U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

80–171 2013

ENTREPRENEURIAL ASSISTANCE: EXAMINING INEFFICIENCIES AND DUPLICATION ACROSS FEDERAL PROGRAMS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MARCH 20, 2013 

Small Business Committee Document Number 113–007 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMER, Missouri 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

SBREP-219 with DISTILLER

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Sam Graves ..................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

William B. Shear, Director, Financial Markets and Community Investment, 

U.S. Government Accountability Office, Washington, DC ................................ 4 

Michael A. Chodos, Associate Administrator for Entrepreneurial Development, Office of Entrepreneurial Development, U.S. Small Business Administration, Washington, DC ................................................................................... 5 

Doug O’Brien, Deputy Under Secretary for Rural Development, United States 

Department of Agriculture, Washington, DC .................................................... 7 

APPENDIX 

Prepared Statements: 

William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC .............. 28 

Michael A. Chodos, Associate Administrator for Entrepreneurial Development, Office of Entrepreneurial Development, U.S. Small Business Administration, Washington, DC ..................................................................... 152 

Doug O’Brien, Deputy Under Secretary for Rural Development, United 

States Department of Agriculture, Washington, DC ................................. 157 

Questions and Answers for the Record: 

Mr. William Shear ............................................................................................ 163 

Mr. Michael Chodos .......................................................................................... 167 

Mr. Doug O’Brien ............................................................................................. 177 

Additional Material for the Record: 

Memorandum of Understanding between the U.S. Small Business Administration and the U.S. Department of Agriculture ..................................... 189 

C.E. Rowe, President/CEO, Association of Small Business Development 

Centers ........................................................................................................... 195 

SBREP-219 with DISTILLER

SBREP-219 with DISTILLER

(1) 

ENTREPRENEURIAL ASSISTANCE: EXAMINING 

INEFFICIENCIES AND DUPLICATION 

ACROSS FEDERAL PROGRAMS 

WEDNESDAY, MARCH 20, 2013 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 1:02 p.m., in Room 

2360, Rayburn House Office Building, Hon. Sam Graves [Chairman 

of the Committee] presiding. 

Present: Representatives Graves, Chabot, Luetkemeyer, Tipton, 

Hanna, Huelskamp, Schweikert, Collins, Vela ́zquez, Schrader, 

Clarke, Chu, Payne, and Murphy. 

Chairman GRAVES. Good afternoon, everyone. I call this hearing 

to order, and I want to thank everyone for being with us today. 

Today America’s national debt has surpassed $16.7 trillion, and, 

according to the Congressional Budget Office, each of the past 4 

years, Federal spending has been between $3.5 trillion and $3.6 

trillion. It is Congress’ duty to put our fiscal house in order, reduce 

spending, and stabilize our debt to ensure prosperity in our Nation 

for future generations. 

In order to do this, we must ensure that taxpayer dollars are 

being spent wisely and not on overlapping, fragmented, wasteful, 

or duplicative Federal programs. It is this Committee’s job to examine each Federal program that claims to help entrepreneurs, with 

a specific focus on the Small Business Administration, to ensure 

that necessary programs remain intact while advocating for the 

elimination of those that are redundant and ineffective. 

Unfortunately, it has become clear that the numerous entrepreneurial assistance programs run by the Federal Government are all 

engaging in similar activities with no true metrics to determine 

which programs are truly beneficial to entrepreneurs. Recent reports by the Government Accountability Office have identified 52 

programs across 4 agencies aimed at helping entrepreneurs, but 

agencies are not adequately measuring the effectiveness and collaboration among these agencies is lacking. That makes figuring 

out what is helpful and what should be consolidated and what 

should be cut much more difficult. 

On this Committee, we understand the value of encouraging entrepreneurs and facilitating the creation of new businesses. However, I am very skeptical that all 52 Federal programs aimed at entrepreneurs are having a significant enough impact to justify their 

costs. And a further question, how any individual seeking to start 

SBREP-219 with DISTILLER

2 

a small business can look at 52 programs and know which is best 

suited for them or how the different programs fit together. I certainly can’t imagine having the time to focus on establishing a company while navigating a disjointed maze of fragmented and overlapping Federal programs. 

And let me be clear about this: There is an immediate need to 

reduce the Federal budget, but even if the United States were not 

facing staggering debt levels, program inefficiencies would need to 

be eradicated to ensure entrepreneurs were receiving the best help. 

Today I hope our witnesses can shed light on some of these programs and comment on the GAO’s findings. 

I thank all of you for taking time out of your busy schedules to 

be here. 

And I now yield to Ranking Member Vela ́zquez for her opening 

statement. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Across the Federal Government, departments, agencies, and bureaus of all sizes are working to help small businesses. Their efforts run the gamut from providing loans to farmers, to helping 

manufacturers gain access to foreign markets, to grants improving 

infrastructure. 

Many of these programs have become essential to our Nation’s 

small businesses. However, others have been proven less necessary, 

duplicative, and even wasteful. Ensuring that these programs work 

better together is important, not just for taxpayers but also for 

small businesses that depend on them. 

In administering these programs, it is critical that agencies 

maximize efficiency and minimize waste. In practice, this means 

ensuring that rules and regulations are clearly articulated, that a 

framework for evaluation is in place, and that the initiatives are 

not simply mirroring other agencies’ work. 

It is imperative that programs are continually evaluated, and it 

should not take a fiscal crisis to do so. This Committee, both Democrats and Republicans, have repeatedly pinpointed programs at 

SBA that are wasteful and duplicative, irrespective of budgetary 

politics. Our views and estimates have annually identified ten of 

millions in wasteful spending that could be reinvested in other valuable programs. 

GAO has also been a regular in this room, as their reports have 

shown that waste, fraud, and abuse are all too common within the 

agency. From the HUBZone programs, to disaster lending, to coordination between the SBA and Agriculture, the GAO has recommended improvements, many of which have been enacted into 

law. 

Today I am looking forward to not only hearing GAO’s recommendations about government-wide coordination of entrepreneurial assistance programs but also the reactions of the SBA and 

USDA. Oversight is not only a responsibility of Congress but also 

for the agencies we oversee. And in this case, for this Committee, 

it means the Small Business Administration. 

Unfortunately, in this regard, the agency has not met expectations. It has established and authorized pilot programs without any 

performance measures. While these initiatives cost taxpayers milSBREP-219 with DISTILLER

3 

lions of dollars, the agency has failed to use objective metrics to 

quantify their success or failure. 

In the last 3 years, SBA requested funds for seven pilot programs, including the Small Loan Advantage and Community Advantage programs, the Impact Investing and Early-Stage Innovation Fund, regional clusters, the Distance Learning Portal, and the 

Emerging Leaders programs. The last three of these alone cost $50 

million. That is more than what we spent on the Women’s Business 

Centers, an initiative that is authorized, has performance measures, and is regularly overseen by Congress. While the original intent may be admirable, once launched, these pilot programs often 

take on a life of their own, drawing funds away from proven initiatives. 

