Report to the Chairman, Committee on 

Finance, U.S. Senate 

United States Government Accountability Office

GAO 

EXPORT 

PROMOTION 

Commerce Needs 

Better Information to 

Evaluate Its FeeBased Programs and 

Customers 

March 2009 

GAO-09-144 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2009

EXPORT PROMOTION

Commerce Needs Better Information to Evaluate Its

Fee-Based Programs and Customers

Highlights of GAO-09-144, a report to 

Chairman, Committee on Finance, U.S. 

Senate 

Federal and state trade promotion

activities are intended to help U.S. 

firms compete successfully in 

foreign markets. Small and 

medium-sized enterprises (SME)—

firms with fewer than 500 

employees—represent a key 

segment of exporting firms. GAO 

was asked to determine (1) the

relationship between the

Department of Commerce’s 

(Commerce) U.S. Commercial

Service (CS) and states’ trade 

offices’ export promotion 

programs, (2) CS’s methodology 

and practices for determining costs 

and establishing user fees for 

export promotion services, and 

(3) how CS’s user fees affect SMEs’ 

use of its programs. 

GAO conducted a survey of states’ 

trade offices and reviewed data

such as export promotion budgets 

and fees, program information, 

government standards, and user fee

studies. GAO met with officials 

from Commerce, the State 

International Development

Organizations, six states’ trade

offices, and others.

What GAO Recommends

GAO recommends that Commerce 

(1) improve CS procedures for 

determining costs and setting user 

fees for export promotion services 

and (2) collect and process more

reliable information about its 

customers to better understand 

demand for CS services and how 

the user fees affect customers.

Commerce concurred with our 

recommendations. 

Both CS and most states’ trade offices provide various types of export 

promotion services. However, states have limited resources and scope when 

compared with CS’s $235 million budget and large overseas staff. Thus, most

states responding to GAO’s survey reported that CS's services are important 

to their export promotion capabilities. State offices often partner with CS on 

trade missions and other activities. CS and most states focus their efforts on 

encouraging SMEs to participate in their programs, but user fees can influence 

whether firms choose to access export promotion services. CS lowers fees for 

SME exporters, but about a third of the states said they provide grants or 

payments to defray firms’ costs and facilitate access to CS’s programs. 

CS needs better information to maximize the efficient and effective operation 

of its programs and to ensure that there is a sound basis for setting fees. CS 

set user fees in May 2008 guided by the Office of Management and Budget’s 

(OMB) full cost recovery policy. However, CS has had a yearly legislative 

exemption from having to recover full costs through its fees and attempted to 

recover only a portion of the full cost of its export promotion services. CS did

not support and document the methodology and assumptions it used to 

determine costs and cannot ensure its cost information is consistent and 

reliable and in accordance with government standards. GAO found significant 

instances where CS used incomplete and potentially inaccurate data. 

Complete and accurate full cost information would assist CS and the Congress

in making decisions about resource allocations, evaluating program 

performance, and improving program efficiency. Finally, CS did not document 

how it established the lower user fees for SMEs and cannot show how the fees 

it charges different firms for each service link to costs. 

The extent to which CS’s user fees affect SMEs’ use of its export promotion 

programs is unclear. CS lacks reliable and sufficient data to evaluate its 

customer base and needs to ensure it charges firms the right fees. CS lacks 

reliable historical data on fees charged, firm size and status, and purchases by

location and type. CS is taking steps to better evaluate its customer base. 

GAO’s survey showed that most states reported the 2008 user fees to be 

reasonable but thought fees charged SMEs for some services were too high 

when compared with those charged by private sector providers. CS projects 

an increase in SMEs’ demand for its services, but the projection is not based 

on any analysis of historical data. Relevant studies and other sources suggest 

that the types of services CS offers compared with other providers, the level 

of individualized attention provided, and service quality are factors that also 

affect SMEs’ choice to use CS’s services. 

View GAO-09-144 or key components. To 

view the survey results, click on GAO-09-

148SP. For more information, contact 

Loren Yager at (202) 512-4347 or

yagerl@gao.gov and Stan Czerwinski 

(202) 512-6520 or czerwinskis@gao.gov. 
Contents 

Letter 1

Results in Brief 3

Background 6

CS and Most States’ Trade Offices Provide Similar Export 

Promotion Services and Work in Partnership 8 

CS Needs to Improve Its Methodology to Determine Costs and Set 

User Fees 24 

The Extent to Which CS’s User Fees Affect SMEs’ Use of Its Export 

Promotion Services Is Unclear 33 

Conclusions 48

Recommendations for Executive Action 49 

Agency Comments and Our Evaluation 50 

Appendix I Scope and Methodology 52 

Appendix II Overview of CS’s and States’ Domestic and 

International Offices 56 

Appendix III Selected CS Fee Services Purchased by Firms in 

Each State in 2007 and 2008 59 

Appendix IV Comments from the Department of Commerce 61 

Appendix V GAO Contacts and Staff Acknowledgments 63

Tables 

Table 1: Export Promotion Services Offered by CS and States’ 

Trade Offices 9 

Table 2: State Export Promotion Resources: Domestic and 

Overseas Staffing and Budget Averages 11 

Table 3: CS Services Sold and Total Collections, Fiscal Year 2008 19 

Table 4: Overview of CS Cost Methodology 29 

Page i GAO-09-144 Export Promotion User Fees
Table 5: Some Studies of CS’s Export Promotion Programs and 

User Fees 38 

Table 6: Numbers of Selected CS Fee Services Purchased by Firms 

in Each State 59 

Figures 

Figure 1: States’ Opinions on the Importance of CS Services to their 

Export Promotion Capabilities 14 

Figure 2: Export Promotion Services States Purchased Directly

from CS 15 

Figure 3: Comparison of the Commercial Service’s 2005 and 2008 

User Fee Schedules 18 

Figure 4: States’ Trade Offices’ Fee-Based and Non-Fee Based

Services 21

Figure 5: States’ Trade Offices Offering Export Promotion Grants 23 

Figure 6: States’ Trade Offices Use of Gold Key Service under 2005 

Fee Schedule 40 

Figure 7: States’ Trade Offices’ Views of CS’s 2008 Fee Schedule 42 

Figure 8: States’ Trade Offices’ Views of Gold Key Service under 

2008 Fee Schedule 43 

Figure 9: States’ Trade Offices’ Views of CS’s Customized Services 

Fees Compared to Private Sector Providers’ Fees 44 

Figure 10: CS Domestic and International Locations 57 

Page ii GAO-09-144 Export Promotion User Fees
Abbreviations 

ARC Appalachian Regional Commission 

CS Commercial Service 

COSO Committee of the Sponsoring Organizations of 

 the Treadway Commission 

CSG Council of State Governments 

CTS Client Tracking System 

DEC District Export Council 

EDO Economic Development Organization 

FUSE Featured U.S. Exporter 

IOAA Independent Offices Appropriations Act of 1952 

ITA International Trade Administration 

MECEA Mutual Education and Cultural Exchange Act 

NTE new to export 

OMB Office of Management and Budget 

SFFAS Statement of Federal Financial Accounting Standards 

SIDO State International Development Organizations 

SME small and medium-sized enterprise 

TCD Transformational Commercial Diplomacy 

USEAC U.S. Export Assistance Center 

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Page iii GAO-09-144 Export Promotion User Fees
United States Government Accountability Office

Washington, DC 20548 

 

March 4, 2009

The Honorable Max Baucus 

Chairman 

Committee on Finance 

United States Senate 

The Honorable Max Baucus 

Chairman 

Committee on Finance 

United States Senate 

Dear Mr. Chairman: 

The low proportion of U.S. firms that engage in exporting is a major 

challenge to realizing the nation’s full export potential. For example, less 

than 1 percent of U.S. firms are identified as exporters. The percentage of 

U.S. production accounted for by exports has risen in recent years as U.S.

industries have responded to export opportunities created by new market 

access and growing foreign markets. Small and medium-sized enterprises 

(SME)—firms with fewer than 500 employees—represent a key segment of 

exporting firms.1

 Federal trade promotion, along with negotiating trade 

agreements and monitoring existing agreements, is intended to help U.S. 

firms gain access to and compete successfully in foreign markets. 

The low proportion of U.S. firms that engage in exporting is a major 

challenge to realizing the nation’s full export potential. For example, less 

than 1 percent of U.S. firms are identified as exporters. The percentage of 

U.S. production accounted for by exports has risen in recent years as U.S.

industries have responded to export opportunities created by new market 

access and growing foreign markets. Small and medium-sized enterprises 

(SME)—firms with fewer than 500 employees—represent a key segment of 

exporting firms.1

 Federal trade promotion, along with negotiating trade 

agreements and monitoring existing agreements, is intended to help U.S. 

firms gain access to and compete successfully in foreign markets. 

The mission of the U. S. Commercial Service (CS),

2

 part of the Department 

of Commerce (Commerce), is to promote economic prosperity and 

enhance job creation through a global network of international trade 

professionals that provide trade promotion services. CS’s trade promotion 

activities seek to increase the number of U.S. firms that export and assist 

current exporters to enter additional markets and expand their presence

within markets. In fiscal year 2008, CS’s budget for export promotion 

totaled approximately $235 million. One way CS seeks to broaden and

deepen the U.S. exporter base is through public and private partnerships, 

including partnerships with state trade offices, which have similar 

missions. The current recession is likely to highlight the importance of 

these federal-state partnerships. During economic downturns, some states 

cut back on or eliminate services, such as export promotion, in an effort to

address fiscal challenges through expenditure cuts. In such circumstances, 

companies seeking export assistance from a government entity may turn 

more to the federal government. 

The mission of the U. S. Commercial Service (CS),

2

 part of the Department 

of Commerce (Commerce), is to promote economic prosperity and 

enhance job creation through a global network of international trade 

professionals that provide trade promotion services. CS’s trade promotion 

activities seek to increase the number of U.S. firms that export and assist 

current exporters to enter additional markets and expand their presence

within markets. In fiscal year 2008, CS’s budget for export promotion 

totaled approximately $235 million. One way CS seeks to broaden and

deepen the U.S. exporter base is through public and private partnerships, 

including partnerships with state trade offices, which have similar 

missions. The current recession is likely to highlight the importance of 

these federal-state partnerships. During economic downturns, some states 

cut back on or eliminate services, such as export promotion, in an effort to

address fiscal challenges through expenditure cuts. In such circumstances, 

companies seeking export assistance from a government entity may turn 

more to the federal government. 

Export Promotio port Promotion User Fee n User Fees

 

-144

 1

In 2006, SMEs comprised 97 percent of all identified exporters and accounted for 29

percent of the total value of U.S. exports.

2

CS is also referred to as the U.S. and Foreign Commercial Service. 

Page 1 GAO-09-144
 

Federal export promotion programs primarily focus on SMEs and charge 

fees for services. The fees charged to prospective exporters, especially 

SMEs, for particular services affect their decisions to participate in these 

federal trade promotion programs. In 2005, SMEs, as well as large firms, 

expressed concerns about their future access to CS programs while CS 

was considering whether to raise its fees in order to recover the full costs 

of these programs. 

In response to your request, we evaluated (1) the relationship between CS

and states’ trade offices’ export promotion programs, (2) CS’s 

methodology and practices for determining costs and establishing user 

fees, and (3) how CS’s user fees affect SMEs’ use of its programs. 

To address these objectives, we reviewed documents and analyzed data

provided by CS, the 50 states’ trade offices, the State International 

Development Organizations,3

 District Export Councils,4 and other relevant

sources. In addition, to obtain information on states’ trade offices’ 

programs and fees, we surveyed the 50 states’ trade offices and conducted

site visits in six states (California, Connecticut, Idaho, Illinois, Mississippi, 

and Pennsylvania). We selected states’ trade offices based on a number of 

criteria, including the size of the states’ trade promotion budgets and 

states’ trade offices colocated with CS’s domestic offices. We received

survey responses from 45 states’ trade offices, or a 90 percent response 

rate. This report does not contain all the results from the survey. The

survey and a more complete tabulation of the results are provided in a 

supplement to this report (see GAO-09-148SP). Further, to obtain 

information on the costs of CS export promotion programs and user fees 

and to determine what is known about how CS’s user fees affect SMEs’ 

participation in its programs, we interviewed Commerce officials in 

Washington, D.C., and at the six U.S. Export Assistance Centers we visited, 

 3

The State International Development Organizations (SIDO) is a nonprofit, nonpartisan 

organization, affiliated with the Council of State Governments (CSG), which comprises

international economic development practitioners and professionals from state and related 

organizations across the country. It is the only national organization focused exclusively on

state international trade development. SIDO helps state international trade agencies better 

serve American exporters by sharing innovative ideas and resources, developing the skills 

of state trade professionals, advocating the interests of states in trade promotion, and 

facilitating multistate collaboration. Forty states are members of SIDO. 

4

District Export Councils (DEC) are volunteer organizations of leaders from local business

communities throughout the United States that are appointed by U.S. Secretaries of 

Commerce under the authority of a 1973 Executive Order; DECs do not receive 

government appropriations or compensation. 

Page 2 GAO-09-144 Export Promotion User Fees
 

as well as officials from the six states’ trade offices, District Export 

Councils, the Office of Management and Budget (OMB), which issues U.S. 

government guidance for user fees, and the State International 

Development Organizations. We conducted this performance audit from 

October 2007 to March 2009, in accordance with generally accepted 

government auditing standards. Those standards require that we plan and

perform our audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit 

objectives. We believe the evidence obtained provides this reasonable 

basis. (Appendix I provides a detailed discussion of our scope and 

methodology.) 

CS and the majority of states’ trade offices provide many of the same types 

of export promotion services, such as export training, trade missions, and 

market research. According to CS officials, no state provides services that

compare with the depth and extent of CS export promotion services. 

Consistent with its role as a federal entity promoting U.S. interests abroad, 

CS has a national and worldwide presence, while states’ trade offices have

fewer staff, smaller budgets, and operate in fewer countries. Our survey 

showed that the 45 states responding have an average of 5 overseas 

offices, or representatives, each and can cover only a few countries and 

regions; in contrast, CS has 124 offices in 75 countries. Partly as a result of 

this limited capacity, most states reported that CS’s services are important 

to their export promotion capabilities and have often partnered with CS’s 

offices on activities, such as trade shows and trade missions, as well as 

joint company visits and counseling sessions. Furthermore, states’ trade 

offices sometimes purchase services from CS. CS and most states’ trade 

offices focus their export promotion efforts on encouraging SMEs to 

participate in their programs. User fees can be a factor in firms’ decisions 

on whether to use state and federal export promotion services. The 

majority of states’ trade offices provide most services, like export 

counseling, for free but charge fees for some services, such as foreign 

trade missions and trade shows; CS charges for some services that state 

offices generally provide for free, such as foreign agency and distributor 

searches, but CS generally provides lower user fees to SMEs as an 

incentive for them to participate in CS’s programs. In addition, to help 

make export promotion services more accessible to potential exporters 

from their states, about a third of the 45 states responding to our survey 

indicated that they provide some grants or payments to SMEs that can 

help defray the costs of CS’s fee services. 

Results in Brief 

Page 3 GAO-09-144 Export Promotion User Fees
 

CS needs better information to maximize the efficient and effective

operation of its export promotion programs and to ensure that there is a 

sound basis for setting its user fees. CS officials decided to use OMB’s full 

cost recovery policy, Circular A-25, User Charges, as a guide for setting its 

May 2008 user fees, despite a yearly legislative exemption from having to 

recover full costs through its fees.5

 Nevertheless, CS neither provided 

support for nor documented the methodology and assumptions it used to 

determine costs, which hampers CS’s ability to make sound management 

decisions about its services. CS cannot ensure its cost information is 

complete, consistent, and reliable and in accordance with government 

standards. For example, we found CS’s cost estimates do not include 

certain costs paid on behalf of CS by other entities, such as approximately 

$17 million in retirement benefits paid by the Office of Personnel 

Management in fiscal year 2008. Also, CS did not support its assumptions 

about the amount of time staff spent performing standardized export 

promotion activities. We found the staff time data CS used, which were 

collected in 2005, were potentially outdated and inaccurate. Complete and

accurate full cost information would assist CS and the Congress in making 

decisions about resource allocations, evaluating program performance, 

and improving program efficiency. Furthermore, CS cannot demonstrate 

that its user fees for the services it provides are based on complete and 

accurate cost information and that the user fees recover the portions of 

program costs that CS intends. Finally, CS designed the 2008 user fee 

schedule to provide an incentive to SMEs.6

 CS did not document its 

procedures and assumptions used to establish the lower user fees for 

SMEs and thus the basis for the different user fees it charges different 

firms for each service are not transparent and are not linked to the costs of 

those services. 

