United States Government Accountability Office

GAO Testimony 

Before the Committee on Small Business

and Entrepreneurship, U.S. Senate

SMALL BUSINESS 

ADMINISTRATION 

Preliminary Views on Issues 

Related to the Women's 

Business Center Program 

Statement of William B. Shear, Director

Financial Markets and Community Investments 

For Release on Delivery 

Expected at 10:00 a.m. EDT 

Thursday, September 20, 2007 

 

GAO-07-1244T
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2007

SMALL BUSINESS ADMINISTRATION

Preliminary Views on Issues Related to the 

Highlight Women's Business Center Program s of GAO-07-1244T, a testimony 

before the Committee on Small Business 

and Entrepreneurship, U.S. Senate 

The Small Business Administration 

(SBA) provides training and

counseling services to women 

entrepreneurs through the

Women’s Business Center (WBC)

program. With approximately $12 

million in fiscal year 2007, SBA

funded awards to 99 WBCs. 

However, Congress and WBCs have 

expressed concerns about the

uncertain nature of the program’s 

funding structure. Concerns have 

also been raised about the

possibility that the WBC and two 

other SBA programs, the Small 

Business Development Center

(SBDC) and SCORE programs, are

duplicating each other’s efforts. 

This testimony discusses 

preliminary views on (1)

uncertainties associated with the 

funding process for WBCs; (2) 

SBA’s oversight of the WBC 

program; and (3) actions that SBA 

and WBCs have taken to avoid

duplication among the WBC, SBDC, 

and SCORE programs. GAO 

reviewed policies, procedures, 

examinations, and studies related 

to the funding, oversight, and 

services of WBCs and interviewed 

SBA, WBC, SBDC, and SCORE 

officials. 

 

What GAO Recommends

Because this testimony is based on

an ongoing engagement, it does not

include recommendations. GAO 

anticipates making

recommendations in its final 

report.

Until 2007, WBCs were funded on a temporary basis for up to 10 years, at 

which time it was expected that the centers would become self-sustaining. 

Beginning in 1997, SBA made annual awards to WBCs for up to 5 years. 

Because of concerns that WBCs could not sustain their operations without 

continued SBA funding, in 1999, Congress created a pilot program to extend 

funding an additional 5 years. Due to continued uncertainty about WBCs’ 

ability to sustain operations without SBA funding, in May 2007, Congress

passed legislation authorizing renewable 3-year awards to WBCs that 

“graduated” from the program after 10 years, as well as to current program 

participants. Like the current awards, the 3-year awards are competitive, 

and more centers may be applying for limited dollars. SBA is currently

revising its award process to incorporate the new program changes. 

Though SBA has oversight procedures in place to monitor WBCs’ 

performance and use of federal funds, staff shortages from the agency’s 

downsizing and limited communication may hinder SBA’s oversight efforts. 

SBA relies extensively on district office technical representatives (DOTRs) 

to oversee WBCs, but these staff members also have other job 

responsibilities and may not have the needed expertise to conduct some

oversight procedures. SBA provides annual training and has taken steps to 

adjust its oversight procedures to adapt to staffing changes, but concerns 

remain. Some WBCs also cited communication problems, and one study 

reported that 54 percent of 52 WBCs responding to the study’s survey said

that SBA could improve its communication with the centers. For example, 

some WBCs told us that SBA did not provide sufficient feedback on their 

performance. 

 

Under the terms of the WBC award, the centers are required to coordinate 

with local SBDCs and SCORE chapters. SBA officials told us that they

expected district offices to ensure that the programs did not duplicate each 

other. However, based on our preliminary review, we found that SBA 

provided limited guidance on how to successfully carry out coordination 

efforts. Most of the WBCs that we spoke with explained that in some

situations they referred clients to an SBDC or SCORE counselor, and some

WBCs also took steps to more actively coordinate with local SBDCs and 

SCORE chapters to avoid duplication and leverage resources. However, 

some WBCs told us that coordinating services was difficult, as the programs 

were each measured by the number of clients served and could end up 

competing for clients. Such concerns thwart coordination efforts and could 

increase the risk of duplication in some geographic areas. 

www.gao.gov/cgi-bin/getrpt?GAO-07-1244T.

To view the full product, including the scope 

and methodology, click on the link above.

For more information, contact William B.

