term fundraising sales (gift-wrap, candy, etc.)--were the most common and lucrative types of commercial activity, although they were a very small part of districts' budgets. The most visible examples of direct advertising appeared on the soft drink machines and high school billboards and names of businesses that had contributed to sports programs. Advertisements were also delivered through school media. Officials from participating schools said that the benefits of having free technology outweighed any negative aspects of the news shows and commercials that were shown. Indirect advertising, such as corporate-sponsored curricula, were generally used for teaching a specific unit for a specific length of time. None of the schools GAO visited reported engaging students in market research.