Even among programs that we know work, there is a need for 

better harmonization. In its recent report, GAO found that agencies 

do not coordinate their services. If they did, the government could 

lower administrative costs and leverage each program’s unique 

strengths. 

Steps must be taken to ensure that agencies are conducting 

meaningful evaluations of their initiatives rather than simply 

checking the box. If a program is not working, it should either be 

fixed or defunded. Doing so will ensure taxpayers get the biggest 

bang for their buck and, equally important, that small businesses’ 

needs are met. Today, reducing duplication and improving performance are not just nebulous, bureaucratic catchphrases. When applied, they mean better services for entrepreneurs and greater job 

creation for the economy. 

Everyone here recognizes the importance of entrepreneurship to 

our economic recovery. As we seek ways to make economic development programs more efficient, we cannot afford to shortchange 

small businesses. Instead, our goal should be ensuring that these 

programs work in concert together, delivering small businesses the 

help they need. 

I look forward to today’s testimony, and I thank all the witnesses 

for being here. 

Thank you, Mr. Chairman. I yield back. 

Chairman GRAVES. Thank you very much. 

Our first witness Bill Shear, the Director of Financial Markets 

and Community Investment at the Government Accountability Office. 

And, Mr. Shear, I know you testified before our Subcommittee on 

Contracting and the Workforce just yesterday, so we appreciate you 

coming to the Hill twice in 1 week. Thank you very much. Look forward to hearing from you. 

SBREP-219 with DISTILLER

4 

STATEMENTS OF WILLIAM B. SHEAR, DIRECTOR, FINANCIAL 

MARKETS AND COMMUNITY INVESTMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C.; MICHAEL A. CHODOS, ASSOCIATE ADMINISTRATOR FOR ENTREPRENEURIAL DEVELOPMENT, OFFICE OF ENTREPRENEURIAL DEVELOPMENT, U.S. SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C.; DOUG O’BRIEN, DEPUTY 

UNDER SECRETARY FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

STATEMENT OF WILLIAM B. SHEAR 

Mr. SHEAR. Okay. And thank you. And so the joke about it is, 

I was in the same chair yesterday, and it is really quite comfortable. So, at any rate, thank you very much. 

Chairman Graves, Ranking Member Vela ́zquez, and members of 

the Committee, I am pleased to be here this afternoon to discuss 

our work on economic development programs that provide entrepreneurial assistance. This statement is based on our report issued in 

August 2012 and information we have received from the four agencies since our report’s issuance. 

We reported information on 52 programs at SBA, USDA Rural 

Development, Commerce, and HUD. In summary, we found the following. 

First, Federal programs that support entrepreneurs are fragmented and overlap based on the type of assistance they are authorized to offer, such as financial and technical assistance, and the 

type of entrepreneur they are authorized to serve. Much of the 

overlap among these programs tends to be concentrated among programs that provide a broad range of technical and financial assistance. 

In addition, while agencies have taken steps to collaborate more 

in administering these programs, they have not implemented a 

number of good collaborative practices we have previously identified. And some entrepreneurs struggle to find the support they 

need. The GPRA Modernization Act’s crosscutting framework requires that agencies collaborate in order to address issues such as 

economic development that transcend more than one agency. And 

it directs agencies to describe how they are working with each 

other to achieve their program goals. 

As my second summary statement, I will offer the following: 

Agencies do not track program information on entrepreneur assistance activities for many programs—a practice that is not consistent 

with government standards for internal controls. 

In addition, we found that 33 of the 52 programs had set goals 

for their programs, but 19 of these 33 programs did not meet any 

of their goals or only met some of their goals. Further, agencies 

have conducted evaluations of only 20 of the 52 active programs 

since 2000. As a result, information on program efficiency and effectiveness is limited, and scarce resources may be going toward 

programs that are less effective. 

The GPRA Modernization Act requires agencies to set and measure annual performance goals and recognizes the value of program 

evaluations because they can help agencies assess programs’ effectiveness and improve program performance. In summary, without 

SBREP-219 with DISTILLER

5 

enhanced collaboration and coordination, as well as more robust 

program information, agencies may not be able to administer programs in the most effective and efficient manner. 

Based on our findings, we recommended that the four agencies 

and OMB explore opportunities to enhance collaboration among 

programs both within and across agencies and that the four agencies track program information and conduct more program evaluations. The agencies neither agreed nor disagreed with the recommendations but did provide information on their plans to address our recommendations. 

Chairman Graves and Ranking Member Vela ́zquez, this concludes my prepared statements. I look forward to answering questions you may have. 

Chairman GRAVES. Thank you, Mr. Shear. 

Our next witness is Michael Chodos. He is the Associate Administrator for Entrepreneurial Development within the Office of Entrepreneurial Development at the SBA. In this capacity, Mr. 

Chodos is responsible for overseeing SBA’s counseling and training 

programs for entrepreneurs. 

And I appreciate you being with us today. 

STATEMENT OF MICHAEL A. CHODOS 

Mr. CHODOS. Thank you. 

Chairman Graves, Ranking Member Vela ́zquez, and distinguished members of the Committee, thank you for inviting me to 

testify about the Small Business Administration’s work to enhance 

collaboration, avoid duplication, and improve data tracking within 

our entrepreneurial assistance programs. I look forward to discussing our extensive collaboration with other Federal agencies and 

our ongoing efforts to evaluate our own programs and to make 

them more streamlined, effective, and efficient. 

Entrepreneurs are the foundation of America’s economic success, 

and SBA is there with the services and support small businesses 

need to start, grow, and create jobs. In the past year alone, SBA 

and its resource partners counseled and trained over 1 million 

small businesses and helped thousands of new businesses start. SBA and its network of lenders also supported over $30 billion 

in loans to small businesses through its 7(a) and 504 loan programs, and we helped agencies across the Federal Government to 

put over $90 billion in Federal contracts in the hands of small businesses. SBA also leveraged a record $3.3 billion in capital for small 

businesses through the SBIC program and, since 2009, has supported over $3.3 billion in lending in our export loan programs. 

To implement its programs and disaster support services, SBA 

connects directly with small businesses in communities across 

America. It does so directly through its nationwide network of SBA 

district offices, Small Business Development Centers, Women’s 

Business Centers, SCORE chapters, and Veterans Business Opportunity Centers. 

And because of so many of SBA’s programs are delivered in partnership with others, we also help small businesses every day by 

collaborating with our very large network of private lenders, microlenders, and investment funds in our lending and capital programs, 

with Federal and State partners in our procurement, Small BusiSBREP-219 with DISTILLER

6 

ness Innovation Research, and export programs, and with university and nonprofit partners in several of our innovative programs 

for supporting veterans entrepreneurship. 

