INDEPENDENT REVIEW OF THE SBA'S ACCOUNTING OF FY 2010 DRUG 

CONTROL FUNDS AND PERFORMANCE SUMMARY REPORT 

Report Number: 11-13 


Date Issued: April 18, 2011 

U.S. Small Business Administration 

Office of Inspector General Memorandum 

To: 	 Antonio Doss Date: April 18, 2011 

Director, Office of Small Business Development 

Centers 

lsi Original Signed 


From: Peter McClintock 


Deputy Inspector General 


Subject: 	 Independent Review of the SBA's Accounting ofFY 2010 Drug Control Funds and 

Performance Summary Report 

Report No. 11-13 

This report presents the results of our review of the Small Business Administration's 

(SBA) Accounting ofDrug Control Funds and Performance Summary Report for the 

year ended September 30,2010. As directed by the Office ofNational Drug Control 

Policy (ONDCP) Circular, Drug Control Accounting, 1 agencies are required annually to 

provide a detailed accounting of all funds expended on National Drug Control Program 

activities and the results associated with those activities. However, when drug-related 

obligations are less than $50 million and a detailed accounting would constitute an 

unreasonable burden, ONDCP permits agencies to submit an alternative report, as long 

as it is accompanied by Agency and Office of Inspector General statements that full 

compliance with the circular would constitute an unreasonable burden. 

As the SBA's Fiscal Year (FY) 2010 drug-related obligations were less than 

$50 million, an alternative report for FY 2010 was submitted. We (1) assessed whether 

providing a detailed accounting of funds expended on National Drug Control Program 

activities would constitute an unreasonable burden, and (2) reviewed SBA's report and 

related management assertions to determine the reliability of management assertions 

made in the SBA's Accounting ofFY 2010 Drug Control Funds and Performance 

Summary Report. 

We reviewed the SBA's FY 2010 accounting entries for the Drug-Free Workplace 

Program made by the Office of the Chief Financial Officer, and grantee self-reported 

performance data used to support the SBA's Accounting ofFY 2010 Drug Control 

Funds and Performance Summary Report. We wish to note that the FY 2010 

performance data reported by the SBA is based on information submitted by grantees 

that was not verified by the SBA to determine whether it was accurate, complete and 

unbiased. The SBA properly disclosed that it relied on the honesty and integrity of 

I Dated May 1, 2007. 
grantees to ensure that performance data was accurate, complete and unbiased in 

presentation and substance. We conducted our review in accordance with attestation 

standards established by the American Institute of Certified Public Accountants, and 

applicable standards contained in Government Auditing Standards, issued by the 

Comptroller General of the United States. Because a review is substantially less in 

scope than an examination and does not provide an adequate basis from which to 

express an opinion on the SBA's Accounting ofFY 2010 Drug Control Funds and 

Performance Summary Report, accordingly, we do not express such an opinion. 

Based on our review, we believe that full compliance with the ONDCP circular would 

constitute an unreasonable burden for the SBA. Also, nothing came to our attention that 

caused us to believe that the SBA's alternative report for the year ended September 30, 

2010 is not presented, in all material respects, in conformity with ONDCP's Circular, or 

that management's assertions are not fairly stated, in all material respects, based on the 

criteria set forth in ONDCP's Circular, Drug Control Accounting. 

A copy ofSBA's Accounting ofFY 2010 Drug Control Funds and Performance 

Summary Report is attached. Should you or your staff have any questions, please 

contact Jeffrey R. Brindle, Director, Information Technology and Financial 

Management Group at (202) 205-7490. 

Attachment 

2 

~,,\. aus/~~ 

<i <J> U.S. SMALL BUSIN£SS ADMINISTRATION . . . WASH'NGTON. D.C. 20415 ;> §t•

'" 

~/,y/jff'v.f.'" 0 

April 7, 2011 

Mr. Jon Rice 

Associate Director for Performance and Budget 

Office ofNational Drug Control Policy 

750 17'h St., NW 

5th Floor 

Washington, DC 20503 

Dear Mr. Rice: 

As requested, the U.S. Small Business Administration's (SBA) is providing the following 

response. 

Drug Methodology Fiscal Year 20 I 0 

Drug Function Budget Decision Unit 

Prevention -$IM Education $IM 

If you have any questions concerning this report, please contact Rachel Karton in SBA's Office 

of Small Business Development Centers at 202-619-1816. 

We attest that full compliance with the ONDCP Circular would create an unreasonable burden 

on the SBA. 

[ForA ex. 6] 

Anronio Doss 

Associate Administrator 

Small Business Development Centers 

[ForA ex. 6] 

JoMCarver 

CIrief Financial Officer 

[ForA ex. 6] 

Peg <Wlstafson 

Inspee'tor General 
~"" BUS~,y<;), 

~ <I> U.S. SMALL BUSINESS ADMINISTRATION . . . ~ WASHINGTON, D.C. 2Q415 :>­

" 

~.I,y/i"f'v. t5"0 

April 7, 2011 

Mr. Ion Rice 

Associate Director for Performance and Budget 

Office ofNational Drug Control Policy 

750 17th St., NW 

5

th Floor 

Washington, DC 20503 

Dear Mr. Rice: 

In accordance with the Office ofNational Drug Control Policy's 

Drug Control Accounting Circular, the Small Business 

Administration submits its Accounting ofFY 2010 Drug Control 

Funds and Performance Summary Report with the accompanying IG 

authentication. 

If you have any additional questions or comments, please call me directly. 