The extent to which CS’s user fees affect SMEs’ use of its export 

promotion programs is unclear because CS lacks reliable and sufficient 

data on its fee-based services to evaluate its customer base and to ensure 

that it is allocating resources to services that its customers need and is 

charging them the appropriate fees. CS lacks comparable and reliable 

 5

See Consolidated Appropriations Act, 2008, Pub. L. No. 110-161, Div. B, 121 Stat. 1844, 1885 

(2007) and Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 

2006, Pub. L. No. 109-108, 119 Stat. 2290, 2307 (2005). 

6

The 2008 CS user fee schedule charges user fees for each service based on the size of a

client firm. This user fee schedule raised the user fees for large firms to CS’s estimates of 

the full costs, while maintaining the level of user fees SMEs had been charged under the

previous user fee schedule implemented in 2005. 

Page 4 GAO-09-144 Export Promotion User Fees
 

historical data on the fees it has charged, as well as reliable data on 

company sizes and purchases by SMEs and its other customers. CS 

officials informed us that they have performed only limited studies of 

customer demand, but that CS has recently begun to take steps to improve 

the quality of data it collects to better evaluate its customer base. We 

surveyed the states’ trade offices to obtain their views on CS user fees 

because state governments are partners with, and customers of CS, and 

play an important role in helping their businesses to compete in the global 

economy. Most states’ trade offices that had a basis to judge said that the 

2005 CS fee change caused them to decrease their use of a key 

standardized service they purchased most often from CS. Overall, most 

states with a basis to judge reported the 2008 user fees to be reasonable 

but thought fees charged to SMEs for some services were too high in 

comparison to fees charged by the private sector. Finally, CS projects an 

increase in SMEs’ demand for its services, but the projection is not based 

on any analysis of historical data. Our work, which included a review of 

relevant studies, suggests that factors other than fees also affect SMEs’ 

choice to use CS’s services, and these factors include the types of services

CS offers compared with other providers, the level of individualized 

attention provided, and service quality. 

We make recommendations in this report to the Secretary of Commerce to 

direct the Assistant Secretary for Trade Promotion and Director General of 

the U.S. and Foreign Commercial Service to (1) take steps to improve the 

collection, processing, and documentation of cost information on its 

export promotion programs and user fees in order to enhance efficient and

effective management in line with federal accounting and internal control 

standards and (2) ensure that the design of its databases and procedures 

followed produce more accurate, reliable, and complete data on its 

customers to better understand demand for CS programs and the extent to

which participation is affected by its user fees. 

In commenting on a draft of this report, Commerce concurred with our 

recommendations and said that CS would take steps to improve the 

collection, processing, and documentation of cost information related to 

its export promotion programs. Commerce officials stated that CS 

developed its new user fee policy from the most accurate data available

and that its accounting systems were not deficient based on receiving an

unqualified audit opinion on its annual financial statements. We remain 

concerned, however, that potentially outdated and inaccurate nonfinancial 

data, such as the time staff spend performing various activities, were used 

to determine the unit cost of specific services and that the full costs of 

specific services should be considered when CS next review its fees. Also, 

Page 5 GAO-09-144 Export Promotion User Fees
 

although an entity’s audited financial statements and unaudited cost 

accounting analyses may use the same underlying financial data, an

auditor’s opinion on the financial statements does not provide assurance 

concerning the reasonableness of cost analyses performed using the 

underlying financial data. Commerce also noted an increase in fees 

collected and services provided in fiscal year 2008, which they believe 

indicates their products and services remain accessible to SMEs. However, 

we continue to believe that more complete and accurate data about 

company size are needed to properly estimate the volume of services 

provided to SMEs and come to judgements about the fees collected from

them. Finally, Commerce emphasized that its trade promotion services 

are greater in depth and scope than those provided by the states, and we 

clarified this point in various places in our report where appropriate. 

Commerce’s comments, along with our responses to specific points, are 

reprinted in appendix IV. Commerce also provided technical comments, 

which were incorporated in the report, as appropriate. 

The U.S. Commercial Service, within Commerce’s International Trade 

Administration (ITA), plays a leading role in the federal government’s 

efforts to encourage and promote U.S. nonagricultural exports. CS was 

founded in 1980, as overseas commercial work was transferred from the 

Department of State (State) to CS. The purpose of CS’s export promotion 

programs is stated through statutory authority.7

 CS’s mission is to 

maximize U.S. competitiveness, and enable economic growth for U.S. 

industries, and enhance job creation by helping U.S. firms take advantage 

of opportunities abroad through a global network of international trade 

professionals. CS operates 108 domestic offices at U.S. Export Assistance 

Centers (USEAC), and maintains 124 international offices in 75 countries 

that represent the significant export markets for U.S. goods and services.8

CS trade specialists at these offices are tasked with assisting U.S. firms 

and representing U.S. commercial interests abroad. In those countries 

where CS does not have a presence, State represents U.S. commercial 

interests and assists U.S. exporters. State and CS are in the process of 

Background 

 7

15 U.S.C. § 4721.

8

USEACs are intended to integrate the representatives and assistance of the principal 

federal agencies providing export assistance—the Commercial Service, the Small Business 

Administration, and the Export-Import Bank. USEACs serve as one-stop-shops to provide 

exporters with information on U.S. government export promotion and export finance

programs and help potential exporters make contact with the federal programs that may 

provide the greatest assistance. 

Page 6 GAO-09-144 Export Promotion User Fees
 

negotiating a memorandum of understanding to formalize this 

arrangement. Currently, State can offer certain export promotion services,

but does not use CS product and customer service standards or CS pricing 

policies.9

The general goal of CS is to use its network of professionals and export 

promotion services to broaden and deepen the U.S. exporter base and help

U.S. firms make sales in international markets. CS reports that it helps 

thousands of firms make export sales each year. Furthermore, according 

to CS, the majority of these sales are by SMEs. Its services include 

providing market research and supporting trade events. The Gold Key 

Service, which helps firms identify international business partners, is one 

of its most popular services. CS provides these services to a variety of 

customers. While private U.S. firms (particularly SMEs) are CS’s main 

customers, CS also delivers services to other customers, including state 

and local governments. 

Many U.S. states maintain state trade offices that provide varying levels of 

export assistance, usually focusing on increasing exports from firms 

located in their states. Most are managed by state economic development 

agencies and funded by states’ operating budgets. Many state trade offices

maintain both domestic and overseas offices to deliver services. In 

addition, many states’ trade offices partner with CS to ensure client firms 

have access to services the state cannot offer, particularly in those foreign 

markets where the states lack offices. 

CS is authorized to charge a user fee for its export promotion services, and 

CS has adjusted its user fee structure in recent years.10 Prior to fiscal year 

2005, CS did not have an agencywide user fee schedule for its export 

promotion programs, as each overseas post decided what user fees firms 

were charged for the export promotion services the posts delivered. As 

part of its user fee review in fiscal year 2005, CS sought to determine the

user fees it would have to charge to recover the full costs of its services. 

CS determined its user fees would have to rise significantly to recover full 

 9

In 2007, Commerce’s Office of Inspector General reported on the need for an agreement 

between State and CS to address specific business processes at posts where CS does not

have a presence. See Department of Commerce, Office of Inspector General, Commerce 

Can Further Assist U.S. Exporters by Enhancing Its Trade Coordination Efforts, Final

Inspection Report Number IPE-18322 (Washington, D.C.: Mar. 30, 2007). 

10CS’s authority to charge a fee for its export promotion services stems from its annual 

appropriation. See e.g., Pub. L. No. 110-161. 

Page 7 GAO-09-144 Export Promotion User Fees
 

costs, causing concern among firms, business leaders, and CS staff. 

However, CS did not implement a 2005 user fee schedule that recovered

full costs but adopted an agencywide user fee schedule with user fees for 

most services set to recover a portion of program costs. 

CS and the majority of states provide many of the same types of export 

promotion services, such as export training, trade missions, and market 

research. Firms can choose to go to CS, states’ trade offices, or other 

providers to get these services. However, states have limited budgets and 

staff to assist their firms. Partly as a result of this limited capacity, most 

states reported that CS’s services are important to their export promotion 

capabilities and have partnered with CS’s offices. Both CS and most states’ 

trade offices focus their export promotion efforts on SMEs. CS and the 

majority of states’ trade offices provide services for free but charge fees 

for certain services. In addition, to facilitate access to CS’s programs, 

about a third of the states responding to our survey indicated that they 

provide grants or payments to firms from their states to defray the costs of 

CS’s fee services.11

CS offers a range of standardized and customized services to help firms to 

export. The standardized CS services, including Gold Key Service, 

International Partner Search, and International Company Profile, are 

prepared and delivered to firms in approximately the same manner around

the world. These services offer firms assistance to identify and meet 

potential overseas buyers and distributors, and to perform due diligence 

on prospective foreign buyers. The customized services, including 

Customized Market Research, QuickTake, seminars/webinars, and trade 

promotion events and trade missions, are tailored to fit the specific needs 

of an individual firm in a specific export market and vary based on the 

scope of work. 

CS and Most States’ 

Trade Offices Provide 

Similar Export 

Promotion Services 

and Work in 

Partnership 

CS and States’ Trade 

Offices Provide Many of 

the Same Types of Export 

Promotion Services 

The majority of the states’ trade offices that responded to our survey 

provide many of the same types of export promotion services as CS to 

 11Forty-five states responded to our survey. We did not receive survey responses from 

Alaska, Kansas, Kentucky, Louisiana, and New Jersey. 

Page 8 GAO-09-144 Export Promotion User Fees
 

assist firms interested in exporting.12 According to CS officials, no state 

provides services that compare with the depth and extent of CS’s export 

promotion services. According to SIDO, states’ comparative advantage is

their local presence and their ability to specialize in the major industries in 

their states and on the export markets those industries typically target. 

Services that most states provide and that are similar to CS include 

training programs and seminars, as well as assistance in participating in

trade shows and missions. Other services states often cited include market 

research, agent and distributor searches, and foreign company 

background checks. According to CS officials, CS provides its services to a 

national client base and provides services in numerous markets where 

states have little or no presence. For example, CS officials explained that

while many states provide “market research” services, these services may 

cover fewer markets and provide less detail than the market research CS 

provides. In addition, CS said that its missions target an industry segment 

more broadly and deeply than is possible for any state. Further, CS 

provides some services for which there are no state counterparts, such as 

government-to-government advocacy. Table 1 shows the major export 

promotion services offered by states’ trade offices and CS. 

Table 1: Export Promotion Services Offered by CS and States’ Trade Offices 

Type of service Description of service CS service(s)

Number of states 

offering similar 

service

Training 

programs/seminars 

Training on various topics related to exporting • Webinars 

• Seminars 40

Foreign Trade Missions Overseas travel to meet officials, prospective

business partners and buyers and to promote the 

sales of U.S. exports to a foreign market 

• Certified Trade

Mission 

39

Trade shows (U.S., foreign, 

and catalog) 

Events organized to introduce U.S. exporters to 

potential overseas business partners 

• Commerce trade 

events 

• Commerce Trade 

Fair Certification 39

Market research Research on target markets, marketability of product, 

market trends and size, distribution and promotion 

practices, product standards and regulations, key 

competitors, potential business partners 

• Publicly available 

market research

• Customized

Market Research 36

 12Even though three states (Arkansas, California, and Michigan) do not offer a formal 

program, they offer some services on an as needed basis. According to the Michigan trade

office, it maintains one overseas office, which provides trade development and foreign

direct assistance to companies interested in exporting to China. 

Page 9 GAO-09-144 Export Promotion User Fees
 

Type of service Description of service CS service(s)

Number of states 

offering similar 

service

Agent/distributor searches Identification of prescreened potential overseas 

buyers and distributors 

• Gold Key Service 

• International 

Partner Search 33

Foreign company 

background checks 

Due diligence to verify the background and credit 

worthiness of overseas companies, including 

information on key officers and management, and the 

company’s financial information

• International 

Company Profile 

29

Product pricing/analysis Review product’s export potential in certain overseas 

markets, including current demand, future demand, 

and competition 

• QuickTake 

29

Sources: CS and GAO survey of states’ trade offices. 

Note: The number of countries in which CS provides export promotion services exceeds the number 

of countries in which states’ trade offices provide similar services. 

States’ Trade Offices’ 

Export Promotion Efforts 

Are Limited by Small Staffs 

and Budgets Relative to CS 

States’ trade offices have small staffs and budgets relative to CS. 

Consistent with its role as a federal entity promoting U.S. interests abroad, 

CS has a national and worldwide presence while states have a local 

presence and operate in fewer countries. CS has 493 domestic and 991 

overseas staff who are currently engaged in export promotion activities in 

47 states13 plus Puerto Rico and 75 countries.14 (See app. II for CS’s 

domestic and international locations.) The 45 states’ trade offices 

responding to our survey have a combined total of 275 domestic staff and 

214 overseas staff.15 According to SIDO, states’ trade offices have 245 

offices in 34 countries. Half the states responding to our survey have five 

 13CS does not currently have offices in Alaska, Delaware, and Wyoming. CS operates in 108

cities nationwide. Of the 493 domestic staff, 211 are located at CS’s headquarters in 

Washington, D.C. 

14CS currently operates offices in 75 countries compared with 80 countries in 2006 and 

2007. CS currently has 124 offices worldwide. In some countries, there are offices in more

than one city. For example, CS has five offices in China. In those countries where CS does 

not have a presence, State represents U.S. commercial interests and assists U.S. exporters. 

The number of overseas staff includes foreign service nationals. 

15Our survey focused on the states’ trade offices, their staff, and the activities they provide

directly and did not include export promotion activities provided indirectly at the state 

level, such as export readiness training and the number of staff associated with those 

activities under a wide variety of arrangements. SIDO estimates that there are hundreds of

individuals employed in states’ funded educational institutions and economic development 

agencies that support small business export promotion primarily through training and 

counseling activities. 

Page 10 GAO-09-144 Export Promotion User Fees
 

or fewer full-time domestic staff and two or fewer full-time overseas staff.16

Table 2 shows the differences among the states in terms of the resources 

they devote to export promotion activities. Both CS and the states’ trade 

offices have been experiencing reductions in their staffing levels. Based on 

CS’s data, it has experienced a 5 percent reduction in domestic staff and 

3.5 percent reduction in overseas staff from fiscal year 2007 to 2008. 

Thirty-two states’ trade offices, or almost 73 percent of those that had a 

basis to judge, said that their overall staffing level has decreased or stayed

the same over the past 5 years. 

Table 2: State Export Promotion Resources: Domestic and Overseas Staffing and 

Budget Averages 

Domestic FTEsa

Number of 

states

Average 

number of 

overseas 

FTEs

Average 

number of 

overseas 

locationsb

Average

 export 

promotion

budget

c

States with 0 to 1 FTE 9 0.2 3.8 $262,000

States with 2 to 4 FTEs 13 1.3 3.1 334,000

States with 5 to 7 FTEs 11 2.9 4.0 1,294,000

States with 8+ FTEs 12 13.6 9.3 2,943,000

Average for all states 

responding to each 

survey 45 4.7 5.1 $1,448,057d

Sources: Analysis of GAO and SIDO surveys of state export promotion agencies. 

a

These groupings are approximate quartiles because 45 states responded to our survey, which does 

not allow for even quartiles, and states frequently had the same number of domestic FTEs, which

also affected the quartile sizes. 

b

States’ overseas offices can be staffed by state employees, contractors, or volunteer or honorary 

representatives. According to SIDO, most offices are staffed by contractors. 

c

SIDO state export promotion budget data were only available for 24 states. Three (3) of these were 

in the first quartile, 6 were in the second quartile, another 6 were in the third quartiles, and 7 were in 

the fourth quartile. One state provided budget data to SIDO but did not respond to the GAO survey. 

d

The median budget was $775,000. 

