prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: The Small Business Administration (SBA) administers programs to support small businesses, including loan guaranty programs to encourage lenders to provide loans to small businesses "that might not otherwise obtain financing on reasonable terms and conditions " The SBA's 7(a) loan guaranty program is considered the agency's flagship loan program  Its name is derived from Section 7(a) of the Small Business Act of 1953 (P L  83-163, as amended), which authorizes the SBA to provide and guarantee business loans to American small businesses  The SBA also administers several 7(a) subprograms that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress, Export Express, and Community Advantage Pilot programs (see the Appendix for additional details)  Although these subprograms have their own distinguishing eligibility requirements, terms, and benefits, they operate under the 7(a) program's authorization  Proceeds from 7(a) loans may be used to establish a new business or to assist in the operation, acquisition, or expansion of an existing business  Specific uses include to acquire land (by purchase or lease); improve a site (e g , grading, streets, parking lots, and landscaping); purchase, convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts  In FY2018, the SBA approved 60,353 7(a) loans totaling nearly $25 4 billion  The average approved 7(a) loan amount was $420,401  As will be discussed, the total number and amount of SBA 7(a) loans approved (and actually disbursed) declined in FY2008 and FY2009, increased during FY2010 and FY2011, declined somewhat in FY2012, and have increased since then  Historically, one of the justifications presented for funding the SBA's loan guaranty programs has been that small businesses can be at a disadvantage, compared with other businesses, when trying to obtain access to sufficient capital and credit  Congressional interest in the 7(a) loan program has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to grow and create jobs  Some Members of Congress have argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations with the expectation that in so doing small businesses will create jobs  Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit  They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to help small businesses further economic growth and job creation  This report discusses the rationale provided for the 7(a) program; the program's borrower and lender eligibility standards and program requirements; and program statistics, including loan volume, loss rates, use of the proceeds, borrower satisfaction, and borrower demographics  It also examines issues raised concerning the SBA's administration of the 7(a) program, including the oversight of 7(a) lenders and the program's lack of outcome-based performance measures  This report also surveys congressional and presidential actions taken in recent years to help small businesses gain greater access to capital  For example, during the 111 th Congress P L  111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the SBA an additional $730 million, including $375 million to temporarily subsidize the 7(a) and 504/Certified Development Companies (504/CDC) loan guaranty programs' fees ($299 million) and to temporarily increase the 7(a) program's maximum loan guaranty percentage to 90% ($76 million)  P L  111-240 , the Small Business Jobs Act of 2010, provided $505 million (plus $5 million for administrative expenses) to extend the fee subsidies and 90% loan guaranty percentage through December 31, 2010; increased the 7(a) program's gross loan limit from $2 million to $5 million; and established an alternative size standard for the 7(a) and 504/CDC loan programs to enable more small businesses to qualify for assistance  P L  111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue the fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted (which occurred on January 3, 2011)  During the 112 th Congress, several bills were introduced to expand the 7(a) program: S  1828 , a bill to increase small business lending (and for other purposes), would have reinstated for one year following the date of its enactment the fee subsidies for the 7(a) and 504/CDC loan guaranty programs and the 90% loan guaranty percentage for the 7(a) program, which were originally authorized by ARRA  H R  2936 , the Small Business Administration Express Loan Extension Act of 2011, would have extended a one-year increase in the maximum loan amount for the SBAExpress program from $350,000 to $1 million for an additional year  That temporary increase was authorized by P L  111-240 and expired on September 27, 2011  S  532 , the Patriot Express Authorization Act of 2011, would have provided statutory authorization for the Patriot Express Pilot Program and increased its loan guaranty percentages and its maximum loan amount from $500,000 to $1 million  The Patriot Express Pilot Program was subsequently discontinued by the SBA on December 31, 2013  During the 113 th Congress, the SBA waived the up-front, one-time loan guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 and FY2015 as a means to encourage the demand for smaller 7(a) loans  H R  2462 , the Small Business Opportunity Acceleration Act of 2013, would have made the fee waiver for smaller 7(a) loans permanent  waived the up-front, one-time loan guaranty fee for a loan to a veteran or to a veteran's spouse under the SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015 (called the SBA Veterans Advantage Program)  waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 up to and including $5 million in FY2015  In addition, P L  113-235 , the Consolidated and Further Continuing Appropriations Act, 2015, provided statutory authorization for the Veterans Advantage fee waiver in FY2015  During the 114 th Congress, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $150,000 or less approved in FY2016 and FY2017 as a means to encourage the demand for smaller 7(a) loans  waived the annual service fee for 7(a) loans of $150,000 or less approved in FY2016 (increased to 0 546% in FY2017)  waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $5 million in FY2016; and 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $150,001 to $500,000 in FY2017  In addition P L  114-38 , the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver under the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero  The SBA waived this fee in FY2016, FY2017, FY2018, and is waiving this fee in FY2019  The act also increased the 7(a) program's FY2015 authorization limit of $18 75 billion (on disbursements) to $23 5 billion  P L  114-113 , the Consolidated Appropriations Act, 2016, increased the 7(a) program's authorization limit to $26 5 billion in FY2016  P L  114-223 , the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, authorized the SBA to use funds from its business loan program account "to accommodate increased demand for commitments for [7(a)] general business loans" for the duration of the continuing resolution (initially December 9, 2016, later extended by P L  114-254 , the Further Continuing and Security Assistance Appropriations Act, 2017, to April 28, 2017)  During the 115 th Congress, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018 as a means to encourage the demand for smaller 7(a) loans  waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $125,001 to $350,000 in FY2018  is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone and reducing the up-front one-time guaranty fee for these loans from 2 0% to 0 6667% of the guaranteed portion of the loan in FY2019  In addition P L  115-31 , the Consolidated Appropriations Act, 2017, increased the 7(a) program's authorization limit to $27 5 billion in FY2017 and P L  115-141 , the Consolidated Appropriations Act, 2018, increased the 7(a) program's authorization limit to $29 0 billion in FY2018  P L  115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit  The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year  P L  115-232 , the John S  McCain National Defense Authorization Act for Fiscal Year 2019, included provisions originally in H R  5236 , the Main Street Employee Ownership Act of 2018, to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives  The act clarified that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership  The act also directs the SBA to create outreach programs and an interagency working group to promote lending to ESOPs and cooperatives  President Trump's FY2019 budget request included proposals to offset SBA business loan administrative costs by, among other provisions, (1) allowing the SBA to set the 7(a) program's annual servicing fee at rates below zero credit subsidy; (2) increasing the 7(a) loan program's FY2019 annual servicing fee's cap from 0 55% to 0 625%; and (3) increasing the FY2019 upfront loan guarantee fee on 7(a) loans over $1 million by 0 25%  The Trump Administration estimated that these changes would raise $93 million in additional revenue  The Trump Administration also requested that the 7(a) loan program's authorization limit be increased to $30 0 million in FY2019; that the SBA be allowed to further increase the 7(a) loan program's authorization amount in FY2019 by 15% under specified circumstances "to better equip the SBA to meet peaks in demand while continuing to operate at zero subsidies"; and that the SBAExpress program's loan limit be increased from $350,000 to $1 million  During the 116 th Congress P L  116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30 0 billion in FY2019  This report's Appendix provides a brief description of the 7(a) program's SBAExpress, Export Express, and Community Advantage programs  To be eligible for an SBA business loan, a small business applicant must be located in the United States; be a for-profit operating business (except for loans to eligible passive companies and businesses engaged in specified industries, such as insurance companies and financial institutions primarily engaged in lending); qualify as small under the SBA's size requirements; demonstrate a need for the desired credit; and be certified by a lender that the desired credit is unavailable to the applicant on reasonable terms and conditions from nonfederal sources without SBA assistance  To qualify for an SBA 7(a) loan, applicants must be creditworthy and able to reasonably assure repayment  SBA requires lenders to consider the strength of the business and the applicant's character, reputation, and credit history; experience and depth of management; past earnings, projected cash flow, and future prospects; ability to repay the loan with earnings from the business; sufficient invested equity to operate on a sound financial basis; potential for long-term success; nature and value of collateral (although inadequate collateral will not be the sole reason for denial of a loan request); and affiliates' effect on the applicant's repayment ability  Borrowers may use 7(a) loan proceeds to establish a new business or to assist in the operation, acquisition, or expansion of an existing business  7(a) loan proceeds may be used to acquire land (by purchase or lease); improve a site (e g , grading, streets, parking lots, landscaping), including up to 5% for community improvements such as curbs and sidewalks; purchase one or more existing buildings; convert, expand, or renovate one or more existing buildings; construct one or more new buildings; acquire (by purchase or lease) and install fixed assets; purchase inventory, supplies, and raw materials; finance working capital; and refinance certain outstanding debts  Borrowers are prohibited from using 7(a) loan proceeds to refinance existing debt where the lender is in a position to sustain a loss and the SBA would take over that loss through refinancing; effect a partial change of business ownership or a change that will not benefit the business; permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business's continuance until the loan supported by the SBA is disbursed; repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow; or pay for a nonsound business purpose  As mentioned previously, P L  111-240 increased the 7(a) program's maximum gross loan amount for any one 7(a) loan from $2 million to $5 million (up to $3 75 million maximum guaranty)  In FY2018, the average approved 7(a) loan amount was $420,401, and about 36% of all 7(a) loans exceeded $2 million  A 7(a) loan is required to have the shortest appropriate term, depending upon the borrower's ability to repay  The maximum term is 10 years, unless the loan finances or refinances real estate or equipment with a useful life exceeding 10 years  In that case, the loan term can be up to 25 years, including extensions  Lenders are allowed to charge borrowers "a reasonable fixed interest rate" or, with the SBA's approval, a variable interest rate  The SBA uses a multistep formula to determine the maximum allowable fixed interest rate for all 7(a) loans (with the exception of the Export Working Capital Program and Community Advantage loans) and periodically publishes that rate and the maximum allowable variable interest rate in the Federal Register   The maximum allowable fixed interest rates in February 2019 are 13 50% for 7(a) loans of $25,000 or less; 12 50% for loans over $25,000 but not exceeding $50,000; 11 50% for loans over $50,000 up to and including $250,000; and 10 50% loans greater than $250,000  The 7(a) program's maximum allowable variable interest rate may be pegged to the lowest prime rate (5 50% in February 2019), the 30-day LIBOR rate plus 300 basis points (5 51% in February 2019), or the SBA optional peg rate (3 13% in the second quarter of FY2019)  The optional peg rate is a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan  For 7(a) loans of $25,000 or less, the SBA does not require lenders to take collateral  For 7(a) loans exceeding $25,000 to $350,000, the lender must follow the collateral policies and procedures that it has established and implemented for its similarly sized non-SBA-guaranteed commercial loans  However, the lender must, at a minimum, obtain a first lien on assets financed with loan proceeds, and a lien on all of the applicant's fixed assets, including real estate, up to the point that the loan is fully secured  For 7(a) loans exceeding $350,000, the SBA requires lenders to collateralize the loan to the maximum extent possible up to the loan amount  If business assets do not fully secure the loan, the lender must take available equity in the principal's personal real estate (residential and investment) as collateral  7(a) loans are considered "fully secured" if the lender has taken security interests in all available fixed assets with a combined "net book value" up to the loan amount  The SBA directs lenders to not decline a loan solely on the basis of inadequate collateral because "one of the primary reasons lenders use the SBA-guaranteed program is for those Applicants that demonstrate repayment ability but lack adequate collateral to repay the loan in full in the event of a default " Lenders must have a continuing ability to evaluate, process, close, disburse, service, and liquidate small business loans; be open to the public for the making of such loans (and not be a financing subsidiary, engaged primarily in financing the operations of an affiliate); have continuing good character and reputation; and be supervised and examined by a state or federal regulatory authority, satisfactory to the SBA  They must also maintain satisfactory performance, as determined by the SBA through on-site review/examination assessments, historical performance measures (such as default rate, purchase rate, and loss rate), and loan volume to the extent that it affects performance measures  In FY2017, 1,978 lenders provided 7(a) loans  The SBA started the Preferred Lenders Program (PLP) on March 1, 1983, initially on a pilot basis  It is designed to streamline the procedures necessary to provide financial assistance to small businesses by delegating the final credit decision and most servicing and liquidation authority and responsibility to carefully selected PLP lenders  PLP loan approvals are subject only to a brief eligibility review and the assignment of a loan number by SBA  PLP lenders draft the SBA Authorization (of loan guaranty approval) without the SBA's review, and execute it on behalf of the SBA  In FY2018, PLP lenders approved 26,497 7(a) loans (43 9% of all 7(a) loans), amounting to $18 8 billion (74 2% of the total amount approved)  PLP lenders must comply with all of the SBA's business loan eligibility requirements, credit policies, and procedures  The PLP lender is required to stay informed on, and apply, all of the SBA's loan program requirements  They must also complete and retain in the lender's file all forms and documents required of standard 7(a) loan packages  Borrowers submit applications for a 7(a) business loan to private lenders  The lender reviews the application and decides if it merits a loan on its own or if it has some weaknesses which, in the lender's opinion, do not meet standard, conventional underwriting guidelines and require additional support in the form of an SBA guaranty  The SBA guaranty assures the lender that if the borrower does not repay the loan and the lender has adhered to all applicable regulations concerning the loan, the SBA will reimburse the lender for its loss, up to the percentage of the SBA's guaranty  The small business borrowing the money remains obligated for the full amount due  If the lender determines that it is willing to provide the loan, but only with an SBA guaranty, it submits the application for approval to the SBA's Loan Guaranty Processing Center (LGPC) through the SBA's E-Tran (Electronic Loan Processing/Servicing) website (which is available through SBA One, the SBA's automated lending platform) or, if attachments to the application are too large for E-Tran, by secured electronic file transfer  The LGPC has two physical locations: Citrus Heights, CA, and Hazard, KY  This center has responsibility for processing 7(a) loan guaranty applications for lenders who do not have delegated authority to make 7(a) loans without the SBA's final approval  The SBA has authorized PLP and express lenders to make credit decisions without SBA review prior to loan approval  However, the PLP and express lender's analysis is subject to the SBA's review and determination of adequacy when the lender requests the SBA to purchase its guaranty and when the SBA is conducting a review of the lender  As an additional safeguard against the potential for loan defaults, the SBA now requires all non-express 7(a) loans of $350,000 or less to be SBA credit scored through E-Tran prior to submission/approval  If the credit score is below the minimum set by the SBA (currently 140 for 7(a) loans of $350,000 or less, including Community Advantage loans), the loan must be submitted to the SBA for approval with a full credit write-up for consideration  The loan cannot be processed under delegated authority  If the credit score is acceptable to the SBA, the lender is a PLP lender, and the loan is eligible to be processed under the PLP lender's delegated authority, the lender will receive an SBA loan number indicating that the loan is approved  The PLP lender's documentation, including underwriting, closing, and servicing, must be maintained in their files, and can be reviewed by the SBA at any time  If the lender is not a PLP lender or if the loan is not eligible to be submitted under