We work collaboratively every day to break down silos and to 

work effectively with our Federal, State, and private-sector partners. But we know that there are always further opportunities to 

use taxpayer dollars wisely and to make things simpler and easier 

for our small-business constituents. We know that navigating the 

Federal Government and its many programs and services can be 

daunting to a small business. 

For that reason, SBA and our network of partners act as the 

front door to Federal support for small businesses. We help them 

access our own programs and services and also act as a community-based and online guide to help small businesses get the help 

they need from whichever Federal, State, or local partners can 

serve that small business best. 

Over the past several years, SBA has focused intensively on opportunities for improving collaboration and coordination within its 

own network. We want to make sure that network is operating as 

efficiently and collaboratively as possible. 

SBA has participated in and led efforts to collaborate and share 

resources with USDA, Department of Commerce, and HUD. For example, SBA has been working with the Department of Commerce 

and numerous other Federal agencies on developing BusinessUSA.gov, the comprehensive one-stop platform for businesses looking to access information, resources, programs, and services available through the Federal Government. 

While more work remains to be done, I am very proud of our accomplishments and progress in the area of collaboration to date. A 

great deal of the credit should go to our SBA district office leadership; national, State, and local leadership in our SBDC, WBC, and 

SCORE networks; and our cluster administrators and other partners. 

In addition to our work fostering collaboration within our own 

SBA family and with other agencies, the agency has been working 

intensively on ways to improve the measurement and evaluation of 

our programs. Starting in 2012, OED, which is the office which I 

lead at the agency, undertook a comprehensive modernization 

project for our resource partner data-collection system, known as 

EDMIS, to enhance current data fields, improve budget and performance integration capabilities, and expand reporting capabilities. 

Additionally, we are also working with all of our resource partners to identify and align all of our respective surveying, polling, 

and impact-study methodologies to harmonize the data collected 

through these efforts and to have a coordinated set of data sources 

between the agency and its partners. 

In closing, I want to thank you for the opportunity to testify before you today. SBA, its resource partners, and its many lending, 

Federal-sector, and other partners share the common goal of collaborating and supporting and strengthening America’s 28 million 

small businesses. Through enhanced collaboration, improved 

metrics, and new service delivery tools, we are building an entrepreneurial ecosystem for the 21st century and beyond. 

SBREP-219 with DISTILLER

7 

I look forward to answering any questions you may have. Thank 

you. 

Chairman GRAVES. Thank you, Mr. Chodos. 

Our final witness is Doug O’Brien, who is the Deputy Under Secretary for Rural Department at the U.S. Department of Agriculture. Mr. O’Brien was appointed to this position in August of 

2011 and oversees efforts to promote economic development 

throughout our rural communities. 

Mr. O’Brien, I apologize I wasn’t able to meet with you on Monday. My flight was delayed. But I appreciate you making the effort, 

and welcome to the Committee. 

STATEMENT OF DOUG O’BRIEN 

Mr. O’BRIEN. Chairman Graves, Ranking Member Vela ́zquez and 

members of the Committee, thank you for this opportunity to appear before the committee to discuss USDA Rural Development’s 

role in supporting economic development of our Nation’s rural communities. 

Since 2009, President Obama’s support for rural America has 

brought about historic investment in rural communities that has 

made rural America stronger and more vibrant. Rural development 

has directly invested or guaranteed more than $131 billion over the 

last 4 years in broadband, businesses, housing, safe water, community facilities, and more that have benefitted not only the communities our agency serves but the Nation’s overall economy. 

In fact, we view rural development programs as building blocks 

for a successful rural economy. Quality infrastructure encourages 

business and economic growth, which, in turn, encourages housing 

development to serve the influx of new employees and leads to additional necessities such as schools, hospitals, and emergency resources. Our programs address all of these needs. 

Congress had the forethought to strategically place comprehensive programs for rural America in one agency, USDA Rural Development. Perhaps most importantly is how Rural Development provides these critical programs: with more than 400 offices in rural 

communities across the country that provide us the ability to work 

directly with stakeholders that, many times, do not have the capacity to otherwise access Federal programs. 

To make sure that the community economic development mission 

is met, we have always looked for opportunities to collaborate with 

other agencies to get the best results possible in rural communities. 

Engaging with members and stakeholders on the White House 

Rural Council has opened doors to improved cooperation. 

Last summer, I participated in the Regional Innovation in Rural 

America forum to develop strategies for leveraging infrastructure 

investments in rural communities that create jobs and boost economic development. Two programs highlighted in this forum were 

the Rural Jobs and Innovation Accelerator Challenge and the 

Stronger Economies Together initiative. 

The Rural Jobs and Innovation Accelerator Challenge leverages 

existing financial and technical assistance resources from 13 Federal agencies and bureaus. To date, projects across 12 States have 

received Federal funding to help strengthen regional industry clusters by identifying and maximizing local assets, connecting to reSBREP-219 with DISTILLER

8 

gional opportunities, and accelerating economic and job growth 

across rural regions. 

Meanwhile, the Stronger Economies Together, or SET, initiative 

enables rural communities and counties to work together to implement multicounty economic blueprints to build on a region’s current and emerging strengths. Rural Development launched this initiative with land-grant university partners and Regional Rural Development Centers 2 years ago. SET is now active in nearly 40 regions in 19 States. 

Over the past year, we have further strengthened our collaborative efforts with the Small Business Administration. We held a 

series of USDA and SBA joint roundtables across the country focused on increasing investment in rural communities. The meetings have presented opportunities to hear from stakeholders at 

both agencies about the challenges and benefits of investing in 

rural America. 

In response to these discussions, leaders from our rural business 

team have been meeting with SBA to increase microlending availability to rural constituents. We determined from these roundtables 

that there are substantial amounts of resources and revolving 

funds created through several of our programs that are available 

for increasing investment in rural communities. We are actively 

pursuing the relending of these funds. 

Participants in these discussions include our revolving fund partners SBA, SBA Certified Development Companies, Small Business 

Development Centers, commercial lenders, and other community 

and economic development stakeholders. This is important in light 

of the challenges entrepreneurs face getting financing in rural 

areas, where lenders are often small and less likely to shoulder the 

risk alone, particularly during an economic downturn. 

Building on these successes, USDA signed an MOU with the 

American Association of Community Colleges to strengthen rural 

economies throughout the Nation. National, State, and local staffs 

around the Nation are diligently working to find ways to coordinate 

with stakeholders and colleagues in other Federal agencies to leverage resources and create jobs. 

For example, a USDA Rural Development in California has recently joined into a memorandum of understanding with the California Community Colleges Chancellor’s Office. In conjunction with 

this effort, the two agencies are partnering with local community 

colleges and small-business development centers to present capital 

readiness events throughout the State, and these events provide information and resources for small businesses seeking financing. 