Shear at (202) 512-8678 or shearw@gao.gov.
Women's Business Center Program

Mr. Chairman and Members of the Committee: 

I am pleased to have the opportunity to be here today to discuss the 

Women’s Business Center (WBC) Program. The WBC program, one of

several business assistance programs offered by the Small Business

Administration (SBA), provides long-term training, counseling, 

networking, and mentoring to women entrepreneurs, especially those who

are socially and economically disadvantaged. With a budget of

approximately $12 million in fiscal year 2007, SBA funded awards to 99

WBCs in amounts ranging from $90,000 to $150,000. However, Congress 

and WBCs under the program have expressed concerns about whether 

WBCs can continue operations without SBA funding and about the 

uncertain funding structure of the program. The 5-year funding cycle for 

regular awards, which many believed did not offer WBCs enough time to 

become self-sustaining, was later supplemented by a pilot program that

provided for an additional 5-year funding cycle for sustainability awards. 

But this program too raised concerns because of uncertainty about its 

reauthorization and funding.1

 In May 2007, to address the uncertainties

about the pilot program, Congress replaced it by allowing WBCs—

including those that had graduated from the program—to receive 3-year 

renewable awards.2

As you know, Congress created the WBC program in part due to the 

finding that existing business assistance programs for small business 

owners were not considered adequate to address women’s needs, but

concerns have also been raised about whether SBA’s business assistance 

programs are duplicating each other’s efforts. The two other primary 

business assistance programs that SBA administers are the Small Business

 1

The Women’s Business Ownership Act of 1988, Pub. L. No. 100-533, § 201, 102 Stat. 2689, 

2690 (1988), creating the Women’s Business Center program with demonstration projects

that would expire in 1991; the Women’s Business Development Act of 1991, Pub. L. No. 102-

191, § 2, 105 Stat. 1589 (1991), made them 3-year projects. In the Small Business

Reauthorization Act of 1997, Pub. L. No. 105-135, § 308, 111 Stat. 2592, 2611 (1997), the 

projects were extended to five years. The Women’s Business Centers Sustainability Act of

1999, Pub. L. No. 106-165, § 4, 113 Stat. 1795, 1796 (1999), created 5-year sustainability pilot 

projects awarded to WBCs who had completed the first 5-year project. 

2

The U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability 

Appropriations Act, 2007, Pub. L. No. 110-28, § 8305, 121 Stat. 112, 209 (2007), amends the 

Small Business Act to repeal the sustainability pilot program and to permit WBCs to 

receive SBA funding on a continual basis. WBCs currently in the program and those that

have successfully graduated will be eligible to apply for continuous award funding through

3-year renewable awards of up to $150,000 per year. 

Page 1 GAO-07-1244T
Women's Business Center Program

Development Center (SBDC) and SCORE (formerly called the Service 

Corps of Retired Executives) programs. These programs also provide 

training and counseling services to aspiring and existing small business 

owners but are not expected to target a particular group. Under the terms 

of the SBA award, WBCs are required to coordinate with local SBDCs and 

SCORE chapters when appropriate. 

In my testimony, I will discuss our preliminary views on these and related 

issues affecting the WBC program. My testimony addresses (1) the 

uncertainties associated with the funding process for WBCs; (2) SBA’s 

oversight of the WBC program, including policies and procedures for 

monitoring compliance with program requirements; and (3) the services 

that WBCs provide to small businesses and actions that SBA and WBCs 

have taken to avoid duplication of the services offered by the WBC, SBDC, 

and SCORE programs. My remarks are based on our ongoing work, which 

is exploring these issues in more detail. 

In conducting this work, we reviewed the legislative history of the WBC 

program, GAO’s previous reports, SBA’s policies and procedures for 

administering the program, and studies of the program conducted by SBA 

and external organizations. For the seven WBCs we visited, we reviewed 

documentation SBA uses to oversee WBCs and interviewed WBC officials 

about their services, relationship with SBA, and coordination with SBDCs 

and SCORE. We also interviewed SBA officials about the WBC, SBDC, and 

SCORE programs. In addition, we compared the statutory authority for the 

3 programs, interviewed a random sample of 17 WBCs about their

services, relationship with SBA, and coordination with SBDCs and 

SCORE, and visited 6 SBDCs and the SCORE national office. We discussed

the contents of this testimony with SBA. We conducted our work between 

August 2006 and September 2007 in accordance with generally accepted 

government auditing standards. 