the PLP lender's delegated authority, the lender must refer the loan to the LGPC for review  The application materials required for a SBA guaranty vary depending on the size of the loan ($350,000 or less versus exceeding $350,000) and the method of processing used by the lender (standard versus expedited/express)  The following SBA documentation is required for all 7(a) standard loans of $350,000 or less: Form 191 9: Borrower Information Form   SBA form 1919 provides information about the borrower (name, name of business, social security number, date and place of birth, gender, race, veteran, etc ); the loan request; any indebtedness; the principals and affiliates; current or previous government financing; the applicant's eligibility (e g , criminal information, citizenship status); the loan's eligibility for delegated or expedited processing (e g , the borrower is not more than 60 days delinquent in child support payments, not proposed or presently excluded from participation in this transaction by any federal department or agency, has no potential for a conflict of interest due to an owner being a current or former SBA employee, a Member of Congress, or a SCORE volunteer); and, among other disclosures, the firm's existing number of employees, the number of jobs to be created as a result of the loan, and the number of jobs that will be retained as a result of the loan that would have otherwise been lost  Form 912 : Statement of Personal History   SBA form 912 is required if the borrower reports on Form 1919 an arrest in the past six months for a criminal offense or had ever been convicted, plead guilty, plead nolo contendere, been placed on pretrial diversion, or been placed on any form of parole or probation (including probation before judgment) of any criminal offense  Form 912 requires the borrower to furnish details concerning his or her offense(s) and authorizes the SBA's Office of Inspector General to request criminal record information about the applicant from criminal justice agencies for determining program eligibility  It must be dated within 90 days of the application's submission to the SBA  Form 159 : Fee Disclosure and Compensation Agreement   SBA form 159 is required if the borrower reports on Form 1919 that he or she used (or intends to use) a packager, broker, accountant, lawyer, etc  to assist in preparing the loan application or any related materials  SBA form 159 is also required if the lender retains the services of a packager, broker, accountant, lawyer, etc  to assist in preparing the loan application or any related materials  Form 159 provides identifying information about the packager, broker, accountant, lawyer, etc  and the fees paid to any such person  Form 601 : Agreement of Compliance (prohibiting discrimination)  SBA form 601 is required if the borrower reports on Form 1919 that more than $10,000 of the loan proceeds will be used for construction  Form 601 certifies that the borrower will cooperate actively in obtaining compliance with Executive Order 11246, which prohibits discrimination on the basis of race, color, religion, sex, or national origin and requires affirmative action to ensure equality of opportunity in all aspects of employment related to federally assisted construction projects in excess of $10,000  Form 1920 : Lenders Application for Guaranty for all 7(a) Programs   SBA form 1920 provides identifying information about the lender; the loan type (standard, SBAExpress, Export Express, etc ); loan terms; use of proceeds; the business's size and information about affiliates, if any; the applicant's character; if credit is reasonably available elsewhere; the type of business; potential conflicts of interest; and other information such the number of jobs created or retained  PLP lenders complete the form and retain it in the loan file  Other lenders must submit this form electronically to the LGPC  Verification of Alien Status   Documentation of the U S  Citizenship and Immigration Services (USCIS) status of each alien is required prior to submission of the application to the SBA  Lender's Credit Memo randum   For loans up to and including $350,000, the Lender's Credit Memorandum includes a brief description of the history of the business and its management; the debt service coverage ratio (net operating income compared to total debt service must be at least 1:1); statement that the lender has reconciled financial data (including seller's financial data) against IRS transcripts; an owner/guarantor analysis (including personal financial condition); lender's discussion of life insurance requirements; explanation and justification for any refinancing; analysis of credit, including lender's rationale for recommending approval; for a change of ownership, discussion/analysis of business valuation and how the change benefits the business; discussion of any liens, judgments, or bankruptcy filings; and discussion of any other relevant information  For loans exceeding $350,000, the Lender's Credit Memorandum must also include an analysis of collateral and a financial analysis which includes an analysis of the historical financial statements; defining assumptions supporting projected cash flow; and, when used, spread of pro forma balance sheet, ratio calculations, and working capital analysis  Cash Flow Projections   A projection of the borrower's cash flow, month-by-month for one year, is required for all new businesses, and when otherwise applicable  The following forms and documentation are also required for 7(a) standard loans exceeding $350,000: Form 413 : Personal Financial Statement   SBA form 413 provides detailed information concerning the applicant's assets and liabilities and must be dated within 90 days of submission to the SBA, on all owners of 20% or more (including the assets of the owner's spouse and any minor children), and proposed guarantors  Lenders may substitute their own Personal Financial Statement form  Form 1846 : Statement Regarding Lobbying   SBA Form 1846 must be signed and dated by lender  It indicates that if any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an officer or employee of a Member of Congress in connection with this commitment, the lender will complete and submit a Standard Form LLL "Disclosure of Lobbying Activities " A copy of Internal Revenue Service (IRS) Form 4506-T, Request for Copy of Tax Return   Lenders must identify the date IRS Form 4506-T was sent to the IRS  For nondelegated lenders, verification of IRS Form 4506-T is required prior to submission of the application to the SBA  For PLP and express lenders, verification of IRS Form 4506-T is required prior the first disbursement  Business Financial Statements or tax returns dated within 180 days of the application's submission to the SBA, consisting of (1) year-end balance sheets for the last three years, (2) year-end profit and loss statements for the last three years, (3) reconciliation of net worth, (4) interim balance sheet, and (5) interim profit and loss statements  Affiliate and Subsidiary Financial Statements or tax returns dated within 180 days of the application's submission to the SBA, consisting of (1) year-end balance sheets for the last three years, (2) year-end profit and loss statements for the last three years, (3) reconciliation of net worth, (4) interim balance sheet, and (5) interim profit and loss statements  A copy of the Le ase Agreement , if applicable  A detailed Schedule of C ollateral   A detailed List of M&E (machinery and equipment) being purchased with SBA loan proceeds, including cost quotes  If real estate is to be purchased with the loan proceeds, a Real Estate Appraisal , Environmental Investigation Report questionnaire, a cost breakdown, and copy of any Real Estate Purchase Agreements   If purchasing an existing business with loan proceeds, a (1) copy of buy-sell agreement, (2) copy of business valuation, (3) pro forma balance sheet for the business being purchased as of the date of transfer, (4) copy of the seller's financial statements for the last three complete fiscal years or for the number of years in business if less than three years, (5) interim statements no older than 180 days from date of submission to the SBA, and (6) if the seller's financial statements are not available, the seller must provide an alternate source of verifying revenues  An explanation of the type and source of applicant's equity injection  Proper evidence of a borrower's equity injection may include the copy of a check together with proof it was processed, or a copy of an escrow settlement sheet with a bank account statement showing the injection into the business prior to disbursement  A promissory note, "gift letter," or financial statement is generally not sufficient evidence  To offset its costs, the SBA is authorized to charge lenders an up-front, one-time guaranty fee and an annual, ongoing service fee for each 7(a) loan approved and disbursed  The SBA's fees vary depending on loan amount and loan maturity  The maximum guaranty fee for 7(a) loans with maturities exceeding 12 months is set by statute and varies depending on the loan amount  The fee is a percentage of the SBA guaranteed portion of the loan  On short-term loans (maturities of less than 12 months), the lender must pay the guaranty fee to the SBA electronically through www pay gov within 10 days from the date the SBA loan number is assigned  If the fee is not received within the specified time frame, the SBA will cancel the guaranty  On loans with maturities in excess of 12 months, the lender must pay the guaranty fee to the SBA within 90 days of the date of loan approval  For short-term loans, the lender may charge the guaranty fee to the borrower only after the lender has paid the guaranty fee  For loans with maturities in excess of 12 months, the lender may charge the guaranty fee to the borrower after initial disbursement  Lenders are permitted to retain 25% of the guaranty fee on loans with a gross amount of $150,000 or less  The annual service fee cannot exceed 0 55% of the outstanding balance of the SBA's share of the loan and is required to be no more than the "rate necessary to reduce to zero the cost to the Administration" of making guaranties  The lender's annual service fee to the SBA cannot be charged to the borrower  In an effort to assist small business owners, the SBA waived its annual service fee for all 7(a) loans of $150,000 or less approved from FY2014 through FY2016 (the annual service fee for other small businesses was 0 52% in FY2014, 0 519% in FY2015, and 0 473% in FY2016); is waiving the annual service fee for 7(a) loans of $150,000 or less made to small businesses located in a rural area or a HUBZone in FY2019 (the annual service fee for other small businesses is 0 55% in FY2019); waived the up-front, one-time guaranty fee for all 7(a) loans of $150,000 or less approved from FY2014 through FY2017; waived the up-front, one-time guaranty fee for all 7(a) loans of $125,000 or less approved in FY2018; and is reducing the up-front one-time guaranty fee for loans made small businesses located in a rural area or a HUBZone from 2 0% to 0 6667% of the guaranteed portion of the loan in FY2019  Table 1 shows the annual service fee and guaranty fee for 7(a) loans in FY2019  The annual service fee is a percentage of the outstanding balance of the SBA's share of the loan  The guaranty fee is a percentage of the SBA guaranteed portion of the loan  As mentioned previously, the SBA waived its up-front, one-time guaranty fee for all veteran loans under the 7(a) SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015  P L  114-38 , the Veterans Entrepreneurship Act of 2015, made this fee waiver permanent, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero  The SBA waived this fee in FY2016, FY2017, and FY2018 and is waiving it in FY2019  The SBA also waived 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $150,001 to $5 million for veterans in FY2015 and FY2016; 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $150,001 to $500,000 for veterans in FY2017; and 50% of the up-front, one-time guaranty fee on all non-SBAExpress 7(a) loans of $125,001 to $350,000 for veterans in FY2018  The Obama Administration argued that fee waivers for 7(a) loans of $150,000 or less were necessary because the demand for smaller 7(a) loans had fallen and the waiver reduction "can be achieved with zero credit subsidy appropriations" because the "annual fees for larger 7(a) loans will cover the cost for those smaller loans " The Administration also contended that waiving the fees on smaller SBA loans would "promote lending to small businesses that face the most constraints on credit access " For context, 7(a) loans of $150,000 or less accounted for about 11 8% of the total amount of 7(a) loan approvals in FY2010 ($1 46 billion of $12 41 billion); 8 3% in FY2011 ($1 63 billion of $19 64 billion); 9 5% in FY2012 ($1 44 billion of $15 15 billion); 8 1% in FY2013 ($1 45 billion of $17 87 billion); 9 7% in FY2014 ($1 86 billion of $19 19 billion); 9 7% in FY2015 ($2 28 billion of $23 58 billion); 9 4% in FY2016 ($2 75 billion of $24 13 billion), and 9 2% in FY2017 ($2 33 billion of $25 45 billion)  The SBA also announced that eliminating guaranty fees for 7(a) loans of $150,000 or less ($125,000 or less in FY2018) was part of its broader effort to "reduce barriers, attract new lenders, grow loan volumes of existing lenders and improve access to capital for small businesses and entrepreneurs " Some in Congress questioned whether it is appropriate to require borrowers of larger 7(a) loans to, in effect, subsidize borrowers of smaller 7(a) loans, who might be direct competitors  They have suggested that it might be more appropriate to reduce fees across-the-board without regard to loan size  The lender may charge an applicant "reasonable fees" customary for similar lenders in the geographic area where the loan is being made for packaging and other services  The lender must advise the applicant in writing that the applicant is not required to obtain or pay for unwanted services  These fees are subject to SBA review at any time, and the lender must refund any such fee considered unreasonable by the SBA  The lender may also charge an applicant an additional fee if, subject to prior written SBA approval, all or part of a loan will have extraordinary servicing needs  The additional fee cannot exceed 2% per year on the outstanding balance of the part requiring special servicing (e g , field inspections for construction projects)  The lender may also collect from the applicant necessary out-of-pocket expenses, including filing or recording fees, photocopying, delivery charges, collateral appraisals, environmental impact reports that are obtained in compliance with SBA policy, and other direct charges related to loan closing  The lender is prohibited from requiring the borrower to pay any fees for goods and services, including insurance, as a condition for obtaining an SBA guaranteed loan, and from imposing on SBA loan applicants processing fees, origination fees, application fees, points, brokerage fees, bonus points, and referral or similar fees  The lender is also allowed to charge the borrower a late payment fee not to exceed 5% of the regular loan payment when the borrower is more than 10 days delinquent on its regularly scheduled payment  The lender may not charge a fee for full or partial prepayment of a loan  For loans with a maturity of 15 years or longer, the borrower must pay to the SBA a subsidy recoupment fee when the borrower voluntarily prepays 25% or more of its loan in any one year during the first three years after first disbursement  The fee is 5% of the prepayment amount during the first year, 3% in the second year, and 1% in the third year  As shown in Table 2 , the total number and amount of SBA 7(a) loans approved (before and after cancellations and modifications) declined in FY2008 and FY2009, increased during FY2010 and FY2011, declined somewhat in FY2012, and have increased since then  The number and amount of 7(a) loans approved annually is higher than the number and amount of loans disbursed because some borrowers decide not to accept the loan for a variety of reasons, such as financing was secured elsewhere, the funds are no longer needed, or there was a change in business ownership  The SBA attributed the decreased number and amount of 7(a) loans approved in FY2008 and FY2009 to a reduction in the demand for small business loans resulting from the economic uncertainty of the recession (December 2007-June 2009) and to tightened loan standards imposed by lenders concerned about the possibility of higher loan default rates resulting from the economic slowdown  The SBA attributed the increased number of loans approved in FY2010 and FY2011 to legislation that provided funding to temporarily reduce the 7(a) program's loan fees and temporarily increase the 7(a) program's loan guaranty percentage to 90% for all standard 7(a) loans from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000  The fee subsidies and 90% loan guaranty percentage were in place during most of FY2010 and the first quarter of FY2011  The increased number and amount of 7(a) loans approved since FY2012 are generally attributed to improving economic conditions  Table 2 also provides the 7(a) program's unpaid principal balance by fiscal year  Precise measurements of the small business credit market are not available  However, the SBA has estimated that the small business credit market (outstanding bank loans of $1 million or less, plus credit extended by finance companies and other sources) is roughly $1 2 trillion  The 7(a) program's unpaid principal balance of $92 41 billion at the end of FY2018 was about 7 7% of that amount  One of the SBA's goals is to achieve a zero subsidy rate for its loan guaranty programs  A zero subsidy rate occurs when the SBA's loan guaranty programs generate sufficient revenue through fee collections and recoveries of collateral on purchased (defaulted) loans to not require appropriations to issue new loan guarantees  From 2005 to 2009, the SBA did not request appropriations to subsidize the cost of any of its loan guaranty programs, including the 7(a) program  However, as indicated in Table 3 , loan guaranty fees and loan liquidation recoveries did not generate enough revenue to cover loan losses in the 7(a) loan guaranty program from FY2010 through FY2013 and in the 504/CDC loan guaranty program from FY2012 through FY2015  Appropriations were provided to address the shortfalls  Congress did not approve appropriations for 7(a) and 504/CDC loan guaranty program credit subsidies for FY2016 through FY2019 because the President's budget request indicated that those programs did not require appropriations for credit subsidies in those fiscal years  In FY2017, the SBA spent $82 2 million on the 7(a) program for administrative expenses, including $63 0 million for loan making, $4 1 million for loan servicing, and $15 1 million for loan liquidation


