SMALL BUSINESS 

ADMINISTRATION

Cosponsored 

Activities Can Benefit 

Small Businesses but 

Lack a Consistent 

Feedback Mechanism

Report to Congressional Requesters

May 2014

GAO-14-260

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-260, a report to 

congressional requesters

May 2014

SMALL BUSINESS ADMINISTRATION

Cosponsored Activities Can Benefit Small 

Businesses but Lack a Consistent Feedback 

Mechanism

Why GAO Did This Study

Section 4(h) of the Small Business Act 

authorizes SBA to provide assistance 

for the benefit of small businesses 

through activities the agency 

cosponsors with eligible for-profit and 

nonprofit entities, as well as federal, 

state, and local government entities. 

Cosponsored activities can provide 

information on SBA programs and 

services or on subjects of interest to 

small businesses, bring together 

government and private sector 

resources and small business owners

(generally for government contracting 

or financing initiatives), or celebrate the 

contributions of small business owners. 

GAO was asked to study SBA’s use of 

its cosponsorship authority. 

This report (1) describes the roles and 

responsibilities of SBA and cosponsors 

in planning, funding, and conducting 

cosponsored activities, and (2) 

examines the benefits cosponsored 

activities provide to small businesses.

GAO reviewed relevant laws and 

regulations and SBA procedures, 

guidance, and official cosponsorship 

files. GAO conducted eight focus 

groups with a total of 48 small 

business entrepreneurs in three cities 

to obtain feedback on their 

experiences with cosponsored 

activities. GAO also interviewed 

cosponsors and SBA officials. 

What GAO Recommends

GAO recommends that SBA develop a 

mechanism to consistently obtain

participant feedback on cosponsored 

activities. SBA generally agreed with 

this recommendation.

What GAO Found

The Small Business Administration (SBA) and cosponsors share responsibilities 

for planning, funding, and conducting cosponsored activities. Before 

cosponsored activities take place, SBA field and program offices decide on the 

type and subject of the activity, solicit potential cosponsors, draft an agreement, 

agenda and budget, and designate a cosponsor as fiscal agent to collect, 

manage, and disburse any funds received. SBA’s General Counsel or designee 

is responsible for reviewing draft cosponsorship agreements for legal sufficiency 

and determining whether any conflicts of interest exist with potential cosponsors. 

GAO’s analysis of the official files for 132 cosponsored agreements SBA 

executed in fiscal year 2012 and other related materials showed that the 

activities were intended to provide training on a variety of topics, such as 

business planning and marketing, social media, and government contracting. 

SBA and cosponsors are both responsible for conducting the activity in 

accordance with the agreement. Following cosponsored activities, SBA field and 

program offices must submit a final cosponsorship report to SBA’s Office of 

Strategic Alliances, which is responsible for maintaining the official files on these 

activities.

SBA does not consistently collect feedback related to the benefits that 

cosponsored activities provide to small businesses. Participants in focus groups 

that GAO held commented positively on the quality of the presentations and 

opportunities to network, among other things, offered by cosponsored activities. 

Participants also noted that they obtained information on topics useful to their 

small businesses, including financial management and the federal contracting 

process. SBA officials and representatives of cosponsors told GAO that the 

events provided attendees with access to services and resources from multiple 

organizations in a single venue and often included counseling and referrals to 

other resources. Although the Small Business Act specifies that SBA 

cosponsored activities provide benefits to small businesses, it does not specify 

how SBA should identify and measure benefits. Some SBA district office staff 

told GAO that they solicited participant feedback on cosponsored events through 

a survey, evaluation, or questionnaire. GAO also found that obtaining periodic 

participant feedback is an integral part of a 7-month training initiative, called the 

Emerging Leaders Initiative, conducted using cosponsorship authority. However, 

SBA officials told us that obtaining formal feedback was not required and that the 

agency did not have a policy on soliciting and using it. Cosponsors GAO met with 

noted the importance of obtaining participant feedback and entrepreneurs GAO

spoke to also identified ways in which the cosponsored activities could have 

been improved. Federal internal control standards state that federal agencies 

should have appropriate policies, procedures, techniques, and mechanisms for 

each of their activities, including those to ensure compliance with key 

requirements. Obtaining feedback on cosponsored events would provide SBA 

with direct information from small business participants that could be used to help 

ensure that events are providing benefits to small businesses. Such information 

could also provide another way for SBA to evaluate the use of its cosponsorship 

authority. View GAO-14-260. For more information, 

contact William B. Shear at (202) 512-8678 or 

shearw@gao.gov. 
Page i GAO-14-260 Small Business Administration

Letter 1 

Background 4

SBA and Cosponsors Jointly Plan, Fund, and Conduct 

Cosponsored Activities 7

Collecting Feedback from Participants Would Help SBA Evaluate 

Cosponsored Activities and Its Use of Cosponsorship Authority 13

Conclusion 20

Recommendation for Executive Action 20

Agency Comments 21

Appendix I Objectives, Scope, and Methodology 22

Appendix II Factors SBA Considers in Deciding Whether to Utilize Cosponsorship 

Authority 27

Appendix III Summary of SBA Office of Inspector General Findings and 

Recommendations and SBA Required Procedures 28

Appendix IV Additional Focus Group Characteristics and Information 30

Appendix V Comments from the Small Business Administration 34

Appendix VI GAO Contact and Staff Acknowledgments 35

Tables

Table 1: Fiscal Year 2012 Cosponsorship Agreements Budgets 11

Table 2: Summary of SBA Office Inspector General Findings and 

Recommendations and SBA Required Procedures 28

Contents
Page ii GAO-14-260 Small Business Administration

Figures

Figure 1: Key Responsibilities of SBA and Cosponsors in 

Planning, Funding, and Conducting Cosponsored 

Activities 8

Figure 2: Perceived Benefits of Attending an SBA Cosponsored 

Activity Reported by Participants in GAO Focus Groups 15

Figure 3: Reasons for Attendance at Cosponsored Activities Held 

in Fiscal Years 2012 and 2013 16

Figure 4: Suggested Improvements to Cosponsored Activities 

Held in Fiscal Years 2012 and 2013 19

Figure 5: Expected Uses of Information Gained at Cosponsored 

Events Held in Fiscal Years 2012 and 2013 30

Figure 6: Focus Group Participants Self-reported Business 

Ownership Status for Attendees at Cosponsored 

Activities Held in Fiscal Years 2012 and 2013 31

Figure 7: Focus Group Participants Self-reported Business 

Ownership Type for Attendees of Cosponsored Events 

Held in Fiscal Years 2012 and 2013 32

Figure 8: Focus Group Participants Self-reported Industry 

Categories for Attendees of Cosponsored Events Held in 

Fiscal Years 2012 and 2013 33
Page iii GAO-14-260 Small Business Administration

Abbreviations

BAT Business Assistance Trust Fund

FMFIA Federal Managers’ Financial Integrity Act

GSA General Services Administration

LGBT Lesbian, Gay, Bisexual, and Transgender

MSA Metropolitan Statistical Areas

OIG Office of Inspector General

OSA Office of Strategic Alliances

SBA Small Business Administration

SOP Standard Operating Procedure

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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Page 1 GAO-14-260 Small Business Administration

441 G St. N.W.

Washington, DC 20548

May 30, 2014

The Honorable James E. Risch

Ranking Member

Committee on Small Business and Entrepreneurship

United States Senate 

The Honorable Sam Graves

Chairman

Committee on Small Business

House of Representatives

The Small Business Administration (SBA) helps Americans start, build, 

and grow businesses by expanding access to capital, providing 

counseling and training, taking actions to increase federal contracting and 

subcontracting opportunities, and serving as a voice for small business. 

SBA utilizes its network of field offices and partnerships with public and 

private organizations to provide assistance to small businesses. SBA 

enters into cosponsorship agreements when the agency seeks to provide 

assistance (generally training, education, or dissemination of information) 

to small businesses in partnership with for-profit and nonprofit entities and 

other governmental entities or officials (federal, state, or local). According 

to SBA, cosponsored activities allow the agency to leverage public and 

private resources in order to provide a benefit to small businesses. 