While reliable trade promotion budget data are not available for the 50 

states’ trade offices, sources estimate that the combined annual trade 

budget of the 50 states is significantly lower than CS’s annual budget, 

perhaps less than half. CS’s total budget for export promotion was about 

$235 million in fiscal year 2008 and is projected at $237.7 million for fiscal 

 16States are often represented overseas by agents or local consultants that work for them 

on a part-time or as-needed basis.

Page 11 GAO-09-144 Export Promotion User Fees
 

year 2009 (less than 1 percent increase in nominal terms.)17 Information 

about states’ export promotion budgets is difficult to obtain and may not 

be fully reliable. States’ commerce departments or economic development 

agencies usually run states’ trade promotion programs and foreign 

investment recruitment programs, and some states do not disaggregate the 

budget data between the two functions. CSG estimates that the 50 states 

spend a combined total of about $100 million each year helping state 

businesses create jobs at home by selling products abroad. SIDO estimates 

that states’ budget for both trade and foreign investment recruitment was 

about $103 million in 2008.18 Current state trade budget data are only 

available for 27 states through SIDO’s survey. Based on these data, the

average state export promotion budget was $1.4 million in 2008, and the 

median was $775,000,

19 ranging from Pennsylvania at about $10 million to 

Vermont at about $170,000. (Also see table 2.) 

In responding to our survey, some states’ trade offices made a variety of 

observations regarding leveraging resources between the states and CS 

and the limited resources available for export promotion programs.20 For 

example, one state said that budget cuts have resulted in its decision not 

to duplicate services offered by CS. Another state that has recently 

discontinued its export promotion programs expressed interest in having

the USEAC colocate within its economic development agency while 

another state said colocation costs incurred by individual states could be

offset by discounted fees for CS services. With regard to CS’s overseas 

offices, some states and SIDO noted that CS is closing offices in developed 

countries (and shifting resources to developing countries), and this leaves

established global markets for SMEs without CS presence in some cases. 

SIDO is concerned about what they believe are the small number of CS 

resources available for export promotion programs. SIDO believes that 

U.S. firms are at a competitive disadvantage compared with firms in other 

 17CS’s total budget averaged about $227 million over the past 3 fiscal years (2006-2008). 

18SIDO tracks states’ expenditures on trade as part of its annual survey and reported in its 

2008 survey that tracking expenditures on trade and investment remains a challenge as 

many states are reluctant to report these expenditures, and others undercount the amount

they spend by not including staff salaries and other overhead in the trade budgets. 

19The median budget is the amount ($775,000) that divides the budget distribution into two 

equal groups, meaning that half had budgets above the median, and half had budgets below

the median. 

20These observations are taken from states’ trade offices responses to our survey’s openended questions. 

Page 12 GAO-09-144 Export Promotion User Fees
 

competitor countries with larger government export promotion budgets 

and has called for a 50 percent increase in CS’s budget.21

Most States’ Trade Offices 

Report CS’s Services Are 

Important to Their Export 

Promotion Capabilities 

and Have Partnered with 

CS 

States’ trade offices collaborate with CS to help provide firms export 

promotion services, and some states’ domestic offices are colocated with 

CS’s staff at a USEAC with a goal of helping firms access CS services. 

More than three-quarters of states’ trade offices (36 of 43) that had a basis 

to judge viewed Commerce’s services to be very or moderately important 

to their states’ export promotion capabilities. (See fig. 1.) According to 

states’ trade offices we visited, as well as SIDO, most states rely on or 

partner with CS to obtain export assistance in overseas markets where the 

states have no representation. Where the states have representation, they

rely on their own services to assist their exporters. Activities in which 

states’ trade offices partnered most with CS included trade shows and 

trade missions, seminars, training programs, conferences, and event 

planning. In addition to partnering with CS, some states’ trade offices also 

reported working closely with their local USEACs. For example, one state 

named its USEAC a “key partner” with which “all export related programs, 

seminars, and conferences are planned, coordinated, and implemented.” 

Another state said that its USEAC serves on the state’s committee, helping 

to select the winners of the Governor’s Awards for Excellence in 

exporting. In addition, 11 states’ trade offices are colocated with 

USEACs.22 According to officials of one state trade office colocated with a 

USEAC, colocation has helped the state partner with CS to provide 

services to firms and outreach to potential client firms. 

 21According to CS, its export promotion budget is projected to grow in nominal terms by

11.4 percent over the last 5 years; the fiscal year 2005 budget was $213.5 million, and the 

budget for 2009 is expected to be about $237.7 million. 

22The following states’ trade offices are colocated with a USEAC: Idaho, Mississippi, New 

Hampshire, New Jersey, New Mexico, New York, Oklahoma, Rhode Island, Tennessee, 

Texas, and Vermont.

Page 13 GAO-09-144 Export Promotion User Fees
 

Figure 1: States’ Opinions on the Importance of CS Services to their Export 

Promotion Capabilities 

2%

Not important

Moderately important

Slightly important

14%

19%

65%

Very important

Total respondents with a basis to judge = 43

Source: GAO analysis of states’ trade offices survey responses. 

Note: A total of 44 states’ trade offices responded to this survey question, but one had no basis to 

judge regarding the importance of CS’s services.

Just over three-quarters of states’ respondents that had a basis to judge (34 

of 42) reported that they have partnered with CS on a variety of activities 

that are not part of CS’s formal services, which requires a signed 

cooperation agreement.23 A few states cited frequently working with CS, 

while the majority of respondents identified only a few activities they have 

conducted jointly with CS during the last 3 years. For example, some 

states we visited informed us that they have conducted joint company 

visits and counseling sessions with their local USEACs. 

Some state trade offices work with CS to facilitate state-sponsored trade 

missions and trade events and are sometimes customers of CS. Our survey 

revealed that some states’ trade offices directly purchased some of CS’s 

services during the last 3 years. Figure 2 indicates the services states’ trade

offices have purchased directly from CS. Gold Key Services and 

seminars/webinars were the services states’ trade offices most often 

 23The formal services are CS’s fee-based standardized and customized services. 

Page 14 GAO-09-144 Export Promotion User Fees
 

reported purchasing directly from CS. Half of the states’ trade offices 

reported purchasing Gold Key Service from CS, and less than half reported 

purchasing seminar/webinar services directly from CS. Three states we 

visited reported purchasing Gold Key services directly from CS to support 

overseas trade missions. One state said that it has purchased CS’s Gold 

Key Service to identify potential consultants and representatives overseas

and another state said that it has purchased Gold Key Service to 

complement a state-led trade mission. 

Figure 2: Export Promotion Services States Purchased Directly from CS 

Gold Key Service

International Company Profile

International Partner Search

Featured U.S. Exporter (FUSE) 

Business Facilitation Service

Customized Market Research

Platinum Key Service

QuickTake

Catalog event/product literature center

Commerce-led Certified Trade Mission/trade mission

Single Company Promotion

22

3

3

0

8

3

7

2

9

3

22

41

41

44

36

41

37

42

8 36

Seminar/webinar

Trade fair

19

14

25

30

35

40

Types of CS services

Number of 

states that did 

not purchase 

from CS

Number of 

states that 

purchased 

directly from CS

Source: GAO analysis of states’ trade offices survey responses. 

Gold Key Service and seminar/webinar were services states’ trade offices most often reported purchasing 

directly from CS

Note: Forty-five states’ trade offices responded to the survey and, in all cases, except the single 

company promotion, 44 responded to each service.

Page 15 GAO-09-144 Export Promotion User Fees
 

In responding to our survey, some states’ trade offices said that the 

collaboration between them and CS can be improved to provide greater 

benefits to their client firms.24 For example, states and CS target the same 

client base within their states, and some states’ trade offices and SIDO 

said that improved information sharing would greatly increase 

effectiveness and reduce duplication of efforts to the benefit of exporting 

SMEs if sharing of client contacts and client needs were allowed. The 

types of information they sought included USEAC offices and staff goals 

and CS’s foreign national contractors’ list. Regarding sharing client 

information, CS officials said they must adhere to federal regulations, 

which prohibit the sharing of business proprietary information with nonU.S. government agencies. 

Some states’ trade offices said that they have partnered with other states’ 

trade offices, chambers of commerce, world trade centers, universities, 

and other entities to share costs for export promotion services. For 

example, some states said that they have obtained sponsors from both the 

public and private sectors to cover some of their costs, such as governorled trade missions and agricultural exports. In addition, other states said 

that they shared costs with several state entities and organizations to 

cover programs, such as export training seminars, conferences, and 

forums while other states said that they have shared the costs of domestic 

and overseas trade offices or contractors with others. 

Both CS and States’ Trade 

Offices Focus Their Export 

Promotion Efforts on 

SMEs 

CS and most states’ trade offices focus their export promotion efforts on 

SMEs. According to CS, the majority of its customers are SMEs. Similarly, 

most state trade offices focus their export promotion efforts on SMEs, 

with 32 of the 42 states responding to our survey question reporting that 

more than three-quarters of their budgets were used to target the needs of 

SMEs. In addition, approximately 79 percent of the 33 states’ trade offices 

that responded to SIDO’s 2008 survey of states’ trade offices reported SME 

manufacturing firms comprised the primary customers for their export 

promotion services, and approximately 18 percent considered very small 

manufacturing firms (50 employees or less) their most important 

customers. 

 24These observations are taken from states’ trade offices responses to our survey’s openended questions. 

Page 16 GAO-09-144 Export Promotion User Fees
 

According to CS, most of its services are sold to SMEs, with about 78 

percent sold to SMEs in fiscal year 2008.25 As an incentive for SMEs to 

purchase their services, CS charges them less than large firms for its 

standardized and customized services. In May 2008, CS implemented its 

current cost-based user fee schedule, which charges SMEs only a 

proportion of the fees large firms pay for the same services. The 2008 user 

fee schedule introduced a reduced one-time incentive user fee to new-toexport (NTE) SMEs using CS standardized services.26 Also, under the 2008 

user fee schedule, CS extends to states’ trade offices the SME user fee 

rates for standardized and customized services when purchasing CS 

services for their own use.27

CS and States’ Trade 

Offices Charge Firms Fees 

for Some Export 

Promotion Services 

CS currently offers firms five standardized and nine customized services. 

CS’s standardized export promotion services have fixed user fees, while 

the user fees for CS’s customized services vary based on the scope of 

service provided. In addition, according to CS, a significant amount of 

trade specialists’ time is spent providing export counseling, advocacy, and 

generic market research, for which CS does not charge user fees. The user 

fee schedule CS implemented in May 2008 replaced CS’s user fee schedule 

implemented in 2005. The 2008 user fee schedule raised the user fees for 

large firms, while maintaining the level of user fees for SMEs.

28 Figure 3 

compares CS’s 2005 and 2008 user fee schedules for CS standardized and 

customized services. 

 25Since CS had difficulty disaggregating the data by company size, and over 16 percent of its

customers are of unknown size, the data for SMEs are not fully reliable. See the discussion 

of data reliability on page 35. 

26CS defines an SME as NTE for incentive fee purposes if it has not exported anywhere in

the world during the last 24 months, except for unsolicited orders or orders placed by U.S.

intermediaries, and has not previously used a CS service.

27In addition, CS extends SME-level user fees for standardized and customized services to 

cities and local governments, trade associations, and nonprofit educational institutions and

partners. 

28Under the 2005 user fee schedule, CS charged large firms and SMEs the same user fees for 

the same services, but the user fees differed from country to country. For example, CS

charged all firms, regardless of size, the same user fees for the Gold Key Service and the

International Company Profile based on groupings of export markets into four user fee

bands, which were roughly related to variations in national labor costs across markets. For 

customized services, the 2005 user fee schedule charged all firms the same user fees based 

on the scope of work required to meet firms’ specific needs, and the range of user fees also

reflected variations in the cost of doing business in different markets. 

Page 17 GAO-09-144 Export Promotion User Fees
 

Figure 3: Comparison of the Commercial Service’s 2005 and 2008 User Fee Schedules 

Source: GAO analysis of Commerce data.

Standardized services

Gold Key Service

International Company Profile

International Partner Search

FUSE

Domestic Business Provider

Customized services

• Business Facilitation Service 

• Platinum Key Service 

• Single Company Promotion 

• Trade missions 

• Catalog events

• Customized Market Research

CS User Fee Schedule

(2005-Apr. 30, 2008)

a

SMEs and large firms

$685-$770 $320-$700

$520-$810 

$500-$790

$5

$250

SMEs and large firms

100% of costs billed to third partyc

35% of CS resource costs

$700

$600

$550

$150

$300

SMEs

100% of costs billed to third partyc

35% of CS resource costs

$300

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

$350

$350

$350

$75

N/A

CS User Fee Schedule

(as of May 1, 2008)

a

SMEs and state trade offices Large firms

Large firms

First 

appointment

Additional 

appointmentsb First appointment

Additional 

appointmentsb New-to-Export 1st use of service

100% of costs billed to a third partyc

100% of CS resource costs

$2,300

$900

$1,400

$300

$600

$1,000

N/A

N/A

N/A

N/A

First 

appointment

Additional 

appointmentsb

a

The 2005 user fee schedule shows the range of user fees charged to both SMEs and large firms by 

groupings of overseas markets. The 2008 user fee schedule shows the user fees for each service by 

size of firm. 

b

Additional appointments also may be referred to as additional days. 

c

Costs billed to a third party include any costs needed to deliver a CS service that requires payment to

a third party vendor. These costs include items such as temporary staff help, ground transportation, 

translators, and catering. 

CS’s data show that it sold a total of 19,906 services in fiscal year 2008. In

addition, CS reports that it collected approximately $10.2 million for these 

standardized and customized services. Table 3 shows the number of 

services sold and collections by type of service for fiscal year 2008. 

Page 18 GAO-09-144 Export Promotion User Fees
 

Table 3: CS Services Sold and Total Collections, Fiscal Year 2008 

Standardized services Number of services sold Collections

Gold Key Service 1,416 $1,200,100

International Company Profile 1,445 1,014,822

International Partner Search 369 215,550

Featured U.S. Exporter (FUSE) 158 50,610

Business Service Provider (domestic) 797 239,721

Total 4,185 $2,720,803

Customized services 

Business Facilitation Service 2,985 $1,953,351

Customized Market Research 178 162,571

Platinum Key Service 67 282,273

QuickTake 12 8,813

Catalog event 157 81,722

Single Company Promotion 101 155,053

Certified Trade Mission 44 433,779

International Buyer Program 936 937,682

Seminar/webinar 9,261 994,391

Trade fair 382 999,493

Trade mission 166 513,420

Trade promotion event 1,110 901,005

Local event 322 73,457

Total 15,721 $7,497,010

Grand total 19,906 $10,217,813

Source: GAO presentation of CS data. 

A majority of states do not charge fees for most types of services they 

offer, and they provide some services for free for which CS charges a fee.

At least 23 states responding to our survey do not charge fees for 7 of the 

11 types of services, including export counseling, market research, market 

entry strategy development, product analysis, and pricing information. 

(See fig. 4.) In contrast, CS charges a fee for similar services in some 

cases. For example, while CS charges user fees for agent and distributor 

searches under its Gold Key Service and International Partner Search 

services, most states reported charging no fee for this type of service. In 

addition, most of the six states’ trade offices we visited told us they 

provide free export promotion services for which CS charges a fee, such 

as foreign company background checks and foreign agent and distributor 

searches. However, the scope and coverage of states’ services compared 

Page 19 GAO-09-144 Export Promotion User Fees
 

with CS’s may differ. For example, some state trade office officials told us

that while they provide for free services similar to CS’s fee-based services, 

often these services are available only in limited overseas markets and are

not as comprehensive as the services CS provides. 