Report 2:  Also, the SBA spent $36 9 million on lender oversight, including oversight of 7(a) lenders  The SBA anticipated that 7(a) program administrative expenses will be about $82 2 million in FY2018 and $84 5 million in FY2019  In addition, the SBA anticipated that it will spend about $36 9 million in FY2018 and $36 6 million in FY2019 for lender oversight of the SBA's various lending programs  In FY2017, borrowers used 7(a) loan proceeds to purchase land or make land improvements (26 62%); purchase a business (17 06%); finance working capital (15 59%); pay off loans, accounts payable or notes payable (13 23%); construct new buildings (6 06%); purchase equipment (5 76%); make leasehold improvements (3 25%); expand or renovate current buildings (2 39%); refinance existing debt (1 40%); and cover other expenses (8 64%)  In 2008, the Urban Institute released the results of an SBA-commissioned study of the SBA's loan guaranty programs  As part of its analysis, the Urban Institute surveyed a random sample of SBA loan guaranty borrowers  The survey indicated that most of the 7(a) borrowers responding to the survey rated their overall satisfaction with their 7(a) loan and loan terms as either excellent (18%) or good (50%)  One out of every five 7(a) borrowers (20%) rated their overall satisfaction with their 7(a) loan and loan terms as fair, and 6% rated their overall satisfaction with their 7(a) loan and loan terms as poor (7% reported don't know or did not respond)  In addition, 90% of the survey's respondents reported that the 7(a) loan was either very important (62%) or somewhat important (28%) to their business success (2% reported somewhat unimportant, 3% reported very unimportant, and 4% reported don't know or did not respond)  The Urban Institute found that about 9 9% of conventional small business loans are issued to minority-owned small businesses, and about 16% of conventional small business loans are issued to women-owned businesses  In FY2018, 32 8% of 7(a) loan approvals ($8 32 billion of $25 37 billion) were to minority-owned businesses (23 0% Asian, 6 0% Hispanic, 3 1% African-American, and 0 7% American Indian) and 13 6% ($3 46 billion of $25 37 billion) were to women-owned businesses  From its comparative analysis of conventional small business loans and the SBA's loan guaranty programs, the Urban Institute concluded the following: SBA's loan programs are designed to enable private lenders to make loans to creditworthy borrowers who would otherwise not be able to qualify for a loan  As a result, there should be differences in the types of borrowers and loan terms associated with SBA-guaranteed and conventional small business loans  Our comparative analysis shows such differences  Overall, loans under the 7(a) and 504 programs were more likely to be made to minority-owned, women-owned, and start-up businesses (firms that have historically faced capital gaps) as compared to conventional small business loans  Moreover, the average amounts for loans made under the 7(a) and 504 programs to these types of firms were substantially greater than conventional small business loans to such firms  These findings suggest that the 7(a) and 504 programs are being used by lenders in a manner that is consistent with SBA's objective of making credit available to firms that face a capital opportunity gap  Congressional interest in the 7(a) loan program has increased in recent years largely because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to assist in the economic recovery  During the 110 th and 111 th Congresses, several laws were enacted to increase the supply and demand for capital for both large and small businesses  For example, in 2008, Congress adopted P L  110-343 , the Emergency Economic Stabilization Act of 2008, which authorized the Troubled Asset Relief Program (TARP)  Under TARP, the U S  Department of the Treasury was authorized to purchase or insure up to $700 billion in troubled assets, including small business loans, from banks and other financial institutions  The law's intent was "to restore liquidity and stability to the financial system of the United States " P L  111-203 , the Dodd-Frank Wall Street Reform and Consumer Protection Act, reduced total TARP purchase authority from $700 billion to $475 billion  The Department of the Treasury's authority to make new financial commitments under TARP ended on October 3, 2010  The Department of the Treasury has disbursed approximately $430 billion in TARP funds, including $370 million to purchase SBA 7(a) loan guaranty program securities  In addition, as mentioned previously, in 2009, ARRA provided an additional $730 million for SBA programs, including $375 million to temporarily reduce fees in the SBA's 7(a) and 504/CDC loan guaranty programs and increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all standard 7(a) loans  Congress subsequently provided another $265 million, and authorized the SBA to reprogram another $40 million, to extend the fee reductions and loan modification through May 31, 2010, and the Small Business Jobs Act of 2010 provided another $505 million (plus $5 million for administrative expenses) to extend the fee reductions and loan modification from September 27, 2010, through December 31, 2010  Also, P L  111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the use of any funding remaining from the Small Business Jobs Act of 2010 to extend the fee subsidies and 90% maximum loan guaranty percentage through March 4, 2011, or until the available funding was exhausted  Funding for these purposes was exhausted on January 3, 2011  The Obama Administration argued that TARP and the additional funding for the SBA's loan guaranty programs helped to improve the small business lending environment and supported "the retention and creation of hundreds of thousands of jobs " Critics argued that small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint are the best means to assist small business economic growth and job creation  Over the years, the SBA's Office of Inspector General (OIG) and the U S  Government Accountability Office (GAO) have independently reviewed the SBA's administration of the SBA's loan guaranty programs  Although improvements have been noted, both agencies have reported deficiencies in the SBA's administration of its loan guaranty programs that they argue need to be addressed, including issues involving the oversight of 7(a) lenders and the lack of outcome-based performance measures  On December 1, 2000, the OIG released its FY2001 list of the most serious management challenges facing the SBA and included, for the first time, the oversight of SBA lenders  Since then, the OIG has determined that the SBA has made significant progress in improving its oversight of SBA lenders  For example The SBA established an Office of Lender Oversight (renamed the Office of Credit Risk Management in 2007), led by an Associate Administrator, which, in October 2000, drafted a strategic plan to serve as a basis for developing a Standard Operating Procedure (SOP) for lender oversight and, among other activities, initiated "steps to develop and implement a comprehensive loan monitoring system to evaluate lender performance  The system will collect data on lenders such as delinquency default rates, liquidations, loan payments, and loan originations " In 2004, the SBA's National Guaranty Purchase Center developed a quality control plan "to review the quality of the guaranty purchase process " In 2006, the SBA issued an SOP that established procedures for on-site, risk-based lender reviews and safety and soundness examinations for 7(a) lenders and Certified Development Companies (CDCs) participating the SBA's 504/CDC loan guaranty program  In 2007, the SBA completed the centralization of all 7(a) loan processing activities and, with very limited exception, ended loan making, servicing, liquidation, and guaranty purchase activity at district offices  In 2008, the SBA issued an SOP for 7(a) lender oversight which included uniform policies and procedures for the evaluation of lender performance and the SBA's Office of Financial Program Operations (OFPO) began designing "a comprehensive quality control program across all of its centers " Previously, quality control was conducted within each loan center (Standard 7(a) Loan Guaranty Processing Center, Commercial Loan Service Center, and National Guaranty Purchase Center) "at various levels of sophistication " The SBA issued an interim final rule in the Federal Register on December 1, 2008, incorporating the SBA's risk-based lender oversight program into the SBA's regulations  In 2010, the SBA's OFPO established its agency-wide quality control program, which is designed to improve service and "reduce waste, fraud, and abuse" by ensuring "that centers accurately and consistently apply statutory, regulatory, and procedural loan program requirements " The SBA also developed a "risk-based, off-site analysis of lending partners through its Loan/Lender Monitoring System (L/LMS), a state-of-the-art portfolio monitoring system that incorporates credit scoring metrics for portfolio management purposes " In 2012-2013, the SBA "(1) developed risk profiles and lender performance thresholds, (2) developed a select analytical review process to allow for virtual risk-based reviews, (3) updated its lender risk rating model to better stratify and predict risk, and (4) conducted test reviews under the new risk-based review protocol " In 2013-2014, the SBA "improved its monitoring and verification of corrective actions by lenders by: (1) developing corrective action assessment procedures, (2) finalizing a system to facilitate the corrective action process, and (3) populating the system with lender oversight results requiring corrective action " In 2015, the SBA's Office of Credit Risk Management (OCRM) "engaged contractor support to expand on its corrective action follow-up process  Additionally, OCRM issued its FY2015 Risk Management Oversight Plan, which included plans to conduct 170 corrective action reviews between 7(a) and 504 lenders " In 2016, OCRM reported that it conducted 147 corrective action follow-up assessments, established performance measures and risk mitigation goals for the SBA's entire lending portfolio, and "conducted portfolio analyses of problem lenders with heavy concentrations in SBA 7(a) lending and sales on the secondary market " Despite these improvements, the OIG continues to list lender oversight as one of the most serious management challenges facing the SBA because it argues that several issues that it has identified in audits have not been fully addressed  Specifically, the OIG reports that the SBA needs to show that the portfolio risk management program is used to support risk based decisions, implement additional controls to mitigate risks, develop an effective method for tracking loan agents, and update regulations on loan agents  GAO has argued that the 7(a) program's performance measures (e g , number of loans approved, loans funded, and firms assisted across the subgroups of small businesses) provide limited information about the impact of the loans on participating small businesses: The program's performance measures focus on indicators that are primarily output measures–for instance, they report on the number of loans approved and funded  But none of the measures looks at how well firms do after receiving 7(a) loans, so no information is available on outcomes  As a result, the current measures do not indicate how well the agency is meeting its strategic goal of helping small businesses succeed  The SBA's OIG has made a similar argument concerning the SBA's Microloan program's performance measures  Because the SBA uses similar program performance measures for its Microloan and 7(a) programs, the OIG's recommendations could also be applied to the SBA's 7(a) program  Specifically, as part of its audit of the SBA Microloan program's use of ARRA funds, the OIG found that the SBA's performance measures for the Microloan program are based on the number of microloans funded, the number of small businesses assisted, and program's loan loss rate  It argued that these "performance metrics     do not ensure the ultimate program beneficiaries, the microloan borrowers, are truly assisted by the program" and "without appropriate metrics, SBA cannot ensure the Microloan program is meeting policy goals " It noted that the SBA does not track the number of microloan borrowers who remain in business after receiving a microloan to measure the extent to which the loans contributed to the success of borrowers and does not determine the effect that technical training assistance may have on the success of microloan borrowers and their ability to repay loans  It recommended that the SBA "develop additional performance metrics to measure the program's achievement in assisting microloan borrowers in establishing and maintaining successful small businesses " In its response to GAO's recommendation to develop additional performance measures for the 7(a) program, the SBA formed, in July 2014, an impact evaluation working group to develop a methodology for conducting impact evaluations of the agency's programs using administrative data sources residing at the SBA and in other federal agencies, such as the U S  Census Bureau and the Bureau of Labor Statistics  Numerous SBA program offices participated in this working group and each office developed its own program evaluation methodology or established program evaluation frameworks  More recently, the SBA indicated in its FY2017 congressional budget justification document that although it "continues to face barriers gathering outcome rich evaluation data with current restrictions in collecting personal identification information (PII) and business identification information (BII)" it "plans to further develop its analytical capabilities, enhance collaboration across its programs, provide evaluation-specific trainings, and broaden use of impact evaluations to support senior leaders and institutionalize the evidence-based process across programs " To encourage evidence-based evaluations across its programs, the SBA has created an annual Enterprise Learning Agenda designed to "help program managers continue to build and use evidence and to foster an environment of continuous learning " As part of this agenda building process, the SBA identifies programs for evidence-based evaluation and undertakes both internal evaluations using available data or contracts with third parties to conduct the evaluations  Congress authorized several changes to the 7(a) program during the 111 th Congress in an effort to increase the number and amount of 7(a) loans  During the 111 th Congress, the Obama Administration supported congressional efforts to temporarily subsidize fees for the 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90%  Congress subsequently provided nearly $1 1 billion to temporarily subsidize fees for the 7(a) and 504/CDC loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage to 90% for all standard 7(a) loans  The Obama Administration also proposed the following modifications to several SBA programs, including the 7(a) program: increase the maximum loan size for 7(a) loans from $2 million to $5 million; increase the maximum loan size for the 504/CDC program from $2 million to $5 million for regular projects and from $4 million to $5 5 million for manufacturing projects; increase the maximum loan size for microloans to small business concerns from $35,000 to $50,000; increase the maximum loan limits for lenders in their first year of participation in the Microloan program, from $750,000 to $1 million, and from $3 5 million to $5 million in the subsequent years; temporarily increase the cap on SBAExpress loans from $350,000 to $1 million; and temporarily allow in FY2010 and FY2011, with an option to extend into FY2012, the refinancing of loans for owner-occupied commercial real estate that are within one year of maturity under the SBA's 504/CDC program  The Obama Administration argued that increasing the maximum loan limits for the 7(a), 504/CDC, Microloan, and SBAExpress programs would allow the SBA to "support larger projects," which would "allow the SBA to help America's small businesses drive long-term economic growth and the creation of jobs in communities across the country " The Administration also argued that increasing the maximum loan limits for these programs would be "budget neutral" over the long run and "help improve the availability of smaller loans " Critics of the Obama Administration's proposals to increase the SBA's maximum loan limits argued that higher loan limits might increase the risk of defaults, resulting in higher guaranty fees or the need to provide the SBA additional funding, especially for the SBAExpress program, which has experienced somewhat higher default rates than other SBA loan guaranty programs  Others advocated a more modest increase in the maximum loan limits to ensure that the 7(a) program "remains focused on startup and early-stage small firms, businesses that have historically encountered the greatest difficulties in accessing credit," and "avoids making small borrowers carry a disproportionate share of the risk associated with larger loans " Others argued that creating a small business direct lending program within the SBA would reduce paperwork requirements and be more efficient in providing small businesses access to capital than modifying existing SBA programs that rely on private lenders to determine if they will issue the loans  Also, as mentioned previously, others argued that providing additional resources to the SBA or modifying the SBA's loan programs as a means to augment small business access to capital is ill-advised  In their view, the SBA has limited impact on small businesses' access to capital  They argued that the best means to assist small business economic growth and job creation is to focus on small business tax reduction, reform of financial credit market regulation, and federal fiscal restraint  As mentioned previously, in 2009, ARRA provided an additional $730 million for SBA programs, including $375 million to temporarily reduce fees in the SBA's 7(a) and 504/CDC loan guaranty programs ($299 million) and increase the 7(a) program's maximum loan guaranty percentage from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to 90% for all standard 7(a) loans ($76 million)  P L  111-240 provided $505 million (plus $5 million for administrative expenses) to extend the 7(a) program's 90% maximum loan guaranty percentage and 7(a) and 504/CDC loan guaranty programs' fee subsidies through December 31, 2010 (later extended to March 4, 2011), or until available funding was exhausted (which occurred on January 3, 2011)  The act also made the following changes to the SBA's programs: increased the maximum loan size for 7(a) loans from $2 million to $5 million; temporarily increased for one year (through September 27, 2011) the cap on SBAExpress loans from $350,000 to $1 million; increased the maximum loan size for the 504/CDC loans from $1 5 million to $5 million for regular projects, from $2 million to $5 million for projects meeting one of the program's specified public policy goals, and from $4 million to $5 5 million for manufacturers; increased the maximum loan size for the Microloan program from $35,000 to $50,000; authorized the SBA to establish an alternative size standard for the 7(a) and 504/CDC programs that uses maximum tangible net worth and average net income as an alternative to the use of industry standards and established an interim size standard of a maximum tangible net worth of not more than $15 million and an average net income after federal taxes (excluding any carryover losses) for the preceding two fiscal years of not more than $5 million; and allowed 504/CDC loans to be used to refinance up to $7 5 billion in short-term commercial real estate debt each fiscal year for two years after enactment (through September 27, 2012) into long-term fixed rate loans  The act also authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) to