• Until 2007, WBCs were funded on a temporary basis for up to 10 years 

at which time it was expected that the centers would become selfsustaining. When the program was created by Congress in 1988, it

began as a demonstration project and then in 1991 Congress authorized 

3-year projects. In 1997, SBA was authorized to make annual regular 

awards to WBCs for up to 5 years. Because of concerns that WBCs 

could not sustain operations without continued SBA funding, in 1999 

Congress created a pilot program to extend funding an additional 5 

years, allowing successful WBCs to receive SBA funding for a total of 

10 years. However, WBCs continued to face funding uncertainties. 

In summary: 

Page 2 GAO-07-1244T
Women's Business Center Program

First, because WBCs sometimes established their operations with SBA 

funds and depended on SBA funds to leverage other support, many 

were concerned about whether they could continue operations after 5 

to 10 years of receiving SBA funding. Second, the sustainability funding

was a pilot program that had to be reauthorized each year, creating 

uncertainty about whether there was a commitment to continue the 

program. Also, in 2007 the Office of Management and Budget (OMB) 

reported in its Program Assessment Rating Tool (PART), that frequent

changes by Congress in the WBC program’s funding structure, delays in

extending sustainability funding, and uncertainty about the future had 

created challenges for the program.3 Recent legislation for the WBC 

program replaced the sustainability pilot program with 3-year 

renewable awards. WBCs that have “graduated” from the program after 

10 years as well as those currently in the regular and pilot sustainability 

programs will be able to compete for the new awards, which could 

increase competition. In addition, exactly how much funding will be 

available in each future 3-year cycle is unclear. But the increased 

competition also provides an opportunity for SBA to continue funding 

high performing centers. Because the WBC program is a competitive 

discretionary award program, WBCs in the program compete annually 

for the maximum award amount but continue to receive SBA funds for 

the length of the project as long as their performance is satisfactory. 

SBA has criteria for ranking new applicants and existing program

participants for awards and is revising its award process to incorporate 

the new program changes. 

• SBA has developed written procedures for monitoring the performance 

and financial management activities of WBCs, but imbalances in its 

allocation of staff resources and ineffective communication may be 

limiting assurances that WBCs are in compliance and meeting the 

program’s goals. To ensure that WBCs are meeting program 

requirements, SBA conducts semi-annual programmatic and financial

examinations and requires that WBCs submit quarterly reports 

describing their progress in meeting annual performance goals and 

financial reports showing program expenses that qualify for SBA 

reimbursement. To carry out these oversight responsibilities, SBA 

relies extensively on district office technical representatives (DOTRs), 

but the current allocation of responsibilities for oversight may not be 

effective, given the staff levels and expertise in SBA’s district offices. 

First, there are concerns that DOTRs may have too many 

 3

OMB, Program Assessment: Women’s Business Centers, http://www. expectmore.gov

(accessed February, 6, 2007).

Page 3 GAO-07-1244T
Women's Business Center Program

responsibilities to be effective. Those we met with all performed other 

full-time agency responsibilities in addition to overseeing WBCs in their

districts. Second, DOTRs conduct the programmatic and financial

examinations for SBA, but there have been some questions about 

whether DOTRs have the expertise to conduct the financial 

component. Third, though most WBCs we interviewed spoke positively

of their relationship with their DOTR, several told us that the reduction 

in district office staffing related to SBA’s downsizing in recent years

had led to staff changes. As a result, there are concerns that some of 

the newer DOTRs might not have relevant oversight experience. SBA 

has taken some steps to adjust its oversight procedures to adapt to the 

changes in staffing in the district offices, but DOTRs continue to have a 

wide range of responsibilities that they may not be equipped to carry 

out effectively. In addition some WBCs told us that communication 

with SBA headquarters officials was not meeting all of their needs and 

one study we reviewed reported that 54 percent of 52 WBCs surveyed 

said that SBA could improve its communication with the centers. To 

communicate with WBCs, the Office of Women’s Business Ownership 

(OWBO) conducts monthly conference calls with WBCs and DOTRs 

and uses email to communicate policy changes and to request 

information. Some WBCs cited problems with these efforts. For 

example, some WBCs said that the conference calls were not a 

comfortable forum for asking questions, and that some of the email 

communications were confusing and did not always explain why 

information was being requested. Also, some WBCs said that SBA did 

not provide sufficient feedback on their performance. 