Section 4(h) of the Small Business Act (the act) provides SBA with the 

authority to provide assistance for the benefit of small businesses through 

cosponsored activities with eligible entities.1 Our analysis of the 

information SBA maintains on cosponsorship agreements showed that 

 

1

15 U.S.C, § 633(h). Section 4(h) of the Small Business Act was originally enacted by 

Section 132 of the Small Business Reauthorization and Manufacturing Assistance Act of 

2004, which was Division K of the Consolidated Appropriations Act of 2005, Pub. L. No. 

108-447. The cosponsorship authority provided in Section 4(h) was originally to sunset on 

October 1, 2006. However, the sunset date has been repeatedly extended by various 

laws, most recently by the Consolidated Appropriations Act of 2014, Pub. L. 113-76, 128 

Stat. 223 (2014). Unless extended once again, Section 4(h) will sunset at the close of the 

current fiscal year (Sept. 30, 2014).
 

Page 2 GAO-14-260 Small Business Administration

the agency executed 132 agreements in fiscal year 2012.2 The budgeted 

direct costs of the activities conducted under these agreements totaled 

$3.8 million, of which approximately $967,000 was to be funded by SBA.3

SBA expected that the activities conducted under these agreements 

would provide assistance to almost 50,000 small businesses.4 Examples 

of activities SBA has conducted under cosponsorship agreements include 

the annual National Small Business Week, which recognizes the 

contributions and accomplishments of small business owners and those 

that support small businesses, and the Emerging Leaders Initiative, which 

provides executives from small businesses with resources and support to 

build and sustain their businesses.

You requested that we study SBA’s use of its cosponsorship authority. In 

this report, we (1) describe the roles and responsibilities of SBA and 

cosponsors in planning, funding, and conducting cosponsored activities; 

and (2) examine the benefits cosponsored activities provide to small 

businesses.

 

2

The act requires that the SBA Office of Inspector General (OIG) report semi-annually to 

Congress on the agency’s use of cosponsorship authority. The OIG reported that SBA 

fully executed 97 cosponsorship agreements during fiscal year 2012. More specifically, 

the OIG reported that SBA fully executed 49 cosponsorship agreements in its Spring 2012 

Semiannual Report to Congress (which summarizes activities from October 1, 2011 to 

March 31, 2012) and 48 cosponsorship agreements in its Fall 2012 Semiannual Report to 

Congress (which summarizes activities from April 1 to September 30, 2012). We found 

that the OIG reports did not include all of the cosponsorship agreements SBA executed in 

fiscal year 2012. Further, we found that the reports included some agreements that had 

been executed but were subsequently cancelled and other agreements that duplicated 

those that had been previously reported.

3

SBA’s procedures on cosponsored activities define direct costs as those expenses that

can be specifically attributed to the delivery of the cosponsored activity (i.e., would not be 

incurred but for the activity). Direct costs may include, among other things, room rental, 

refreshments, fees for speakers not employed by SBA or a cosponsor, and copies of 

workbooks or other handouts to be used during the cosponsored activity. Indirect costs 

and other costs excluded from the budget include employee salaries and benefits, 

cosponsor or SBA’s travel, and copying of non-cosponsored materials. Further, these 

budgets do not include in-kind contributions of goods and services that do not have a 

readily determinable value.

4

SBA and its resource partners conduct various outreach activities, including those under 

cosponsorship and cooperative agreements. According to SBA, the agency and its 

resource partners provided in-person and online training to 960,212 clients in fiscal year 

2012. As discussed later in this report, the assistance SBA provided small businesses 

under cosponsorship agreements executed in fiscal year 2012 included training and other 

activities.
 

Page 3 GAO-14-260 Small Business Administration

To describe the roles and responsibilities of SBA and cosponsors in 

planning, funding, and conducting cosponsored activities, we reviewed 

Section 4(h) of the act, implementing regulations, and SBA’s standard 

operating procedures and guidance related to its use of cosponsorship 

authority.5 We also interviewed officials and staff from SBA’s Office of 

Strategic Alliances and Office of General Counsel, officials from six 

district offices and staff from five of those district offices, and 

representatives from 10 entities that cosponsored activities during 

calendar years 2012 or 2013 to gain an understanding of the roles and 

responsibilities of SBA and cosponsors related to planning, funding, and 

conducting cosponsored activities. We requested the official file for each 

cosponsorship agreement SBA executed in fiscal year 2012 as listed in a 

spreadsheet the agency maintains on the status of these agreements.6

Based on our independent review of the information in the official file and 

other materials, we identified the type of activity, subject matter, and 

amount and type of budgeted direct costs of the activities for each 

agreement, as well as whether each agreement included a responsibility 

for SBA or a cosponsor to obtain participant feedback. In addition, we 

identified the specific roles and responsibilities of SBA and cosponsors for 

a nonprobability sample of cosponsorship agreements SBA executed in 

fiscal year 2012. The selected agreements represented a variety of 

eligible entities, allowable activities, expected number of businesses 

assisted, and direct costs. We assessed the reliability of the spreadsheet 

data SBA maintains on the status of cosponsorship agreements by 

reviewing it for obvious errors and comparing the data for selected 

agreements to SBA’s official files. We determined that the data were 

sufficiently reliable for the purposes of determining the number of 

executed cosponsorship agreements and the associated date of 

execution and budgeted direct cost for these agreements.

To examine the benefits cosponsored activities provide to small 

businesses, we conducted eight focus groups in three cities with 48 

individuals (including prospective and current small business owners) 

who had attended one of three SBA cosponsored activities conducted in 

2012 and 2013 to obtain information about their experience including 

 

5

13 C.F.R §§ 106.101–106.204. 

6

SBA executed more than 132 agreements in fiscal year 2012, but some of these 

agreements were subsequently cancelled. 
 

Page 4 GAO-14-260 Small Business Administration

benefits realized and suggestions for improving the activity.7 The results 

of these focus groups are not generalizable, but do provide insights on 

participants’ perceptions of the benefits received by attending a 

cosponsored activity. In addition, we interviewed key officials at SBA 

headquarters in Washington, D.C., and six SBA district offices and staff 

from five of those district offices to obtain their perspectives on the 

benefits small businesses receive from attending cosponsored events 

and information on how the offices evaluate the results of these.8 We also 

interviewed representatives from 10 entities that cosponsored activities 

during calendar years 2012 and 2013 to obtain their perspectives on the 

benefits cosponsored activities provide to small businesses. 

We conducted this performance audit from January 2013 to May 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. See appendix I for more 

details on our objectives, scope, and methodology.

SBA’s standard operating procedures on outreach activities establish the 

agency’s policy on cosponsored activities and are governed by the 

cosponsorship authority provided to the agency under Section 4(h) of the 

act, SBA’s regulations implementing cosponsorship authority, and Office 

of Government Ethics regulations.9 SBA’s procedures define, among 

 

7

The cosponsored activities that focus group participants attended included the Emerging 

Leaders Initiative, Doing Business with Federal Procuring Agencies series, and Small 

Business Talk series. We selected these events because the cosponsored activities had 

occurred within the 12 months preceding the focus groups. Additionally, the cosponsored 

activities had a significant number of expected attendees, which would increase the 

likelihood of success in soliciting our targeted number of focus group participants (8 to 12 

people).

8

The six district offices interviewed were Georgia, Michigan, New York City, North Dakota, 

Santa Ana, and South Florida. We selected four of the district offices based primarily on 

the frequency with which the office conducted cosponsored activities in fiscal years 2010 

to 2012 and interviewed officials and staff from the remaining two district offices because 

of their role in events we selected for our focus group.

9

Small Business Administration Standard Operating Procedure (SOP) 90 75 3, Outreach 

Activities (Washington, D.C.: Apr. 27, 2007).

Background
 

Page 5 GAO-14-260 Small Business Administration

other things, the entities SBA may enter into a cosponsorship agreement 

with, certain activities that may and may not be performed as 

cosponsored activities, and how cosponsored activities may be funded. 

For example, SBA may enter into a cosponsorship agreement with any 

eligible entity with whom such partnership would not create a conflict of 

interest with the agency. Eligible entities can include for-profit or nonprofit 

entities, or any federal, state, or local government official or entity.10

SBA’s procedures on outreach activities also define certain activities that 

may be performed as cosponsored activities, described by the following 

examples:

• Training: Activity must include delivery of an instructional program—

either in person or on-line—that provides information on or 

experiences with SBA programs or services or a business-related 

subject.