encourage community banks to provide small business loans ($4 billion was issued), a $1 5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, and about $12 billion in tax relief for small businesses  It also contained revenue raising provisions to offset the act's cost and authorized a number of changes to other SBA loan and contracting programs  Congress did not approve any changes to the 7(a) program during the 112 th Congress  However, several bills were introduced during the 112 th Congress that would have changed the program  S  1828 , a bill to increase small business lending, and for other purposes, was introduced on November 8, 2011, and referred to the Senate Committee on Small Business and Entrepreneurship  The bill would have reinstated for a year following the date of its enactment the temporary fee subsidies for the 7(a) and 504/CDC loan guaranty programs and the 90% loan guaranty for standard 7(a) loans, which were originally authorized by ARRA and later extended by several laws, including the Small Business Jobs Act of 2010  H R  2936 , the Small Business Administration Express Loan Extension Act of 2011, introduced on September 15, 2011, and referred to the House Committee on Small Business, would have extended a one-year increase in the maximum loan amount for the SBAExpress program from $350,000 to $1 million for an additional year  The temporary increase in that program's maximum loan amount was authorized by P L  111-240 , the Small Business Jobs Act of 2010, and expired on September 27, 2011 (see Appendix )  S  532 , the Patriot Express Authorization Act of 2011, introduced on March 9, 2011, and referred to the Senate Committee on Small Business and Entrepreneurship, would have provided statutory authorization for the Patriot Express Pilot Program  This program was subsequently discontinued by the SBA on December 31, 2013  The bill would have increased the program's maximum loan amount from $500,000 to $1 million, and it would have increased the guaranty percentages from up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000 to up to 85% of loans of $500,000 or less and up to 80% of loans exceeding $500,000  H R  2451 , the Strengthening Entrepreneurs' Economic Development Act of 2013, was introduced on June 20, 2013, and referred to the House Committee on Small Business  It would have authorized the SBA to make direct loans of up to $150,000 to businesses with fewer than 20 employees  It would have also required the SBA to assess, collect, and retain a fee with respect to the outstanding balance of the deferred participation share of each 7(a) loan in excess of $2 million that is no more than is necessary to reduce to zero the SBA's cost of making the loan  H R  2461 , the SBA Loan Paperwork Reduction Act of 2013, was introduced on June 20, 2013, and referred to the House Committee on Small Business  It would have provided statutory authorization for the Small Loan Advantage (SLA) pilot program  The SBA started that program on February 15, 2011  It provided a streamlined application process for 7(a) loans of up to $350,000 if the loan received an acceptable credit score from the SBA prior to the loan being submitted for processing  The SBA adopted the SLA application process as the model for processing all non-express 7(a) loans of $350,000 or less, effective January 1, 2014  As mentioned previously, the Obama Administration waived the up-front, one time loan guaranty fee and ongoing servicing fee for 7(a) loans of $150,000 or less approved in FY2014 (and later extended the fee waiver in FY2015 and FY2016)  H R  2462 , the Small Business Opportunity Acceleration Act of 2013, introduced on June 20, 2013, and referred to the House Committee on Small Business, would have made the fee waiver permanent  Also, the Obama Administration waived the up-front, one-time loan guaranty fee for veteran loans under the SBAExpress program (up to $350,000) from January 1, 2014, through the end of FY2015 (called the Veterans Advantage Program)  S  2143 , the Veterans Entrepreneurship Act, would have authorized this fee waiver and made it permanent  Also, P L  113-235 provided statutory authorization to waive the 7(a) SBAExpress program's guarantee fee for veterans (and their spouse) in FY2015  P L  114-38 , the Veterans Entrepreneurship Act of 2015, authorized and made permanent the waiver of the up-front, one-time loan guaranty fee for veterans (and their spouse) in the SBAExpress program beginning on or after October 1, 2015, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero  The act also increased the 7(a) program's authorization limit from $18 75 billion in FY2015 to $23 5 billion  On June 25, 2015, the SBA informed Congress that the 7(a) program "is on track to hit its authorization ceiling of $18 75 billion well before the end of FY2015 " The SBA indicated that "our activity and trend analysis reveal a strong uptick that, if sustained, would exceed our lending authority ceiling by late August " If that were to occur, and in the absence of statutory authority to do otherwise, the SBA reported that it would have to suspend 7(a) loan making for the remainder of the fiscal year  The SBA requested an increase in the 7(a) loan program's authorization limit to $22 5 billion in FY2015  On July 23, 2015, citing "unprecedented demand," the SBA suspended 7(a) program lending  The SBA indicated that it would continue to process loan applications "up to the point of approval" and then place approved loans "into a queue awaiting the availability of program authority " Loans would be released "once program authority became available due to Congressional action or as a result of cancellations of loans previously approved this fiscal year " Applications would then "be funded in the order they were approved by SBA, with the exception that requests for increases to previously approved loans will be funded before applications for new loans " The SBA resumed 7(a) lending on July 28, 2015, following P L  114-38 's enactment  In addition to increasing the 7(a) program's authorization limit for FY2015, the act added requirements designed to ensure that SBA loans do not displace private sector loans (e g , the SBA Administrator may not guarantee a 7(a) loan if the lender determines that the borrower is unable to obtain credit elsewhere solely because the liquidity of the lender depends upon the guarantied portion of the loan being sold on the secondary market, or if the sole purpose for requesting the guarantee is to allow the lender to exceed the lender's legal lending limit), and requires the SBA to report, on a quarterly basis, specified 7(a) program statistics to the House and Senate Committees on Appropriations and Small Business  These required statistics are designed to inform the committees of the SBA's pace of 7(a) lending, provide estimates concerning the date on which the program's authorization limit may be reached, and present information concerning early defaults and actions taken by the SBA to combat early defaults  As mentioned previously, P L  114-113 increased the 7(a) program's authorization limit from $23 5 billion in FY2015 to $26 5 billion for FY2016  In addition, P L  114-223 , the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017, authorized the SBA to use funds from its business loan program account "to accommodate increased demand for commitments for [7(a)] general business loans" for the duration of the continuing resolution (initially December 9, 2016, later extended by P L  114-254 , the Further Continuing and Security Assistance Appropriations Act, 2017, to April 28, 2017)  In a related development, S  2496 , the Help Small Businesses Access Affordable Credit Act, introduced on February 2, 2016, would have authorized the SBA Administrator, with prior approval of the House and Senate Committees on Appropriations, to make loans in an amount equal to not more than 110% of the 7(a) program's authorization limit if the demand for 7(a) loans should exceed that limit  The Obama Administration also requested authorization to allow the SBA Administrator to continue to issue loans should the demand for 7(a) loans exceed the program's authorization limit  Also  S  2992 , the Small Business Lending Oversight Act of 2016, would have required the Director of the SBA's Office of Credit Risk Management (OCRM) to impose penalties on 7(a) lenders who "knowingly and repeatedly" undertake specified activities; required the SBA to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; redefined the credit elsewhere requirement; authorized fees to be used to support OCRM operations; required the SBA to identify potential loan risks by lenders participating in the Preferred Lenders Program by requiring the SBA, at the end of each year, to "calculate the percentage of loans in a lender's portfolio made without a contribution of borrower equity when the loan's purpose was to establish a new small business concern, to effectuate a change of small business ownership, or to purchase real estate"; and, among other provisions, prohibited the SBA from approving any loan if its financing is more than 100% of project costs  Legislation was also introduced ( S  2125 , the Small Business Lending and Economic Inequality Reduction Act of 2015) to provide permanent, statutory authorization for the Community Advantage Pilot program (see Appendix )  The SBA announced on December 28, 2015, that it was extending the Community Advantage Pilot program through March 31, 2020  It had been set to expire on March 15, 2017  Recognizing that 7(a) loan approvals during the first half of FY2017 were about 9% higher than during the first half of FY2016, Congress included a provision in P L  115-31 , the Consolidated Appropriations Act, 2017, that increased the 7(a) program's authorization limit to $27 5 billion in FY2017 from $26 5 billion in FY2016  Congress also approved legislation ( P L  115-141 , the Consolidated Appropriations Act, 2018) that increased the 7(a) program's authorization limit to $29 0 billion in FY2018  In addition, as mentioned earlier, P L  115-189 , the Small Business 7(a) Lending Oversight Reform Act of 2018, among other provisions, codified the SBA's Office of Credit Risk Management; required that office to annually undertake and report the findings of a risk analysis of the 7(a) program's loan portfolio; created a lender oversight committee within the SBA; authorized the Director of the Office of Credit Risk Management to undertake informal and formal enforcement actions against 7(a) lenders under specified conditions; redefined the credit elsewhere requirement; and authorized the SBA Administrator to increase the amount of 7(a) loans not more than once during any fiscal year to not more than 115% of the 7(a) program's authorization limit  The SBA is required to provide at least 30 days' notice of its intent to exceed the 7(a) loan program's authorization limit to the House and Senate Committees on Small Business and the House and Senate Committees on Appropriations' Subcommittees on Financial Services and General Government and may exercise this option only once per fiscal year  Also, P L  115-232 , the John S  McCain National Defense Authorization Act for Fiscal Year 2019, included provisions to make 7(a) loans more accessible to employee-owned small businesses (ESOPs) and cooperatives  The act authorizes the SBA to make "back-to-back" loans to ESOPs to better align with industry practices (the loan proceeds must only be used to make a loan to a qualified employee trust); clarifies that 7(a) loans to ESOPs may be made under the Preferred Lenders Program; allows the seller to remain involved as an officer, director, or key employee when the ESOP or cooperative has acquired 100% ownership of the small business; and authorizes the SBA to finance transition costs to employee ownership and waive any mandatory equity injection by the ESOP or cooperative to help finance the change of ownership  The act also directs the SBA to create outreach programs with Small Business Investment Companies and Microloan intermediaries to make their lending programs more accessible to all eligible ESOPs and cooperatives, an interagency working group to promote lending to ESOPs and cooperatives, and a Small Business Employee Ownership and Cooperatives Promotion Program, administered by Small Business Development Centers, to offer technical assistance and training to small businesses on the transition to employee ownership through cooperatives and ESOPs  Congress did not focus much attention on the Trump Administration's proposal in its FY2019 budget request to "introduce counter-cyclical policies in SBA's business guaranty loan programs and update certain fees structures to offset $155 million in business loan administration " As mentioned earlier, the proposal included raising $93 million in additional revenue by allowing the SBA to set the 7(a) program's annual servicing fee at rates below zero credit subsidy; increasing the 7(a) loan program's FY2019 annual servicing fee's cap from 0 55% to 0 625%; and increasing the FY2019 upfront loan guarantee fee on 7(a) loans over $1 million by 0 25%  The Administration also requested that the 7(a) loan program's authorization limit be increased to $30 0 million in FY2019; that the SBA be allowed to further increase the 7(a) loan program's authorization amount in FY2019 by 15% under specified circumstances "to better equip the SBA to meet peaks in demand while continuing to operate at zero subsidies;" that the SBA be allowed to impose an annual fee, not to exceed 0 05% per year, of the outstanding balance on 7(a) secondary market trust certificates to help offset administrative costs; and that the SBAExpress program's loan limit be increased from $350,000 to $1 million  P L  116-6 , the Consolidated Appropriations Act, 2019, increased the 7(a) program's authorization limit to $30 0 billion in FY2019  The congressional debate concerning the SBA's 7(a) program during the 111 th Congress was not whether the federal government should act, but which federal policies would most likely enhance small businesses' access to capital and result in job retention and creation  As a general proposition, some Members of Congress argued that the SBA should be provided additional resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations with the expectation that in so doing small businesses will create jobs  Others worried about the long-term adverse economic effects of spending programs that increase the federal deficit  They advocated business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to help small businesses further economic growth and job creation  In terms of specific program changes, increasing the 7(a) program's loan limit, extending the 7(a) program's temporary fee subsidies and 90% maximum loan guaranty percentage, and establishing an alternative size standard for the 7(a) program were all designed to achieve the same goal: to enhance job creation by increasing the ability of 7(a) borrowers to access credit at affordable rates  However, determining how specific changes in federal policy are most likely to enhance job creation is a challenging task  For example, a 2008 Urban Institute study concluded that differences in the term, interest rate, and amount of SBA financing were "not significantly associated with increasing sales or employment among firms receiving SBA financing " The study also reported that the analysis accounted for less than 10% of the variation in firm performance  The Urban Institute suggested that local economic conditions, local zoning regulations, state and local tax rates, state and local business assistance programs, and the business owner's charisma or business acumen also "may play a role in determining how well a business performs after receipt of SBA financing " As the Urban Institute study suggests, because many factors influence business success, measuring the 7(a) program's effect on job retention and creation is complicated  That task is made even more challenging by the absence of performance-oriented measures that could serve as a guide  Both GAO and the SBA's OIG have recommended that the SBA adopt outcome performance-oriented measures for its loan guaranty programs, such as tracking the number of borrowers who remain in business after receiving a loan to measure the extent to which the program contributed to their ability to stay in business  Other performance-oriented measures that Congress might also consider include requiring the SBA to survey 7(a) borrowers to measure the difficulty they experienced in obtaining a loan from the private sector and the extent to which the 7(a) loan or technical assistance received contributed to their ability to create jobs or expand their scope of operations  The 7(a) program has several specialized programs that offer streamlined and expedited loan procedures for particular groups of borrowers, including the SBAExpress, Export Express, and Community Advantage programs  Lenders must be approved by the SBA for participation in these programs  SBAExpress Program The SBAExpress program was established as a pilot program by the SBA on February 27, 1995, and made permanent through legislation, subject to reauthorization, in 2004 ( P L  108-447 , the Consolidated Appropriations Act, 2005)  The program is designed to increase the availability of credit to small businesses by permitting lenders to use their existing documentation and procedures in return for receiving a reduced SBA guaranty on loans  It provides a 50% loan guaranty on loan amounts up to $350,000  As shown in Table A-1 , the SBA approved 27,794 SBAExpress loans (46 1% of total 7(a) program loan approvals), totaling $1 98 billion (7 8% of total 7(a) program amount approvals) in FY2018  The program's higher loan amount in FY2011 was due, at least in part, to a provision in P L  111-240 , the Small Business Jobs Act of 2010, which temporarily increased the SBAExpress program's loan limit to $1 million for one year following enactment (through September 27, 2011)  During the 112 th Congress, H R  2936 , the Small Business Administration Express Loan Extension Act of 2011, would have extended the SBAExpress program's higher loan limit for an additional year (through September 27, 2012)  SBAExpress loan proceeds can be used for the same purposes as those of the 7(a) program (expansion, renovation, new construction, the purchase of land or buildings, the purchase of equipment, fixtures, and lease-hold improvements, working capital, to refinance debt for compelling reasons, seasonal line of credit, and inventory); except that participant debt restructure cannot exceed 50% of the project and may be used for revolving credit  The program's loan terms are the same as those of the 7(a) program (the loan maturity for working capital, machinery, and equipment (not to exceed the life of the equipment) is typically 5 years to 10 years; and the loan maturity for real estate is up to 25 years, except that the term for a revolving line of credit cannot exceed 7 years  The SBAExpress loan's interest rates and fees are the same as those used for the 7(a) program  To account for the program's lower guaranty rate of 50%, lenders are allowed to perform their own loan analysis and procedures and receive SBA approval with a targeted 36-hour maximum turnaround time  Also, collateral is not required for loans of $25,000 or less  Lenders are allowed to use their own established collateral policy for loans over $25,000  As mentioned earlier, the SBA waived the up-front, one-time loan