Women's Business Center Program: Incomplete Program Records and Financial Data

Published by the Government Accountability Office on 1999-09-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United Stakes General Accounting             Office                                                 Resources, Community, and
Washington, DC 20548                                                                           Economic Development Division


          September        15,1999

          The Honorable Aida Alvarez
          Administrator, Small Business Administration

              Subject: Women’s Business Center Program: Incomnlete Program Records
                       and ??inancial Data

          Dear Ms. Alvarez:

          In May 1999, the House and Senate Committees on Small Business requested that we help
          them prepare for the reauthorization of the Women’s Business Center Program. Specifically,
          the Committees asked us to provide information on (1) all currently or previously funded
          women’s business centers, including their funding status, experience in raising matching
          funds, the types of services offered in a center’s first and last year of grant funding, and the
          differences between “parent” and “satellite” centers; (2) the extent to which the Small
          Business Administration’s (SBA) award criteria might predict the long-term success or failure
          of women’s business centers; and (3) the compliance of the Office of Women’s Business
          Ownership with legislative reporting requirements and the difficulties with obtaining the
          required data from the clients of women’s business centers,

          In conducting our review, we found problems with the records maintained by the Office of
          Women’s Business Ownership and the Office of Procurement and Grants Management. We
          also received conflicting information concerning whether the Office of Women’s Business
          Ownership or the Office of Procurement and Grants Management is responsible for the
          collection and review of financial status reports. As a result, when we briefed the Committee
          staffs and issued a report’ on the results of our work, we were unable to provide all of the
          information requested for data for program years 1989 through 1998 because of limitations in
          SBA’s records and databases. The information we did provide was subject to a number of
          limitations. We are apprising you of these limitations and other related issues because we are
          concerned that they could adversely affect your ability to manage the Women’s Business
          Center Program, especially as it continues to grow.

          In particular, we found the following:

          l      Historical txogram documentation is not consistentlv maintained. Although we were
                 asked to provide information for the lo-year period from 1989 through 1998, our analysis

          ’ Small Business Administration:   Information   on the Women’s Business Center Program (GAO/RCED-99-278R, Sept. 2,1999).

                                                                     GAOLRCED-99-277R        Women’s Business     Center Program

             of top-scoring centers’ was limited to 5 program years (1991,1993,1995,1997, and 1998),3
             because the program staff was unable to provide this information for other years.
             Although SBA officials explained that some of this requested information was destroyed
             in accordance with federal paperwork reduction standards, they did not explain why data
             were not available for 1996.

l            Financial svstem information on the centers was not complete. Financial data from the
             Federal Financial System showing amounts of funding available and disbursed to the
             women’s business centers were incomplete. Consequently, we were unable to fully
             respond to the Committees’ request for funding status. We could not provide information
             on years 1989 through 1995 because the data were incomplete. For example, while some
             information for 1995 was available, SBA staff explained that the information was
             unreliable because of a change to a new financial system that year. As a result, we were
             limited to reporting on financial information for 1996 and 1997, and we found some
             problems with these data. For example, the data showed that one center withdrew
             $155,000 in 1996, which exceeds the $150,000 maximum available in a given year.
             Officials in the Office of Women’s Business Ownership could not explain why their
             records reflected this overdraft of funds. In addition, as originally submitted to us, the
             information was missing on 1997 amounts available and disbursed for one center.

    l        SBA staff are unclear about their resuonsibilities regarding the financial reports. The
             1998 monitoring guide for the Office of Women’s Business Ownership lays out the roles
             and responsibilities of the Office of Women’s Business Ownership and the Office of
             Procurement and Grants Management. The guide states that the Office of Women’s
             Business Ownership is responsible for receiving and reviewing electronically transmitted
             semiannual data, collection/progress reports, financial reports, and other items requiring
             a grant officer’s approval.

    In June, for all currently funded centers, we reviewed program files for the Office of Women’s
    Business Ownership and grant files for the Office of Procurement and Grants Management.
    Eleven of the 35 files we reviewed did not contain the required semiannual financial reports.
    We informed the program staff that we were unable to find the necessary financial reports
    and requested their assistance in locating the missing documents. After several weeks, staff
    from both offices were unable to provide the necessary reports, and we informed the
    Assistant Admimstrator for the Office of Women’s Business Ownership and the Deputy
    Assistant Administrator for Procurement and Grants Management of our concerns about the
    financial reports. The following day, the Grants Management Deputy Assistant provided the
    missing linancial reports.

        The difficulty in locating the financial reports that we requested revealed a lack of
        understanding between the Office of Women’s Business Ownership and the Office of
        Procurement and Grants Management regarding their responsibilities for the financial
        reports. For example, staff in Office of Women’s Business Ownership told us that they
        believed that it was the responsibility of the staff in Office of Procurement and Grants
        Management to collect and review the reports. In contrast, staff in the Office of Women’s
        Business Ownership told us they were unaware of the policy about collecting and reviewing

        ’ Top-scoring centers are centem whose grant proposals received the highest numerical scores on their applications   for grants
        from the Office of Women’s Business Ownership.

        ’ The Office of Women’s Business Ownership did not issue a request for proposals for new centers in 1994, and officials   told us
        that in 1996 the Office did not issue any competitive awards.

         2                                                       ‘GAO/RCED-99-277R         Women’s Business        Center    Program

reports. Consequently, neither office had taken responsibihty for determining which reports
were missing and for following up with the centers to ensure compliance.

We reviewed the case files of the women’s business centers and data documenting funding
status from the Office of Women’s Business Ownership. We also meet with officials from
Office of Women’s Business Ownership and the Office of Procurement and Grants
Management to discuss the grant data, their roles and responsibilities, and the status of the
women’s business centers, among other issues.

Even though there were difficulties in obtaining the data needed for our review, your staff
made themselves available and were cooperative. We also appreciate the support from your
staff in encouraging participation in our telephone survey in which we discussed aspects of
the program with various staff of the women’s business centers. We conducted our work
from May 1999 through August 1999 in accordance with generally accepted government
auditing standards.

Please call me at (202) 512-7631 if you or your staff have any questions about this report.
Major contributors to this report were Thorn Barger, Virginia Keller, Michael Mgebroff,
LaSonya Roberts, Cheri Truett, and Carol Anderson-Guthrie.

Sincerely yours,

Associate Director, Housing and
 Community Development Issues


3                                         GAO/RCED-99-277R    Women’s Business   Center   Program
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