• We found that the WBCs we spoke with focused on a different type of

client than the SBDCs and SCORE chapters in their areas. Consistent

with the WBC program’s statutory authority and SBA requirements, 

WBCs tailor services to meet the needs of economically and socially

disadvantaged women. SBA’s study of WBCs showed that they tended 

to serve clients with businesses that had fewer employees and lower

revenues than clients of SBDCs and SCORE. As described by the terms 

of the SBA award, WBCs are required to coordinate with local SBDCs 

and SCORE chapters. In addition, SBA officials told us that they 

expected district offices to ensure that the programs did not duplicate 

each other. However, based on our review, WBCs appear to lack

guidance and information from SBA on how to successfully carry out 

their coordination efforts. Most of the WBCs that we spoke with

explained that in some situations they referred clients to an SBDC or 

SCORE counselor, and some WBCs also took steps to more actively 

coordinate with local SBDCs and SCORE chapters to avoid duplication

and leverage resources. We learned that WBCs used a variety of 

Page 4 GAO-07-1244T
Women's Business Center Program

approaches to facilitate coordination, such as memorandums of

understanding, information-sharing meetings, and co-locating staff and 

services. However, some WBCs expressed concerns related to 

coordinating services with SBDC and SCORE. Some WBCs told us that

coordinating services could be difficult because the programs are each 

measured by the number of clients they serve, resulting in competition

among the service providers in some locations. Other WBCs told us

that they were unsure how they could effectively co-locate with an 

SBDC. Such concerns thwart coordination efforts and could increase 

the risk of duplication in some geographic areas. 

The WBC program is administered through the Office of Women’s 

Business Ownership (OWBO) in SBA’s Office of Entrepreneurial

Development (OED). The program was established by the Women’s 

Business Ownership Act of 1988 to provide long-term training, counseling,

networking, and mentoring to women who own businesses or are potential

entrepreneurs after Congress found that existing business assistance 

programs for small business owners were not addressing women’s needs. 

The program’s goal is to add more well-trained women entrepreneurs to

the U.S. business community and to specifically target services to women 

who are socially and economically disadvantaged. In fiscal year 2007, SBA 

funded 99 WBCs throughout the United States and its territories. 

Background 

Private nonprofit organizations are eligible to apply for funds to set up 

WBCs, and successful applicants are initially awarded cooperative

agreements for a maximum of 5 years. WBCs must raise matching funds 

from nonfederal sources such as state and local public funds, private 

individuals, corporations and foundations, and program income derived 

from WBC services.

4

 In the first 2 years of the 5-year award, each WBC is 

required to match SBA award funding at one nonfederal dollar for each 

two federal dollars. In the last 3 years, the match is one nonfederal dollar 

for each federal dollar. WBC award amounts cannot exceed $150,000 each 

fiscal year per recipient. Award amounts may vary depending upon a 

WBC’s location, staff size, project objectives, performance, and agency 

priorities. 

WBC funding is performance-based, and each additional 12-month budget

period beyond the initial award may be exercised at SBA’s discretion. 

 4

When permissible under the terms of the Community Development Block Grant (CDBG)

program, CDBG funds may also be used to match a WBC award. 

Page 5 GAO-07-1244T
Women's Business Center Program

Among the factors involved in deciding whether to exercise an option for 

continued funding are the availability of funds, the extent to which past

WBC funds were spent, and satisfactory performance against SBAestablished performance measures, including the number of clients served 

and the number of jobs created. WBCs are required to provide this 

performance data to SBA in quarterly reports. 

In the Women’s Business Centers Sustainability Act of 1999, Congress 

established the sustainability pilot program because of concerns that

WBCs could not become self-sustaining in 5 years and needed continued

SBA funding. Under the sustainability pilot program, WBCs that had been 

receiving funding for 5 years could receive sustainability awards for an 

additional 5 years. Criteria for receiving awards under the pilot program 

were similar to those for receiving the initial awards. WBCs were assessed 

on their record of performance and had to provide nonfederal matching

funds equal to one dollar for each federal dollar. Unlike the WBC regular 

award, WBC sustainability award amounts could not exceed $125,000 each 

budget year per recipient. As noted earlier, Congress recently replaced 

these sustainability awards with 3-year renewable awards of not more than

$150,000 each year per recipient. SBA has not yet begun making these new

awards. 