guaranty fee for 7(a) loans of $125,000 or less approved in FY2018  The SBA also waived 50% of the up-front, one-time loan guaranty fee on all non-SBAExpress 7(a) loans to veterans of $125,001 to $350,000 in FY2018  In addition, P L  114-38 , the Veterans Entrepreneurship Act of 2015, provided statutory authorization and made permanent the veteran's fee waiver in the SBAExpress program, except during any upcoming fiscal year for which the President's budget, submitted to Congress, includes a cost for the 7(a) program, in its entirety, that is above zero  The SBA waived this fee in FY2016, FY2017, and FY2018 and is waiving it in FY2019  The SBA indicated that its fee waivers for veterans are part "of SBA's broader efforts to make sure that veterans have the tools they need to start and grow a business " In a related development, the SBA discontinued the Patriot Express Pilot Program on December 31, 2013  It provided loans of up to $500,000 (with a guaranty of up to 85% of loans of $150,000 or less and up to 75% of loans exceeding $150,000) to veterans and their spouses  It had been in operation since 2007, and, like the SBAExpress program, featured streamlined documentation requirements and expedited loan processing  Over its history, the Patriot Express Pilot Program disbursed 9,414 loans amounting to more than $791 million  Export Express The Export Express program was established as a subprogram of the SBAExpress program in 1998, and made a separate pilot program in 2000  It was made permanent through legislation, subject to reauthorization, in 2010 ( P L  111-240 , the Small Business Jobs Act of 2010)  The Export Express program is designed to increase the availability of credit to current and prospective small business exporters that have been in business, though not necessarily in exporting, for at least 12 full months, particularly those small businesses needing revolving lines of credit  Export Express loans may not be used to finance overseas operations, except for the marketing or distribution of products or services exported from the United States  The program is generally subject to the same loan processing, making, closing, servicing, and liquidation requirements as well as the same maturity terms, interest rates, and applicable fees as the SBAExpress program  Two key differences between the two programs is that the Export Express program's maximum loan amount is up to $500,000, and its guaranty rate is 90% for loans of $350,000 or less, and 75% for loans exceeding $350,000  There were 215 lenders with approved SBA Export Express loan guaranties at the end of FY2017  These lenders are located in 46 states, Guam, and Puerto Rico  As shown in Table A-2 , the SBA approved 59 Export Express loans totaling $15 45 million in FY2018  Community Advantage 7(a) Loan Initiative The SBA's Community Advantage (CA) 7(a) loan initiative became operational on February 15, 2011  Originally announced as a three-year pilot program (through March 15, 2014), it subsequently was extended through March 15, 2017; March 31, 2020; and September 30, 2022  As of September 12, 2018, there were 113 approved CA lenders, 99 of which were actively making and servicing CA loans  The CA loan initiative is designed to increase lending to underserved low- and moderate-income communities  It, along with the now-discontinued Small Loan Advantage program, replaced the Community Express Pilot Program, which also was designed to increase lending to underserved communities  The CA loan initiative provides the same loan terms, guaranty fees, and guaranty as that of the 7(a) program on loan amounts up to $250,000 (85% for loans up to $150,000 and 75% for those greater than $150,000)  Loan proceeds can be used for the same purposes as those of the 7(a) program  The loan's maximum interest rate is prime, plus 6%  The program has an expedited approval process, which includes a two-page application for borrowers and a goal of completing the approval process within 5 to 10 days  The CA loan initiative is designed to increase "the number of SBA 7(a) lenders who reach underserved communities, targeting community-based, mission-focused financial institutions which were previously not able to offer SBA loans " These mission-focused financial institutions include the following: nonfederally regulated Community Development Financial Institutions certified by the U S  Department of the Treasury, SBA's Certified Development Companies, SBA's nonprofit microlending intermediaries, and, added in December 2015, SBA's Intermediary Lending Pilot Program intermediaries  They are expected to maintain at least 60% of their SBA loan portfolio in underserved markets, including loans to small businesses in, or that have more than 50% of their full-time workforce residing in, low-to-moderate income (LMI) communities; Empowerment Zones and Enterprise Communities; HUBZones; start-ups (firms in business less than two years); businesses eligible for the SBA's Veterans Advantage program; Promise Zones (added in December 2015); and Opportunity Zones and Rural Areas (added in October 2018)  The SBA placed a moratorium, effective October 1, 2018, on accepting new CA lender applications, primarily as a means to mitigate the risk of future loan defaults  The SBA also increased the minimum acceptable credit score for CA loans "that satisfies the need to consider several required underwriting criteria" from 120 to 140; increased the wait time for CA lenders ineligible for delegated lender status at the time of approval as a CA lender from 6 months to 12 months and increased the number of CA loans that must be initially dispersed before a CA lender may process applications under delegated authority from five to seven loans; increased the loan loss reserve requirement for CA loans sold in the secondary market from 3% to 5% of the outstanding amount of the guaranteed portion of each loan; modified requirements related to the refinancing of debts with a CA loan; limited fees that can be charged by a CA lender for assistance in obtaining a CA loan to no more than $2,500, with the exception of necessary out-of-pocket costs such as filing or recording fees; and as mentioned previously, added Opportunity Zones and Rural Areas to the list of economically distressed communities that are eligible for a CA loan  As shown in Table A-3 , the SBA approved 1,118 CA loans amounting to $157 5 million in FY2018 and 4,906 CA loans amounting to $643 72 million from the time the program became operational to the end of FY2018  As mentioned previously, legislation was introduced during the 114 th Congress ( S  2125 , the Small Business Lending and Economic Inequality Reduction Act of 2015) to provide the Community Advantage Pilot program permanent, statutory authorization 

ground_truth: The federal government owns billions of dollars of personal property—such as office furniture, scientific equipment, and industrial machinery. By law, each agency is required to follow GSA's disposal process so that an agency's unneeded property can be used by other agencies or certain non-federal entities. Since 2012, agencies have reduced their office and warehouse space due to government-wide initiatives, a reduction that in turn has required agencies to dispose of some affected personal property. GAO was asked to review how federal agencies identify and dispose of unneeded personal property. This report examines (1) how selected agencies assess whether personal property is needed and (2) how these agencies dispose of unneeded property and how, if at all, space reduction efforts have affected disposals. GAO reviewed federal statutes and regulations, and selected five agencies—EPA, Forest Service, GSA, HUD, and IRS—mainly based on space reduction results and goals. GAO reviewed these agencies' property disposal data for 2012 through 2016 and interviewed headquarters and field staff about their property management and disposal processes. The five agencies GAO reviewed—the Environmental Protection Agency (EPA), Forest Service, General Services Administration (GSA), Department of Housing and Urban Development (HUD), and Internal Revenue Service (IRS)—generally do not have policies or processes for identifying unneeded personal property, such as office furniture, on a proactive basis. Instead, officials from these agencies said they typically identified unneeded property as a result of a “triggering event,” such as an office space reduction. Executive agencies are required by law to continuously review property under their control to identify unneeded personal property and then dispose of it promptly. Without such policies or processes, agencies may not be routinely identifying unneeded property that could be used elsewhere, and efforts to maximize federal personal property use and minimize unnecessary storage costs may not be effective. GSA has issued regulations establishing a government-wide disposal process for unneeded personal property. However, according to GSA officials, the agency lacks the authority to promulgate regulations or formal guidance on management of in-use agency property, and there is no government-wide guidance to agencies on identifying unneeded personal property. Agencies are required to have internal control activities—such as policies and procedures—for reasonable assurance of efficient operations and minimal resource waste, and the Office of Management and Budget (OMB) provides guidance to agencies on implementing such activities. Guidance from OMB that emphasizes agencies' internal control responsibilities could help ensure that agencies are proactively and regularly identifying property that is no longer needed. The selected agencies reported little difficulty in following GSA's personal property disposal process, reporting over 37,000 items as unneeded property in fiscal years 2012 through 2016. This property was disposed of through transfers to other agencies, donations to authorized recipients, sales, or discarding. When disposing of personal property from space reduction projects at locations GAO visited, agencies also reported using GSA's process (see figure). Overall, agencies said they have not experienced major challenges with disposing of personal property from space reduction efforts. This lack of challenges could be because projects are geographically dispersed and spread over several years. OMB should provide guidance to executive agencies on managing their personal property, emphasizing that agencies' policies or processes should reflect the requirement to continuously review and identify unneeded personal property. OMB did not comment on GAO's recommendation.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: Federal agencies’ personal property may include commonly used items, such as computers, office equipment, and furniture, and more specialized property reflective of their mission, such as scientific devices, fire control equipment, heavy machinery, precious metals, generators, and chemicals  Some items require special handling, such as hazardous materials, animals, and firearms  See figure 1 for examples of federal personal property  Federal agencies manage personal property while they are using it  Specifically, executive agencies are required by law to: maintain adequate inventory controls and accountability systems for property under their control; continually survey property under their control to identify excess; promptly report excess property to GSA and dispose of it in accordance with GSA regulations; and use existing agency property or obtain excess property from other federal agencies before purchasing new property  GSA assists agencies when they no longer need personal property and has established a government-wide personal-property disposal process in federal regulation  The process generally begins when an agency declares a personal property item as “excess”—that is, the agency determines it no longer needs the item to carry out its mission  Agencies are to make this determination only after ensuring the property is not needed elsewhere within the agency  Once property is declared excess, there are four potential property disposal methods: transfer to another federal agency or certain non-federal entities, donation, sale, and abandonment or destruction  Federal agencies and some non-federal entities have the priority to acquire excess property, through transfer  If none of these eligible entities have requested the property for transfer after 21 days, the property becomes “surplus”—that is, GSA determines that federal agencies no longer need the item to carry out their missions  Surplus property may be donated to eligible entities through a State Agency for Surplus Property, representing the state of the prospective donee  Property not donated within 5 days after the close of the 21-day screening period may be sold to the general public and, finally, unsold property may be abandoned or destroyed  See appendix II for an expanded description of the personal property disposal process  OMB is responsible for establishing government-wide management policies and requirements and provides guidance to agencies to implement them  OMB has issued guidance for specific types of personal property, such as for government aircraft and information technology systems  OMB also implemented the Freeze the Footprint and Reduce the Footprint initiatives, starting in 2012, to reduce the amount of domestic office and warehouse space needed by the federal government, in part, through consolidations and improved space utilization  As a result, federal agencies have reported achieving space reductions, and they have goals for additional reductions in the future  Although these reductions are a relatively small part of the federal government’s overall footprint, according to OMB, through this and other efforts agencies collectively reduced their office and warehouse space by about 25 million square feet from fiscal years 2012 through 20156  As federal agencies continue to reduce office and warehouse space, they will also likely have to manage or dispose of personal property, such as office furniture or stored property, from these spaces  Each of the five selected agencies we reviewed have policies and processes for carrying out their responsibilities to maintain adequate accountability systems and inventory controls for property under their control: All five agencies have policies for regularly inventorying their personal property to physically locate and verify property tracked in their asset management systems  EPA, GSA OAS, and IRS policies require physical inventories of personal property once a year, while Forest Service’s policy requires inventories every other fiscal year and a 10 percent sample inventory in the alternate years  HUD policies require inventories every 2 years at its headquarters, but according to HUD officials, field locations conduct inventories annually  All of the agencies also have an electronic asset-management system for maintaining information on personal property  Although each agency has its own system, and the type of information maintained varied by agency or type of property, generally each system generates a record for each property item that provides descriptive information about the item, such as manufacturer name, model number, serial number or other identifier, acquisition cost, condition, and current location  We found that the five agencies use these policies and processes to track and inventory certain property determined by each agency to be “accountable ” Accountable property is nonexpendable personal property with an expected useful life of 2 years or longer that an agency determines should be tracked in its property records, based on an item’s acquisition cost and sensitivity  Each agency determines its own appropriate acquisition cost threshold: four of the agencies—EPA, Forest Service, HUD, and IRS—consider property with an original acquisition cost of $5,000 or greater to be accountable; GSA OAS’s accountable threshold is $10,000 or greater  In addition, certain sensitive property— such as digital cameras, laptop computers with hard drives, and firearms—is considered accountable regardless of acquisition cost because it could be easily stolen or can store data or personal information  Table 1 provides a snapshot of accountable personal property items— including the reported original acquisition cost, amount, and examples— reported from 4 of the selected agencies’ asset management systems in 2017  The agencies in our review generally did not track in their asset management systems or formally inventory their remaining—or “non- accountable”—personal property that did not meet their definition of accountable property  According to agency officials we interviewed, they do not track or inventory low value items because: (1) the cost and manpower required to do so are too high; (2) certain property, such as office furniture, is less susceptible to theft; or (3) agencies believe they are not required by law to inventory low value items  While agencies are required to have systems of accounting and internal controls that provide effective control over, and accountability for, their assets, they generally have latitude in how they implement these procedures, including which property to track and inventory  While the five selected agencies had policies and processes for their property accountability and inventory control responsibilities, they largely did not have policies and processes for carrying out their responsibilities, as established in law, to continually survey property under their control to identify excess  According to officials at each of the selected agencies, the responsibility for identifying unneeded property generally lies with that agency’s property custodians—designated officials who are assigned responsibility for the property—or the agency program or individual using the property  Four of the five selected agencies’ policies do not require property custodians or other property users to assess property for continued need  Furthermore, these four agencies’ policies did not have specific criteria for the property custodian or user to assess property for continued need  Only IRS’s personal-property management policy specifies that the property custodian is responsible for identifying excess property and provides criteria to be applied in doing so, such as whether property is still needed in its location and the feasibility of transferring it to other locations, taking into account the property’s condition and transportation charges  An official at one of the selected agencies identified several specific criteria that should be used to assess property for continued need, including the item’s serviceability, whether it poses a safety hazard, and the feasibility of relocating it  However, the official acknowledged that these or any other criteria are not part of the agency’s formal policy  The personal property policy of an agency not included in our review— NASA—includes requirements and criteria to review NASA property for continued need in multiple ways  For example, it requires a high-level NASA official to conduct a walk-through inspection annually to identify idle or underused equipment that is no longer needed and report it as excess  It also requires, as part of an annual property inventory, that property that appears to be excess, worn out, or in obvious need of repair be noted as such and that guidance on identifying unneeded property be provided to personnel involved in conducting the inventories as well as employees assigned