These are just a few of the examples of USDA’s collaborative efforts with other agencies across Federal Government to support 

rural communities that are fostering economic development. 

Leveraging Federal resources to more effectively support economic 

development efforts continues to be an agency best practice. 

I am proud of our record of collaboration and meeting increased 

demand for our services in the face of declining funding levels and 

significant staffing losses. In spite of those challenges, Rural Development has been able to maintain a unique connection to rural 

America, a connection like no other Federal agency, by aggressively 

SBREP-219 with DISTILLER

9 

implementing the Secretary’s Blueprint for America and Rural Development’s economic development strategies. 

I appreciate the opportunity to join my colleagues from SBA and 

GAO to testify before members of the Committee today, and I welcome the chance to answer your questions. And thank you for your 

support for Rural Development programs. 

Chairman GRAVES. Thank you very much, Mr. O’Brien. 

We are going to start with Mr. Huelskamp. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. 

Mr. Shear, I appreciate your returning to the Committee. I also 

appreciate the brevity. You had a minute, 25 left in your time— 

well recognized for that. 

But I have a follow-up question, particularly a tough one. And 

if we are looking at these programs, and, again, many different 

programs across multiple agencies, are we able to compare the performance or efficiencies of these programs one to another? 

Mr. SHEAR. It is a very good question, and it is a very difficult 

question. And the general answer to that is no. 

Each program has program metrics looking at the attainment of 

certain goals, which there are some differences among them, but 

the idea is that those metrics provide an opportunity to track outputs over time, such as number of businesses assisted, things of 

that nature. So they are more output-oriented, but they don’t get 

to the issue of the effectiveness of the programs. 

And this is one reason why we say that especially for the programs that don’t meet their goals, but even those that do, evaluation is important, where you are trying to benchmark to some degree what would happen without the program and saying, how well 

does the program work at serving its particular mission, such as 

training and counseling, and how well does it help the small businesses that participate in training and counseling, is one example. 

Mr. HUELSKAMP. And so, well, how do we then—does that mean 

that we just don’t have the data? We are on the other side of the 

table. I mean, we have a multitude of programs here, two different 

agencies represented today. And it is time to pick or choose, when 

we have a $16.7 trillion deficit. You are telling me that even if we 

don’t have the data or even if we did have the data to collect it, 

we still couldn’t compare it and say, hey, this program is something 

worth keeping compared to another program? 

Mr. SHEAR. There are some indications—there is some information that can be available to look at the usefulness, some programs 

better than others. As it happens, there is better information on 

the three counseling and training programs at SBA than other programs, but, really, there is generally a lack of information. 

To give you an example, when we issued our GAO-wide report 

last year, we thought we would be making a recommendation to 

Congress, what we call a matter for consideration, to tie funding 

more closely to demonstrate effectiveness. But based on further 

evaluation on our part, we decided that was premature because the 

first step in that would be for the agencies, to have a requirement 

and should consider it their responsibility, both individually and 

collectively, to collect and evaluate information on how well their 

programs are serving their intended purposes. 

Mr. HUELSKAMP. You know, appreciate that. 

SBREP-219 with DISTILLER

10 

And so let me ask the agencies represented here—and thank you 

for coming here. 

Mr. O’Brien, later I will follow up separately on RUS. We can actually make a key difference if we got a key decision out of that 

agency. 

But if you had to pick one particular program, gentlemen, in 

your purview that you would say, hey, that is the least effective 

program in our department, would you please identify that for me? 

Mr. CHODOS. Well, from the SBA’s perspective, in the President’s 

submission in the 2013 budget the SBA proposed that the PRIME 

technical assistance program not be funded further, that it was duplicative of programs that are essentially micro-assistance counseling and technical assistance already provided in our SBDC, 

Women’s Business Center, and SCORE networks and, therefore, 

that it was an opportunity for savings. 

Mr. HUELSKAMP. Very good. 

USDA, Mr. O’Brien? 

Mr. O’BRIEN. Thank you for that question, Congressman. 

I think two programs that I might point to are somewhat similar 

programs, one called the Rural Business Opportunity Grant and 

the one called the Rural Business Enterprise Grant. They have 

similar purposes; the way that we deliver them is separate. And 

there has been discussion and we have suggested in the past that 

we actually merge those two programs and consolidate the implementation of those two programs. 

Mr. HUELSKAMP. Are you proposing to save money or simply consolidate and maintain the same—— 

Mr. O’BRIEN. Well, there would be some streamlining. Each of 

those programs have their separate competitive process to compete 

for those Federal dollars, and, by consolidating the program, that 

would be one less—NOFA process and the attendant staff time that 

goes on to make sure that we do a good job. 

Mr. HUELSKAMP. Indeed. Now, is that in the President’s budget 

proposal? 

Mr. O’BRIEN. Well, at this point, of course, with the President’s 

budget not being released, that is something I can’t comment on 

right now. 

Mr. HUELSKAMP. Okay. I would have some comments—and I am 

out of time—on the President’s budget proposal, but, Mr. Chairman, I appreciate the opportunity to ask questions. I yield back. 

Chairman GRAVES. Ms. Vela ́zquez? 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Mr. Shear, thank you for coming back. 

I just would like to clarify for the members of the Committee, 

when you were answering the gentleman from Kansas, you said 

that all the programs have metrics and all the authorized programs 

have metrics. What about pilot projects? Do they all have metrics, 

the pilot programs? 

Mr. SHEAR. My understanding is that they don’t. 

But one of the things with the pilot programs, and one reason 

they are not in our universe, we took what was basically the executive branch’s approach to what is considered a program, which is 

from the Catalog of Federal Domestic Assistance. So some of the 

SBREP-219 with DISTILLER

11 

programs you talk about—it is a very good point—some of these 

pilot programs don’t appear on that list. 

So there are some programs out there that my understanding is 

don’t have metrics, but they have not been included in our universe 

because they are not identified as such. 

Ms. VELA ́ ZQUEZ. Uh-huh. Okay. 

So, Mr. Shear, in your 2011 testimony before this Committee, 

you stated that SBA had only met 16 of 26 requirements of the 

Small Business Disaster Response and Loan Improvement Act, 

which was passed to make improvements in the aftermath of Hurricane Katrina. 

Where does the agency stand on implementing these requirements? 

Mr. SHEAR. The agency—there are 26 provisions. Some of them 

create some authority but not a responsibility, and we put those 

down as not applicable. But you take those away, they have implemented—let’s say, we made a big deal about having regional outreach-type plans, and they have implemented that. 

The three remaining provisions from that act that haven’t been 

implemented are the private and the expedited and the intermediate loan programs, which are programs to operate with private 

lenders. Those have not been implemented. 

In terms of our recommendation around the whole thing, we 

asked, for things not implemented, to give us a timeline. We still 

don’t have a timeline on those three. 