In addition to the WBC program, SBA’s SBDC and SCORE programs also 

provide training and counseling services to small business clients. The 

SBDC program was created by Congress in 1980. SBDC services include, 

but are not limited to, assisting prospective and existing small businesses 

with financial, marketing, production, organization, engineering, and 

technical problems and feasibility studies. Each state and U.S. territory 

has a lead organization that sponsors and manages the SBDC program. 

The lead organization coordinates program services offered to small

businesses through a network of centers and satellite locations in each 

state that are located at colleges, universities, community colleges, 

vocational schools, chambers of commerce and economic development

corporations. In fiscal year 2007, the SBDC program received $87 million 

to make awards to 63 lead SBDCs throughout the United States.

5

The SCORE program was founded in 1964 as a nonprofit organization. 

Under the Small Business Act, as amended, SCORE is sponsored by and 

 5

The 63 lead centers include one in every state (Texas has four and California six), the 

District of Columbia, Guam, Puerto Rico, Samoa and the U.S. Virgin Islands.

Page 6 GAO-07-1244T
Women's Business Center Program

may receive appropriations through SBA. The SCORE program is designed

to provide free expert advice to prospective and existing small businesses

in all aspects of business formation, advancement, and problem solving. 

SCORE counselors are volunteers who assist clients through a Web site, 

SCORE chapter offices, SBA district offices, and other establishments. In

fiscal year 2007, the SCORE program received $5 million to support its 

activities and currently has 389 chapters throughout the United States. 

Recent legislation addresses concerns about long-term funding for WBCs, 

but prior to this legislation, the funding structure had been in flux since 

the program’s inception in 1988. In establishing the WBC program in 1988, 

Congress authorized SBA to help private nonprofit organizations conduct

projects that benefit small business concerns owned and controlled by 

women. The 1988 act allowed for demonstration projects that terminated 

in 1991. However, in 1991, Congress authorized SBA to make awards for 3-

year projects, and in 1997 Congress authorized SBA to make awards to 

WBCs for 5-year projects. In its 1999 reauthorization of the WBC program, 

as noted earlier, Congress added 5-year sustainability funding for WBCs 

that successfully completed 5-year projects to provide additional time for 

the centers to become self-sustaining. Because the WBC program is a 

competitive discretionary award program, WBCs in the program compete 

annually for the maximum award amount but continue to receive SBA 

funds as long as their performance is satisfactory.

Recent Legislation 

Addresses Some

Concerns about the 

WBC Program’s 

Funding 

WBCs that we spoke with identified two related factors that have largely 

been responsible for their funding uncertainties. First, because until

recently the WBC program offered limited-term funding—in contrast to 

the SBDC and SCORE programs, which receive continuous funding—

WBCs “graduated” from SBA support after 5 or 10 years. Several WBCs

that we spoke with expressed concern about the funding term limits and 

pointed out that the SBDC and SCORE programs do not have the same 

limits, even though SBA also administers those programs. Some WBCs in

both the regular and sustainability programs also said that they were

concerned about their ability to continue operations after losing SBA 

support. Second, Congress did not make the additional 5-year term for

sustainability funding permanent. Instead, Congress extended the pilot

program with each SBA reauthorization, creating uncertainty that limited 

SBA’s ability to manage the program effectively and causing concern

among the WBCs themselves. Several WBCs said that they were concerned 

that sustainability funding was not a permanent aspect of the WBC 

program.

Page 7 GAO-07-1244T
Women's Business Center Program

Several of the WBCs that we spoke with said that funding uncertainties 

made it difficult to establish an annual program budget with performance 

goals. Each year, SBA requires that WBCs participating in its program 

submit project-year proposals with performance goals in anticipation of an 

award. WBCs are not guaranteed funding each year because SBA makes 

awards each year at its discretion. Also, because the program is 

competitive and performance based, WBCs may receive varying award 

amounts each year. As noted, WBCs in the regular program can receive 

annual awards up to $150,000, and those in the sustainability program can 

receive annual awards up to $125,000. 

OMB’s 2007 PART report found that frequent changes by Congress in the 

WBC program’s funding structure, delays in extending sustainability

funding, and uncertainty about the future had created challenges for the 

program.