• Matchmaking: Activity (generally government contracting or financing 

initiatives) that brings together government and private-sector 

resources and small business owners. Matchmaking events are 

permissible so long as the activities are not exclusive to any one 

group or do not benefit only one entity. No business transactions (e.g., 

signing of contracts) can take place during the cosponsored activity.

• Counseling: One-to-one counseling may be a part of an activity only if 

the counseling is performed by an SBA employee or by an SBA 

grantee that provides counseling services as part of its SBA-funded 

activity.

• Web pages or websites: A cosponsored web page or website can 

refer to a variety of activities including (1) the actual cosponsored 

activity itself; (2) a means to host the cosponsored activity (i.e., online 

training, digital publication or podcast); or (3) a means to advertise or 

register participants for the cosponsored activity. The web page or 

 

10SBA’s procedures on outreach activities define a cosponsor as “an entity or individual 

that has signed a written cosponsorship agreement with SBA and who actively and 

substantially participates in planning and conducting an agreed upon cosponsored 

activity.” These procedures also state that individuals other than government officials are 

not eligible to be a cosponsor and all entities must be legal entities authorized to conduct 

business in the United States. 
 

Page 6 GAO-14-260 Small Business Administration

website must include information or links to SBA programs and 

services and cannot include commercial activity.

• Recognition: Activity that celebrates the contributions of small 

business, small business owners, or small business advocates.

In addition, SBA’s procedures define activities that may not be performed 

as cosponsored activities, including political and fundraising activities, 

and activities that are solely or primarily a networking or social reception 

and do not provide a formal opportunity for SBA to make a presentation 

on SBA programs and services.

Further, SBA’s procedures define the various ways cosponsored activities 

may be funded. Cosponsors may provide cash or an in-kind contribution, 

a cosponsor may charge a participant fee to cover the direct costs of 

providing the cosponsored activity, or SBA may accept a gift under its gift 

acceptance authority to support cosponsored activities.11 SBA also may 

use appropriated funds to support a cosponsored activity. However SBA 

must purchase the product or service directly (following the appropriate 

procurement process) and provide that product or service to the 

cosponsored activity as an in-kind contribution. Additionally, SBA’s 

procedures note that funds to support a cosponsored activity may be 

used for nearly any expense so long as that type of expense is approved 

as part of the proposed cosponsorship budget, is a direct cost of the 

activity, and is necessary and integral to the activity.

SBA district office officials and staff we spoke to said that they consider 

various factors when making a decision to provide assistance to small 

businesses under a cosponsorship agreement, including whether a 

potential cosponsor has expertise in a particular area such as lending or 

 

11Cosponsors may contribute cash to support the cosponsored activity by writing a check 

or wiring funds to the fiscal agent. The fiscal agent is responsible for collecting, managing, 

and expending each cosponsor’s cash contribution. In lieu of cash, SBA and cosponsors 

may contribute products and services which may be used to provide logistical or 

administrative support to the cosponsored activity—not including a product or service of 

the cosponsor(s). SBA must place cash gifts in the agency’s Business Assistance Trust 

Fund; donations to SBA must not be construed as gifts to the cosponsored activity.
 

Page 7 GAO-14-260 Small Business Administration

exporting, has resources necessary to conduct an event such as space, 

or could provide funding to cover these and other event costs.12

SBA and cosponsors share responsibilities for planning, funding, and 

conducting cosponsored activities. SBA’s procedures on outreach 

activities generally describe the roles and responsibilities of the various 

offices within SBA. In addition, cosponsorship agreements between SBA 

and cosponsors describe each party’s specific responsibilities; the 

division of responsibilities and the extent to which SBA and cosponsors 

share responsibilities differed in the agreements we reviewed. Figure 1 

illustrates the key responsibilities of SBA and cosponsors before, during, 

and after cosponsored activities.13

 

12Appendix II provides a more detailed list of the various factors that district office officials 

and staff told us that they consider in deciding whether to utilize cosponsorship authority 

to conduct an outreach activity. 

13The cosponsorship process includes SBA internal controls that exist to ensure 

compliance with applicable laws and regulations. In September 2013, SBA’s OIG reported 

that, based on an audit it conducted, SBA did not fully implement effective controls over its 

cosponsored activities and made eight recommendations to SBA to strengthen controls 

and oversight. See appendix III for a summary of the OIG’s findings and 

recommendations, the required procedures that the OIG found SBA had not complied 

with, and SBA’s responses to the OIG’s findings and recommendations.

SBA and Cosponsors 

Jointly Plan, Fund, 

and Conduct 

Cosponsored 

Activities
 

Page 8 GAO-14-260 Small Business Administration

Figure 1: Key Responsibilities of SBA and Cosponsors in Planning, Funding, and Conducting Cosponsored Activities

Before a cosponsored activity takes place, SBA and cosponsors have 

several key responsibilities, as the following examples illustrate.
 

Page 9 GAO-14-260 Small Business Administration

Determining type and subject of activity. SBA field and program 

offices are responsible for originating cosponsored activities. As 

previously stated, our analysis of the information SBA maintains 

on cosponsorship agreements showed that the agency executed 

132 cosponsorship agreements in fiscal year 2012. In addition, 

our review of the official file for these agreements and other 

related materials showed that more than 80 percent of them 

included training activities, about 20 percent included recognition 

activities, and about 17 percent included matchmaking activities.14

Further, the subject matter of the activities conducted under these 

agreements varied and included business planning and marketing, 

social media, e-commerce, technology, franchising, employment 

practices and employee benefits, tax planning and other legal 

issues, and government contracting. 

Making conflict-of-interest determinations. SBA field or program 

offices that originate cosponsored activities are responsible for 

vetting nonprofit and governmental entities; SBA’s Office of 

Strategic Alliances is responsible for vetting for-profit entities and 

upon request may assist originating offices in vetting nonprofit and 

government entities. Vetting is the process of gathering 

information to determine whether potential cosponsors have an 

actual or apparent conflict of interest with SBA that would preclude 

them from cosponsoring an activity.15 The information gathered 

during the vetting process is submitted to SBA’s General Counsel 

or designee to determine whether any conflicts of interest exist. 

The SBA Form 1615 documents the conflict-of-interest 

determination.

Preparing cosponsorship agreement, agenda and budget. Initially, 

SBA will prepare a draft cosponsorship agreement and, with the 

assistance of potential cosponsors as necessary, drafts an 

 

14Events conducted under cosponsorship agreements can include multiple cosponsored 

activities. For example, an event on government contracting can include both training and 

matchmaking activities.

15According to SBA’s procedures on outreach activities and guidance provided to district 

counsel, recipients of 8(a), Small Disadvantaged Business or Historically Underutilized 

Business Zones (HUBZone) Certifications, SBA guaranteed loans, or certificates of 

competency or surety bond guarantees, and entities in litigation with SBA, are ineligible to 

serve as cosponsors of an SBA outreach activity or event.
 

Page 10 GAO-14-260 Small Business Administration

agenda and budget. Cosponsorship agreements, among other 

things, describe the purpose of the activity or event, provide the 

dates and locations of the event and estimated number of 

attendees, and include, as applicable, a draft agenda and budget 

for the activity or event.16 After SBA’s General Counsel or their 

designee determines that no conflicts of interest exist with 

potential cosponsors and reviews the draft cosponsorship 

agreement for legal sufficiency, SBA field and program offices—

with assistance from cosponsors—will work to finalize the 

agreement and develop a proposed budget for the activity that 

lists the sources of income, such as cash and in-kind contributions 

from cosponsors, in-kind contributions from SBA, and fees paid by 

participants, and the estimated cost of conducting the 

cosponsored activity. Some SBA district office officials told us that, 

beyond available human resources and the district office’s own 

space, they do not have an abundance of discretionary funds to 

spend on cosponsored activities and they leverage the resources 

of cosponsors because of this. SBA is responsible for designating 

a cosponsor as fiscal agent when the cosponsored activity 

expects to receive cash contributions from cosponsors or fees 

from participants. The fiscal agent is responsible for collecting, 

managing, and disbursing cosponsorship funds and establishing a 

separate mechanism to account for all cosponsorship funds that 

prevents commingling of cosponsorship funds with the fiscal 

agent’s own funds.17 

Our review of the proposed budgets for all fiscal year 2012 

cosponsorship agreements showed that SBA funded direct costs 

in less than half of the agreements, and when it did it generally 

funded costs for course materials and instructors, printing, 

postage, marketing activities, and awards. Table 1 provides 

information on the budgets for cosponsorship agreements SBA 

executed in fiscal year 2012. The largest direct cost SBA funded 

in fiscal year 2012 was $810,475 for the course materials and 

 

16Cosponsorship agreements also set forth other requirements, such as the term of the 

cosponsorship, conditions for amending or terminating the agreement, and a statement

that SBA and cosponsors will receive appropriate recognition on all cosponsorship 

materials.