Page 20 GAO-09-144 Export Promotion User Fees
 

Figure 4: States’ Trade Offices’ Fee-Based and Non-Fee Based Services 

Source: GAO analysis of states’ trade offices survey responses. 

Export counseling

Market research

Market entry strategy development

Product analysis/pricing information

Agent/distributor searches

Marketing/promotional literature reviews

Foreign company background checks

Foreign trade missions

Trade shows (U.S., foreign, and catalog)

Training programs and seminars

Licensee, joint venture, and 

partnership contracts

38

31

30

26

25

23

23

3

2

8

11

1

5

4

2

7

6

3

28

28

23

1

0

1

1

1

2

2

3

8

9

8

2

Types of services no 

fee

partial 

fee

full 

fee

provide service

Number and percentage of states that:Number of states

that charge:

do not provide service

39

89%

5

11%

37

84%

7

16%

35

80%

9

20%

29

66%

15

34%

34

77%

10

23%

31

70%

13

30%

29

66%

15

34%

39

89%

5

11%

39

89%

5

11%

39

91%

4

9%

14

33%

29

67%

Note: For most of the services, 44 states’ trade offices responded and, in two cases, 43 responded.

For those services for which states’ trade offices reported charging a fee, 

most states charge partial fees rather than full fees. Most states reported 

charging a fee for trade shows, foreign trade missions, as well as training 

Page 21 GAO-09-144 Export Promotion User Fees
 

programs and seminars. Most states reported charging a partial fee to

recover part of the cost of these services. For example, for foreign trade 

missions, 28 states charge a partial fee, and 8 states charge a full fee. We

did not request information on the fees states’ trade offices charge for 

their services or their annual fee collections. According to SIDO, the 

states’ fees vary widely. 

Some States Help Client 

Firms Defray Costs of 

Export Promotion Services 

To help make export promotion services more accessible to potential 

exporters from their states, some states’ trade offices offer grants. Of the 

45 states that responded to our survey, 19 reported providing SMEs with 

grants, and 16 reported providing SMEs with grants or direct payments 

that could be used to defray the costs of CS’s export promotion programs 

and services.

29 (See fig. 5.)

 29CS does not offer any comparable export promotion grant programs to SMEs. However, 

ITA offers limited financial assistance to nonprofit groups, including trade associations and

states’ trade offices, under the Market Development Cooperator Program. 

Page 22 GAO-09-144 Export Promotion User Fees
 

Figure 5: States’ Trade Offices Offering Export Promotion Grants 

State Type and amount of export promotion grant

Can grant be used to 

defray cost of 

CS’s export 

promotion services?

 1. Alabama

The current grant has expired that provided money to companies to set up one-on-one matchmaking appointments

through the Gold Key Service. Funding has been requested through the Appalachian Regional Commission (ARC) 

and, if accepted, grants will be provided to companies located in the ARC region, excluding Madison and Shelby 

Counties, to pay for Gold Key Service. 

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes, subject 

to approval of 

grant project 

overall

Yes

No

Yes

Yes

Yes

No

Yes

Yes

 2. Connecticut Connecticut reimburses SMEs 50% up to $1,000 for certain CS’s export promotion programs and services.

 4. Indiana Trade Show Assistance Program offers up to $5,000 per company per fiscal year to attend international trade shows; 

about $100,000 allocated each year.

 5. Iowa

Export Trade Assistance Program reimburses a company up to $4000, three times in the state’s fiscal year, for trade 

shows and trade missions, which may include the purchase of Gold Key or other services from Commerce on the 

company's behalf. 

 3. Florida

Does not provide grants directly to SMEs but to economic development organizations (EDO) based on competitive 

proposals designed to expand trade in their specific regions. However, the EDOs may use these grant funds to defray 

the cost of participation of local SMEs on Enterprise Florida, Inc. trade missions, which use Gold Key or trade show 

space. 

 7. Maryland Provides up to $5,000 in matching grants, with $100,000 allocated each year.

 6. Maine Yes Offers limited support through the Manufacturing Extension Partnership program, which can be used to offset CS fee 

services; $1,000 to $1,500 toward matchmaking costs.

8. Mississippi Provides grants for up to a maximum of $250 per company for Gold Key Services based on budget availability.

 9. Montana Provides grants for up to half the cost of Gold Key Service.

10. New York The Global Export Market Service Program offers matching grants to qualified individual firms (up to $25,000) or to 

groups of companies, or industry/trade associations (up to $50,000).

11. North Dakota Receives grant through Commerce’s Market Development Cooperator Program, which it uses to defray costs of CS’s

services. 

12. Oklahoma

Provides Trade Show Matching Grant Program for companies to attend international trade shows. The grant matches

company expenses up to $2,500 for booth rental, translation service, and promotional materials shipping costs. The 

grant does not cover travel, hotel, and food costs.

13. Oregon Provides $2,500 grants for trade show or trade mission costs.

14. Pennsylvania

Provides SMEs a matching grant of up to $5,000 yearly per firm if the SME meets eligibility requirements. The grant 

can be used to defray Commerce’s fees if Pennsylvania does not have an overseas office in the country where 

Commerce service is used; about $1 million allocated each year.

15. Rhode Island Provides minigrants up to $5,000 for export training.

16. Vermont Provides limited grants to pay for Gold Key and other CS services.

17. Virginia Provides 20 $5,000 grants per year and 15 $10,000 grants per year. 

18. Washington Offers an international trade show grant program, which can be used for trade shows organized by Commerce. 

19. Wisconsin Offers $5,000 grants from an annual fund of $100,000. Grant can be used to purchase CS’s Gold Key Service and 

interpreters during a trade mission.

Sources: GAO analysis of states’ trade offices survey responses and State International Development Organizations data.

The rate at which states defray costs or reimburse SMEs for their 

participation in CS’s programs varies. States’ grants generally range from 

$1,000 to $5,000 per firm and are often intended for participation in trade 

Page 23 GAO-09-144 Export Promotion User Fees
 

shows, trade missions, or other state-sponsored events. States’ trade 

offices cannot determine what portions of the grants (or direct payments) 

are used to defray the cost of CS’s user fees; SMEs may use states’ grant 

funding for a range of other eligible expenses, such as travel and logistical 

expenses. According to SIDO, states’ funding of CS’s services is highly 

dependent upon their affordability relative to services available from 

private consultants and other sources. Three of the six states’ trade offices

we visited offer such grants—Connecticut, Mississippi, and Pennsylvania.

According to these states’ trade officials, grants are a useful tool to 

outreach to SMEs that might not have considered exporting and might not 

be familiar with the costs of export assistance. However, these officials 

explained that grants in and of themselves often do not determine whether 

SMEs participate in export promotion programs. 

CS needs better information to maximize the efficient and effective

operation of its export promotion programs and to ensure there is a sound 

basis for setting its user fee rates. CS decided to base its export promotion 

user fees on program costs, though it has a yearly legislative exemption 

from having to recover full costs, and it attempted to recover only a 

portion of the cost of its services. 30 Nevertheless, CS did not document its 

methodology, calculations, and support for the assumptions it used to 

determine the full cost of each type of service; thus, CS cannot ensure its 

methodology is based on accurate information or is consistently applied 

from year to year to allow officials to make sound management decisions 

about its services and user fees. In addition, CS’s cost estimates are not 

complete. For example, CS’s cost estimates did not include certain costs 

paid for by other entities on behalf of CS, as federal accounting standards 

require. 31 Also, CS used potentially outdated and inaccurate 2005 staff time 

data to estimate its program costs, upon which it based the 2008 user fee 

structure. Complete and accurate full cost information would assist CS 

and the Congress in making decisions about resource allocations, 

evaluating program performance, and improving program efficiency. 

Finally, CS did not document its procedures and assumptions for setting 

CS Needs to Improve 

Its Methodology to 

Determine Costs and 

Set User Fees 

 30Pub. L. No. 110-161. 

31According to the Statement of Federal Financial Accounting Standards (SFFAS) 4:

Managerial Cost Accounting Standards and Concepts, full cost of a service produced by a 

segment of an agency is the sum of the costs of resources consumed by the segment that

directly or indirectly contributes to the service, and the costs of identifiable supporting 

services provided by other segments within the agency, and by other entities. 

Page 24 GAO-09-144 Export Promotion User Fees
 

its user fees, including how it determined incentive rates for SMEs, thus 

weakening the link between costs and the user fees. 

CS Uses OMB Full Cost 

Recovery Policy as a Guide 

for Fee Setting but Is Not 

Required to Do So 

CS’s annual appropriation permits it to charge user fees but is silent with 

respect to setting and revising user fees.32 Nevertheless, there should be a 

sound basis for any user fees charged. According to CS officials, CS made 

a policy decision to use OMB Circular A-25, including its direction to 

recover full costs, as a guide for establishing its 2008 user fee structure, 

but it does not attempt to recover the full cost of its services. In annual 

appropriations since the 1990s, certain provisions of the Mutual Education

and Cultural Exchange Act (MECEA) have applied to ITA’s trade 

promotion activities.33 Through these MECEA provisions, CS is authorized 

to accept “contributions” from firms. Under this statutory authority CS 

charges a fee for services provided in its export promotion programs, but 

the statute is silent with respect to setting and revising user fees.34

Furthermore, since fiscal year 2006, the Congress has exempted CS from 

the requirements of OMB Circular A-25 as part of the ITA’s annual 

appropriation.35 However, according to the CS officials who established 

the user fee policy, CS nevertheless implemented the 2008 user fee 

schedule with the goal of moving toward OMB’s full cost recovery policy.36

 32Pub. L. No. 110-161. 

33See e.g., Departments of Commerce, Justice, and State, the Judiciary, and Related 

Agencies Appropriations Act, 1990, Pub. L. No. 101-162, 103 Stat. 988, 990, (1989). Since the 

Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies 

Appropriations Act, 1990, the Congress has applied certain provisions of MECEA to ITA in

ITA’s annual appropriation. 

34The Congress has stated that, for ITA, certain provisions of MECEA shall apply in carrying 

out international trade and promotion activities abroad. Through the application of these 

MECEA provisions, the Congress authorizes CS to accept contributions from “[f]oreign

governments, international organizations and private individuals, firms, associations,

agencies, and other groups” to carry out the purposes of MECEA. These contributions 

“shall include payment for assessments for services provided as part of these activities.” 

Under this authority, CS must charge a fee for services it renders in its export promotion 

programs and CS has made a policy decision to charge the fee on a full cost recovery basis. 

See e.g., Pub. L. No. 110-161. 

35Pub. L. No. 109-108 and Pub. L. No. 110-161. 

36Other options could include basing fees on competing market rates charged by other 

providers of similar services or setting fees that would promote a certain level of 

participation. 

Page 25 GAO-09-144 Export Promotion User Fees
 

Our review of various documents and interviews with agency officials 

indicated that there had been confusion over whether CS is required to 

comply with Circular A-25. OMB has expressed concern about the 

adequacy of CS’s understanding of its costs, to which CS has responded. In

2003, OMB found that although CS charges user fees for some services, it 

did not have a consistently applied pricing strategy for its services, and the 

infrastructure for capturing cost information was inadequate for making 

informed decisions. In addition, in 2004, Commerce’s Office of Inspector 

General reported that CS was not in compliance with Circular A-25 and 

recommended that CS work with OMB to comply with the circular. In 

response, CS undertook efforts to determine the full cost of its services 

and to comply with Circular A-25. 

Confusion Over Whether CS 

Must Try to Recover Full Costs 

Although CS has received a yearly legislative waiver explicitly exempting 

it from the requirements, in May 2008, CS submitted a request to OMB for 

a permanent waiver from the full cost recovery provisions contained in the 

circular. In its request to OMB, CS explained “the user fee schedule moves

us closer to the intent of the cost recovery provisions of the OMB Circular 

without making our services out of reach to SMEs who have less financial 

flexibility.” According to OMB officials, OMB reviewed the 2008 CS user 

fee schedule based on estimates of fee collections, which OMB considered 

reasonable; however, OMB did not review details of the methodology CS

used to determine costs and establish the user fees. Following the review, 

OMB found, “the new fee structure will increase collections and moves 

toward the goals of the circular.” OMB stated it will continue to work with 

CS through the executive budget process to ensure the user fee strategy is 

evolving properly to meet the provisions of OMB Circular A-25. Although 

OMB did not approve the request for a permanent waiver, OMB told CS 

the 2008 user fee structure was acceptable with Circular A-25 for fiscal 

year 2009. 

OMB Circular A-25, User Charges, establishes, among other things, 

guidelines for federal agencies for assessing user fees for government 

services.37 It provides information on the scope and types of activities 

subject to user fees and the basis on which user fees are to be set. The 

 37Agencies may derive their authority to charge fees either from specific statutory authority

or from the Independent Offices Appropriation Act of 1952 (IOAA). OMB Circular A-25 

generally applies to agencies that derive their authority to charge user fees under IOAA, but 

specific user fee statutes should be construed consistent with OMB Circular A-25 to the

extent possible as part of an overall statutory scheme. CS derives its authority to charge 

fees for its export promotion services from its annual appropriation. 

Page 26 GAO-09-144 Export Promotion User Fees
 

circular also provides guidance for agency implementation of user fees 

and collections and outlines the following several policy objectives: 

• Ensure that each service, sale, or use of government goods or resources 

provided by an agency to specific recipients be self-sustaining. 

• Promote efficient allocation of resources by establishing charges for 

special benefits provided to the recipient that are at least as great as costs 

to the government of providing the special benefits. 

• Allow the private sector to compete with the government without 

disadvantage in supplying comparable services, resources, or goods where 

appropriate.

In determining full costs to set user fees, agencies may use cost 

accounting systems—a system designed to consistently produce reliable 

cost information—or cost finding methodology, which uses cost studies or 

cost analyses to develop cost information. The methodology the agency 

uses to determine costs should be appropriate for management’s needs 

and the environment in which the agency operates. 

Understanding the full costs of federal programs, including CS’s export 

promotion programs, is important for several reasons. First, management 

needs reliable cost information to make resource decisions and to find and 

avoid waste and inefficiencies. For example, using full cost information, 

management can make decisions to reduce resources devoted to activities 

that are not cost-effective. In addition, such information allows managers 

to compare cost changes over time and identify their causes and reduce

excess costs. Second, management needs reliable and complete cost 

information to assess the extent to which user fees recover the proportion 

of full costs intended. Third, the Congress and the public can use full cost 

information to evaluate the performance of federal programs and compare 

their costs and benefits. For example, full cost information assists the 

Congress in making decisions about allocating federal resources, and 

when authorizing and modifying programs. 

In 2005, CS developed a cost-finding methodology to attempt to determine 

the full costs of its export promotion services and increased the user fees 

of one of its most popular services, International Company Profile, to full 

cost recovery for all firms based on its 2005 cost estimates. CS officials 

explained that it is currently adopting a new cost accounting system that is 

used throughout Commerce, which CS officials stated would provide 

improvements to its cost accounting. However, according to CS officials, 

Understanding the Full Costs of 

Federal Programs Is Important 

for Good Management 

Page 27 GAO-09-144 Export Promotion User Fees
 

this new cost accounting system would not be used to apply salary costs 

to activities or attribute overhead costs to determine the full cost of 

services. 

While CS has taken steps to move toward full cost recovery, CS officials 

told us they balance this objective with trying to ensure its user fee 

schedule keeps its services accessible to SMEs. CS officials decided to

provide lower incentive rates to SMEs, which only cover a portion of the 

full costs of these services. The 2008 fee schedule seeks to charge large 

companies “full cost.” For example, CS charges large firms a $70 per hour 

rate and charges SMEs approximately 35 percent of that rate, or $25 per 

hour, for the cost of staff time required to deliver standardized and 

customized services. CS charges both large firms and SMEs the full cost of 

third party charges needed to deliver a CS service, such as translation and 

transportation services. 