6

 OMB’s report also noted that SBA had taken steps to foster 

more consistent management of the WBC program but added that longterm planning was problematic because of the program’s funding

structure. When we spoke with officials at OMB, they emphasized that 

SBA appeared to be making a significant effort to assist WBCs, given the 

program’s limitations. They also noted that the funding challenges that 

WBCs faced after graduating from the sustainability pilot could be related 

to the fact that these organizations operate resource-intensive programs 

and collect nominal revenues in program fees, largely because of their 

focus on economically disadvantaged clients, causing them to rely heavily 

on external support.

Our preliminary review indicates that WBCs that perform satisfactorily 

continue to receive funds until they complete the program, and SBA 

indicates that it will fund WBCs through the project term, subject to

availability of funds. But SBA officials in headquarters and the district 

offices were aware of the challenges WBCs faced in planning annual 

budgets without knowing how much they would receive or whether 

sustainability funds would continue to be available. In discussing the WBC 

program’s limited term funding, some SBA district office officials 

emphasized that the agency had invested in creating successful WBCs and 

should be working to make those that performed well permanent SBA 

partners. 

 6

OMB, Program Assessment: Women’s Business Centers, http://www. expectmore.gov

(accessed, February 6, 2007).

Page 8 GAO-07-1244T
Women's Business Center Program

Recent legislation for the WBC program replaces the sustainability pilot 

program with 3-year renewable awards, providing an opportunity for SBA 

to continue funding WBCs. Current program participants and those that

have successfully graduated will be eligible to apply for continuous 

funding through these awards. The award process will remain competitive 

and the number of organizations competing could increase while SBA’s 

annual budget for the WBC program may not increase beyond the 

approximate $12 million provided in the last 5 years. However, increased 

award competition provides an opportunity for SBA to continue funding 

high-performing centers. Prior to the new program changes, SBA officials 

emphasized that the WBC program is the agency’s only performance based 

program and said that they believed this provided an incentive for WBCs 

to continuously improve. SBA officials told us that by the end of fiscal year 

2007, 26 WBCs would have graduated since the beginning of the program. 

SBA has criteria for ranking new award applicants and performance-based 

criteria for placing existing program participants into three funding 

categories for annual awards. As a result of the new legislation, which 

allows graduated WBCs to re-enter the pool of applicants for continuous 

funding and which changes the existing 5-year sustainability project terms 

going forward, SBA has begun revising its existing award process. SBA 

just completed making WBC awards for fiscal year 2007 to fund activities

in fiscal year 2008, and SBA officials told us that they plan to begin 

providing the 3-year renewable awards in fiscal year 2008. 

Our preliminary review found that SBA had developed written procedures

for monitoring the performance and financial management activities of

WBCs and has taken steps to measure the WBC program’s effectiveness. 

Since 1997, as a condition of continued funding, SBA has been required to

assess WBCs’ performance at least annually through programmatic and 

financial examinations.

7

 SBA also requires that WBCs submit performance 

and financial reports quarterly to describe their progress in meeting 

annual performance goals and to detail program expenses that qualify for 

SBA reimbursement. Some of the performance data that SBA collects from

WBCs are reported in the agency’s annual performance reports through

several output and outcome measures that are meant to evaluate the WBC 

program’s performance and effectiveness. As part of a broader impact

assessment of its business assistance programs, in 2004, SBA initiated a 3-

Imbalances in SBA’s 

Staff Resources and 

Ineffective 

Communication with 

WBCs Could Reduce 

the Effectiveness of 

Oversight Procedures 

 7

Small Business Reauthorization Act of 1997, Pub. L. No. 105-135, Section § 308(a), 111 Stat. 

2592, 2611 (1997); see also 15 U.S.C. Section § 656(h). 

Page 9 GAO-07-1244T
Women's Business Center Program

year longitudinal study of the WBC program, surveying clients served by

WBCs nationwide. 