1713 C.F.R § 106.202(d) prohibits cosponsors from making a profit on any cosponsored 

activity.
 

Page 11 GAO-14-260 Small Business Administration

instructors for the Emerging Leaders Initiative, a 7-month training 

program provided to small business executives in more than 20 

cities (under separate cosponsorship agreements) across the 

country.

Table 1: Fiscal Year 2012 Cosponsorship Agreements Budgets

Cosponsorship name

Cosponsorship 

budget

Amount funded by 

cosponsors and fees

Amount

funded by SBA

Type of costs

funded by SBA

Emerging Leaders Initiative (e200)a $862,830 $52,355 $810,475 Course materials and 

instructors

National Small Business Weekb 585,000 585,000 0 None

Connecticut Business Expoc 281,770 266,770 15,000 Postage

Business Women’s Forumd 256,000 241,000 15,000 Mailing

Many Faces One Dream Toure 240,000 240,000 0 None

America East Conference for SBA 

Lendersf 146,570 146,570 0 None

Business Showcase 2012g 103,800 97,000 6,800 Postage

All other cosponsorship agreements 

with budgets less than $100,000

1,289,570 1,170,279 119,291 Various 

Total $3,765,540 $2,798,974 $966,566

Source: GAO analysis of SBA information.

a

Emerging Leaders (e200) is an initiative with activities that include executive training and peer-topeer coaching sessions. The training component provides 15 to 20 participants in more than 20 cities 

(under separate cosponsorship agreements) with more than 100 hours of intensive training over a 7-

month period. The training curriculum focuses on various topics, including business growth planning, 

financial statement analysis, sales and marketing, access to capital, and government contracting. The 

curriculum is designed to support companies that have achieved local success and are ready for the 

next level of growth.

b

National Small Business Week is SBA’s annual event to celebrate the contributions and 

accomplishments of small businesses from across the country. This 3-day event includes guest 

speakers and workshops on a variety of subjects as well as business matchmaking sessions between 

federal and corporate “buyers” and small business “suppliers.” 

c

Connecticut Business Expo is a 1-day event that consists of educational seminars, training sessions, 

and business expo that provides an educational outreach opportunity to inform and prepare existing 

and potential small business owners in the Greater Hartford, Connecticut, area.

d

Business Women’s Forum is a 1-day conference designed to assist women with present changes 

and future challenges and to educate women on how to manage their finances and reinvent 

themselves in this economy, and how and where to access capital and the opportunities available to 

them in the contracting arena.

e

Many Faces One Dream Tour is a 2-day event to be conducted in multiple cities that have a 

significant Lesbian, Gay, Bisexual, and Transgender (LGBT) presence in communities of color. The 

event includes two different training tracks on the first day—Starting Your Business and Taking Your 

Business to the Next Level—and training on financial literacy and workforce development and oneon-one counseling sessions with SBA resource partners on the second day.

f

America East Conference for SBA Lenders is a 3-day conference that provides new and seasoned 

SBA lenders with training, updates on all SBA programs and initiatives, and access to SBA staff, 

industry specialists, and lenders from across the country.
 

Page 12 GAO-14-260 Small Business Administration

g

Business Showcase 2012 is a 1-day event consisting of educational seminars, training sessions, and 

business expo. Areas covered include business finance, marketing and government procurement 

opportunities, and federal, state, and local assistance.

SBA and cosponsors are both responsible for conducting activities in 

accordance with the cosponsorship agreements. During a cosponsored 

activity, SBA is responsible for ensuring that activities are conducted 

according to the terms and conditions established in the cosponsorship 

agreements, SBA’s procedures on outreach activities, and applicable 

laws and regulations.

18 We noted that some fiscal year 2012 

cosponsorship agreements we reviewed included specific responsibilities 

for SBA or cosponsors to obtain feedback from participants in the 

activities.19 For example, one cosponsorship agreement for an activity 

designed to assist small businesses in becoming export-and-import ready 

stated that SBA was responsible for preparing, distributing, collecting, and 

tabulating evaluations of each seminar, and sharing the data with the 

cosponsors. In addition, another cosponsorship agreement for an activity 

designed to provide information on changes to state and federal laws and 

regulations affecting employers stated that SBA was responsible for 

preparing, collecting, and tabulating evaluations of the event. One SBA 

district office staff person we met with during our audit told us that 

cosponsorship agreements do not always include a specific responsibility 

for SBA or cosponsors to obtain participant feedback.

Following a cosponsored activity, the responsible program official from 

the SBA field or program office must submit a signed final report on the 

activity (SBA Form 2299) to SBA’s Office of Strategic Alliances.20 SBA’s 

procedures require that the final report include (1) a final accounting 

 

18SBA’s procedures note that government ethics rules govern the conduct of SBA 

employees when planning and participating in a cosponsored activity and prohibit actions 

such as showing preferential treatment towards a private individual or entity, or promoting 

the products or services of any cosponsor during the course of an activity.

19We identified nine cosponsorship agreements and other related materials, such as 

agendas, that explicitly stated or suggested that SBA, cosponsors, or both would 

administer feedback evaluations to participants. 

20SBA’s procedures on outreach activities define a Responsible Program Official as the 

SBA senior management official from the originating office who is accountable for the 

cosponsored activity. If the originating office is a district or branch office, the Responsible 

Program Official is the district director or their deputy. In headquarters, the Responsible 

Program Official is the management board member or their deputy with responsibility for 

the relevant program area. 
 

Page 13 GAO-14-260 Small Business Administration

report of the activity’s income by source and itemized list of expenses 

from the cosponsor designated as fiscal agent, along with information on 

the disposition of any excess funds; (2) the actual number of small 

businesses assisted or attendees; and (3) a copy of the final budget. 

SBA’s Office of Strategic Alliances is also responsible for maintaining the 

agency’s official cosponsorship files.

SBA does not systematically collect feedback on the benefits that 

cosponsored activities provide to small businesses. However, participants 

in all eight focus groups that GAO held described various benefits they 

received from attending specific cosponsored activities. In addition, 

according to SBA officials, cosponsored activities enable the agency to 

combine public and private resources and provide assistance to small 

businesses at little or no cost. SBA officials and cosponsors also said that 

cosponsored activities provided participants with convenient access to 

services and resources from multiple organizations in a single location 

and often included counseling and training. Some SBA district office staff 

we met with told us that they collected feedback from participants at 

cosponsored activities—for instance, through a survey, evaluation, or 

informal follow-up—and as previously noted some fiscal year 2012 

cosponsorship agreements we reviewed included specific responsibilities 

for SBA or cosponsors to collect participant feedback. However, SBA 

officials told us that the agency did not have a formal policy that required 

the collection of such information.

Our focus groups participants identified benefits they received from 

attending cosponsored activities and also noted that they obtained 

information on topics useful to their small business (see fig. 2).21 For 

example, participants from all eight focus groups commented positively 

on the quality of the presentations and nearly all of the focus group 

participants said that the opportunity to network was beneficial. In 

addition, the focus group participants most often cited topics that provided 

information on how to develop and implement a business expansion plan 

 

21During the focus groups, we asked participants how they benefited from attending the 

activity. Based on their responses we developed broad themes that we used to categorize 

the types of benefits identified, by each focus group. Appendix IV provides additional 

information on the results of the focus groups including selected characteristics of the 

participants.