CS relied on a cost-finding methodology to determine full costs, according 

to CS officials; however, CS did not document the methods, calculations, 

and support for the assumptions it used to estimate the full cost of each 

type of service, as called for by federal accounting standards.38 Instead, CS 

officials generally described to us its cost-finding methodology, which they 

said was partly based on the one used for the 2005 user fee schedule, and 

provided limited documentation of its cost templates. (See table 4.) CS did 

not document its methods, assumptions, and cost calculations for each 

service. 

CS Did Not Document Its 

Methodology for 

Determining Full Costs 

 38SFFAS, No. 4, provides that agencies may determine full costs based on a cost-finding 

methodology; however, the methodology for determining costs should be clearly 

documented and followed consistently. According to federal accounting standards, cost

accounting procedures and processes should be documented and should provide 

instructions for procedures and practices to be followed in determining costs and contain 

examples of other documents used. 

Page 28 GAO-09-144 Export Promotion User Fees
 

Table 4: Overview of CS Cost Methodology 

According to CS officials: 

CS estimated the hourly rates for staff time spent to deliver CS services by dividing their 

total annual budget by the total number of annual staff hours budgeted for CS. 

• For example, for the 2008 user fee schedule, CS officials told us they divided the 

fiscal year 2007 CS budget of $229 million by the total number of hours incurred by 

1,566 staff in 1 year to calculate a $70 hourly full cost rate. 

CS then used cost templates that included an estimate of staff time for each type of 

service, which it multiplied by the $70 hourly rate to determine full cost of each service. 

• If there are any costs incurred by a third party, such as venue costs or equipment 

rentals, these are also included. 

• CS included overhead costs using a flat rate of 12 percent of salaries and benefits, as 

recommended by OMB Circular A-76. 

For standardized services, for which CS charges a set user fee, CS officials stated they 

determined 

• the specific step-by-step activities, and 

• the amount of time required to deliver services by surveying staff at CS domestic 

offices and at overseas posts. 

Source: CS. 

Note: Although CS officials stated CS included overhead costs using a flat rate of 12 percent, the cost 

templates CS provided to us showed a 6.25 percent rate for calculating overhead costs, and CS 

officials did not explain how the 12 percent flat rate was applied to its cost estimates. 

Better information would raise CS’s awareness of the composition of its 

costs, and changes to those costs, and allow them to better control and 

reduce costs where possible and to evaluate program performance. For 

example, such documentation could allow CS to compare costs among 

alternatives, such as whether to provide a service in-house or contract it 

out or whether to continue or eliminate a service. Without complete 

documentation and support for the specific methodology and information 

CS used as a basis for determining costs, CS cannot be sure that its chosen

cost assignments are reasonable and based on accurate information. In 

addition, it is not possible to ensure the methodology is consistent from 

year to year to allow CS to make sound decisions about its services and 

user fees. The risk of overestimating or underestimating costs may be 

reduced if CS clearly documents its methods for accounting for program 

costs and the assumptions used to project future costs. Such 

documentation would help CS assess whether its estimates are aligned 

Page 29 GAO-09-144 Export Promotion User Fees
 

with changes in costs; this is important so that the user fees recover the 

intended portion of full costs, and CS does not charge firms more or less 

than intended. However, CS did not document how it assigned costs to 

each service in enough detail to allow CS staff and other knowledgeable 

persons to assess these procedures and determine the accuracy of the 

information used. Furthermore, the lack of documentation makes it 

difficult to ensure staff are properly trained and consistently apply the 

methodology so that it produces accurate cost information that can be

compared from year to year. Finally, the lack of full cost information 

makes it difficult for CS and the Congress to accurately evaluate the 

performance of CS services in light of the true overall costs and determine 

whether resources are rationally allocated to CS services. 

Notwithstanding the lack of documentation, we found CS’s cost estimates 

do not accurately reflect full costs. First, for example, CS did not include 

certain costs paid on behalf of CS by other entities, as required in federal 

accounting standards. Without consideration of costs paid by other federal 

entities, CS’s cost estimates do not reflect full costs to the federal 

government and are misleading for CS officials and others using that 

information to make decisions about resource allocations and changes in

programs. Moreover, because CS has chosen to base its user fees on the 

full cost of its services, it needs a reliable accounting of total costs when 

setting user fees so that they cover the intended share of the cost of its 

services. According to CS officials, CS did not include certain retirement 

benefits to be paid by the Office of Personnel Management, including the 

costs of pensions and health and life insurance, in determining the full 

costs of its export promotion services. CS estimated the annual cost of 

these benefits to be approximately $17 million in fiscal year 2008. Full

costs should include the cost of such employee retirement benefits 

according to federal accounting standards.39

Second, CS used potentially outdated and inaccurate information about 

staff time spent to estimate program costs and set user fees. These were 

CS Cost Estimates Are Not 

Complete or Accurate 

 39Federal accounting standards state that each entity’s full costs should include the costs of

goods and services that it receives from other entities, and the payment of retirement 

benefits is likened to providing goods and services. Furthermore, federal accounting

standards state that recognizing the costs of interentity goods and services is especially 

important when those costs constitute inputs to services provided to nonfederal 

government entities for a user fee and thus these costs need to be recognized by the entity 

in order to determine user fees for services. 

Page 30 GAO-09-144 Export Promotion User Fees
 

key data that CS used to assign costs to the activities required to deliver its

standardized services. CS officials explained that, as part of its cost-finding 

methodology, CS surveyed staff to determine the specific step-by-step 

activities and time staff spent to deliver services and used these data to 

develop the cost templates to estimate the full costs of each standardized 

service. However, CS officials stated that, for its most recent user fee 

adjustment in 2008, CS relied on the survey data it collected in preparation 

for its prior adjustment of user fees in 2005 and did not update the survey 

data to ensure its reliability. Thus, these data were potentially outdated 

and inaccurate. CS officials explained they assumed the activities and staff 

time required to deliver services had not changed significantly, but they

did not justify or provide documentation supporting the assumption the 

data were reliable in 2008. 

In addition, we found the accuracy of CS’s 2005 survey data to be 

questionable. These data were not based on an actual accounting of staff 

time, according to CS officials. Instead, CS officials explained that these 

data were based on staffs’ estimates of the amount of time they thought

they spent, on average, performing specific tasks to deliver a service. Staff 

reported widely divergent time estimates for the same activities, which 

raises concerns about how accurately staff estimated their time. For 

example, for the activity “identifying and contacting potential partners” 

staffs’ time, estimates ranged from 1 hour to 20 hours and, for the activity, 

“final debrief of the client,” the range was 15 minutes to 4 hours. CS 

officials told us they were satisfied that these estimates were reasonably 

accurate; however, based on our statistical analysis we disagree and 

believe they did not sufficiently explain and document support for this 

assumption.

Federal accounting standards recognize the importance of collecting 

accurate cost information. For example, federal accounting standards 

state that reliable information on the costs of federal programs and 

activities is crucial for effective management of government operations. 

Without supporting its assumptions of its staff time estimates, CS cannot

be sure that the cost assignments it used to determine costs were 

accurate. In addition, inaccurate cost information can skew fee-setting 

decisions, so CS needs reliable information to ensure that the user fees are 

aligned with any changes in staff productivity and recover CS’s intended 

share of program costs. 

Page 31 GAO-09-144 Export Promotion User Fees
 

CS does not seek to recover full costs from all firms under its 2008 user fee 

structure. CS offers lower fees to SMEs as an incentive to purchase CS 

services, and CS officials explained that factors other than costs 

contributed to their formulation of the 2008 user fee structure.40 CS seeks 

to recover only a proportion of full costs from SMEs, with the remainder 

of the costs covered by CS’s annual budget appropriation. Lower user fees 

are an incentive to SMEs to use CS services. 

However, CS did not sufficiently support and document the methods and 

assumptions it used, particularly with regard to the lower user fees for 

SMEs under the 2008 user fee structure. For example, according to CS 

officials, CS set the current SME-level user fees based on the historical 

proportion of costs—approximately 35 percent—recovered by the old user 

fees charged to SMEs. However, CS did not document how it determined 

this 35 percent incentive level and the level of the newly introduced newto-export incentive user fees. Instead, CS officials told us they set the level

of the incentive user fee for new-to-export SMEs based on their perception

of what would constitute a reasonable discount while still signaling that 

the services are valuable. These officials also stated the new-to-export 

incentive user fees were set at the same $350 for the most popular SME 

services to eliminate potential confusion among customers. They 

explained that CS used informal client and stakeholder feedback, as well 

as program counts and collections data, to assist in establishing the user 

fees SMEs are charged for standardized services, but CS did not document 

this. As a result, CS cannot demonstrate how its cost estimates are linked 

to the user fees it charges different sizes of firms for each of its services. 

This information would allow comparisons to inform management and 

program staff decisions, such as whether to adjust user fees, do a project 

in-house or contract it out, to accept or reject a proposal, or to continue or

eliminate a service. 

Significant events, which can include key decisions about user fees, are to 

be clearly documented, according to federal internal control standards.41

CS Did Not Justify and 

Document Its Procedures 

for Establishing SME User 

Fees 

 40CS implemented the 2008 user fee structure with the goals of (1) moving toward the 

provisions of OMB Circular A-25, (2) maintaining the level of user fees SMEs are charged

and providing incentive user fees for new-to-export SMEs to use CS services for the first 

time, and (3) simplifying the user fee structure implemented in 2005. CS officials explained 

the 2008 user fee schedule moves closer to the intent of OMB’s full cost recovery policy 

because it seeks to recover full costs from large firms. 

41GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 

Page 32 GAO-09-144 Export Promotion User Fees
 

Transparent procedures can contribute toward an improved 

understanding about the decisions made to establish the user fees and the 

basis on which those decisions were made. For example, as CS cost-based 

user fees represent a charge for a specific service received, stakeholders 

may expect a change in the user fees firms are charged to be related to a 

change in the true cost of providing services. 

The extent to which CS’s user fees affect SMEs’ use of its export 

promotion programs is unclear because CS lacks comparable and reliable

historical data on fees charged its customers and has only limited 

disaggregated data on services sold by company size and type of 

customers. CS officials informed us that they have performed only limited

studies of customer demand, but that CS has recently begun to take steps 

to improve the quality of data it collects to better evaluate its customer 

base. Because state governments play a potentially important role in 

helping their businesses to compete in the global economy, and because 

they are also partners with and customers of CS, we obtained the states’ 

trade offices’ views on the user fees CS charges for some of its services. 

States’ trade offices’ views of the 2005 and 2008 user fee schedules and 

their projected future use of CS services varied. CS projects a 10 percent

increase in SMEs’ total demand for its services in fiscal year 2009 based on

its new user fees, but support for this projection is unclear. Factors other 

than fees, such as the availability and quality of comparable services from 

private providers, may affect SMEs’ use of CS services. 

CS lacks reliable and sufficient data on its export promotion fee-based 

services to evaluate its customer base. We have identified several 

limitations with regard to CS’s data about: (1) fees charged its customers, 

(2) the characteristics of its customers, and (3) purchases by location and 

types of services. CS is taking steps to improve the quality of the data it

collects, as well as the integration of its customer data systems, but its 

officials acknowledged that the Client Tracking System (CTS) may not be 

fully operational until well into 2009 or beyond.42 For an entity to run and 

control its operations and to achieve all its objectives, it must collect and 

process relevant, reliable, and timely data relating to internal, as well as 

The Extent to Which 

CS’s User Fees Affect 

SMEs’ Use of Its 

Export Promotion 

Services Is Unclear 

CS Lacks Reliable and 

Sufficient Data to Evaluate 

Its Customer Base

 42The CTS is an ITA-wide customer relationship management system that is being 

developed to track clients and their activities (fee-based and non-fee-based services) at 

domestic and overseas posts. 

Page 33 GAO-09-144 Export Promotion User Fees
 

external events, based on GAO’s Standards for Internal Control in the 

Federal Government and OMB Circular A-123 on Management’s 

Responsibility for Internal Control. In addition, effective information 

technology management is critical to achieving useful, reliable, and 

continuous recording and communication of information. 

CS lacks comparable and reliable historical data on the fees charged for 

each service to measure past and potential effects of user fee changes on

its SME customers to ensure that it is charging them the correct fee. Prior 

to 2005, according to CS officials, there were no set fees, and each post 

decided what to charge customers for its export promotion services. In 

addition, according to CS officials, prior to December 2007, every overseas

post had its own database of customers, resulting in 80 databases, as well 

as domestic databases that did not communicate with each other. 

According to CS, it currently uses two main systems (the eMenu43 and the 

CTS) to collect and track data on the programs and services it offers its 

customers. We observed demonstrations of both these systems in August 

2008. While the systems have many useful features and represent 

promising directions for CS to take, we identified several limitations with 

regard to computer database design and internal controls.44 In our review 

of the data, we noticed instances where companies received a bill that was 

much larger than the advertised service fee, but the reason (possibly 

because the extra days and add on services were being included) was not 

documented. More comparable and reliable user fee data could be used to

help CS in determining how changes in its user fees affect SMEs’ demand 

for its services. 

CS is limited in its ability to disaggregate the firms that purchased fee 

services by company size or by export status (whether the firms are newto-export or had purchased prior export services from CS). Such 

information would be useful for making managerial decisions and 

CS Lacks Reliable Historical 

Data on User Fees Charged Its 

Customers 

CS Is Limited in Its Ability to 

Analyze Data by Size and Status 

of Customers 

 43According to CS, the eMenu is now primarily used as a tool for customers to pay for CS’s

services, capturing clients’ credit card information, as well as statistics such as company

size, export status, and export successes. 

44For example, when preparing a statement of work for the client in the eMenu, the trade 

specialist has to enter the fee into a data field, since the field is not automatically populated

based on company size and export status. CS officials explained that the fees could consist 

not only of the initial fee-based services, such as a 1-day Gold Key Service, but could also

include additional days of service, as well as “add ons,” such as transportation and 

interpreter costs. However, as there is only one field in the database for all these costs, we 

could not isolate the initial fee part of the costs or identify any additional service costs 

when those applied. 

Page 34 GAO-09-144 Export Promotion User Fees
 

determining which products and services are in demand and which 

products are purchased less frequently by CS’s different customers. A lack 

of accurate customer information and good procedures creates the risk of 

charging CS customers a fee that is inconsistent with their company size 

or export status. According to CS officials, the eMenu initially relies on the 

customers to self-report their size and export status. CS officials stated 

that its trade specialists could verify company size by consulting the Harris 

database45 and export status by consulting the CTS. When we examined 

data for 2008 from the CTS, we found that 16 percent of the companies 

were listed as being of “unknown size.” In addition, there were numerous 

inconsistencies in the designation of company size, with more than 200 

instances of companies being designated with different sizes. In addition, 

based on our review of the data, CS has not yet addressed the deficiencies 

with prior years’ data. The 2006 and 2007 database did not identify 

company size for at least one quarter of the companies per year. Prior to 

December 2007, according to CS officials, the size of firms purchasing 

services was not a mandatory field in the databases. 

It would require a manual review of the records to determine whether a 

company meets CS’s new-to-export status. Even with a manual review, the 

accuracy of the designation about export status would depend on the 

thoroughness, completeness, and consistency of the entries that had been 

made by trade specialists and others. Yet our review of CS data raised 

questions about the manual review because we found at least 30 instances 

when companies designated as new to export in 200846 had appeared in the 

prior year’s (2007) database as purchasers of certain CS fee services.47 CS’s 

limitations in collecting and processing accurate information on company

size and export status reduce its ability to determine which products and 

 45A service CS purchases that provides various statistics on U.S. companies. 

46This represents data for the first half of fiscal year 2008 as we did not obtain the remaining 

months on time to complete the analysis for the year. The purpose of this test was neither

to quantify the exact number of firms that had been inappropriately designated as NTE in 

2008, nor to comment on whether any firms had been inappropriately charged a lower fee

than was required; rather, it was to establish that there are some concerns about data 

reliability in the designations of NTE in the historic data and to suggest that CS take 

actions to correct these problems given that the new fee structure offers lower fees to NTE 

SMEs. 