SBA relies heavily on District Office Technical Representatives (DOTRs) 

to carry out oversight responsibilities, but our preliminary review suggests

that the downsizing of SBA’s staffing may have created challenges for 

DOTRs in fulfilling their assigned responsibilities. District directors 

currently assign the role of DOTR as a collateral duty to district office 

staff. In 2001, we reported that DOTRs had been given an increased role in 

assessing WBCs’ performance to ensure that the programs were fiscally 

sound and functioning smoothly. To this end, we reported that DOTRs 

were receiving intensive training each year at the postaward conference at

SBA headquarters on how to monitor the WBCs’ programmatic and 

financial activities. DOTRs are expected to conduct the WBC’s 

programmatic and financial examinations semiannually, but also have 

other program duties and full-time agency responsibilities. SBA has a list

of 23 responsibilities for DOTRs, some of which involve oversight,

including (1) reviewing the WBC’s requests for project revisions, (2) 

determining the extent to which the WBC is meeting the match

requirement, (3) reviewing the scope and quality of services provided to 

clients, (4) reviewing all WBC signage and media, and (5) helping to 

resolve problems. DOTRs are also expected to act as advocates for the 

WBCs within their district. Some of the DOTRs’ responsibilities related to

this role include (1) ensuring that the district office displays and 

distributes WBC brochures; (2) collecting success stories from WBCs to be 

used for publicizing the program; and (3) including WBCs in district office 

conferences, workshops, and other events for women business owners. 

The DOTRs’ total responsibilities for the WBC program appear to be

substantial, particularly since this oversight is a collateral role. Given 

SBA’s downsizing in recent years, some DOTRs may have more 

responsibilities than they had in the past to perform their WBC program

duties effectively, and others new to the role may lack the necessary

experience and training. Although most WBCs we interviewed spoke 

positively of their relationship with their DOTR, several told us that the 

reduction in district office staffing had led to changes, including assigning 

DOTR responsibilities to a different district office staff member. DOTRs 

still attend required training for the WBC program annually at SBA 

headquarters, and SBA provides them with a handbook to assist them in

performing their duties. However, district office staff at one location felt 

that DOTRs were not adequately trained to conduct the financial

component of WBC programmatic and financial examinations and told us

that SBA headquarters had previously coordinated financial examinations

Page 10 GAO-07-1244T
Women's Business Center Program

for WBCs.

8

 When we followed up with OWBO officials, they said that in

2004 a requirement was added that WBCs’ financial records be certified 

annually by a certified public accountant (CPA), both because the agency 

recognized that some DOTRs lacked this expertise and because of isolated 

incidents of mismanagement of WBC award funds. OWBO officials also 

said that they were coordinating with SBA’s Office of SBDCs, which is also 

under OED, to use SBDC financial examiners for these onsite financial

reviews of WBCs but added that recently there had not been enough staff 

to do all of the reviews. The officials also said that OED was reviewing 

how future financial audits for all of SBA’s business assistance programs 

would be conducted. 

Our preliminary review found that SBA had taken some steps to adapt

program oversight procedures to staffing changes in district offices. For 

example, before January 2007 DOTRs conducted programmatic and 

financial examinations four times a year, and SBA switched to semiannual

examinations to conserve its staff resources. In March 2007, SBA also

revised its reporting procedures for WBCs to streamline communication 

and reduce review and processing times. For example, WBCs had 

previously submitted quarterly financial reports with reimbursement

requests through the district office but now submit them directly to OWBO 

and copy the district office. These and other revisions that SBA has made

to date appear to have been made on an as-needed basis and were not part

of a strategic process or plan to revise its oversight activities. 

WBCs also cited concerns about communication with SBA. One study that

we reviewed reported that 54 percent of 52 WBCs surveyed said that SBA 

could improve its communication with them.

9

 OWBO, which administers 

the program, conducts monthly conference calls with the WBCs and 

DOTRs, but some WBCs said that the calls were not a good forum for 

asking questions though the topics covered in the call may raise questions. 

OWBO also uses email to communicate policy changes and make interim 

information requests, but several WBCs said these communications often 

came without sufficient explanation and mentioned areas in which policy 

changes or program requirements were unclear. The study specifically 

noted that better communication should include an effort to seek 

information from WBCs on how SBA’s frequent information requests and 

 8

SBA headquarters still coordinates bi-annual financial audits for SBDCs.

9

Center for Women’s Leadership at Babson College, “The Impact and Influence of Women’s

Business Centers in the United States,” April 2005. 

Page 11 GAO-07-1244T
Women's Business Center Program

policy changes impacted WBC operations. Some WBCs also told us that

they were not sure how well they were performing because they did not

receive feedback on semi-annual examinations or the reports they 

submitted quarterly to SBA. SBA officials told us that they are aware of 

this concern and are taking steps to make the performance-based funding 

process more transparent. 