Collecting Feedback 

from Participants 

Would Help SBA 

Evaluate 

Cosponsored 

Activities and Its Use 

of Cosponsorship 

Authority

Focus Group Participants, 

SBA, and Cosponsors 

Generally Reported That 

Cosponsored Activities 

Benefited Small 

Businesses
 

Page 14 GAO-14-260 Small Business Administration

(growth management) and information about the federal contracting 

process as being useful to their business. Further, the benefits reported 

were directly related to the type of cosponsored activity. For example, 

those attending the Emerging Leaders Initiative, which emphasized 

business management skills, reported obtaining information on topics 

such as financial management, strategic planning, and marketing as 

being useful.22 Likewise, those attending cosponsored activities focused 

on federal contracting, such as the Doing Business with Federal 

Procuring Agencies and the Small Business Talk series, reported 

obtaining information on understanding the federal contracting process as 

being useful.23

 

22The Emerging Leaders Initiative provides a curriculum consisting of five modules 

covering (1) business and leadership, (2) financial management, (3) marketing and sales, 

(4) resource management, and (5) Strategic Growth Action Plans. The concept supports 

small companies that have achieved local success and are ready for the next level of 

growth. The targeted outreach identifies CEO-level executives from small businesses in 

select communities across the country, that show a high potential for growth, and among 

other things, provides the businesses with the support network and training resources 

required to build and sustain businesses of size and scale within designated communities. 

23The two SBA events covering contracting topics included two monthly series, entitled 

“Doing Business with Federal Procuring Agencies” and “Small Business Talk.” The Doing 

Business with Federal Procuring Agencies series included both training and matchmaking 

for various industries with different federal procuring agencies to assist about 800 

businesses in total. The Small Business Talk series was entitled “Fiscal Year 2013 GSA 

Schedule Proposal Writing Series,” and consisted of three parts: (1) The Administrative 

Process, (2) The Technical Proposal, and (3) The Price Proposal. 
 

Page 15 GAO-14-260 Small Business Administration

Figure 2: Perceived Benefits of Attending an SBA Cosponsored Activity Reported by Participants in GAO Focus Groups

Note: GAO conducted a total of four focus groups for Emerging Leaders Initiative cosponsored 

activities occurring in 2012 and 2013 and a total of four focus groups for Doing Business with Federal 

Procuring Agencies and Small Business Talk cosponsored activities occurring in 2013. A total of 48 

individuals participated in the focus groups, with individual focus group attendance ranging from 3 to 

11. During each of the eight focus groups, we asked participants how they benefited from attending 

the activity. Based on their responses, we developed broad themes that we used to categorize the 

types of benefits identified, by each focus group.

a

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both dealt with government 

contracting.

Focus group participants also described their reasons for attending 

certain cosponsored activities (see fig. 3). For example, focus group 

participants told us that networking and partnering opportunities and 

improved federal contracting opportunities were among the primary 

reasons why they attended the cosponsored activity. In addition, the 

participants noted in 6 of 8 focus groups that growth management, 

business administration, and the federal contracting process were topics 

of interest that led them to attend the cosponsored activity. 
 

Page 16 GAO-14-260 Small Business Administration

Figure 3: Reasons for Attendance at Cosponsored Activities Held in Fiscal Years 2012 and 2013

Note: GAO conducted a total of four focus groups for activities cosponsored under the Emerging 

Leaders Initiative in 2012 and 2013 and a total of four focus groups for cosponsored activities 

associated with Doing Business with Federal Procuring Agencies and Small Business Talk series in 

2013. During the focus groups, we asked participants why they chose to attend the specific activities. 

Based on their responses, we developed broad themes that we used to categorize the reasons for 

attending the cosponsored activity identified, by each focus group.

a

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both emphasized contractingrelated activities.

b

Examples of “other“ responses included (1) the ability to question SBA representatives about 

participant’s existing contract, and (2) the opportunity to hear about the struggles of other businesses.

We also noted that the number of focus groups citing certain benefits 

received from attending the cosponsored activity was higher than the 

number of groups citing this benefit as a primary reason for attending the 

cosponsored activity. For example, participants in all eight focus groups 

cited the quality of the curriculum as a benefit received from attending the 

cosponsored activity (see fig. 2); participants in four focus groups had 

mentioned obtaining access to the training curriculum as a reason for 
 

Page 17 GAO-14-260 Small Business Administration

attending (see fig. 3). Similarly, participants in seven of eight focus groups 

cited networking or relationship building as a benefit received from 

attending the cosponsored activity, while participants in five focus groups 

said that the possibility of identifying such opportunities had helped 

motivate them to attend.

SBA officials told us that having cosponsorship authority allowed the 

agency to benefit small businesses by combining public and private 

resources to offer activities and that the events offered benefits that SBA 

or the cosponsors alone could not provide. Both SBA officials and 

cosponsors told us that the activities provided attendees with “one-stop 

shopping,” including access to services and resources from multiple 

organizations, counseling, and referrals. SBA officials added that when 

multiple entities acted as cosponsors, small businesses gained a better 

understanding of the services each entity offered and the way the entities 

worked together to service small businesses. For example, a district office 

official said that one Emerging Leaders Initiative cosponsor specialized in 

business development and another in financing, allowing participants to 

learn about both opportunities for expanding their businesses. Further, 

many cosponsored events are offered for free, which an SBA official 

noted was an important benefit to small businesses that might not be able 

to spare money for attendance fees. Cosponsors generally shared SBA’s 

views, with one cosponsor citing one-stop shopping as a benefit.

Although the act specifies that SBA cosponsored activities provide 

benefits to small businesses, it does not specify how SBA should identify 

and measure benefits. Some SBA district office staff we met with told us 

that they sought to obtain feedback from attendees at cosponsored 

activities through various means, including surveys, evaluations, and 

informal follow-up with participants and cosponsors. However, SBA 

officials told us that the agency did not have a formal policy requiring the 

collection and use of participant feedback on cosponsored activities. An 

SBA official told us that the agency had at one time obtained feedback 

from participants using an Office of Management and Budget approved 

survey instrument, but added that SBA did not seek to renew the survey 

instrument once it had expired. As previously noted, some fiscal year 

2012 cosponsorship agreements we reviewed included specific 

responsibilities for SBA or cosponsors to obtain feedback from 

Some SBA District Offices 

Informally Collect 

Participant Feedback on 

Cosponsored Activities
 

Page 18 GAO-14-260 Small Business Administration

participants.24 SBA officials told us that obtaining participant feedback 

was not a responsibility that cosponsorship agreements were required to 

include. Although not required by the cosponsorship agreements, 

obtaining periodic participant feedback is an integral part of the Emerging 

Leaders Initiative course. The contractor that provides the curriculum and 

instructors for the course summarize the participant feedback and provide 

it to SBA. Further, SBA has reported that the Initiative has shown 

significant employment growth among participating companies and 

access to new financing since participants graduated from the program.

Cosponsors we met with noted the importance of obtaining participant 

feedback. For example, three cosponsors told us that having a 

mechanism to follow up after an activity would help assess its impact—

that is, how the activity ultimately benefited participants. Further, small 

businesses attending focus groups that we held provided us with 

feedback on ways in which the cosponsored activity could have been 

improved. As figure 4 shows, participants in seven of the eight focus 

groups we held commented that they wanted additional follow-up after 

attending a cosponsored activity. In addition, participants in five of the 

eight focus groups commented that more time was need for the activity.

 

24The official files SBA maintained for these agreements did not include information on 

whether the feedback was actually obtained; SBA officials told us that this information was 

not available. 
 

Page 19 GAO-14-260 Small Business Administration

Figure 4: Suggested Improvements to Cosponsored Activities Held in Fiscal Years 2012 and 2013

Note: GAO conducted a total of four focus groups for Emerging Leader Initiative cosponsored 

activities occurring in 2012 and 2013 and a total of four focus groups for Doing Business with Federal 

Procuring Agencies and Small Business Talk cosponsored activities occurring in 2013. During the 

focus groups, we asked participants several questions to determine what would have improved their 

experience and areas in which improvements were needed. Based on their responses, we developed 

broad themes that we used to categorize the types of improvements identified by focus group.

a

Focus group participants noted a need for better targeting such as ensuring that the right buyers are 

there for contracting activity attendees, otherwise it would not be worth the effort of attending. 