to use the property  In addition to not having policies on identifying and assessing property for continued need, agencies we reviewed also did not have a systematic process for doing so  Instead, when describing situations in which they declared property as excess, officials said they typically did so as a result of a “triggering event ” The types of triggering events the officials cited include an office move or consolidation or a lifecycle replacement of laptops  For example, officials from field locations of three of these agencies reported declaring most of their existing furniture as excess as the result of an office relocation or renovation  Agency officials said they were unable to use their existing furniture and had to declare it excess because it did not conform to new space utilization standards  At another agency, officials were disposing of a large number of laptop computers that had been declared excess because they had been replaced by new computers  Officials at two agencies said an assessment of property for continued need is an assumed practice that is part of the inventory for accountable property  However, an official from one of these agencies acknowledged that assessing need is not addressed in the written instructions provided to those conducting the inventory  Officials from two other agencies acknowledged that they continue to retain unneeded property that should be declared excess in storage on-site but had not pursued disposal due to other competing responsibilities with higher priorities  Proactively assessing personal property for continued need instead of responding to a triggering event can help agencies achieve both effective and efficient operations by ensuring that only needed property is retained and unneeded property is identified and declared excess  Federal internal control standards require that agencies design and maintain internal control activities—such as policies and procedures—to identify risks arising from mission and mission-support operations, and to provide reasonable assurance that agencies are operating in an efficient manner that minimizes the waste of resources  Such a system also provides reasonable assurance that agency property is safeguarded against waste, loss, or unauthorized use  OMB staff and GSA officials agreed that assessing all types of property—accountable and non-accountable—for continued need is important and called-for by internal control standards  Because the agencies we reviewed did not have systematic processes for assessing the continued need for personal property, they may not be aware of potential risks of maintaining property that may no longer be needed for operational purposes  Furthermore, previous work others have performed has shown that inaction on unneeded or idle property can limit efficient use of the government’s personal property, unnecessarily use an agency’s resources, or miss opportunities for potential cost savings, for example: The Department of Homeland Security’s Inspector General found that the U S  Coast Guard could not ensure that personal property was efficiently reutilized or properly disposed of to prevent unauthorized use or theft because the Coast Guard did not have adequate policies, procedures, and processes to identify and screen, reutilize, and dispose of excess personal property properly, including criteria for identifying such property  The EPA’s Inspector General estimated EPA could save $8 9 million in reduced warehouse costs through improved management of stored personal property  GSA personal property asset management studies conducted in 2003 and 2005 found, among other things, that personal property is not being used to its fullest extent in some agencies and that no government-wide usage assessment or standard exists to detect whether property is no longer needed and can be reported as excess  Without a triggering event, agencies may not be seeking out or identifying property that is no longer needed and declaring it excess as often as they should  Such unneeded property may be put to better use elsewhere within the agency or the federal government, or agencies may purchase or lease new property instead of using another agency’s property that is unneeded but not reported as excess  In addition, agencies may be missing opportunities to realize cost savings by identifying and disposing of unneeded property, such as property stored in warehouses, to reduce or make better use of that space  While the requirements for agencies to continually survey property under their control to identify excess is established in law, according to GSA officials, there are no government-wide regulations on managing personal property or fulfilling this specific requirement  According to GSA OGP officials, GSA does not have the authority to promulgate regulations or issue formal guidance on personal property that is in use by executive agencies  Furthermore, according to the officials, GSA is only authorized by law to prescribe regulations on excess and surplus personal property  OMB staff stated that they could issue a notification, such as a controller alert to agencies’ chief financial officers, to reinforce the statutory requirement that agencies conduct assessments of personal property for continued need  OMB periodically issues such alerts to highlight emerging financial management issues for agencies and also issues guidance to agencies through bulletins, circulars, and memorandums  By issuing a controller alert or other guidance, OMB can help ensure that agencies are proactively taking steps to evaluate their property for continued need, including developing appropriate policies for doing so, and can thereby improve efforts to promote maximum use of excess personal property  Officials from the five agencies we reviewed reported that they followed GSA’s automated process to dispose of property once they had made the determination it was no longer needed to support their agency’s mission  As previously described, GSA regulations on disposing of property establish a specific process for all executive agencies to follow, and GSA has also issued guidance to help agencies dispose of property under this process  In particular, once an agency has determined that the property it has is no longer needed within the agency, the agency is required to promptly report the property to GSA as excess, typically by entering information about it into GSAXcess, GSA’s web-based system for facilitating personal property disposal  This method requires agency employees to manually enter information using data entry screens that include help screens and error messages  GSA encourages agencies to provide a complete description of the property and to include multiple photographs of it  Officials from the five agencies we reviewed reported no significant difficulties with entering information into GSAXcess; collectively, these agencies reported over 37,000 items as excess property from fiscal year 2012 through 2016  Figure 2 indicates the number of items each selected agency reported to GSA as excess during that period  Once information entry is completed, the disposal process begins  If the property is not disposed of during one stage, it advances to the next stage  The disposal process is shown in figure 3  Agency officials we interviewed told us that responsibility for disposing of property is decentralized and typically occurs at the property’s location, whether at an agency headquarters, regional office, or lower level  Because of the large federal government presence in the Washington, D C , area, agency offices in that area may have access to resources to facilitate the disposal process that are unavailable elsewhere, such as transferring excess property to certain entities that complete some or all aspects of the disposal process for a fee  Two such entities are GSA’s Personal Property Center in Springfield, Virginia, which takes full accountability and control of an agency’s excess property for a fee and handles all the details of the disposal process, and USDA’s Centralized Excess Property Operation in Beltsville, Maryland  According to USDA’s Agriculture Property Management Regulations, property not needed by USDA or its bureau offices in the Washington, D C , area must be transferred to this office for final disposal actions  It also provides these same services to some non-USDA agencies  Agencies also use GSAXcess to search for and select available excess property  Agency officials told us that the system also sends disposition instructions to the property-holding agency, when the property is to be transferred to other federal agencies, donated, or sold and that the agencies follow these instructions  For example, when an agency requests an excess item in GSAXcess and GSA approves the request, the system notifies the requesting agency and the property-holding agency and provides contact information to arrange to complete the transaction  None of the selected agency officials reported difficulties completing a transfer or donation transaction  For property not transferred, donated, or sold, GSA notifies the agency that the property has no commercial value and can be abandoned or destroyed  All of our selected agencies reported trying to recycle such property  Selected agency officials told us they disposed of property from space reduction efforts, such as Freeze the Footprint and Reduce the Footprint, the same way as other personal property—using GSA’s disposal process  To meet space reduction goals, selected agencies are undertaking projects at dozens of locations  Projects have primarily involved leased space for offices and warehouses and have included office moves, consolidations, and closures  As federal agencies carry out these space reduction projects, they must also address any personal property in the project spaces  Selected agencies reported several factors that affected their decisions about this property, which for three of the agencies was primarily office furniture  Four agencies reported needing less space than they previously occupied because of changes in agency missions or staffing levels  Furthermore, officials from GSA OAS and IRS noted that workplace trends, including teleworking and decreased staffing, reduced the space needed  Finally, agencies also reported that the office furniture itself was mostly unsuitable because it was old and because it could not be configured for use in more efficient office space designs  As a result, some selected agency locations that completed an office move or renovation project reported that most of their existing furniture was not needed in their new space  For example, in its Reduce the Footprint plan for fiscal years 2017 through 2021, HUD noted that many of its locations were designed and furnished when it had a much larger staffing level and reported that in 2016, its usable square feet per employee was 356  Subsequently, HUD revised its space design standards, requiring future office spaces to adhere to a utilization rate of 175 square feet or less  At the HUD project we visited, an official told us the furniture in use before the project was old and was generally too large to be used to achieve space design standards  In 2017, Housing and Urban Development (HUD) reduced its Denver regional office space by 30 percent  HUD’s lease was expiring and it needed less space because it had fewer employees in the office, in part due to increased telework  Adhering to new space utilization standards in its office and furniture design further reduced HUD’s overall required space  An example of a new workstation is shown above  Before the project, the agency occupied about five floors of a commercial building  HUD renovated in place, one floor at a time, and replaced its existing office furniture with new  Personal property at this office included primarily office furniture, such as desks and 25-year old modular systems, and equipment, such as telephones  As each floor was completed and employees moved to new workstations, the property official on-site disposed of their old furniture and workstations by entering its information in GSAXcess  The official reported selling some of the excess furniture after completing the first floor but recycled or discarded excess furniture in subsequent rounds  In some cases, agencies did not dispose of all the personal property after a space reduction project but instead were able to retain it for other uses within the agency  For example, IRS officials reported closing an office in Englewood, Colorado, and transferred its furniture to Ogden, Utah, for storage for an upcoming project  GSA OAS officials in Denver said that after a space reduction project in which GSA decreased the size of its regional office, it retained the unneeded furniture and office space for temporary use by other agencies  For property that was declared excess following a space reduction project, agencies reported transferring, donating, and selling property to dispose of it, using GSA’s process  For example, officials in GSA OAS, Forest Service, and IRS locations told us they transferred some excess property to other federal agencies  The Forest Service in Denver transferred some modular office furniture to the Bureau of Land Management and the U S  Postal Service  The Forest Service and IRS also reported donating property, such as office furniture and equipment, through the State Agencies for Surplus Property program  Four agencies reported selling some of their property from a space reduction project  For example, HUD’s regional office in Denver sold some of its excess office furniture, which dated to 1992, and recycled or discarded the remainder  When disposing of property from a space reduction project, some agencies sought assistance from GSA  GSA’s Office of Personal Property Management (GSA OPPM) assists agencies, when requested, in disposing of personal property, and officials at selected agency locations reported receiving assistance and training  In one example, GSA officials told us that a regional office of a selected agency needed to dispose of an office full of furniture and, in addition to using the disposal process, contacted GSA OPPM for additional assistance  Because of the large amount of property, GSA OPPM took steps to make other agencies in the area aware of the available property and facilitated access to allow agencies to view the property  In another example, GSA OPPM officials met with officials from another agency in the planning stages of a relocation to answer questions and provided advice and guidance for disposing of personal property  When the Forest Service’s lease on its Denver-area office expired, the agency leased space in another location, requiring a move but reducing its office by over 21,000 square feet  The agency sought to conform to new space utilization standards, which required more efficiently-designed furniture than its existing office furniture  Because the Forest Service did not reuse most of its old furniture in its new space, it no longer had a need for it  The Forest Service retained some of the furniture for use in other Forest Service offices within the region and declared the remainder as excess  Through GSAXcess, the Forest Service transferred some of its excess furniture to other federal agencies, such as the Bureau of Land Management and the U S  Postal Service  The Forest Service sold some furniture at auction; broken items were recycled  Agencies may dispose of large amounts of property during a space reduction project, but overall, agency officials reported few challenges in doing so  This may be in part because any effects from space reductions are distributed across an entire agency  Although selected agencies’ average Reduce the Footprint space reduction goals ranged from 97,000 square feet to 662,000 square feet each fiscal year from 2016 to 2020, each agency’s efforts consisted of dozens of geographically dispersed projects of various sizes to be completed over several years  For example, as of fiscal year 2016, EPA had 21 space reduction projects planned from fiscal years 2016 through 2021, with individual anticipated reductions ranging from less than 1,000 square feet to more than 140,000 square feet  At least one project is present in 8 of EPA’s 10 regions  Agencies’ ability to pay for space reduction projects may also have affected these projects’ effects  Two selected agencies said they delayed projects because of a lack of funding  Agencies may reduce costs over the long term because of lower rent for smaller spaces but they may have to pay some expenses upfront, such as for moving, renovations, and new furniture  Although officials from all five agencies told us they have been able to manage personal property disposals from space reductions, they identified factors that can impact the efficient use of the disposal process during a space reduction project and some strategies taken to address them: Inventorying non-accountable property: As a space reduction project commenced at a location, most selected agencies reported that they did not have a complete list of the personal property affected by the project  As previously described, selected agencies do not maintain an itemized list of non-accountable personal property and for four agencies, office furniture is generally non-accountable  During a space reduction project, property personnel had to develop some type of inventory to identify property that would be needed and property that should be disposed of  Selected agencies had various methods for conducting such an inventory  For example, officials from two agencies said they walked through the affected space and created a list of all the items  Officials from one agency said a contractor was hired for this purpose  Most agencies reported using the inventory they created to enter information on excess property into GSAXcess  Officials at GSA’s OPPM offices in Philadelphia and Fort Worth said that they offer training and guidance to agencies in conducting inventories  Managing disposals within time frames: Agencies generally are not able to begin the disposal process until the property is no longer in use  For example, agency staff continue to use their old workspaces until they can move to new workspaces  Agencies also face deadlines, such as vacating space due to a lease expiration or commencement of renovation work  Officials from three agencies described challenges completing the disposal process—reporting excess personal property as well as completing transactions to transfer, donate, sell or abandon or destroy it—within required time frames  Some agency officials reported using different strategies to address this timing challenge  For example, one agency official was able to enter information about the excess property items into GSAXcess while employees were still using them  According to the official, this was possible because a note could be included in the property item’s description in GSAXcess, with the date when the property would be available  When the property was no longer in-use within the agency, the transfers or other transactions were completed  Additionally, an agency may conduct an on-site screening of its unneeded property to allow other federal agencies or authorized parties to physically view and identify any furniture they want  For example, GSA OPPM officials in Philadelphia conducted an on-site screening of unneeded office furniture resulting from the agency’s regional office relocation  Federal agencies collectively have billions of dollars’ worth of personal property, ranging from