Based on our preliminary review, we found that the WBCs we spoke with

focused on a different type of client than the SBDCs and SCORE chapters

in their areas, and several WBCs actively coordinated with the other 

programs to avoid duplicating services. But based on our review to date, 

the centers appear to lack guidance and information from SBA on how to 

successfully coordinate. Consistent with the WBC program’s statutory 

authority and SBA requirements, WBCs tailor services to meet the needs of

economically and socially disadvantaged women. According to one 

academic study and WBCs we reviewed, WBCs offered services 

emphasizing financial literacy and more intensive long-term business plan 

training.10 Through our work, we also found that WBCs tended to serve 

smaller businesses with fewer employees and lower revenues than SBDCs 

and SCORE. According to an SBA study of WBCs, WBC clients had 

businesses with an average of 2.5 employees that produced average annual

revenues of $63,694, while other SBA business assistance programs served 

businesses with an average of 4.5 employees and $175,076 in annual 

revenue.11

WBCs Make Some 

Efforts to Coordinate 

with SBDCs and 

SCORE but Appear to 

Lack the Guidance 

Needed to Improve 

These Efforts 

Most WBCs told us that they referred clients to the SBDCs and SCORE 

when appropriate, and several coordinated services with the other 

programs to leverage resources and avoid duplication. SBA officials told 

us that they expected district offices to ensure that the programs did not

duplicate each other, and the program requirement suggests that WBCs 

can promote coordination through co-sponsorship arrangements or

memorandums of understanding. However, SBA has not provided detailed 

guidance explaining how WBCs could effectively coordinate with SBDC 

and SCORE. Lacking such guidance, WBCs used a variety of approaches to 

 10Center for Women’s Leadership at Babson College, “The Impact and Influence of

Women’s Business Centers in the United States,” April 2005. 

11SBA, Office of Entrepreneurial Development, “Initial Impact Study of Entrepreneurial

Development Resources,” November 29, 2004. 

Page 12 GAO-07-1244T
Women's Business Center Program

facilitate coordination. Some coordination efforts were initiated by local

business assistance providers, including WBCs, and involved a 

memorandum of understanding or regularly scheduled meetings. For 

example, a WBC in Wisconsin coordinated with SBDC, SCORE, and other 

small business service providers in the area to develop a detailed triage 

system for small business clients in their area. In order to better 

coordinate services, the WBC and other Wisconsin business assistance

providers developed a flow chart to help service providers divide 

resources and determine where to refer customers. In some cases, we

found that the SBA district office was active in the coordination effort and 

participated in regular meetings or organized events that included all of 

the programs. Several WBCs were co-located with an SBDC, allowing the

two programs to benefit from shared office space and other resources. 

However, our preliminary review also found that some WBCs experienced 

challenges in their attempts to coordinate services with SBDC and SCORE.

Some WBCs told us that coordinating services could be difficult. Several

WBCs told us that they had considered co-locating or sharing space with 

an SBDC or SCORE chapter in order to reduce costs but feared that colocation would inhibit the WBC’s ability to maintain its identity and reach 

its target client group of low-income women. WBCs and SBDCs are both

measured on the number of clients that participate in small business 

training and counseling services, and one WBC told us that co-location 

would cause WBCs to compete for clients. Also, in some instances SBA 

encouraged WBCs to provide services similar to those that SBDCs were 

already providing to small businesses. For example, one WBC told us that

staff were encouraged to develop a government procurement curriculum

although an SBDC in their area was already providing this service to small

business clients. These concerns and uncertainties thwart coordination 

efforts and could increase the risk of service duplication in some 

geographic areas. 

Mr. Chairman, this concludes my prepared statement. I would be pleased 

to respond to any questions that you or other members of the Committee 

may have. 

For additional information about this testimony, please contact William B. 

Shear at (202) 512-8678 or Shearw@gao.gov. Contact points for our Offices

of Congressional Affairs and Public Affairs may be found on the last page 

of this statement. Individuals making key contributions to this testimony 

GAO Contact and 

Acknowledgements 

Page 13 GAO-07-1244T
Women's Business Center Program

include Kay Kuhlman, Assistant Director; Bernice Benta, Michelle Bracy, 

Tania Calhoun, and Emily Chalmers. 

Page 14 GAO-07-1244T (250369)
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