Additionally, recommended prerequisites should be covered before attending and accompanied by 

screening. Some felt that they could have gotten more out of it had they been better prepared, i.e., 

told by SBA what to read ahead of time. Others noted that audience mixture could be a problem, e.g., 

subject matter could be too detailed for many start-up businesses.

b

Focus group participants’ comments on course content noted that the content was too general, too 

abstract, or too advanced for the attendees.

c

An Emerging Leaders participant said that how the program was initially explained left the 

impression that the program was for those seeking government contracting or lending. A focus group 

participant noted that the activity attended provided a lot of knowledge but it was not helpful in 

actually learning to write a General Services Administration (GSA) schedule proposal.

d

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both emphasized contractingrelated activities.

Standards for Internal Control in the Federal Government state that 

federal agencies should have appropriate policies, procedures, 
 

Page 20 GAO-14-260 Small Business Administration

techniques, and mechanisms for each of their activities, including those to 

ensure compliance with key requirements.25 Obtaining feedback on 

cosponsored events could provide SBA with direct information from small 

business participants that could be used to help ensure that the events 

benefited small businesses. In addition, we found that participants had 

suggestions for improving the events that could help SBA in designing 

future activities. Further, evaluating participant feedback could help SBA 

evaluate its use of cosponsorship authority—that is, whether SBA is most 

effectively implementing the statutory authority to conduct cosponsored 

events for the benefit of small businesses.

Cosponsored activities can allow the agency to leverage public and 

private resources to benefit small businesses—generally in the form of 

training, education, or dissemination of information. Various offices within 

SBA and cosponsors have a shared responsibility for planning, funding, 

and conducting cosponsored activities as required under SBA policies 

and procedures and defined in cosponsorship agreements. Some 

cosponsorship agreements we reviewed included an additional 

responsibility for SBA or cosponsors to obtain the views of participants at 

cosponsored events, but SBA does not have formal policies or 

procedures for obtaining participant feedback. Federal internal control 

standards state that federal agencies should have, among other things, 

appropriate policies and mechanisms for each of their activities, including 

those to ensure compliance with key requirements. Obtaining feedback 

on cosponsored events would provide SBA with direct information from 

small business participants that could be used to help ensure that events 

are providing benefits to small businesses. Such information could also 

provide another way for SBA to evaluate the use of its cosponsorship 

authority.

To ensure that SBA most effectively implements the statutory authority to 

conduct cosponsored events for the benefit of small businesses and to 

enhance SBA’s ability to evaluate the use of its cosponsorship authority, 

the Administrator of the SBA should develop a mechanism to consistently 

obtain participant feedback on cosponsored activities.

 

25GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

Conclusion

Recommendation for 

Executive Action
 

Page 21 GAO-14-260 Small Business Administration

We requested comments from SBA on a draft of this report, and the 

agency provided written comments that are presented in appendix V. 

SBA generally agreed with our recommendation to develop a mechanism 

to consistently obtain participant feedback on cosponsored activities. SBA 

stated that it will evaluate the best means to obtain consistent feedback 

from participants during cosponsored activities in a manner that is not 

overly burdensome to the participant. In addition, SBA stated that it thinks 

there are many ways to obtain feedback on events and activities and it 

will look to provide a range of options for SBA program and district offices 

to employ. SBA also provided technical comments, which we 

incorporated as appropriate.

We will send copies of this report to SBA and interested congressional 

committees. The report will also be available at no charge on the GAO 

website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

William B. Shear at (202) 512-8678 or shearw@gao.gov. Contact points 

for our Offices of Congressional Relations and Public Affairs may be 

found on the last page of this report. GAO staff who made major 

contributions to this report are listed in appendix VI.

William B. Shear

Director, Financial Markets and

Community Investment 

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 22 GAO-14-260 Small Business Administration

The objectives of this report are to (1) describe the roles and 

responsibilities of SBA and cosponsors in planning, funding, and 

conducting cosponsored activities; and (2) examine the benefits 

cosponsored activities provide to small businesses.

To describe the roles and responsibilities of SBA and cosponsors in 

planning, funding, and conducting cosponsored activities, we reviewed 

Section 4(h) of the Small Business Act, implementing regulations, and 

SBA’s standard operating procedures and guidance related to the use of 

cosponsorship authority.1 In addition, we identified the specific roles and 

responsibilities of SBA and cosponsors for a nonprobability sample of 27 

cosponsorship agreements SBA executed in fiscal year 2012. The results 

of our analyses of the specific roles and responsibilities described in 

these agreements cannot be generalized to all cosponsorship 

agreements SBA executed in fiscal year 2012, but the agreements 

represent a variety of eligible entities, eligible activities, expected number 

of businesses assisted, direct costs, and locations and dates.

We interviewed officials and staff from SBA’s Office of Strategic Alliances

and Office of General Counsel, and officials from six district offices and 

staff from five of those district offices to gain an understanding of the roles 

and responsibilities of SBA and cosponsors related to planning, funding, 

and conducting cosponsored activities. We selected four of the district 

offices based primarily on the frequency with which the office conducted 

cosponsored activities in fiscal years 2010 to 2012 and interviewed 

officials and staff from the remaining two district offices that originated the 

cosponsored activities we selected for our focus groups.2 The district 

offices were located in California, Florida, Georgia, Michigan, North 

Dakota, and New York. We also interviewed representatives from 10 

entities that cosponsored an activity with SBA during calendar years 2012 

or 2013 to understand their roles and responsibilities for the activities they 

cosponsored and how and why they cosponsored them. Seven of these 

entities had cosponsored the activities selected for our focus groups and 

the other three entities had cosponsored National Small Business Week 

 

1

13 C.F.R §§ 106.101–106.204. 

2

Two of the district offices were selected because they executed the most cosponsorship 

agreements in total for the three fiscal years 2010, 2011, and 2012; the other two district 

offices were selected based on the relative infrequency with which they executed 

cosponsorship agreements during these three fiscal years and other factors. 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 23 GAO-14-260 Small Business Administration

activities in 2012 and 2013. Further, we attended two cosponsored events 

and observed how information was delivered to and received by 

participants. We also reviewed SBA’s Office of Inspector General (OIG) 

report on its audit of SBA’s controls over cosponsored activities, which 

assessed the adequacy of those controls, and discussed the audit with 

the OIG.3 In addition, we requested the official file for the more than 132 

cosponsorship agreements SBA executed in fiscal year 2012 as listed in 

a spreadsheet the agency maintains on the status of these agreements.4

Two analysts reviewed the cosponsorship documentation contained in the 

files and other materials, including cosponsorship agreements, draft and 

final agendas, marketing materials and final cosponsorship reports (SBA 

form 2299). As a part of this review, the analysts independently coded the 

documentation to identify the type of activity and subject matter. The 

analysts also recorded the type of budgeted direct costs, whether each 

agreement included a responsibility for SBA or the cosponsor to obtain 

participant feedback, and compared the budgeted amount to that listed in 

the spreadsheet data SBA maintains. Any disagreement between the 

analysts on the coding of the cosponsorship documentation was resolved 

through discussion. We assessed the reliability of the spreadsheet data 

SBA maintains on the status of cosponsorship agreements by reviewing it 

for obvious errors and comparing the data for selected agreements to 

SBA’s official files. We clarified any discrepancies with SBA and corrected 

the data accordingly. We determined that the data were sufficiently 

reliable for the purposes of determining the number of executed 

cosponsorship agreements and the associated date of execution and 

budgeted direct cost for these agreements.

To examine the benefits cosponsored activities provide to small 

businesses, we conducted eight focus groups in three cities (Atlanta, GA; 

Detroit, MI; and Kalamazoo, MI) with 48 entrepreneurs that had attended 

one of three SBA cosponsored activities conducted in 2012 and 2013—

the Emerging Leaders Initiative, Doing Business with Federal Procuring 

Agencies series, and Small Business Talk Series. We considered a 

number of factors in selecting the three activities. For example, we 

selected the Emerging Leaders Initiative because of the large amount of 

 

3

SBA, Office of Inspector General, SBA Enterprise-wide Controls over Cosponsored 

Activities. Advisory Memorandum Report No. 13-21 (Washington, D.C.: Sept. 26, 2013).