Sincerely yours, 

[FOIA ex. 6] 

AR1onio Doss 

Director, Office of Small Business Development Centers 

Enclosure 
PERFORMANCE INFORMATION 

MEASURE 1: Number of Small Businesses Educated 

Table 11 

FY2007 

Actual 

FY 2008 Actual FY 2009 Actual FY2010 Goal FY2010 Actual 

2,731 2,280 1,550 1,500 1,332 

(a) Describe the measure. This measure reflects the number of small businesses that were 

educated by a Drug Free Workplace Program (DFWP) grantee. A purpose ofthe 

program is to educate as many small businesses as possible to make them aware ofthe 

benefits of implementing a DRWP for their business. If a business implements a 

DFWP, it is believed that there will be a decrease in absenteeism, workplace 

accidents, tardiness, damaged or stolen property and insurance premiums. It is also 

believed that productivity and morale will increase. The information is collected 

directly froIIl the grantees. The grantees input their data into a database created for 

this program. 

(b) In 2007, the program started to collect outcome information on the following metrics 

frpm businesses that had a change in: 

Absenteeism 

" ~ 

-~.~ IInsurance Premiums 

Tardiness _I Damaged or stolen Property 

costs 

Workplace Accidents IProductivity 

Employee Turnover I 

In Fiscal Year (FY) 2007 and FY 2008, the outcome information was collected and 

analyzed to determine the effects that the implementation of a DFWP has on small 

businesses. It showed that after the implementation of a DFWP a small business saw 

a decrease in absenteeism, workplace accidents, employee turnover, damaged or 

stolen property and insurance premiums. Also, the small business saw an increase in 

productivity. Since this information was the first ever collected, it is possible that the 

results will not yield the expected outcomes long term. 

InFY 2009 and FY 2010, after implementation ofaDFWP, the small businesses 

reported no increases in insurance premiums and damaged or stolen property. 

Additionally, there was a decrease in the categories of employee turnover, 

absenteeism, insurance premiums, damaged or stolen property and workplace 

accidents. Further, the results show that productivity increased as we expected. 

1 While not required, ONDCP recommends agencies develop a graph to accompany information contained in the table. 
(c) The Agency determines the goals based on the number of grantees and whether 

previous goals were reached. 

(d) The Agency depends on the honesty and integrity ofthe DFWP grantees to ensure 

performance data for this measure are accurate, complete, and unbiased in 

presentation and substance. 

MEASURE 2: Number ofDFWPs Implemented 

Table 22 

FY 2007 Actual FY 2008 Actual FY 2009 Actual FY 2010 Goal FY 2010 Actual 

453 363 375 170 465 

(a) Describe the measure. This measure reflects the number of small businesses that 

implemented a whole or partial DFWP. A purpose ofthe program is to encourage as 

many small businesses as possible to implement a DFWP for their business. If a 

business implements a DFWP, it is believed that there will be a decrease in 

absenteeism, workplace accidents, tardiness, damaged or stolen property and 

insurance premiums. It is also believed that productivity and moral will increase. 

The information is collected directly from the grantees. The grantees input their data 

into a database created just for this program. 

(b) The actual goal ofFY 2010 was underestimated because the number of small 

businesses implementing a DFWP varies widely from year to year due to the 

fact that the grantees cannot force a small business to implement such a 

program. The grantee can only encourage the small business by showing the 

benefits of the implementation. 

(c) The Agency determines the goals based on the number of grantees and whether 

previous goals were reached. 

(d) The Agency depends on the honesty and integrity ofthe DFWP grantees to ensure 

performance data for this measure are accurate, complete, and unbiased in 

presentation and substance. 

2 While not required, ONDCP recommends agencies develop a graph to accompany infonnation contained in the table. 
II. RESOURCES~ARY 

FY 2010 Drug Methodology 	 FY2010 


Final BA 


Prevention and Education 


DFWPGrants $lM 


Drug Resources Personnel 


Total FTEs (direct only) 0 


Information 

Total Agency Budget* $729.4M 

Drug Percentage 0.001371% 

*Does not include Office ofDisaster Assistance Program or the Office of 

the Inspector General. 

GRANTEE NAlvrE DATE PO AMOUNT 

Houston Council on Alcohol and Drug 9/16/10 $250,000.00 

figment Group, Inc. 9121110 $163,006.00 

iAdvanced Behavioral Health, Inc. 9123/10 $176,511.00 

Arkansas Occupational Health Clinic 9116/10 $160,000.00 

Drug Free America Foundation 9/20/10 $250,000.00 

Total $999,517.00

III. MANAGEMENT'SASSERTIONS 

(1) Performance reporting system is appropriate and applied - The Agency 

has a system to capture performance information accurately and that system 

was properly applied to generate the performance data. 

(2) Explanations for not meeting performance targets are reasonable The 

goal for the number of Small Businesses Educated was not reached in FY 

2010. It is difficult to predict the number. ofsmall businesses that will want 

education on a DFWP since there is no legally binding rule requiring them to 

do so. 

(3) Methodology to establish performance targets is reasonable and applied 

The methodology described above to establish performance targets for the 

current year is reasonable given past performance and available resources. 

(4) Adequate performance measures exist for all significant drug control 

activities - The Agency has established at least one acceptable performance 
measure for each Drug Control Budget Decision Unit identified in reports 

required by Section 6a(1 )(A) for which a significant amount of obligations 

($1,000,000 or 50 percent ofthe agency drug budget, whichever is less) were 

incurred in the previous fiscal year. Each performance measure considers the 

intended purpose ofthe National Drug Control Program actIvity.