Ms. VELA ́ ZQUEZ. Okay. 

As you know, Hurricane Sandy has produced the largest number 

of disaster loan applications since Hurricane Katrina. Unfortunately, processing times have spiked significantly, causing many to 

go without the funds they need to fully recover. 

Given these delays, wouldn’t the unimplemented provisions, particularly those allowing private lenders to assist SBA during periods of high volume, help individuals get their loans more quickly? 

Mr. SHEAR. The intent of those programs, as passed, was to provide that type of assistance when you had big disasters. So I can’t 

say exactly how they would have played out if they were available. 

But what I can observe is that, ever since, the act went through, 

SBA said it wanted to conduct pilot programs, which we thought 

were a good idea. But this is a number of years ago. And they were 

focused on having pilot programs in the Gulf States, but you can 

have a disaster anywhere. So they really didn’t look at it in the 

proper way. 

Ms. VELA ́ ZQUEZ. But it was a great opportunity now under 

Sandy, given the magnitude, right? 

Mr. SHEAR. Absolutely. And if they would have taken steps to at 

least be positioned to introduce pilot programs in different parts of 

the country, they would be in a position now to implement pilot 

programs. And it not only could help serve that purpose, but it 

could also provide information on how effective such interventions 

could be. 

Ms. VELA ́ ZQUEZ. Okay. 

While there is significant overlap among the populations that 

these programs serve, you know that GAO did not find duplication. 

Can you elaborate on this point and the distinction GAO makes beSBREP-219 with DISTILLER

12 

tween overlap and duplication? Because I think it is a critical part 

of GAO’s findings. 

Mr. SHEAR. Yes. ‘‘Duplication’’ we define as providing the same 

or similar services to the same types and the same businesses 

themselves. So it really is serving the same audience, the same 

types of services. We did not find evidence of duplication. 

‘‘Overlap’’ tends to be when you have a number of programs that 

are operating in the same space as far as missions and goals. So 

we do observe overlap. And we do observe an awful lot of fragmentation. 

Ms. VELA ́ ZQUEZ. Some of the overlap you talk about has been 

caused by agencies creating their own initiatives without the authorization of Congress. For instance, the SBA has created programs like Regional Innovation Clusters and Emerging Leaders. 

With more than 50 entrepreneurial assistance programs across 

the government, does it make any sense for agencies to be creating 

new programs in this area? 

Mr. SHEAR. While we didn’t look at the pilot programs, we say 

it doesn’t make sense and it goes against the grain of everything 

we are recommending here. 

Under the GPRA Modernization Act, agencies are supposed to 

work with each other. There is a priority goal established by the 

administration to serve entrepreneurs and small businesses. And 

no agency by itself, in that framework and under the law as passed 

by Congress that everybody seems to have accepted, it is not appropriate for an agency to go off and create its own pilot programs on 

their own. It just is inconsistent with where we are going on this. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Shear. 

Mr. Chodos, SBA ED programs are funded through a salaries 

and expenses account, which will face a reduction of $22 million. 

Is that correct, $22 million, right? 

Mr. CHODOS. We are speaking about under sequestration? 

Ms. VELA ́ ZQUEZ. Yes. 

Mr. CHODOS. Approximately, yes. 

Ms. VELA ́ ZQUEZ. Based on information we have received from 

your agency’s CFO, it appears that SBA will reduce some of its entrepreneurial development programs by 8 percent, such as SBDC, 

and others by nearly nothing, such as microloans, technical assistance, and veterans assistance. 

I just would like to know, how did you arrive at these decisions, 

and why did they not apply 5 percent across the board? 

Mr. CHODOS. Thank you, Ranking Member Vela ́zquez, for the 

question. 

The whole issue of how best to apply the sequestration, application of sequestration cuts—I am sorry. 

Ms. VELA ́ ZQUEZ. I just—I need for you to answer my question. 

How did the agency arrive at the decision, and why did it not apply 

the 5 percent across the board? You cut some programs at 8 percent and other programs at 5. How did you get to that decision? 

Mr. CHODOS. I will respond by saying this. The overall requirement was to cut 5 percent out of each major line item, budget item, 

for the agency. The salaries and expenses account includes almost 

all of the agency’s programs and services and expenses for salaries. 

SBREP-219 with DISTILLER

13 

The overall cut was required to be 5 percent. The agency engaged 

in a very deep analysis of where best to apply cuts, either below 

or above that level, in order to achieve the 5 percent cut across that 

entire bucket. 

Ms. VELA ́ ZQUEZ. So I hope you could share with the Committee 

what metrics you used to decide which programs to cut at 5 and 

which programs to cut at 8. 

Explain to me, why did you decide to defund the PRIME Program that happens to be the only program that provides technical 

assistance to low-income, entrepreneurs for example? Or why did 

you decide to cut 5 percent—let’s pick one. Emerging Leaders, you 

know, where you train 300 people at a cost of $3 million. Compare 

that to SBDC. That is only $2,000 per client, while Emerging Leaders, which is a pilot program with no metrics, costs $12,000 per client. 

Mr. CHODOS. Actually, the Emerging Leaders Program does not 

cost $12,000 per client, and we do maintain metrics on all of our 

programs, including the two that you have mentioned, Regional Innovation Clusters and Emerging Leaders. 

We are highly focused on the need to maintain actual, meaningful measurements of not only participation and activity but also 

outcomes in all of those programs. And, indeed, we do. 

Ms. VELA ́ ZQUEZ. Excuse me 1 second. These are your numbers; these are not my numbers. Emerging Leaders, $3.776 million to 

train 300 individuals. The cost per training one individual through 

that program, if I do the arithmetic, is $12,500. 

Mr. CHODOS. I look forward to and I am happy to provide a detailed summary of all of the budget analysis and expenditures in 

e200. This year’s budget for the e200 Program is approximately 

$1.2 million. The number of students who were enrolled in the e200 

program last year across the country in our 27 cities in which we 

operate the program is approximately 400 to 500 per—— 

Ms. VELA ́ ZQUEZ. Can you explain to the Committee, why did you 

decide to apply 8 percent to the Women’s Business Development 

Centers compared to any of the unauthorized programs? 

Mr. CHODOS. We applied an 8 percent cut across our three primary programs because it is a key principle that we have in all of 

our dealings with our three main technical assistance, counseling, 

and training programs that not only do they collaborate and coordinate and provide a complementary suite of services, but as our 

budget goes up or goes down, all of them need to absorb those increases or decreases in a proportionate way. 

Ms. VELA ́ ZQUEZ. Mr. Chodos? 

Mr. CHODOS. Yes. 

Ms. VELA ́ ZQUEZ. For the record—and this is my last question 

now—if you cut all the unauthorized pilot programs, that will add 

up to what? 