47According to recent CS guidance, NTE firms are not supposed to have been prior

recipients of services such as Gold Key, International Company Profile, International 

Partner Search, trade missions, Customized Market Research, Business Service Provider, 

and QuickTake. We found more than 650 companies designated as NTE in the data for the 

first half of 2008 that we examined. 

Page 35 GAO-09-144 Export Promotion User Fees
 

services are in demand or underused by its different customers and more 

importantly to charge firms the appropriate fees. Under the 2008 fee 

structure, SMEs and new-to-export SMEs are charged lower fees for CS’s 

services. 

Due to limitations in CS’s databases, it is difficult to disaggregate 

purchases by location and types of services. Complete information on the 

characteristics of CS’s customers, such as geographic location, industry, 

and services bought and at what price over time, would allow CS to better

analyze and understand its customer base and to adjust to changes in 

market demand. CS’s database has total purchases by states, which not 

only includes private sector firms but also includes state export promotion 

agencies, universities, and other entities, making it difficult to obtain an 

accurate count for only SMEs, for example. We wanted to analyze SMEs’ 

fee-based purchases by home state for about 5 years to better understand 

the relationship between CS and SMEs in home states. Since it was not 

possible to disaggregate only the SMEs’ purchases, we decided to examine 

the data by home state for all firms. However, CS could only identify 

companies’ home states by performing a manual review of its records; 

therefore, the analysis was limited to data for 2 years, 2007 and 2008, and

for only four standardized services. See appendix III for information on 

CS’s customers’ purchases by states for selected services. 

CS has made some attempts to determine how the user fees affect its 

customers’ participation in its programs; however, these studies have been

limited, according to CS officials, in determining how the fees affect 

customers’ participation due to lack of sufficient data. One company 

contracted by Commerce attempted to estimate price elasticity (or 

sensitivity) of demand, both in 1998 and 1999, using different data.48 In 

1998, the company used data based on a survey of a small number of trade 

consulting companies on how their customers would have responded to 

price increases. CS officials said that they did not use the results of the 

1998 study in determining the fees to be charged because the analysis was 

unreliable since it was based on hypothetical data. For the 1999 estimate 

CS Is Limited in Its Ability to 

Analyze Customers’ Purchases 

by Location and Type

Studies of CS’s Export 

Promotion Programs and 

User Fees Have Been 

Limited 

 48The price elasticity of demand measures how sensitive the quantity demanded is to 

changes in price. If a small price increase results in a disproportionately large decrease in

the quantity demanded, then demand is price elastic. For example, if a price increase of 10

percent results in a decrease of more than 10 percent in the quantity demanded, then 

demand is price elastic. If the quantity demanded decreases less than 10 percent, then 

demand is price inelastic. 

Page 36 GAO-09-144 Export Promotion User Fees
 

of price sensitivity, the contractor used customer survey data. However, 

the data suffer from a low response rate of 11 percent. Again, CS did not 

directly consider the price sensitivity estimates when making fee decisions 

in subsequent years. Table 5 provides a summary of some prior 

assessments of CS’s export promotion programs and user fees. 

Page 37 GAO-09-144 Export Promotion User Fees
 

Table 5: Some Studies of CS’s Export Promotion Programs and User Fees 

Date Study Relevant findings Relevant recommendations

2003 OMB Program Assessment 

Rating Tool 

CS’s primary assessment mechanism has 

been customer service surveys. Although 

these surveys yield relevant information, 

they do not provide a comprehensive 

independent assessment of CS’s products 

and services. 

CS should perform ongoing competitor and 

market analysis. 

January 

2003 

ITA User Fee Study • The contractor said that ITA was 

unable to provide them with useful 

customer information to conduct the 

study because its systems did not 

properly track information that would 

assist them in further understanding 

its customer base. 

• The contractor did not conduct a price 

sensitivity survey of CS’s customers, 

which it had intended, but instead 

conducted an internal survey of ITA’s 

trade specialists’ perception of

customers’ willingness to pay for ITA’s 

products and services, among other 

things. 

• The low response rate (40%) of the 

survey impacted the contractor’s 

ability to precisely quantify market 

demand and price sensitivity for all of 

the products and services the

contractor was asked to evaluate. 

ITA should set fees that align with 

established strategic position, using 

accurate product cost information. Factors 

that need to be considered when making 

this determination include the characteristics 

of the customer that buys the product, what 

demand ITA has experienced for the 

product at the current price, the market price 

for the product, and ITA’s strategic objective

in offering the products. 

March 

1999 

CS study on the Impact of 

Product Price Increases on 

Clients and Revenues 

• The contractor reported that, based 

on its estimate of price sensitivity of 

demand, the reduction in participation 

from a price increase would result in a 

reduction in revenues. 

• Increasing revenues through acrossthe–board price increases will

negatively impact the mission to 

develop SME exports. 

No relevant recommendation. 

Page 38 GAO-09-144 Export Promotion User Fees
 

Date Study Relevant findings Relevant recommendations

May 1998 ITA Product Pricing Study • Due to major cost and price data 

limitations, price and revenue 

projections cannot be made with 

confidence. 

• Based on estimated price sensitivity, 

ITA can increase revenue by raising 

prices on some existing products or 

services, charging for some products 

for which ITA has not historically 

charged, and charging for selected 

new products or services. 

• However, price increases will result 

inevitably in the loss of some current 

and prospective clients. Thus,

pursuing revenue generation has 

important implications for ITA’s 

mission of maximizing its services to 

SME clients. 

Initiate a tiered pricing structure based on 

factors, such as size of firm or export 

maturity using appropriate OMB (A-25) 

waivers and approvals. 

Sources: GAO analysis of OMB and Commerce data. 

Note: These reports contain several recommendations. We used the terms “relevant findings and 

recommendations” to mean those that address the fee or pricing structure with regard to CS’s clients.

According to CS, it is difficult to compare CS prices to others offering 

similar services, such as private sector providers. CS officials informed us 

that many consultants are reluctant to talk to them or share their pricing

schedules. GAO also contacted some private sector firms to determine 

what export advisory services they offer and the fees charged but either 

these firms did not provide such services or the firms did not respond to 

our inquiries for information on fees. Our survey of states’ trade offices 

found none of the 45 states that responded, including those we visited, had 

conducted an evaluation on the effects of user fees on SMEs’ participation 

in federal export promotion programs. 

States Had Differing 

Opinions About the Impact 

of CS’s 2005 Fee Schedule 

Because state governments play a potentially important role in helping 

their businesses compete in the global economy, partner with CS, and are 

sometimes customers themselves, we obtained the states’ trade offices’ 

views on the impact of CS’s change in user fees in 2005 on states’ use of 

certain services.49 States had mixed views about the impact of CS’s 2005 

 49CS did not have set fees for its services prior to 2005, so we categorized the 2005 fees as 

“fee change.” It is unclear what fees were charged prior to 2005. 

Page 39 GAO-09-144 Export Promotion User Fees
 

fee change. Some states said that the introduction of the 2005 fee schedule 

had no impact on their use of certain CS services, while others said that it 

caused them to decrease their use of those services. For example, of the

states that had a basis to judge, 56 percent (14 of 25) reported that the 

2005 fee schedule caused their offices to decrease their use of CS’s Gold 

Key Service, compared with 44 percent (11 of 25) reporting that their use

stayed the same.50 (See fig. 6.) 

Figure 6: States’ Trade Offices Use of Gold Key Service under 2005 Fee Schedule 

Greatly decreased use

44%

36%

20%

Somewhat decreased use

Total respondents with a basis to judge = 25

Stayed the same

Source: GAO analysis of states’ trade offices survey responses. 

Note: Forty-four states’ trade offices responded to this question, but 19 had no basis to judge. 

Based on CS’s data, for the total number of standardized services 

purchased, SMEs’ participation fluctuated before and after the 2005 fee 

change. For example, the Gold Key Service showed a decline in purchases 

of about 26 percent from 2005 to 2006 and slightly increased in 2007 by 

about 3 percent above the 2006 level. CS officials said that these large 

 50We highlighted the Gold Key Service throughout the report because, based on our survey,

most states’ trade offices said that they have primarily purchased the Gold Key Service 

from Commerce over the past 3 years. 

Page 40 GAO-09-144 Export Promotion User Fees
 

changes are due in part to a spike in demand in 2005 as companies rushed 

to sign up for certain services before the 2005 fees went into effect in April 

2005. 

CS Projects Increase in 

SMEs’ Demand with New 

Fee Schedule 

CS projects a 10 percent increase in SMEs’ total demand for its services in 

fiscal year 2009 based on its new user fees, but support for this projection 

is unclear. According to CS officials, although the fees for Featured U.S. 

Exporter and Business Service Provider (domestic) will increase for SMEs 

with the new fee schedule, overall collections are expected to rise, with 

higher demand for services such as Gold Key, International Company 

Profile, and International Partner Search that are now priced lower in 

most markets. In particular, CS expects an increase in demand for Gold 

Key Service in the expensive markets that now offer SMEs lower fees. The 

10 percent increase in SMEs’ demand is not based on any analysis of 

historical data. According to CS, the projected increase is based on 

anecdotal reports from its offices in the field, some businesses, SIDO, and 

DEC officials. With the new-to-export pilot incentive fee introduced for the 

first time, CS also anticipates an increase in demand from new-to-export 

SMEs, but the assumption of how much demand will change is a “wild 

guess,” according to CS officials. CS said it expects participation by large 

firms to remain constant or to decrease moderately. CS arrived at the 

assumption for large firms on the basis that large firms are less sensitive to 

the fees and will often use CS’s services to expand their overseas markets 

even when fees increase.

Our survey showed states’ trade offices’ reaction to the new fee schedule 

was generally positive, but there were some negative views. Most states 

view CS’s new fee schedule to be reasonable. As figure 7 shows, almost 

two-thirds (24 of 37) of the states that had a basis to judge reported that 

they considered CS’s new fee schedule to be very reasonable or somewhat 

reasonable. In addition, some DEC members in the states we visited 

believed the new fee schedule for SMEs is reasonable but expect the effect

of the fees to vary by company. 

Page 41 GAO-09-144 Export Promotion User Fees
 

Figure 7: States’ Trade Offices’ Views of CS’s 2008 Fee Schedule 

Very unreasonable

Neither reasonable nor

unreasonable

Somewhat reasonable

Somewhat unreasonable

8%

16%

11%

35%

30% Very reasonable

Total respondents with a basis to judge = 37

Source: GAO analysis of states’ trade offices survey responses. 

Note: Forty-three states’ trade offices responded to this question, but 6 had no basis to judge. 

Some states’ trade offices elaborated on their views regarding the 

reasonableness or unreasonableness of the new user fees. For those 

states’ trade offices that considered the new fee schedule to be somewhat 

or very reasonable, one said that it is very happy with the new fee 

schedule and has been promoting it and that the concept behind the low 

fees for new-to-export companies is “really brilliant.” Another state said 

that SMEs will still complain about having to pay for services, but that the 

new fee schedule is fair and makes CS’s services much more accessible for 

very small firms, while another state said that lower fees for SMEs is a 

good start but ignores the need to invest more in trade and investment 

promotion. For those states’ trade offices that considered the fees to be

somewhat or very unreasonable, one said that SMEs need assistance and

support to increase exports and that CS should provide available services 

at reasonable cost instead of trying to get more money from U.S. business 

taxpayers. One state said that the majority of its companies have fewer 

than 10 employees and that these companies find it difficult to justify 

paying the government fees for services, while another state said that the

Page 42 GAO-09-144 Export Promotion User Fees
 

majority of its SMEs are not currently using CS’s programs due to the cost 

involved and that alternatives may be less expensive but take longer to 

achieve similar results. 

We asked states’ trade offices for their views on the new fees’ projected 

impact on their use of certain services purchased directly to assist SMEs. 

Of the three standardized services we asked about (Gold Key, 

International Company Profile, and International Partner Search), at least

85 percent of those that had a basis to judge for each service said that their 

use would increase or stay the same. For example, 27 of the 30 states (90 

percent) that had a basis to judge reported that their use of the Gold Key 

Service for SMEs would either increase or stay the same under the new fee 

schedule. (See fig. 8.) 

Figure 8: States’ Trade Offices’ Views of Gold Key Service under 2008 Fee Schedule 

Greatly decreased use

44%

17%

33%

10%

Somewhat increased use

Somewhat decreased use

Total respondents with a basis to judge = 30

Stayed the same

Source: GAO analysis of states’ trade offices survey responses. 

Note: Forty-four states’ trade offices responded to this question, but 14 had no basis to judge. 

We also asked states’ trade offices their views on the new fees CS charges 

certain customers compared with the fees charged by private sector 

providers. More than two-thirds of the states that had a basis to judge (27 

of 39) indicated that Commerce’s new fees for new-to-export SMEs were 

about right compared with fees charged by private sector providers. 

Page 43 GAO-09-144 Export Promotion User Fees
 

However, states’ trade offices had mixed views about the new fees 

charged to SMEs that already export, and for each of the CS services 

about which we inquired (Gold Key, International Company Profile, 

International Partner Search, FUSE, Domestic Business Provider, and the 

customized services), roughly half of those that had a basis to judge 

responded that the fees were about right while roughly half reported they 

were too high compared with private sector providers. For example, figure

9 shows that more than half (16 of 27) thought that the new customized 

fees charged to SMEs that already export were somewhat or much too 

high compared with the private sector. 

Figure 9: States’ Trade Offices’ Views of CS’s Customized Services Fees Compared

to Private Sector Providers’ Fees 

41% About right

59%

Somewhat or much

too high

Total respondents with a basis to judge = 27

Source: GAO analysis of states’ trade offices survey responses. 

Note: Forty-three states’ trade offices responded to this question, but 16 had no basis to judge. 

According to SIDO, states can obtain cost competitive services in some 

markets, but such private sector alternatives are not universally available.

CS also subcontracts with private sector providers at lower rates than 

those of its employees. These private providers state that their knowledge 

of a particular market or its operational efficiencies allows them to offer 

lower cost services, such as matchmaking, according to SIDO. However, 

SIDO states that some states’ trade offices might choose CS’s services 

because they are more comfortable working with a federal agency and CS

generally offers superior quality control to private sector alternatives. One 

Page 44 GAO-09-144 Export Promotion User Fees
 

study prepared for CS found that export promotion services available from

private enterprises and trade groups vary in price, but that a number of 

private providers’ services are significantly more expensive. In addition, 

the study reported that, in some cases, these enterprises and trade groups 

work with CS to develop products and services and that some repackage 

and sell CS’s products, particularly market research and contact 

development information. 

Almost all of the states’ trade offices with a basis to judge responded that 

SMEs’ use of CS’s services would decrease if they were charged the same

fees as large firms (which, according to CS, represent the full cost of 

services). For example, more than 70 percent of these respondents 

indicated that they would expect a great or very great decrease in services, 

such as Gold Key (28 of 37) and International Company Profile (22 of 30) if 

fees were the same as those charged for large firms. Further, DEC 

members and USEAC officials in the states we visited expect that there 

would be significant decreases in SMEs’ demand for CS’s services if they 

were charged full costs for export promotion services. 

Factors Other Than Fees 

May Affect SMEs’ Choice 

to Use CS’s Services 

Factors other than fees may affect SMEs’ choice to use CS’s services 

including: (1) the types of services CS offers compared with other 

providers, (2) the individualized attention received, and (3) the quality of

the service. First, some states’ trade offices and other sources reported 

that factors such as the types of services required influence the choice of 

services purchased from CS versus other providers. A 2002 study prepared

for the Trade Promotion Coordinating Committee found that more than 

half of the services used by SME exporters were obtained from the private 

sector, which leads in providing transaction-related services, such as 

freight forwarding and helping firms to develop Web sites to promote 

products to foreign buyers.51 The study reported that the government’s 

role, including CS’s role, was seen as strongest in the provision of basic 

information to exporters, such as “how to export” information, Web-based 

information on markets, export counseling, and government procedures 

 51Chemonics International in Cooperation with University of North Carolina at Chapel Hill, 

The Kenan Institute of Private Enterprise, Kenan-Flagler Business School, Report Card on

Trade II: Assessing the Effectiveness of U.S. Government Support to Small and Midsize 

Exporters (Chapel Hill: June 12, 2002).