4

SBA executed more than 132 agreements in fiscal year 2012, but some of these 

agreements were subsequently cancelled. 
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-14-260 Small Business Administration

direct costs SBA funded for the initiative. We selected the Doing Business 

with Federal Procuring Agencies and Small Business Talk series because 

the activities (1) took place in the same or nearby location where an 

Emerging Leaders Initiative was taking place (2) included a significant 

training component, (3) had a sizable number of expected attendees from 

which to solicit 8 to12 people for a focus group, (4) had lists of 

preregistered participants or attendee lists with contact information, and 

(5) occurred within 12 months preceding the focus groups. We also 

considered geographic diversity for the three activities we selected to 

conduct focus groups. We sought to ensure that the activities we selected 

to conduct focus groups took place in different regions of the country with 

differing economic profiles.5 We determined that these activities would 

provide us with sufficient information from participants on the benefits 

participants received or expected to receive in the future from having 

attended different types of cosponsored activities in different parts of the 

country.

The entrepreneurs who participated in our focus groups included mostly 

small business owners, but also individuals who were interested in 

starting up their own small business and those who worked for a small 

business. We limited our focus group participation to entrepreneurs with 

recent experience attending a cosponsored activity to minimize recall bias 

and to ensure that the most accurate account of participants’ experiences 

could be obtained. To recruit volunteers to our focus groups, we obtained 

from SBA a list of persons who attended the three activities in locations 

we selected. We contacted each person by email, soliciting them to 

participate in our focus groups and took the first volunteers for up to 12 

persons per focus group. Our focus groups ranged in size from 3 to 11. 

Attendees at our focus groups included women-owned and veteranowned small businesses in a variety of industries including construction, 

janitorial services, and health care (see app. IV, figs. 5 through 8, for 

additional information about participant characteristics and focus group 

responses on various themes).

 

5

For example, among the 15 largest Metropolitan Statistical Areas (MSA) in the United 

States, in 2012 Detroit had the lowest entrepreneurial activity rate, which is a measure of 

new business development. See Robert W. Fairlie, Kauffman Index of Entrepreneurial 

Activity, 1996 - 2012, April 2013, accessed on March 12, 2014, 

http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2

013/04/kiea_2013_report.pdf. 
Appendix I: Objectives, Scope, and 

Methodology

Page 25 GAO-14-260 Small Business Administration

The focus groups were structured small group discussions designed to 

generate information on the participants’ experiences with SBA 

cosponsored training, education, and counseling events.

Methodologically, information gathered from focus groups cannot be used 

to make generalizations about a population or to demonstrate the extent 

of an issue. Thus, while the information we gathered is not generalizable 

to all participants in SBA cosponsored activities, it provides valuable 

context regarding their perceptions of the benefits and challenges they 

experienced when attending these events and this information is more indepth than is possible using numerous individual interviews. Small 

business owners and other participants who did not attend our focus 

groups may have had different experiences.

A GAO facilitator guided the focus group participants using a structured 

set of questions. In addition to the GAO facilitator, another team member 

recorded notes of the proceedings. At the start of each discussion 

session, ground rules were established encouraging participants to limit 

their comments to their own personal experiences with the SBA 

cosponsored event attended unless explicitly asked to respond more 

broadly. The facilitator encouraged all participants to share their views 

and react to the views of others. Using a GAO-developed discussion 

guide, the facilitator asked the participants to give their perspectives on 

(1) their decision to attend the SBA cosponsored event, (2) the perceived 

benefits, (3) the challenges associated with their experience or 

suggestions for improvements, (4) expectations about future uses of what 

they learned, and (5) events they attended within 12 months preceding 

the focus groups. We conducted the analysis of the focus group results in 

three steps. First, two analysts developed a codebook to identify common 

themes in the focus group notes and worked together to ensure 

agreement. Second, two GAO analysts independently coded the 

transcripts and then resolved any coding discrepancies. Third, the coders 

noted how often a theme was expressed across each focus group and 

focused on those that were mentioned frequently across the majority of 

focus groups. The focus group results discussed in this report reflect the 

range of views and perceptions expressed in a larger number of the focus 

groups.

We also interviewed key officials at SBA headquarters in Washington, 

D.C., including representatives from the agency’s Office of Strategic 

Alliances and Office of General Counsel and six SBA district offices and 

staff from five of those district offices to obtain testimonial information 

about district office involvement and experiences with their use of SBA’s 

cosponsorship authority, including how they evaluate the results of the 
Appendix I: Objectives, Scope, and 

Methodology

Page 26 GAO-14-260 Small Business Administration

events. Finally, we interviewed representatives from 10 entities that 

cosponsored an activity with SBA during calendar years 2012 or 2013 to 

obtain their perspectives on benefits to small business arising from 

cosponsored events. We analyzed the information obtained from the 

interviews to determine what perceived benefits small businesses 

received from attending or were expected to gain from the cosponsored 

events, what would have improved the cosponsored event experience, 

whether cosponsors sought feedback about a cosponsored event, and 

whether SBA had any consistent practices for obtaining participant 

feedback on cosponsored events.

We conducted this performance audit from November 2012 to May 2014 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Factors SBA Considers in 

Deciding Whether to Utilize Cosponsorship 

Authority

Page 27 GAO-14-260 Small Business Administration

SBA district office officials and staff we spoke to identified the following 

factors that they consider in deciding whether to utilize cosponsorship 

authority to conduct outreach activities:

1. Whether a proposed activity would better meet the needs of small 

businesses, and more of them, if conducted with other entities under a 

cosponsorship agreement.

2. Whether a potential cosponsor has expertise in a particular area, such 

as lending or exporting, or has resources necessary to conduct an 

event, such as space, or could provide funding to cover these and 

other event costs.

3. How much control SBA wants to have over the various aspects of an 

event’s planning, content, and delivery, including setting the agenda, 

identifying speakers, and selecting a suitable location, or whether it 

would be helpful to share these responsibilities.

4. Whether potential cosponsors could provide SBA with access to 

groups that it does not have a well-established relationship with or 

that might not be familiar with SBA or its programs and services.

5. Whether cosponsorship authority provides SBA with an opportunity to 

develop and strengthen long-term relationships with groups that 

represent minority small businesses or those in particular geographic 

areas that could help identify and target those businesses that might 

benefit most from a particular event.

6. Whether co-branding of a cosponsored activity—displaying SBA and 

cosponsor logos on all marketing and event material—could attract 

greater small business attendance, in part because of the appeal of 

having multiple small business resources at a single event.

7. What the costs would be in terms of time and SBA’s own resources.

8. Whether potential cosponsors would be able to fulfill their 

responsibilities under an agreement, including handling 

cosponsorship funds while serving as a fiscal agent.

Appendix II: Factors SBA Considers in 

Deciding Whether to Utilize Cosponsorship 

Authority
Appendix III: Summary of SBA Office of 

Inspector General Findings and 

Recommendations and SBA Required 

Procedures

Page 28 GAO-14-260 Small Business Administration

The SBA Office of Inspector General issued Advisory Memorandum 

Report No. 13-21, SBA Enterprise-wide Controls over Cosponsored 

Activities, dated September 26, 2013, which presented the results of its 

work on the adequacy of controls over SBA’s cosponsored activities. The 

table below summarizes the findings and recommendations from that 

report and the required procedures that the Office of Inspector General 

found SBA had not complied with.

Table 2: Summary of SBA Office Inspector General Findings and Recommendations and SBA Required Procedures

Office of Inspector 

General findings SBA required procedures Office of Inspector General recommendations

SBA did not always vet 

and perform conflict of 

interest determinations for 

cosponsors

All potential cosponsors must be vetted by the 

originating office or Office of Strategic Alliances 

(OSA). Vetting entails gathering information 

about each potential cosponsor in order for the 

General Counsel or designee to make a conflict 

of interest determination.

The General Counsel or designee must sign 

SBA Form 1615 to demonstrate a conflict of 

interest determination was made.

The OSA Director should collaborate with District 

Counsel and General Counsel to ensure all potential 

cosponsors are properly vetted prior to soliciting and 

accepting their cash contributions.