office furniture to highly specialized equipment that, when in use, supports agency missions  However, the agencies in our review did not have policies and systematic processes for identifying unneeded property  Furthermore, other’s previous work has shown that agencies across the government may not be effectively assessing their property for continued need, leading to idle property that could be put to better use elsewhere within the agency or the federal government and potential unnecessary storage costs  Consequently, agencies may be retaining property that is no longer needed  GSA has recognized that opportunities may exist for agencies to more effectively manage property under their control, but according to GSA OGP officials, GSA’s authority is limited to agency property that has been declared excess or surplus  According to OMB staff, OMB has the authority to issue guidance, such as controller alerts, emphasizing agencies’ property management obligations, and thus, it is well-positioned to assist agencies to more effectively manage their property and to ensure unneeded property is made available to others, as appropriate  The Director of OMB should provide guidance to executive agencies on managing their personal property, emphasizing that agencies’ policies or processes should reflect the requirement to continuously review and identify unneeded personal property  (Recommendation 1) We provided a draft of this report to OMB, EPA, the Forest Service, GSA, HUD, and IRS for comment  OMB stated that it did not have any comments on our draft report in an email and provided a technical clarification to the report, which we incorporated  GSA and IRS provided technical comments in an email, which we incorporated as appropriate  EPA, the Forest Service, and HUD each stated in an email that they did not have any comments on the draft report  We are sending copies of this report to the appropriate congressional committees, the Director of the Office of Management and Budget, the Administrator of the Environmental Protection Agency, the Secretary of the U S  Department of Agriculture, the Administrator of the General Services Administration, the Secretary of the Department of Housing and Urban Development, and the Secretary of the Department of the Treasury  In addition, the report is available at no charge on the GAO website at http://www gao gov  If you or your staffs have any questions about this report, please contact me at (202) 512-2834 or rectanusl@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff making key contributions to this report are listed in appendix III  The objectives of this report were to examine (1) how selected federal agencies assess whether personal property is needed and (2) how selected federal agencies dispose of unneeded personal property, and how, if at all, space reduction efforts have affected disposals  We excluded certain types of personal property, such as aircraft and vehicles, from our review because of our prior or ongoing work  To address our objectives, we reviewed applicable federal statutes and regulations pertaining to personal property management and disposal, our prior work, and reports by federal agencies’ Offices of Inspector General on personal property issues  In addition, to determine how selected federal agencies assess whether personal property is needed, we conducted background searches to inform our understanding of key practices for personal property and asset management through a search of databases containing peer-reviewed articles, government reports, general news, hearings and transcripts, and association and think tank papers  We also reviewed relevant asset management practices, such as ASTM standards and the General Services Administration’s (GSA) Federal Asset Management Evaluation and Personal Property Asset Management Study  In order to select agencies that may have had recent experiences with excess personal property, we selected 5 of the 24 agencies that were included in the Freeze the Footprint and Reduce the Footprint initiatives  We selected agencies based on their overall Freeze the Footprint results, in terms of the amount of square feet reduced, and Reduce the Footprint goals for reducing domestic office and warehouse space, and the amount of personal property declared excess over the last 5 years, as reported to GSA’s GSAXcess system from fiscal years 2012 to 2016, to coincide with the Freeze the Footprint time frame  Specifically, we obtained information on the Freeze the Footprint results and Reduce the Footprint goals from the Office of Management and Budget’s public website and from Performance gov  We limited our scope to civilian federal agencies with personal property within the United States  Although we have previously reported that the overall accuracy of data that agencies reported on office and warehouse space reductions could be improved, we found that the data were generally reliable for our purposes  After reviewing the data for any inconsistencies and discussing the information with selected agency officials to ensure that the reported numbers for the Reduce the Footprint initiative were current, we determined that the quality of the data were sufficient for our use in selecting agencies  In order to select agencies that were more likely to have relevant, recent experience with excess personal property from space reduction efforts, we ranked these agencies based on their Freeze the Footprint results, Reduce the Footprint goals, and the amount of declared excess personal property, and eliminated the bottom third of the agencies  We selected GSA as our first agency due to its central role in excess personal property disposal, and randomly selected four additional agencies from the remaining agencies  These agencies were the Environmental Protection Agency, the U S  Department of Agriculture, the Department of Housing and Urban Development, and the Department of the Treasury  The organizational structure of two selected agencies, the Department of Agriculture and the Department of the Treasury, is different than the other three agencies in that they are comprised primarily of sub-agencies  Therefore, we selected the largest sub-agency for both departments—the Forest Service within the Department of Agriculture and the Internal Revenue Service within the Department of the Treasury  We obtained information from the five selected federal agencies on the total value and number of items in their asset management systems in 2017 to understand the size and scope of personal property assets they manage  As we used the information to describe the scope of the agencies’ property holdings, we did not verify the data  We also analyzed documents, such as the selected agencies’ personal property management policies, along with policies from the National Aeronautics and Space Administration and Department of Energy, to understand how they addressed requirements for managing personal property  We included these agencies’ policies based on our review of prior work related to personal property  We interviewed officials from the selected agencies about their processes for managing personal property assets, such as their inventory procedures  However, we did not independently assess agencies’ inventory practices  We also interviewed staff from the Office of Management and Budget (OMB) to discuss regulations and policies pertaining to personal property and OMB’s role in personal property management  To determine how selected federal agencies dispose of excess and surplus personal property and how space reduction efforts may have affected disposals, in addition to the above, we obtained information from each selected agency on its space reduction projects and interviewed officials about their roles and responsibilities in the agency’s space reduction planning efforts and personal property disposal process  We also conducted site visits to Philadelphia, Pennsylvania, and Denver, Colorado to meet with regional and local officials from each selected agency responsible for managing and disposing of personal property  These locations were chosen based on the number of our selected federal agencies present, the amount of excess personal property declared, and the existence of space reduction projects  We discussed property accountability policies, overall personal property disposal processes, and how the disposal processes were affected by government-wide space savings initiatives, such as Freeze the Footprint and Reduce the Footprint, and any efforts to prepare for them, and requested supporting documentation on the amount of property declared as excess and the disposition outcomes of that property  We did not independently verify the information that was provided, as data reported as excess from space reduction projects are not always tracked separately from other property disposed of for other reasons  We reviewed documents and interviewed officials from GSA’s Office of Personal Property Management (GSA OPPM) in GSA’s headquarters, in Philadelphia and in Fort Worth, Texas, to discuss their role in assisting agencies in disposing of personal property and to obtain their views on how personal property disposals have been affected by space reductions  Finally, we interviewed GSA’s Office of Government-wide Policy (GSA OGP) officials about the Interagency Committee on Property Management and the Property Management Executive Council regarding their personal property and asset management efforts and met with officials and representatives from the following: the U S  Department of Agriculture’s Centralized Excess Property Operation, the Users and Screeners Association–Federal Excess Personal Property, and the National Association of State Agencies for Surplus Property to discuss their roles in the reuse and disposal of Federal personal property  We conducted this performance audit from July 2016 to February 2018 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  The Federal Property and Administrative Services Act of 1949, as amended, requires executive agencies, in part, to promptly report excess property to the General Services Administration (GSA) and dispose of it in accordance with GSA regulations  Each executive agency is also required to fulfill requirements for personal property by using existing agency property or by obtaining excess property from other federal agencies before purchasing new property  GSA’s disposal process, as laid out in federal regulation, incorporates and facilitates these requirements, providing a means for both disposing of and acquiring unneeded property: agencies with excess personal property can dispose of it and other agencies, authorized non-federal entities, and, eventually, the general public can acquire this property  After determining that a property item is no longer needed to complete its mission, an agency may have several options for proceeding before formally declaring the property as excess to GSA: Immediately authorize abandonment or destruction of the property: Determine, in writing, that the property has no commercial value or the estimated cost of its continued care and handling would exceed the estimated proceeds from its sale  If an agency makes such a determination, it may abandon or destroy the property without reporting it to GSA as excess  In lieu of abandonment or destruction, an agency may donate excess personal property to a public body without going through GSA  Directly transfer the property to another federal agency: Agencies usually become aware of available property through informal means, such as a contact at the disposing agency, according to GSA  GSA approval for such a transfer is not needed if the total original acquisition cost for each item does not exceed $10,000  If this cost is greater than $10,000, the acquiring agency must obtain prior approval from GSA  In either case, the acquiring agency must notify GSA of the transfer  Directly transfer the property to an eligible recipient under a special authority: Special authorities are legal provisions that are designed to give excess assets to groups that may use them for a particular purpose, such as universities that can use the National Aeronautics and Space Administration’s scientific equipment in their research  Some authorities exist to collectively support all federal agencies and some support an agency-specific program  According to GSA, the primary government-wide programs are the Stevenson-Wydler Technology Innovation Act of 1980 and Executive Order 12999, also known as the Computers for Learning program  Recipients meeting eligibility requirements of the special authority contact agencies to determine the availability of property, and the agency and recipient must complete the appropriate documentation to make a record of the transfer  An agency initiates GSA’s disposal process by formally declaring property as excess, either by completing and submitting a form to GSA or, more typically, by electronic entry of an item into GSAXcess, GSA’s real-time, Web-based site for facilitating the disposal process  The latter method requires agency employees to enter information about the excess property using data entry screens that include help screens and error messages  GSA encourages reporting agencies to provide a complete description of the property and to include multiple photographs of the property  The disposal process generally consists of four sequential stages in which personal property may be transferred to another agency or eligible recipient, donated, sold, or abandoned or destroyed, as described below  If the property is not disposed of during one stage, it advances to the next stage, though the holding agency generally retains physical custody of the property until it is disposed of  Table 2 illustrates actions a disposing agency and eligible property recipients take during each of the four stages of the disposal process after an agency declares property excess  In addition to the individual named above, the following individuals made important contributions to this report: David J  Wise (Director), Nancy Lueke (Assistant Director), Travis Thomson (Analyst-in-Charge), Lacey Coppage, Rosa Leung, Josh Ormond, Amy Rosewarne, Pamela Vines, and Elizabeth Wood 


Report 2: The Federal Communications Commission (FCC) is an independent federal agency, with its five members appointed by the President, subject to confirmation by the Senate  It was established by the Communications Act of 1934 (1934 Act, or "Communications Act") and is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable  The mission of the FCC is to ensure that the American people have available, "without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges " The 1934 Act is divided into titles and sections that describe various powers and concerns of the commission  Title I—FCC Administration and Powers  The 1934 Act originally called for a commission consisting of seven members, but that number was reduced to five in 1983  Commissioners are appointed by the President and approved by the Senate to serve five-year terms; the President designates one member to serve as chairman  Title II—Common carrier regulation, primarily telephone regulation, including circuit-switched telephone services offered by cable companies  Common carriers are communication companies that provide facilities for transmission but do not originate messages, such as telephone and microwave providers  The 1934 Act limits FCC regulation to interstate and international common carriers, although a joint federal-state board coordinates regulation between the FCC and state regulatory commissions  Title III—Broadcast station requirements  Much existing broadcast regulation was established prior to 1934 by the Federal Radio Commission, and most provisions of the Radio Act of 1927 were subsumed into Title III of the 1934 Act  Title IV—Procedural and administrative provisions, such as hearings, joint boards, judicial review of the FCC's orders, petitions, and inquiries  Title V—Penal provisions and forfeitures, such as violations of rules and regulations  Title VI—Cable communications, such as the use of cable channels and cable ownership restrictions, franchising, and video programming services provided by telephone companies  Title VII—Miscellaneous provisions and powers, such as war powers of the President, closed captioning of public service announcements, and telecommunications development fund  The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms (except when filling an unexpired term)  The President designates one of the commissioners to serve as chairperson  Three commissioners may be members of the same political party as the President and none can have a financial interest in any commission-related business  Ajit Pai, Chair (originally sworn in on May 14, 2012; designated chairman by President Trump in January 2017 and confirmed by the Senate for a second term on October 2, 2017); Michael O'Rielly (sworn in for a second term on January 29, 2015); Brendan Carr (sworn in on August 11, 2017); Jessica Rosenworcel (sworn in on August 11, 2017); and Geoffrey Starks (sworn in on January 30, 2019)  The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices  The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates  The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006, largely in response to Hurricane Katrina  The bureaus process applications for licenses and other filings, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things  The offices provide support services  Bureaus and offices often collaborate when addressing FCC issues  The bureaus hold the following responsibilities: Consumer and Governmental Affairs Bureau—Develops and implements consumer policies, including disability access and policies affecting Tribal nations  The Bureau serves as the public face of the Commission through outreach and education, as well as responding to consumer inquiries and informal complaints  The Bureau also maintains collaborative partnerships with state, local, and tribal governments in such critical areas as emergency preparedness and implementation of new technologies  In addition, the Bureau's Disability Rights Office provides expert policy and compliance advice on accessibility with respect to various forms of communications for persons with disabilities  Enforcement Bureau—Enforces the Communications Act and the FCC's rules  It protects consumers, ensures efficient use of spectrum, furthers public safety, promotes competition, resolves intercarrier disputes, and protects the integrity of FCC programs and activities from fraud, waste, and abuse  International Bureau—Administers the FCC's international telecommunications and satellite programs and policies, including licensing and regulatory functions  The Bureau promotes pro-competitive policies abroad, coordinating the FCC's global spectrum activities and advocating U S  interests in international communications and competition  The Bureau works to promote high-quality, reliable, interconnected, and interoperable communications infrastructure on a global scale  Media Bureau—Recommends, develops, and administers the policy and licensing programs relating to electronic media, including broadcast, cable, and satellite television in the United States and its territories  Public Safety and Homeland Security Bureau—Develops and implements policies and programs to strengthen public safety communications, homeland security, national security, emergency management and preparedness, disaster management, and network reliability  These efforts