Mr. CHODOS. Well, I am not sure—I don’t believe we have any 

unauthorized programs. I think every program that the agency 

has—— 

Ms. VELA ́ ZQUEZ. Those are pilot programs that are unauthorized. 

Mr. CHODOS. Well—— 

Ms. VELA ́ ZQUEZ. We legislate here. We know which programs 

have been authorized by this Committee. 

SBREP-219 with DISTILLER

14 

Mr. CHODOS. Yes. 

Ms. VELA ́ ZQUEZ. And those are not. 

Mr. CHODOS. I would like to say, Ranking Member Vela ́zquez— 

and I am not sure specifically which programs you are referring to. 

The e200 program, as I said, has a $1.2 million budget for this 

year. Now, that is a significant amount in any agency’s budget, including our budget. 

The Regional Innovation Clusters budget for the agency for 2012 was $5 million. Under sequestration, it is going to be something 

less than that. 

Ms. VELA ́ ZQUEZ. Well, since you don’t know—— 

Mr. CHODOS. May I—— 

Ms. VELA ́ ZQUEZ. Excuse me 1 second. 

For the record, Mr. Chairman—— 

Mr. CHODOS. May I answer? 

Ms. VELA ́ ZQUEZ. I know what you are going to say. But you said 

that you don’t know what programs are unauthorized, and I am 

going to tell you. You have $6 million for BusinessUSA Web site; 

$3.4 million for Clusters; $7 million for national vet training program; $2.2 million for Emerging Leaders. And these add up to $22 

million. 

Mr. CHODOS. Yes. Well, if the question that—I believe the last 

question that you asked is, do we maintain metrics in those programs? Are we able to measure the effectiveness of those programs? And, in fact, have we cut the only program that provides 

training to our micro-entrepreneurs? And the answer, I think, to 

those questions is no. 

The reason that the President proposed in his 2013 budget that 

the PRIME Program be defunded is simply that the allocation in 

that program and the problems addressed by that program can be 

addressed by our Women’s Business Centers, which are targeted to 

underserved women and male entrepreneurs all across this country, and by our—— 

Ms. VELA ́ ZQUEZ. Reclaiming my time, Mr. Chairman. 

PRIME is the only program where a loan is tied to technical assistance. If you want to see low-income entrepreneurs succeed, you 

provide technical assistance, and until they graduate, they will not 

be able to access capital. And it has been proven that it has been 

one of the most successful, at least for women—62 percent, 62 percent of borrowers are low-income women. 

And, with that, I yield back the balance of my time. 

Chairman GRAVES. Thank you, Ranking Member. 

Mr. Luetkemeyer? 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Mr. Shear, you were talking a while ago about some of the programs were not—we did not evaluate them, they were not required 

by law to be evaluated. What is the penalty for not evaluating a 

program? 

Mr. SHEAR. We would hope that through hearings such as this 

and by initiatives by the administration that there be a recognition 

that the demonstrated effectiveness of programs should play some 

role in allocating resources. 

Mr. LUETKEMEYER. Okay. So what you are saying is, at this 

point, there is no penalty? 

SBREP-219 with DISTILLER

15 

Mr. SHEAR. There is no legal requirement. 

Mr. LUETKEMEYER. There is no outcome that we are looking for 

that will show some sort of a penalty for not doing evaluation on 

it; is that right? 

Mr. SHEAR. The question there is almost like, how would you as 

a Committee, Congress, and the administration respond in terms 

of agencies that run programs—— 

Mr. LUETKEMEYER. Okay. 

Mr. SHEAR.—that don’t measure effectiveness. 

Mr. LUETKEMEYER. If you can’t measure the effectiveness, why 

should we continue to fund it? 

Mr. SHEAR. This is really—it is a great question. It is one of the 

questions we had in mind when we thought we were going to make 

the recommendation of tying funding to demonstrated effectiveness. 

In the absence of such information, it is a difficult situation. 

Mr. LUETKEMEYER. Well, the gentleman from Kansas asked a 

great question, you know, with regards to—he pointed the problem 

we have with our budget, and we are going to have to find some 

places where we are going to cut. And, you know, Mr. Chodos made 

the comment with regard to some of the things he was trying to 

do. 

But, at the same time, if we have no measurement of any of 

these programs—on half the programs, I was going through here, 

we have them highlighted. I mean, you look at some of this stuff. 

Some of the programs didn’t meet goals; other ones met some of the 

goals. Some of them have information on them; some don’t have information on them. 

I mean, and then when somebody complains, well, we don’t have 

any—you know, well, this is a great program and we have to cut 

it, it is a bunch of nonsense. If we are supposed to be sitting here 

setting priorities, you know, I would hope that you and your agency 

would help set priorities so we know which ones to fund, which 

ones not to fund. 

Mr. SHEAR. This is a very important point, I think, is that what 

we are trying to do is to provide our evaluation of the situation 

that we hope provides information that can lead to certain decisions. There are certainly value judgments involved, where we are 

not going to make those value judgments. We are not here to pick 

the winners and losers of what programs should stay and which 

ones should not. But we are trying to do our best, based on the information that we could glean from these agencies, of how well 

these programs are working. And, there are certain things where 

we have to look to the agencies to collect and analyze information. 

Mr. LUETKEMEYER. It was kind of interesting, when I was—I 

served on the Appropriations Committee back in Missouri, and 

when an agency came in and they couldn’t explain a program, it 

was automatically cut. 

Mr. SHEAR. Yes. 

Mr. LUETKEMEYER. And you should have seen the gasps from the 

rest of the crowd, who were all full of—the crowd was made up of 

all the people from the agency. That is why we got their attention, 

and that is how we managed our budget. This is ridiculous. 

Mr. O’Brien, you know, the title of this hearing today is ‘‘Examining Inefficiencies and Duplication Across Federal Programs.’’ And 

SBREP-219 with DISTILLER

16 

I fail to see anywhere in your testimony on in this hearing you testified today anywhere where you talked about streamlining any 

programs. All you talked about was collaboration. 

Is there anyplace in the USDA that you are streamlining? 

Mr. O’BRIEN. Yes. And I thank you for that question, Congressman. 

Mr. LUETKEMEYER. Why wasn’t it in your testimony? 

Mr. O’BRIEN. I believe, actually, in some of the written testimony 

there was. Some of it should have been in the oral testimony. 

Mr. LUETKEMEYER. Okay. 

Mr. O’BRIEN. One thing I would like to highlight on streamlining: 

In 2009, department-wide and including Rural Development, we instituted an effort called Blueprint for Stronger Service. That was 

focused on, streamlining the operations and the programs across 

the Department. Since that time, across the Department we have saved $700 million in things such as reduced travel, and office closures, as well 

as a number of things like coordinating procurement contracts, and 

a list that I would be able to and would be very happy to provide 

you on the record afterward. 

