**GAO-09-440**                      Published: Mar 25, 2009. Publicly Released: Mar 25, 2009.                  

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## Highlights

The Small Business Administration's (SBA) Historically Underutilized Business Zone (HUBZone) program provides federal contracting assistance to small firms located in economically distressed areas, with the intent of stimulating economic development. In July 2008, GAO identified substantial vulnerabilities in SBA's application and monitoring process that demonstrated the HUBZone program is vulnerable to fraud and abuse. GAO also investigated 10 case studies of HUBZone firms in the Washington, D.C., area that misrepresented their eligibility. GAO was asked to determine (1) whether additional cases of fraud and abuse exist outside of the Washington, D.C., area; (2) what actions, if any, SBA has taken to establish an effective fraud prevention program for the HUBZone program; and (3) what actions, if any, SBA took against the 10 case study firms in GAO's July 2008 testimony. To meet these objectives, GAO identified selected HUBZone firms based on certain criteria, such as magnitude of HUBZone contracts and firm location. GAO also interviewed SBA officials and reviewed SBA data.

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## Topics

Business Regulation and Consumer Protection

AccountabilityContract administrationContractsEconomically depressed areasEligibility criteriaEligibility determinationsEmployment assistance programsFederal regulationsFraudInternal controlsInvestigations by federal agenciesInvestigations into federal agenciesProgram abusesProgram evaluationProgram managementReporting requirementsSmall businessSmall business assistanceWaste, fraud, and abuse