include rulemaking proceedings that promote more efficient use of public safety spectrum, improve public alerting mechanisms, enhance the nation's 911 emergency calling system, and establish frameworks for communications prioritization during crisis  The Bureau also maintains 24/7 operations capability and promotes Commission preparedness to assist the public, first responders, the communications industry, and all levels of government in responding to emergencies and major disasters where reliable public safety communications are essential  Wireless Telecommunications Bureau—Responsible for wireless telecommunications programs and policies in the United States and its territories, including licensing and regulatory functions  Wireless communications services include cellular, paging, personal communications, mobile broadband, and other radio services used by businesses and private citizens  Wireline Competition Bureau—Develops, recommends, and implements policies and programs for wireline telecommunications, including fixed (as opposed to mobile) broadband and telephone landlines, striving to promote the widespread development and availability of these services  The Bureau has primary responsibility for the Universal Service Fund which helps connect all Americans to communications networks  The offices hold the following responsibilities: Administrative Law Judges—Composed of one judge (and associated staff) who presides over hearings and issues decisions on matters referred by the FCC  Communications Business Opportunities—Promotes competition and innovation in the provision and ownership of telecommunications services by supporting opportunities for small businesses as well as women and minority-owned communications businesses  Economics and Analytics—Responsible for expanding and deepening the use of economic analysis into Commission policymaking, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies  The Office also manages the FCC's auctions in support of and in coordination with the FCC's Bureaus and Offices  In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with the Office of Economics and Analytics  Engineering and Technology—Advises the FCC on technical and engineering matters  This Office develops and administers FCC decisions regarding spectrum allocations and grants equipment authorizations and experimental licenses  General Counsel—Serves as the FCC's chief legal advisor and representative  Inspector General—Conducts and supervises audits and investigations relating to FCC programs and operations  Legislative Affairs—Serves as the liaison between the FCC and Congress, as well as other federal agencies  Managing Director—Administers and manages the FCC  Media Relations—Informs the media of FCC decisions and serves as the FCC's main point of contact with the media  Workplace Diversity—Ensures that FCC provides employment opportunities for all persons regardless of race, color, sex, national origin, religion, age, disability, or sexual orientation  Additionally, an FCC Secretary serves to preserve the integrity of the FCC's records, oversee the receipt and distribution of documents filed by the public through electronic and paper filing systems, and give effective legal notice of FCC decisions by publishing them in the Federal Register and the FCC Record   The current FCC Strategic Plan covers the five-year period FY2018-FY2022  The plan outlines four goals: Closing the Digital Divide—Broadband is acknowledged as being critical to economic opportunity, but broadband is unavailable or unaffordable in many parts of the country  The FCC is to seek to help close the digital divide, bring down the cost of broadband deployment, and create incentives for providers to connect consumers in hard-to-serve areas  Promoting Innovation—Fostering a competitive, dynamic, and innovative market for communications services is a key priority for the FCC  The FCC plans to promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment  Protecting Consumers and Public Safety—Serving the broader public interest is the FCC's core mission  The FCC plans to work to combat unwanted and unlawful robocalls, make communications accessible for people with disabilities, and protect public safety (e g , ensuring delivery of 9-1-1 calls, restoring communications after disasters)  Reforming the FCC's Processes—One of the chairman's top priorities has been to implement process reforms to make the work of the FCC more transparent, open, and accountable to the public  The FCC plans to modernize and streamline its operations and programs to improve decisionmaking, build consensus, and reduce regulatory burdens  The FCC has identified performance objectives associated with each strategic goal  Commission management annually develops targets and measures related to each performance goal to provide direction toward accomplishing those goals  Targets and measures are published in the FCC's Performance Plan, and submitted with the commission's annual budget request to Congress  Results of the commission's efforts to meet its goals, targets, and measures are found in the FCC's Annual Performance Report published each February  The FCC also issues a Summary of Performance and Financial Results every February, providing a concise, citizen-focused review of the agency's accomplishments  Since the 110 th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item  Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item  The FCC annually collects and retains regulatory fees to offset costs incurred by the agency and to carry out its functions  Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation  The fees, often referred to as "Section (9) fees," are collected from license holders and certain other entities (e g , cable television systems)  The regulatory fees do not apply to governmental entities, amateur radio operator licensees, nonprofit entities, and certain other non-commercial entities  The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year  The Commission originally implemented the Regulatory Fee Collection Program by rulemaking on July 18, 1994  The most recent regulatory fee order was released by the Commission on August 29, 2018  The FCC's budgets from FY2010 to FY2020 are in Figure 1   On March 23, 2018, the Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 (the "RAY BAUM'S Act" or "2018 Act") became law as part of the Consolidated Appropriations Act, 2018 ( P L  115-141 )  The 2018 Act requires the FCC to transfer all excess collections for FY2018 and prior years to the General Fund of the U S  Treasury for the sole purpose of deficit reduction  The 2018 Act also requires the Commission to transfer any excess collections in FY2019 and in subsequent years to the General Fund of the U S  Treasury for the sole purpose of deficit reduction  On October 1, 2018, the Commission transferred over $9 million in excess collections from FY2018 as well as approximately $112 million in excess collections from FY2017 and prior years to the General Fund of the U S  Treasury  For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections  This is $3,950,000 less than the authorization level of $339,610,000 included in the 2018 FCC Reauthorization in the Consolidated Appropriations Act, 2018  The FY2020 FCC request also represents a decrease of $3,340,000, or about 1 0%, from the FY2019 appropriated level of $339,000,000  The FCC requested $132,538,680 in budget authority for the spectrum auctions program  For FY2019, Congress appropriated a cap of $130,284,000 for the spectrum auctions program, which included additional funds to implement the requirements of the 2018 Act that mandated significant additional work for the FCC related to the TV Broadcaster Relocation Fund  The Commission's FY2020 budget request of $132,538,680 for this program would be an increase of $2,254,680, or 1 7%, over the FY2019 appropriation  This level of funding is intended to enable the Commission to continue its efforts to: reimburse full power and Class A stations, multichannel video programming distributors, Low Power TV, TV translator, and FM stations for reasonable costs incurred as a result of the Commission's incentive auction; make more spectrum available for 5G; and educate consumers affected by the reorganization of broadcast television spectrum  To date, the Commission's spectrum auctions program has generated over $114 6 billion for government use; at the same time, the total cost of the auctions program has been less than $2 0 billion, or less than 1 7% of the total auctions' revenue  Through the Consolidated Appropriations Act, 2018 ( P L  115-141 ), the FCC was reauthorized for the first time since 1990 (FCC Authorization Act of 1990, P L  101-396 )  The FCC publishes four periodic reports for Congress  Strategic Plan  The Strategic Plan is the framework around which the FCC develops its yearly Performance Plan and Performance Budget  The FCC submitted its current four-year Strategic Plan for 2018-2022 in February 2018, in accordance with the Government Performance and Results Modernization Act of 2010, P L  111-352   Performance Budget  The annual Performance Budget includes performance targets based on the FCC's strategic goals and objectives, and serves as the guide for implementing the Strategic Plan  The Performance Budget becomes part of the President's annual budget request  Agency Financial Report  The annual Agency Financial Report contains financial and other information, such as a financial discussion and analysis of the agency's status, financial statements, and audit reports  Annual Performance Report  At the end of the fiscal year, the FCC publishes an Annual Performance Report that compares the agency's actual performance with its targets  All of these reports are available on the FCC website, https://www fcc gov/about/strategic-plans-budget   One FCC-related hearing has been held in the 116 th Congress  On April 3, 2019, the House Committee on Appropriations Subcommittee on Financial Services and General Government held a hearing on the FY2020 FCC budget  The hearing addressed issues including 5G deployment, federal preemption of state and local tower siting requirements, merger reviews, robocalls, and net neutrality  No bills that would affect the operation of the FCC have been introduced in the 116 th Congress  The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P L  632, 69 th Congress), but how this mandate is applied depends on which of two regulatory philosophies is relied upon to interpret it  The first seeks to protect and benefit the public at large through regulation, while the second seeks to achieve the same goals through the promotion of market efficiency  Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances, and the agency has not defined it in more concrete terms  These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries  This evolution can be illustrated in changes to the agency's strategic goals under former Chairman Tom Wheeler to current Chairman Ajit Pai, which, in turn, led to the repeal in 2017 of the FCC's 2015 net neutrality rules and to changes in the agency's structure in 2019  The FCC's strategic goals are set forth in its quadrennial Strategic Plan  How these goals change from one plan to the next can illustrate how the priorities of the commission change over time, especially when there is a change in the political majority of the commission and therefore, the political party of the chairman  Table 1 outlines the strategic goals of Chairman Wheeler in the FY2015-FY2018 Strategic Plan compared to those of Chairman Pai in the FY2018-FY2022 Strategic Plan  Chairman Wheeler was a proponent of protecting and benefitting the public through regulation  His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as the "rights of users" and the "responsibilities of network providers " Another example can be seen in the following language: "The FCC has a responsibility to promote the expansion of these networks and to ensure they have the incentive and the ability to compete fairly with one another in providing broadband services " On the other hand, Chairman Pai speaks about protecting and benefitting the public through the promotion of market incentives and efficiency  His support of this regulatory philosophy can be seen in the language used in the strategic goals, such as "reducing regulatory burdens" and ensuring that "regulations reflect the realities of the current marketplace, promote entrepreneurship, expand economic opportunity, and remove barriers to entry and investment " The use of this particular language may seem somewhat vague, but within the context of the net neutrality debate, discussed below, and the replacement of the Office of Strategic Planning and Policy Analysis with the Office of Economics and Analytics, those words take on more specific meaning, each intending to support the policy agenda of the Chairman  Net neutrality is arguably the highest profile issue illustrating the two regulatory philosophies described above  Chairman Pai had long maintained that the FCC under Chairman Wheeler had overstepped its bounds, expressing confidence that the 2015 Wheeler-era net neutrality rules would be undone, calling them "unnecessary regulations that hold back investment and innovation " Although the net neutrality debate originated in 2005, the 2015 Open Internet Order, implemented under the leadership of Chairman Wheeler, and the 2017 Order overturning those rules, promulgated under Chairman Pai, are the most recent  These two orders can be used to illustrate the contrast between the regulatory philosophies of the two chairmen: Some policymakers contend that more proscriptive regulations, such as those contained in the FCC's 2015 Open Internet Order (2015 Order), are necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept  Others contend that existing laws and the current, less restrictive approach, contained in the FCC's 2017 Restoring Internet Freedom Order (2017 Order), provide a more suitable framework  Net neutrality continues to be a highly politicized issue, with most FCC action being approved along party lines  In January 2019, the FCC voted along party lines to eliminate the Office of Strategic Planning and Policy Analysis and replace it with a new Office of Economics and Analytics  The Office of Strategic Planning and Policy Analysis (OSP) was created in 2005, replacing the Office of Plans and Policy  OSP had been charged with "providing advice to the chairman, commissioners, bureaus, and offices; developing strategic plans; identifying the agency's policy objectives; and providing research, advice, and analysis of advanced, novel, and nontraditional communications issues " It had also been the home of the Chief Economist and Chief Technologist  The new Office of Economics and Analytics is "responsible for expanding and deepening the use of economic analysis into FCC policy making, for enhancing the development and use of auctions, and for implementing consistent and effective agency-wide data practices and policies " This new office reflects the goals in the current strategic plan: We will modernize and streamline the FCC's operations and programs to … reduce regulatory burdens…  A key priority [is to] … ensure that the FCC's actions and regulations reflect the realities of the current marketplace … and remove barriers to entry and investment  As the FCC continues to conduct its business into the future, the changing regulatory philosophies of the FCC chairmen may continue to drive how the FCC defines its long-term, strategic goals  This, in turn, may affect how the agency structures (and restructures) itself and how it decides regulatory questions, including a continued review of net neutrality  Congress may determine that the public interest standard should remain more static, rather than fluctuating dramatically depending on the regulatory philosophy of the chairman  No legislation on this topic has been introduced in Congress, signaling to some observers that it intends to continue allowing the FCC to define it  Table A-1   Senate and House hearings in the 115 th Congress regarding the operation of the FCC are detailed in Table A-2 and Table A-3 , respectively  Links to individual hearing pages are included in these tables 

ground_truth: The Federal Communications Commission (FCC) is an independent federal agency established by the Communications Act of 1934 (1934 Act, or "Communications Act"). The agency is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The mission of the FCC is to make available for all people of the United States, "without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges." The FCC operates under a public interest mandate first laid out in the 1927 Radio Act (P.L. 632, 69th Congress), but how this mandate is applied depends on how "the public interest" is interpreted. Some regulators seek to protect and benefit the public at large through regulation, while others seek to achieve the same goals through the promotion of market efficiency. Additionally, Congress granted the FCC wide latitude and flexibility to revise its interpretation of the public interest standard to reflect changing circumstances and the agency has not defined it in more concrete terms. These circumstances, paired with changes in FCC leadership, have led to significant changes over time in how the FCC regulates the broadcast and telecommunications industries. The FCC is directed by five commissioners appointed by the President and confirmed by the Senate for five-year terms. The President designates one of the commissioners as chairperson. Three commissioners may be members of the same political party of the President and none can have a financial interest in any commission-related business. The current commissioners are Ajit Pai (Chair), Michael O'Rielly, Brendan Carr, Jessica Rosenworcel, and Geoffrey Starks. The day-to-day functions of the FCC are carried out by 7 bureaus and 10 offices. The current basic structure of the FCC was established in 2002 as part of the agency's effort to better reflect the industries it regulates. The seventh bureau, the Public Safety and Homeland Security Bureau, was established in 2006. The bureaus process applications for licenses and other filings, manage non-federal spectrum, analyze complaints, conduct investigations, develop and implement regulatory programs, and participate in hearings, among other things. The offices provide support services. Bureaus and offices often collaborate when addressing FCC issues. Beginning in the 110th Congress, the FCC has been funded through the House and Senate Financial Services and General Government (FSGG) appropriations bill as a single line item. Previously, it was funded through what is now the Commerce, Justice, Science appropriations bill, also as a single line item. Since 2009 the FCC's budget has been derived from regulatory fees collected by the agency rather than through a direct appropriation. The fees, often referred to as "Section (9) fees," are collected from license holders and certain other entities. The FCC is authorized to review the regulatory fees each year and adjust them to reflect changes in its appropriation from year to year. Most years, appropriations language prohibits the use by the commission of any excess collections received in the current fiscal year or any prior years. For FY2020, the FCC has requested $335,660,000 in budget authority from regulatory fee offsetting collections. The FCC also requested $132,538,680 in budget authority for the spectrum auctions program.