Mr. O’BRIEN. Within Rural Development itself, in the last year 

and a half we have reduced our workforce by about 18 percent. We 

have 47 State offices. We have done things in our business programs to create team leads, 10 team leads, in 10 different regions 

so that they have a higher expertise and that they basically provide 

the training for our staff in these particular programs. And, also, 

with some of the staffing shortages that we have, that they have 

some backup in those places. So it is some streamlining. 

Mr. LUETKEMEYER. Okay. With regards to—you talked about all 

your collaboration. Okay, through your collaborative efforts, have 

you found places where you can save? 

Mr. O’BRIEN. Yes, I—— 

Mr. LUETKEMEYER. Collaborating with other agencies, have you 

found where you can save some money? 

Mr. O’BRIEN. I think the—I think yes, sir. And thank you for 

that question. 

Mr. LUETKEMEYER. Okay. Since you have found places, have you 

instituted a program to save that money? 

Mr. O’BRIEN. Well, I think that the money—well, you know, instituted a program. I think that with the reduced—I think with 

those savings what we have experienced as opposed to—because a 

number of our programs have been cut, and in particular our salaries and expenses have been reduced in the last few years—— 

Mr. LUETKEMEYER. Okay, we got that part. What about programs 

now? You know, you have sequestration cuts coming here. Have 

you found a place where you can cut, other than salaries and associated expenses, somewhere in your programmatic group? 

Mr. O’BRIEN. Yes, we have. And—— 

Mr. LUETKEMEYER. Give me an example. 

Mr. O’BRIEN. In the fiscal year 2013 budget, we identified some 

programs that we thought would—— 

Mr. LUETKEMEYER. Give me an example, please. 

Mr. O’BRIEN. I think the Rural Business Opportunity Grant Program in the 2013 budget was one that we recommended that it not 

SBREP-219 with DISTILLER

17 

be funded. There were a number of other programs that we did recommend some reduced—— 

Mr. LUETKEMEYER. With the new sequestration cuts, what are 

some of your latest ones you are going to go after? 

Mr. O’BRIEN. The latest programs that we will go after? 

Mr. LUETKEMEYER. Yes, uh-huh. 

Mr. O’BRIEN. Well, with the sequestration cuts, the way that it 

works with our budget lines so the way that sequestration will affect the programs in the Rural Business Cooperative Service, each 

of those programs will be cut 5 percent. And we have looked at 

flexibilities to try and perhaps move some of those dollars around, 

and—— 

Mr. LUETKEMEYER. Okay, but you haven’t—— 

Mr. O’BRIEN. I am afraid that we do not have that flexibility. 

Mr. LUETKEMEYER.—given an example. You haven’t given me an 

example of a program that you are going to cut or where you are 

going to make a cut. 

Mr. O’BRIEN. In response to the sequestration? 

Mr. LUETKEMEYER. Yes. 

Mr. O’BRIEN. We do not have the flexibility to pick and choose 

which program to cut—— 

Mr. LUETKEMEYER. Okay. 

Mr. O’BRIEN.—and which one not to cut. 

Mr. LUETKEMEYER. All right. Very good. Thank you. 

Thank you, Mr. Chairman. 

Chairman GRAVES. Mr. Murphy? 

Mr. MURPHY. Thank you, Mr. Chairman. Thank you all for being 

here today. GAO reported that only half the entrepreneurial assistance programs identified attempted to measure their success. Is 

that accurate? That only about half the programs are being measured for success? 

Mr. SHEAR. Yes. 

Mr. MURPHY. It is. Okay. Forgive me. I am new here. I am just 

trying to get my head around this. But it is hard for me to believe 

that we are giving all this money and it is not being tracked. And 

I know we all keep talking about it here, and I don’t want to beat 

a dead horse, but maybe you could start off by maybe telling me 

what you think should be tracked when this money is given out. 

Mr. SHEAR. We don’t raise many issues with what is tracked as 

far as metrics over time, such as how many entrepreneurs are 

being served, things of that nature. 

What we are critical of—evaluations are important but don’t 

have to occur on an annual basis. It would be quite costly to do 

such. But what we are looking for is certain snapshots in time for 

evaluations which get at the question as to how well these programs are serving their intended purposes. 

Mr. MURPHY. Things such as how many jobs are created, ROI? 

Mr. SHEAR. No, and I really appreciate that question. 

We actually think it can be very problematic to try to estimate 

directly how many jobs are created by a program because it is so 

hard to benchmark what would have happened in the absence of 

the program. 

But let me just give you an example using the three counseling 

and training programs that Mr. Chodos runs for SBA. And, in that 

SBREP-219 with DISTILLER

18 

case, what they look at is, first, for those people who get counseling 

and training from those programs, how do they value that counseling and training in terms of how much it helps their businesses? 

But then I think, more importantly, it takes those businesses that 

are served, and it collects information on how well those businesses 

do after they receive such assistance. 

So the underlying issue is that counseling and training programs 

are supposed to help businesses succeed. They come up with an estimate of how much it helps them succeed. And if they are succeeding—there is the general notion that if they are succeeding, 

they are probably providing more jobs in the community because 

they are successful businesses as a result of the counseling and 

training. 

Mr. MURPHY. Can you provide an example, maybe, of a program 

you thought was failing and what you did about it? 

Mr. SHEAR. It is not like we do anything about it. Again, we don’t 

want to pick out winners and losers. We report on the results of 

some of these evaluations. It is—— 

Mr. MURPHY. So you don’t want to report on it; you want us to 

do it. 

Mr. SHEAR. Well, the question is, is there a specific program that 

you might be interested in, or maybe somebody on the panel would 

be? I mean, I can identify one where the evaluation does not show 

a lot of success. Would you like me to identify one from our list? 

Mr. MURPHY. I think that would be helpful for all of us. 

Mr. SHEAR. Okay. 

In our list, which is—the table is not in my prepared statement. 

It is in our report that my statement is based on. We have a table 

of evaluations that have been conducted. And in that, the SBA program that shows up as not being especially effective at its purpose 

is the HUBZone program. It is supposed to facilitate economic development in economically depressed areas. And the evaluation 

conducted on that program suggests that, due to kind of the small 

nature of the dollars involved over the very large geographic area, 

that the program has not facilitated economic development, which 

is the purpose of the program. 

So that is one program. I hate picking one program, but that is 

one program which, if you read the table in our report, I think it 

stands out. 

Mr. MURPHY. Thank you for that. 

And since we don’t have the measures and since it seems perhaps more complicated for you to give us employment numbers, 

ROI, that sort of thing, do you provide other areas that we can cut, 

other programs, instead of that one in particular. I mean, is there 

a whole list of them? 

And that goes for all three of you. 

Mr. SHEAR. We are not picking the winners and losers. And part 

of it, getting back to—— 

Mr. MURPHY. But you need to give us the information to be able 

to do so, correct? 