SBA cosponsorship files 

did not always include 

required documentation

The Responsible Program Official must ensure 

all the proper documentation and paperwork, 

including the Final Cosponsorship Report Form 

2299, is completed and submitted to OSA for 

the official cosponsorship file within 60 calendar 

days of the cosponsored activity.

The OSA Director should establish controls to ensure 

that all activities are timely and properly closed out, and 

that all required documents and reports are obtained.

The OSA Director should conduct periodic reviews of 

the official cosponsorship files for completeness and 

compliance with SOP 90 75 3. 

SBA did not always 

properly account for 

excess funds from 

cosponsored activities

Excess funds that result from participant fees 

must be returned to participants on a pro-rata 

basis. Excess funds that result from cosponsor 

cash contributions must be either returned to 

cosponsors on a pro-rata basis or donated to 

SBA and placed in SBA’s Business Assistance 

Trust (BAT) Fund.

The Assistant Administrator for the Office of 

Communications and Public Liaison should collaborate 

with the General Counsel to update the cosponsorship 

agreement template to clearly include all specific roles 

and responsibilities for fiscal agents and all other 

accountable parties. In accordance with SOP 90 75 3.

The Associate Administrator for the Office of Field 

Operations should initiate actions to properly account 

for and dispose of excess funds from two 

cosponsorships in accordance with SOP 90 75 3.

The Associate Administrator for the Office of Field 

Operations should, under the provisions of the Federal 

Managers’ Financial Integrity Act (FMFIA), perform 

periodic quality service reviews to include 

cosponsorship files and funds distribution, verifying any 

expenses paid out of cosponsored income are 

appropriate.

The General Counsel should revise SOP 90 75 3 to 

include specific procedures and time frames regarding 

the disposition of any excess funds that result from 

SBA-cosponsored activities.

Source: SBA Office of Inspector General.

Appendix III: Summary of SBA Office of Inspector 

General Findings and Recommendations and SBA 

Required Procedures
Appendix III: Summary of SBA Office of 

Inspector General Findings and 

Recommendations and SBA Required 

Procedures

Page 29 GAO-14-260 Small Business Administration

Note: The Office of Inspector General also made a recommendation that the OSA Director provide 

training for staff that plan cosponsored activities to reinforce their roles and responsibilities.

SBA agreed with some but not all of the OIG’s findings and 

recommendations. SBA stated that the OIG’s findings about the failings of 

SBA’s cosponsorship program as a whole are too broadly stated, 

considering that the five agreements the OIG tested represent less than 1 

percent of all the cosponsored activities that took place during the fiscal 

years covered by their audit. SBA also responded to each specific 

recommendation. For example, SBA agreed that vetting is important, but 

disagreed with the recommendation because it believed that the OIG’s 

audit did not demonstrate a deficiency with the vetting process, adding 

that only one cosponsorship file did not contain the requisite vetting 

information. Also, SBA agreed with the intent of the OIG’s 

recommendation to modify the cosponsorship agreement template to 

include the specific roles and responsibilities of fiscal agents but did not 

agree with the recommendation itself, as SBA believes that providing staff 

with supplemental guidance and more instruction would be a better 

approach.
Appendix IV: Additional Focus Group 

Characteristics and Information

Page 30 GAO-14-260 Small Business Administration

As discussed in this report, we conducted eight focus groups with 48 

participants and obtained a variety of information about their experience 

at certain cosponsored events. This appendix provides additional 

information on the results of the focus groups including selected 

characteristics of the participants, as shown in the following figures.

Figure 5 presents information on how the focus group participants thought 

they might use the information and skills learned at the cosponsored 

activity attended to improve their business management activities and 

approaches.

Figure 5: Expected Uses of Information Gained at Cosponsored Events Held in Fiscal Years 2012 and 2013

Note: GAO conducted a total of four focus groups for Emerging Leaders Initiative cosponsored 

activities occurring in 2012 and 2013 and a total of four focus groups for Doing Business with Federal 

Procuring Agencies and Small Business Talk cosponsored activities occurring in 2013. A total of 48 

individuals participated in the focus groups, with individual focus group attendance ranging from 3 to 

11.

Note: GAO separated the results of this analysis based on the emphasis of the activity attended to 

illustrate the effect the type of cosponsored activity attended may have on the benefits described by 

focus group participants.

Appendix IV: Additional Focus Group 

Characteristics and Information
Appendix IV: Additional Focus Group 

Characteristics and Information

Page 31 GAO-14-260 Small Business Administration

a

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both emphasized contractingrelated activities.

As part of the focus group discussions, we asked participants whether 

they owned a small business or what role they held in the small business 

activity represented. Figure 6 describes the self-reported responses.

Figure 6: Focus Group Participants Self-reported Business Ownership Status for 

Attendees at Cosponsored Activities Held in Fiscal Years 2012 and 2013

Note: GAO conducted a total of four focus groups for Emerging Leaders Initiative cosponsored 

activities occurring in 2012 and 2013 and a total of four focus groups for Doing Business with Federal 

Procuring Agencies and Small Business Talk cosponsored activities occurring in 2013. A total of 48 

individuals participated in the focus groups, with individual focus group attendance ranging from 3 to 

11.

a

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both emphasized contractingrelated activities.

This report notes that SBA helps entrepreneurs start, build, and grow 

businesses by, among other things, providing counseling and training as 

well as actions to increase federal contracting and subcontracting 
Appendix IV: Additional Focus Group 

Characteristics and Information

Page 32 GAO-14-260 Small Business Administration

opportunities. As part of discussions, we asked the participants to 

describe the ownership of the business they represented, including 

ownership types that SBA has targeted for assistance.1 The responses 

received are noted in figure 7.

Figure 7: Focus Group Participants Self-reported Business Ownership Type for Attendees of Cosponsored Events Held in 

Fiscal Years 2012 and 2013

Note: GAO conducted a total of four focus groups for Emerging Leaders Initiative cosponsored 

activities occurring in 2012 and 2013 and a total of four focus groups for Doing Business with Federal 

Procuring Agencies and Small Business Talk cosponsored activities occurring in 2013. A total of 48 

individuals participated in the focus groups, with individual focus group attendance ranging from 3 to 

11.

a

The values in the figure only represent focus group participants who belong to these categories 

(mostly self identified) and in some instances had dual representation in this analysis, e.g., womanand veteran-owned businesses.

b

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both emphasized contractingrelated activities.

 

1

SBA offers initiatives or programs that help small and disadvantaged businesses. Such 

businesses include minority-owned firms that can qualify for the 8(a) Business 

Development Program, women-owned small businesses, and service-disabled veteranowned businesses. 
Appendix IV: Additional Focus Group 

Characteristics and Information

Page 33 GAO-14-260 Small Business Administration

Finally, the participants in the focus group discussions provided 

information on the industry in which their businesses or planned 

businesses operated (see fig. 8).

Figure 8: Focus Group Participants Self-reported Industry Categories for Attendees of Cosponsored Events Held in Fiscal 

Years 2012 and 2013

Note: GAO conducted a total of four focus groups for Emerging Leaders Initiative cosponsored 

activities occurring in 2012 and 2013 and a total of four focus groups for Doing Business with Federal 

Procuring Agencies and Small Business Talk cosponsored activities occurring in 2013. A total of 48 

individuals participated in the focus groups, with individual focus group attendance ranging from 3 to 

11.

a

Examples of “Other” include a bakery, a community newspaper publisher, and a language translation 

and interpretation business.

b

For the analysis, the focus group results for the Doing Business with Federal Procuring Agencies 

and the Small Business Talk series were combined because they both emphasized contractingrelated activities. 
Appendix V: Comments from the Small 

Business Administration

Page 34 GAO-14-260 Small Business Administration

Appendix V: Comments from the Small 

Business Administration
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 35 GAO-14-260 Small Business Administration

William B. Shear, (202) 512-8678 or shearw@gao.gov

In addition to the contact named above, Marshall Hamlett (Assistant 

Director), Emily Chalmers, Pamela Davidson, Alexandra MartinArseneau, John McGrail, Scott E. McNulty, and Jena Sinkfield made key 

contributions to this report.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(250696)
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