Page 45 GAO-09-144 Export Promotion User Fees
 

overseas.52 In addition, our survey revealed that 36 of 45 states’ trade 

offices (80 percent) use private consultants, including private businesses 

and American Chambers of Commerce, as providers for trade promotion 

services. For example, some states’ trade offices use private consultants 

for trade missions and trade shows, market research, and arranging 

company meetings, which are services CS provides. Services that CS does

not provide and which states’ trade offices obtain from the private sector 

include assistance in setting up offices in a foreign country, assistance in

sourcing products or manufacturers with sourcing a manufacturing 

partner, having prototypes or product samples made, and freight 

forwarding.53

Second, transaction-related services tend to require individualized 

attention, which is another factor that may influence SMEs’ choice of

whether to obtain services from CS versus other providers. Based on the 

2002 study, Commerce was seen as not being as well-positioned as private 

providers to provide the intensive attention that transaction-related 

services may require. We also spoke with officials of one large American 

chamber of commerce operating in a key market who informed us that its

members, including SMEs, are attracted to private providers’ intensive 

“handholding,” which, according to these officials, CS is not well known 

for providing. For example, this chamber of commerce offers a Corporate

Visa Program, which, according to the officials, actively helps its member 

companies to complete paperwork and expedite the visa process within a 

1-week time frame. In addition, one state trade office also said that 

contractors or private consultants offer in-country coordination and 

individualized attention that the CS no longer offers. 

The quality of service is also a key factor that influences SMEs’ choice of 

where to purchase services. A 2003 study54 estimated that fees for some CS

services that SMEs demand were lower than market comparisons but that 

CS’s market share based on total demand by SMEs for products and 

 52The study, which looked across all services used, said Commerce emerged as the “clear 

leader” among the government service providers, accounting for more than a third of all 

government-provided services. 

53CS also purchases services from the private sector. However, the partnership between CS

and the private sector was beyond the scope of our review. In addition, we did not further 

explore states’ trade offices’ relationship with private sector providers. 

54User Fee Study, prepared for the Department of Commerce, International Trade 

Administration by KPMG LLP, January 24, 2003. 

Page 46 GAO-09-144 Export Promotion User Fees
 

services similar to CS’s was relatively small; it suggested that the quality or

type of services provided by CS may not match the quality or type of 

services demanded by SMEs.55 One DEC member also told us that 

companies may perceive the quality to be better in the private sector since 

prices for similar services tend to be higher in the private sector and that, 

in some instances, inexperienced CS staff performed work, which may 

have led some businesses to the private sector. One state trade office said 

that the quality of CS’s service depends on staff dynamics at the individual

post. Another state trade office said that, while price is important, the 

delivery of consistent quality is more important to companies and that it 

relies on CS to provide quality service. According to CS, its customer 

surveys indicate that quality is a key factor in their choice of where to 

purchase services.56 CS officials said that, in reviewing the surveys’ openended questions, companies cited three drivers of client satisfaction: 

communication, quality, and consistency.57 Price paid for the services, 

according to the officials, has not been of equal importance. 

SIDO officials noted that another factor that may influence SMEs’ 

participation in CS’s programs is small firms’ general level of awareness 

about the states’ and federal government’s export promotion efforts. SIDO 

officials expressed concern that domestic firms’ awareness about U.S. 

export promotion programs is less than that of foreign firms about the 

programs in competing countries. However, according to the 2002 study, 58

small and medium-sized exporters are generally aware of government 

programs that can help them export, but there is still room for 

 55The study mentioned ITA, but the specific services that were evaluated were those of the 

CS. 

56According to CS officials, after the closing of a Participation Agreement (service) or the

completion of a trade event, CS sends its customers a comment card, called a Quality 

Assurance Survey (QAS), in order to track customer satisfaction with its services. The 

current survey has three questions, two closed-ended and one open-ended.

57The three survey questions are: (1) on a scale of 1 to 10, please rate your level of overall 

satisfaction with the service; (2) on a scale of 1 to 10, how likely is it that you would 

recommend this service; and (3) comments and suggestions. CS does not have a survey

question that specifically relates to the fees it charges. 

58Chemonics International in Cooperation with University of North Carolina at Chapel Hill, 

The Kenan Institute of Private Enterprise, Kenan-Flagler Business School, Report Card on

Trade II: Assessing the Effectiveness of U.S. Government Support to Small and Midsize 

Exporters (Chapel Hill: June 12, 2002).

Page 47 GAO-09-144 Export Promotion User Fees
 

improvement. Exporters appear to be broadly familiar with Commerce.59

However, SIDO advocates for more resources for CS and state outreach to

small firms in order to raise the profile of their programs and increase 

participation. 

CS and states’ trade offices provide various types of export promotion 

programs. These programs share similar goals of increasing the number of 

exporting firms, especially SMEs, expanding existing markets, and 

opening up new markets to U.S. exports. Targeting federal government 

resources to programs that achieve the goals outlined in the National 

Export Strategy requires knowledge of whether existing programs 

contribute to these goals, whether customer experiences reveal 

suggestions for enhancing these programs, and knowledge of the extent to

which current intergovernmental partnerships contribute to export 

promotion goals. 

Conclusions 

Commerce’s $235 million export promotion program currently collects 

about $10 million annually through fees on some services. Commerce 

decided to collect these fees to cover at least a portion of the costs for 

providing some of its services. However, Commerce lacks good 

information on the true costs of providing these services, both fee-based 

and those offered for free. As a result, it is unclear whether the fees they 

established reflect their policy objectives or whether they optimize the 

efficient and effective management of these programs. 

Similarly, Commerce lacks reliable information about the size, location, 

and type of its customers, and about how its fees (or lack thereof) affect 

their access to the program, or how they compare to state or private sector 

fees. Fees for particular services affect firms’ access to and use of federal

export promotion programs. Better information would help CS market its 

program better, adjust to changes in the marketplace, and address those 

areas that maximize the impact of its services on promoting U.S. exports. 

Not much is known about the extent to which user fees or other factors 

influence SMEs’ decisions to rely on CS for export promotion services. 

 59According to the study, 15 percent of small exporters had not heard of or used 

Commerce’s services, 30 percent had used Commerce’s services, and 55 percent had heard

of Commerce’s services but had not used them. In contrast, 44 percent of small exporters

had not heard of or used states’ trade offices’ services, 15 percent had used states’ trade 

offices’ services, and 41 percent had heard of states’ trade offices services but had not used 

them. 

Page 48 GAO-09-144 Export Promotion User Fees
 

Studies and other sources suggest that the types of services CS offers 

compared with other providers, the level of individualized attention 

provided, and service quality are factors that also affect SMEs’ choice to 

use CS’s services. 

Better evaluation of fee-based programs and customers, including states,

could improve program continuity, help managers target their resources 

more efficiently and effectively, assess costs and benefits, and help the 

Congress make more informed funding decisions. Commerce has taken 

some initial steps in developing systems that could improve this situation, 

but it is unclear whether they intend to fully develop this potential. 

We recommend that the Secretary of Commerce direct the Assistant 

Secretary for Trade Promotion and Director General of the U.S. and 

Foreign Commercial Service to (1) take steps to improve the collection,

processing, and documentation of cost information on its export 

promotion programs and user fees in order to enhance efficient and 

effective management in line with federal accounting and internal control 

standards. These steps could, for example, include 

Recommendations for 

Executive Action 

• documenting the procedures and processes of the costing methodology in

sufficient detail so that staff who work with costing at a later point could 

understand the specific procedures used and the data sources and cost 

assignment methods for each step in the process; 

• incorporating costs paid by other federal entities for CS’s benefits, such as 

pensions and health insurance paid for by the Office of Personnel 

Management when determining the full cost of each service;

• updating estimates of the amount of time staff spent performing various 

activities to realize any efficiency gained and to provide more accurate

estimates of full costs; and 

• documenting the methods and assumptions for establishing the user fees

CS charges different firms for each service to clearly show the linkage

between costs and user fees, particularly with regard to the lower user 

fees for SMEs. 

To better understand demand for CS export promotion programs and the 

level of participation attributable to its user fees, we also recommend that 

the Secretary of Commerce direct the Assistant Secretary for Trade 

Promotion and Director General of the U.S. and Foreign Commercial 

Page 49 GAO-09-144 Export Promotion User Fees
 

Service to (2) ensure that the design of CS databases and procedures 

followed by those entering the data enable CS to produce more accurate, 

reliable, and complete data on its customers and services, including all 

fees charged, company size, and export status. 

Commerce concurred with our recommendations and stated that CS 

would take steps to improve the collection, processing, and 

documentation of cost information on its export promotion programs. 

Commerce stated that CS developed its new user fee policy from the most 

accurate data available from its existing database and that its accounting 

systems were not deficient based on receiving an unqualified audit opinion

on its annual financial statements. Its technical comments mentioned CS’s

conversion to a new financial accounting system, Commerce Business 

System, which management expects will improve information about CS’s 

costs of delivering services. We support CS’s implementation of an 

improved financial accounting system. We remain concerned, however, 

that potentially outdated and inaccurate nonfinancial data that are used to

determine the unit cost of specific services, such as the time staff spend 

performing various activities, may not be updated by the new system. 

Updating that information will help ensure that the full costs of specific 

services are considered when setting fees. In addition, although an entity’s 

audited financial statements and unaudited cost accounting analyses may 

use the same underlying financial data, an auditor’s opinion on the 

financial statements does not provide assurance concerning the 

reasonableness of cost analyses performed using that data. 

Commerce also noted an increase in fees collected and services provided 

to SMEs in fiscal year 2008, which they believe indicates their products 

and services remain accessible to SMEs. However, we believe that missing 

and inaccurate data about company size mean that CS cannot reliably or 

accurately estimate the volume of services provided to SMEs or the fees 

collected from them. In addition, CS’s response relies on aggregate 

analyses between fiscal year 2007 and fiscal year 2008 that did not take 

into account changes in the mix of services provided or longer term trends 

and, therefore, does not provide useful information about the impact of its 

2008 fee schedule on SMEs. 

Further, Commerce stated that its trade promotion services are greater in 

depth and scope than those provided by the states, and we discussed this 

in our report. We clarified this point in various places in our report, taking

into account some related information that we received in technical 

comments from agency officials. Commerce’s comments, along with our 

Agency Comments 

and Our Evaluation 

Page 50 GAO-09-144 Export Promotion User Fees
 

responses to specific points, are reprinted in appendix IV. Commerce also 

provided technical comments, which were incorporated into the report, as 

appropriate.

As agreed with your office, unless you publicly announce the contents of

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to interested congressional 

committees and the Secretary of Commerce. The report also will be 

available at no charge on the GAO Web site at http://www.gao.gov. 

Should you or your staff have any questions about this report, please 

either contact me at (202) 512-4347 or yagerl@gao.gov or Stanley J. 

Czerwinski at (202) 512-6806 or czerwinskis@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs can be found on

the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix V. 

Sincerely yours, 

Loren Yager

Director, International Affairs and Trade 

Stanley J. Czerwinski 

Director, Strategic Issues 

Page 51 GAO-09-144 Export Promotion User Fees
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

Our objectives were to evaluate (1) the relationship between the U.S. 

Commercial Service (CS) and states’ trade offices’ export promotion 

programs, (2) CS’s methodology and practices for determining costs and 

establishing user fees, and (3) how CS’s user fees affect small and 

medium-sized enterprises’ (SME) use of its programs. Our scope of work 

focused on the Department of Commerce’s (Commerce) U.S. Commercial 

Service’s and the 50 states’ trade offices’ export promotion programs and 

associated user fees. 

To determine what export promotion services states’ trade offices provide 

and their relationship with CS’s programs and user fees, we reviewed and

analyzed both CS’s and states’ trade offices’ export promotion programs 

and user fee data; data on domestic and overseas staff; export promotion 

budgets; states’ export promotion grant programs, and services states 

trade offices purchased from CS. In addition, to obtain information on the 

states’ trade offices’ export promotion programs, fees, grants, and the 

importance of Commerce to their activities, we surveyed the 50 states’ 

trade offices. We developed our survey instrument between January and

late April 2008. To ensure that the survey respondents understood the 

questions in the same way, that we had used appropriate terms for this 

population, and that we had covered the most important issues, we 

conducted three expert reviews1

 and three formal pretests.2 We received 

45 responses from the 50 states’ trade offices, or a 90 percent response 

rate. The survey and a more complete tabulation of the results are 

provided in a supplement to this report (see GAO-09-148SP). We also 

conducted site visits in 6 states (California, Connecticut, Idaho, Illinois, 

Mississippi, and Pennsylvania). We chose these states to ensure a range of

characteristics based on the following criteria: the size of the state trade 

promotion budget, the existence of a grant or subsidy program that funds 

SMEs’ participation in CS’s export promotion programs, states’ trade 

offices collocated with U.S. Export Assistance Centers, the number of 

overseas states’ trade offices and representatives, size of the state’s 

economy and population, and states that do not have trade offices. We 

also reviewed and analyzed information in the 2005-2007 National Export 

Strategy reports and the State International Development Organizations’ 

(SIDO) annual survey results of states’ trade offices. Based on interviews 

and our analysis, we determined that SIDO’s data were sufficiently reliable 

 1

The expert reviewers were officials from the Commercial Service, the Pennsylvania’s state

trade office, and from SIDO. 

2

The pretest states were Iowa, Nevada, and Pennsylvania. 

Page 52 GAO-09-144 Export Promotion User Fees
Appendix I: Scope and Methodology 

for our purposes. Information on all the states’ export promotion budgets 

were difficult to obtain, and reliable and current data were only available 

from SIDO for 27 states; however, we used data for only 24 states in our 

analysis because 3 states did not disaggregate their export promotion 

budgets from their foreign investment recruitment budgets. 

To determine CS’s procedures for determining costs and establishing user 

fees, we interviewed key CS and International Trade Administration staff 

and reviewed and analyzed available documentation about CS’s export 

promotion programs and user fees based on the 2005 and 2008 user fee 

changes; CS’s methodology for full cost recovery; cost templates of CS’s 

fee-based export promotion programs; data on CS’s budget and staff; data

on staff time spent on various activities to deliver services; legislation 

authorizing CS to charge a fee for services (annual appropriations and the 

Mutual Education and Cultural Exchange Act); OMB Circular A-25, User 

Charges; Statement of Federal Financial Accounting Standards 4: 

Managerial Cost Accounting Standards and Concepts; GAO’s Standards 

for Internal Control in the Federal Government;

3

 and GAO’s Federal User

Fees: A Design Guide.

4

 We did not need to perform an assessment of the 

reliability of the export promotion programs’ cost and user fees data 

because we did not use the data but noted weaknesses in the cost-finding

methodology. 

To determine what is known about how CS’s export promotion programs’ 

user fees affect SMEs’ participation in its programs, we reviewed and 

analyzed past export promotion programs and user fees studies performed 

for Commerce by Booz Allen and Hamilton, Inc.,

5

 KPMG LLP, 6 and 

Chemonics International.

7

 In addition, we reviewed and analyzed the 

 3

See GAO/AIMD-00-21.3.1. 

4

See GAO, Federal User Fees: A Design Guide, GAO-08-386SP (Washington, D.C.: May 29, 

2008). 

5

Department of Commerce, International Trade Administration, Product Pricing Study

(Washington, D.C.: May 1998) and Impact of Product Price Increases on Clients and

Revenues (Washington, D.C.: March 1999). 

6

Department of Commerce, International Trade Administration, User Fee Study

(Washington, D.C.: January 2003). 

7

Chemonics International in Cooperation with University of North Carolina at Chapel Hill, 

The Kenan Institute of Private Enterprise, Kenan-Flagler Business School, Report Card on

Trade II: Assessing the Effectiveness of U.S. Government Support to Small and Midsize 

Exporters (Chapel Hill: June 12, 2002).

Page 53 GAO-09-144 Export Promotion User Fees
Appendix I: Scope and Methodology 

Office of Management and Budget’s 2003 and 2008 Program Assessment 

Rating Tool for the CS. We also reviewed and analyzed CS’s fee-based 

export promotion services purchased by its customers and the associated 

collections from these purchases from 2004 to 2008. While we cited data

elements on clients and collections for 2008, having determined that these 

elements were sufficiently reliable for our purposes, we noted that other 

data elements, particularly company size and export status, are not fully 

reliable for the reasons that we have elaborated upon in the report’s third 

objective. We also reviewed ad hoc feedback CS received on its user fees 

from CS’s field staff, client firms, District Export Councils, states’ trade 

offices, and trade and industry associations. Further, we analyzed our 

survey results regarding states’ trade offices’ views on the impact of the

2005 and 2008 user fees changes on their purchase of CS’s services. We

obtained the states’ trade offices’ views for several reasons: (1) they are

experts in offering export promotion programs and services; (2) they work 

with SMEs that export and, in many cases, they work with the same SMEs 

as CS; (3) they are purchasers and multipliers of CS’s fee services, as well 

as purchasers of private sector fee services and are able to compare and 

contrast these service providers; and (4) our research at the beginning of 

our review indicated that it would be feasible to survey the states within 

our time frame and achieve an acceptable response rate. 

Further, we interviewed Commerce officials in Washington, D.C., and at

the six U.S. Export Assistance Centers we visited, as well as officials of the 

six states’ trade offices, District Export Councils, the Office of 

Management and Budget, the State International Development 

Organizations, and American chambers of commerce. 

To determine the purposes for which we could and could not use 

Commerce data on customers served and the dollars collected, we 

interviewed agency officials, attended a demonstration of CS’s data 

systems, and performed checks and analyses of the data themselves. We 

determined that the data were sufficiently reliable in the aggregate to

report on fee services provided, in a broad sense, and dollars collected. We 

also determined that the data were sufficiently reliable to report on 

selected fee services by the state of the company purchasing the service,

though with the caveat that we could not examine the data by company 

size. However, we noted several limitations in the data, which we 

discussed in the body of this report. In particular, the data do not provide 

accurate counts by company size and export status. Moreover, the data 

only provide an incomplete picture of the fee services purchased by states’ 

trade offices. We based our review on various internal control standards, 

such as the GAO’s Standards for Internal Control in the Federal 

Page 54 GAO-09-144 Export Promotion User Fees
Appendix I: Scope and Methodology 

Government; the Office of Management and Budget Circular A-123, 

Management’s Responsibility for Internal Control; Internal Control – 

Integrated Framework, by the Committee of Sponsoring Organizations of 

the Treadway Commission,8

 as well as GAO’s guidance on Assessing the 

Reliability of Computer-Processed Data.

9

We conducted this performance audit from October 2007 to March 2009, in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform our audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe the evidence 

obtained provides this reasonable basis. 

 8

Internal Control–Integrated Framework, by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO), September 1992. 

9

GAO, Assessing the Reliability of Computer-Processed Data, GAO-02-15G (Washington, 

D.C.: September 2002). 

Page 55 GAO-09-144 Export Promotion User Fees
Appendix II: Overview of CS’s and States’ Appendix II: Overview of CS’ Domestic and International Offices s and States’ 

Domestic and International Offices 

CS and states’ trade offices both maintain offices in domestic and 

international locations to help firms identify export opportunities. CS’s 

trade specialists are currently working in 108 cities in 47 states and Puerto 

Rico. CS does not currently have an office in Alaska, Delaware, and 

Wyoming, and CS provides services to customers in these states from U.S. 

Export Assistance Centers (USEAC) in neighboring states. For example, 

the USEAC in Seattle provides services to customers in Alaska. In 

addition, USEACs are colocated with 11 states’ trade offices.1

 CS’s trade 

specialists also work in 75 countries or 124 offices worldwide. In some 

countries, such as Brazil, China, and India, CS has offices in 5 or more 

cities. In addition, most states’ trade offices have 1 or more overseas 

offices. For example, in 2008, there were 34 countries in which at least one 

state trade office maintained an office or representative.2

 In some 

countries, such as China, multiple states maintain offices, and individual 

states maintain offices in more than one city. CS also operates offices in 

each of these 34 countries. However, CS operates in 41 countries where 

states do not have representation, and some states’ trade offices explained 

they rely heavily on CS services in these countries. The following map (see 

fig. 10) shows CS’s domestic and international locations. 

 1

The following states’ trade offices are colocated with USEACs: Idaho, Mississippi, New 

Hampshire, New Jersey, New Mexico, New York, Oklahoma, Rhode Island, Tennessee, 

Texas, and Vermont.

2

According to the State International Development Organizations (SIDO), in 2008 states’ 

trade offices had overseas offices or representatives located in the following 34 countries: 

Argentina, Australia, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic,

Finland, France, Germany, Hong Kong, India, Israel, Italy, Japan, Jordan, Korea, Mexico, 

Netherlands, Poland, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, 

Switzerland, Taiwan, Thailand, United Kingdom, and Vietnam. 

Page 56 GAO-09-144 Export Promotion User Fees
Appendix II: Overview of CS’s and States’ 

Domestic and International Offices 

Figure 10: CS Domestic and International Locations

 Europe

 1 Austria

 1 Belgium

 1 European Union (Brussels)

 1 Bulgaria

 1 Croatia

 1 Czech Republic

 1 Denmark

 1 Finland

 1 France

 4 Germany

 1 Greece

 1 Hungary

 1 Ireland

 4 Italy

 1 Kazakhstan

 1 Netherlands

 1 Norway

 1 Poland

 1 Portugal

 1 Romania

3 Russia

 1 Serbia

 1 Slovak Republic

 1 Spain

 1 Sweden

 2 Switzerland

3 Turkey

 1 Ukraine

 1 United Kingdom

Africa/Near East/South Asia

 1 Algeria

 2 Egypt

 1 Ghana

 7 India

 1 Iraq

 2 Israel

 1 Jordan

 1 Kenya

 1 Kuwait

 1 Lebanon

 1 Morocco

 1 Nigeria

3 Pakistan

 1 Qatar

3 Saudi Arabia

 1 Senegal

 2 South Africa

 2 United Arab Emirates

East Asia/Pacific

 2 Australia

 5 China

 1 Hong Kong

 1 Indonesia

 4 Japan

 1 Korea

 1 Malaysia

 1 New Zealand

 1 Philippines

 1 Singapore

 2 Taiwan

 1 Thailand

 2 Vietnam

Western Hemisphere

 1 Argentina

 5 Brazil

 5 Canada

 1 Chile

 1 Colombia

 1 Costa Rica

 1 Dominican Republic

 1 Ecuador

 1 El Salvador

 1 Guatemala

 1 Honduras

 4 Mexico

 1 Panama

 1 Peru

 1 Uruguay

 1 Venezuela

CS Domestic locations

Alabama

Arizona

Arkansas

California

Colorado

Connecticut

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

Wisconsin

West Virginia

Puerto Rico

Countries with international CS field offices (FY 2008)

CS domestic locations (FY 2008)

Sources: GAO analysis of Commerce data; Map Resources (map).

The number of CS’s staff varies across countries, and states’ overseas 

offices vary in size and composition. The number of CS’s trade specialists 

Page 57 GAO-09-144 Export Promotion User Fees
Appendix II: Overview of CS’s and States’ 

Domestic and International Offices 

working in its overseas offices varies widely across the countries in which 

it operates. For example, CS has 104 staff in China, 30 staff in Germany, 

and 12 staff in Australia. In addition, some states maintain large overseas 

offices in certain countries, which tend to be staffed with full-time 

employees. Other states’ overseas offices are staffed by part-time private 

consultants working on contract or volunteer representatives. For 

example, states often maintain full-time offices in primary overseas 

markets, such as Mexico and Japan, while states tend to employ part-time 

consultants in smaller markets. 

Recently, CS and many states’ trade offices have reduced or consolidated 

their overseas offices but have maintained or opened offices in key 

markets. CS has recently undertaken the Transformational Commercial 

Diplomacy (TCD) initiative, which seeks to shift CS resources from more 

accessible overseas markets to less accessible markets to better align the 

needs of U.S. exporters with CS resources. Under the TCD initiative, CS 

has closed a number of small offices in well-developed markets or in small 

markets with limited commercial opportunities to open offices in new 

emerging markets with greater commercial potential, such as China and 

India. For example, under TCD, CS has closed 22 offices and opened 4 

offices in Qatar, Tunisia, Libya, and Afghanistan.3

 In addition, CS plans to 

open additional offices in Baku, Azerbaijan; Wuhan, China; Porto Alegre, 

Brazil; and Racife, Brazil; and add staff at offices in China and India.4

Similarly, many states’ trade offices have reduced or consolidated their 

overseas offices but have maintained and opened offices in key overseas 

markets. For example, some states’ trade offices have consolidated their 

overseas offices in multiple countries of a particular region, such as 

Europe or Asia, to cover the entire region from a single office. However, 

many states continue to maintain and expand overseas offices in key 

markets, including China and Japan. For example, in recent years many 

states have opened offices in multiple cities in China. 

 3

Under CS’s Transformational Commercial Diplomacy initiative, CS has closed offices in

Bridgetown, Barbados; Halifax, Canada; Abidjan, Cote d’Ivoire; Lyon, France; Marseille, 

France; Strasbourg, France; Toulouse, France; Hamburg, Germany; Leipzig, Germany;

Naples, Italy; Kingston, Jamaica; Fukuoka, Japan; Luxembourg City, Luxembourg; Rabat, 

Morocco; Amsterdam, Netherlands; Aukland, New Zealand; Oporto, Portugal; 

Yekaterinburg, Russia; Barcelona, Spain; Zurich, Switzerland; Port of Spain, Trinidad and 

Tobago; and Belfast, United Kingdom. CS has recently opened offices in Kabul, 

Afghanistan; Tunis, Tunisia; Tripoli, Libya; and Doha, Qatar.

4

CS plans to add staff at offices in Beijing, China; Guangzhou, China; Calcutta, India;

Chennai, India; Mumbai, India; and New Delhi, India. 

Page 58 GAO-09-144 Export Promotion User Fees
Appendix III: Selected CS Fee Services 

Purchased by Firms in Each State in 2007 and

2008 

This table presents selected fee services purchased by CS’s customers in 

each state for 2 years. The data are for 2007 and 2008 and include 5,890 

standardized fee services purchased, out of a total of more than 30,000, or

about 20 percent for all fee services in those years. However, they include 

four of the five standardized fee services that CS offers (Gold Key, 

International Company Profile, International Partner Search, and Featured

U.S. Exporter). Table 6 shows selected CS services that firms purchased 

from CS by home state in fiscal years 2007 and 2008, sorted by the number 

of services purchased per state. 

Table 6: Numbers of Selected CS Fee Services Purchased by Firms in Each State 

State Selected CS fee services

California 720

Texas 577

New York 506

Virginia 467

Florida 351

Illinois 277

Minnesota 237

Connecticut 230

Pennsylvania 200

Ohio 176

Massachusetts 146

New Jersey 129

Maryland 122

Michigan 104

Arizona 99

Georgia 85

Wisconsin 84

North Carolina 81

Rhode Island 78

Tennessee 77

Indiana 72

Washington 72

South Carolina 71

Oregon 69

Utah 67

Kansas 65

Appendix III: Selected CS Fee Services 

Purchased by Firms in Each State in 2007 and 

2008 

Page 59 GAO-09-144 Export Promotion User Fees
Appendix III: Selected CS Fee Services 

Purchased by Firms in Each State in 2007 and

2008 

State Selected CS fee services

Alabama 55

New Hampshire 52

Louisiana 51

Colorado 43

Kentucky 41

Montana 40

Missouri 40

Iowa 34

Nebraska 33

Nevada 26

Oklahoma 21

West Virginia 20

South Dakota 19

Idaho 19

North Dakota 16

Delaware 16

Maine 12

New Mexico 8

Mississippi 8

Hawaii 7

Arkansas 4

Alaska 1

Wyoming 1

Vermont 1

Source: GAO analysis of CS’s 2007 and 2008 data. 

Notes: 

The Gold Key, International Company Profile, International Partner Search, and FUSE Services were 

selected in consultation with CS. A key limitation in this analysis was that CS had to manually review

participation agreements to identify companies’ home states. These services were selected based on

the CS’s capacity to perform that review, and what we knew about the completeness of the data on

CS’s services. 

CS identified the companies’ home states from information provided in participation agreements it 

had signed with them. CS could not authoritatively identify the companies’ home states from these 

agreements because companies sometimes used their headquarters contact information and 

sometimes used their branch contact information. CS was able to identify more than 90 percent of the 

companies’ home states. 

In some instances, the companies may have used CS facilities outside of their state; for example, 

according to CS, companies in the District of Columbia used USEACs in Northern Virginia and 

Baltimore. 

Page 60 GAO-09-144 Export Promotion User Fees
Appendix IV: Comments from the Department Appendix IV of Commerce : Comments from the 

Department of Commerce 

See comment 1. 

See comment 2. 

See comment 3. 

Page 61 GAO-09-144 Export Promotion User Fees
Appendix IV: Comments from the Department 

of Commerce 

The following are GAO’s comments on the Department of Commerce’s 

letter dated February 18, 2009. 

1. Also, Commerce’s technical comments mentioned CS’s conversion to a 

new financial accounting system, Commerce Business System, which 

management expects will improve information about CS’s costs of 

delivering services. We support CS’s implementation of an improved 

financial accounting system. We remain concerned, however, that 

potentially outdated and inaccurate nonfinancial data that are used to 

determine the unit cost of specific services, such as the time staff 

spend performing various activities, may not be updated by the new 

system. Updating that information will help ensure that the full costs 

of specific services are considered when setting fees.1

GAO Comments 

2. We believe that missing and inaccurate data about company size mean 

that CS cannot reliably or accurately estimate the volume of services 

provided to SMEs or the fees collected from them. In addition, CS’s 

response relies on aggregate analyses between fiscal year 2007 and 

fiscal year 2008 that did not take into account changes in the mix of 

services provided or longer term trends and, therefore, does not 

provide useful information about the impact of its 2008 fee schedule on 

SMEs. 

3. Commerce commented that CS’s trade promotion services are greater 

in depth and scope than those provided by the states, and we 

discussed this in our report. We clarified this point in various places in 

our report, taking into account some related information that we 

received in technical comments from agency officials. 

 1

Also, auditor opinions on an entity’s financial statements focus on whether those principal 

financial statements present fairly, in all material respects, the financial position of the

entity and its net costs, changes in net position, and budgetary resources in conformity 

with U.S. generally accepted accounting principles. Those audits are conducted for the

purpose of forming an opinion on the financial statements taken as a whole. An audit 

includes consideration of internal control over financial reporting as a basis for designing 

audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity’s internal control over financial 

reporting. Accordingly, while an entity’s audited financial statements and unaudited cost

accounting analyses may use the same underlying financial data, an auditor’s opinion on

financial statements does not provide assurance concerning the reasonableness of cost 

analyses performed using that data. 

Page 62 GAO-09-144 Export Promotion User Fees
A

A

ppendix V: GAO Contacts and Staff 

cknowledgments 

Page 63 GAO-09-144

Appendix V: GAO Contacts and Staff 

Acknowledgments 

Loren Yager, (202) 512-4347, yagerl@gao.gov

Stanley Czerwinski, (202) 512-6803, czerwinskis@gao.gov

In addition to the individuals named above, Adam Cowles, Assistant 

Director; Michelle Sager, Assistant Director; Martin De Alteriis, Assistant 

Director; Jack Warner, Assistant Director; Yesook Merrill, Assistant 

Director; Karen Deans; Bradley Hunt; Grace Lui; and Barbara Shields 

made key contributions to this report. In addition, the following staff 

provided technical assistance: Jacqueline Nowicki, Assistant Director; 

Etana Finkler; Sheila Rajaibiun; and Jena Sinkfield. 

Export Promotion User Fees

GAO Contacts 

Staff 

Acknowledgments 

(320495) 
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