Mr. SHEAR. It is like for us or the agencies to evaluate, and we 

are saying the agencies have a responsibility to collect and evaluate 

certain information. We collected an extensive amount of data from 

the agencies, and it only allows us to go so far in terms of what 

SBREP-219 with DISTILLER

19 

we can say about these programs or how the agencies use the information to administer the programs and to demonstrate effectiveness. 

And we can’t make up data. We are a fact-based agency. So we 

have done what we can with the information made available. And 

among our biggest recommendations is that agencies, both individually and collectively, should be collecting information and evaluating information that tries to demonstrate how well the programs 

are working. 

Mr. MURPHY. Thank you. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, would you indulge me 1 second 

to make a follow-up question regarding the HUBZone program to 

Mr. Shear? 

Mr. Shear, the HUBZone program is supposed to provide economic development opportunities in low-income communities. Is 

that the case? 

Mr. SHEAR. Yes. It is to foster economic development, yes. 

Ms. VELA ́ ZQUEZ. And is there any data to back this up? 

Mr. SHEAR. The one evaluation conducted—and I am just going 

to go through a couple steps. 

One of the things that we recommended when we prepared a report on the HUBZone program that was delivered to this Committee in 2008, that there should be evaluations of the effectiveness 

of the program. SBA acted like they were going to evaluate, but the 

one evaluation of it by the Office of Advocacy does not show that 

it has the intended impact. 

Ms. VELA ́ ZQUEZ. Thank you. The short answer is no. 

Mr. SHEAR. The answer is no, yes. 

Chairman GRAVES. Mr. Collins? 

Mr. COLLINS. Thank you, Mr. Chairman. 

I am relatively new here, and, you know, so I have been listening 

and watching. And I guess my take of what I am hearing today, 

Mr. Shear, is that if you are the teacher, you are not giving very 

good grades to Mr. Chodos or Mr. O’Brien. 

So if I look at that as a report card and, you know, I look at what 

we are talking about, a lack of coordination and efficiency and so 

forth, I guess—you know, some people know me around the country 

as the pied piper of Lean Six Sigma, bringing efficiency to government. And I have done that. So I guess I have a simple question. 

Some of the concerns that I am hearing Mr. Shear bring up are 

just screaming for a master black belt to step in and take a project 

and process-map one or two in the SBA, and in process-mapping 

what those steps are, look for efficiencies but, more importantly, 

define outcomes, define metrics, come up with control charts. 

Where we say we don’t measure it all the time, well, if the process is properly set up, you will get data at every turn that will give 

you your metrics. They are ongoing, hourly, daily, monthly snapshots. Snap your fingers, you have the data. 

And what I am hearing is a lack of data, a lack of accountability, 

duplication, overlap. I mean, it is just screaming, to me, let’s maybe 

think about something out of the private sector. Lean Six Sigma is 

what comes to mind. 

I mean, do you have a comment to make? Does that make sense 

to you? Is it something you might want to try, Mr. Chodos? 

SBREP-219 with DISTILLER

20 

Mr. CHODOS. Thank you, Congressman. 

Let me say—and I just want to make sure that we leave a proper 

impression and set of facts with the Committee here today. The 

SBA’s Office of Entrepreneurial Development engages in among the 

most robust tracking and ‘‘metricking’’ of outputs and outcomes 

across all of our entrepreneurial development programs of just 

about anywhere in the Federal Government. 

We track in detail demographic data about our clients, who they 

are, how big their business is, what their revenues are. Then we 

track what services we provide. Then we track what outcomes they 

report in terms of changes in revenue, changes in number of employees, job starts, business starts, that sort of thing. 

And then, in addition to the hard data, which is done on a clientby-client basis, we engage in annual evaluation through surveying 

of the clients who have received our services to find out attitudinal 

changes, management changes, and the effectiveness of the programs. And then we track cohorts over time to see how things have 

improved over time. 

We are deeply engaged in exactly the kind of process management that you are describing. We agree with you completely that 

it is critical. 

We recognize that improvements in performance analysis are an 

ongoing project. You never get it right just once and then stop; you 

do it on an ongoing basis. We are happy to work with the Committee on an ongoing basis, as we do and look forward to continuing to do, to look at what we measure and how we measure it 

and to find opportunities for making it even better. 

Mr. COLLINS. Mr. O’Brien, do you have a—— 

Mr. O’BRIEN. Yes, just very quickly. I will also—and sort of a 

two-part answer is that, at USDA Rural Development, we also 

track every one of our programs. We take the recommendations on 

how we improve that tracking and, in particular, how we can do 

a better job at program evaluation very seriously. And, in fact, we 

are in the middle of a strategic plan right now on how we can do 

so. 

On your point about Lean Six Sigma, indeed, Secretary Vilsack, 

when he was the Governor of Iowa, it was something that he 

brought to State government, Lean Six Sigma in particular, and 

that is something he brought to the USDA. We have used it across 

the Department at USDA Rural Development. We have used it in 

a number of places. So, absolutely, we agree with that. 

Mr. COLLINS. Well, I mean, that is encouraging. I will just—not 

to go to the Agriculture, it was just disappointing when Secretary 

Vilsack, the other day, said that Lean Six Sigma won’t work with 

food inspectors. It works everywhere. 

But, you know, I guess I am hearing a little bit of a disconnect, 

because it starts with the GAO report of all the opportunities, but 

then taking it to isolated cases, everything is fine, but everything 

is not fine. 

So, Mr. Shear, do you want to comment on those two answers? 

Mr. SHEAR. One of the reasons why I referred to the counseling 

and training programs, which Mr. Chodos is in charge of, is that 

is one of the better examples where—so if you are saying what 

grade to get, his office gets one of the better grades, if not the best 

SBREP-219 with DISTILLER

21 

grade, among these agencies. And for the programs within SBA, 

compared with other SBA programs in other areas, his three programs come out the best. And one of the things that makes it attractive for me, when I am asked questions about it, I can give an 

example of something that goes down the path that we are looking 

for. So his programs do a little bit better. 

But there is the distinction between, again, metrics, where you 

can track certain processes and outcomes, and measures of effectiveness and collecting information on how well programs are administered. His programs, among the programs we are talking 

about today, his three programs are the ones that are the best 

evaluated. 

And I will just make reference to, without commenting on the 

numbers, but on page 9 of my written statement we have a table 

which really gets to the internal control issues, what types of information are the agencies collecting to administer their programs. 

And I will just refer to it. You can get an idea as far as kind of 

a scorecard, or a grade sheet as such, of how well the different 

agencies are doing. 

Mr. COLLINS. Thank you. My time is up. 

Chairman GRAVES. Mr. Payne? 

Mr. PAYNE. Thank you, Mr. Chairman, and to the ranking member of the Committee. 

Let’s see. Mr. Shear, in your effort to identify overlap and fragmentation of the programs across Federal agencies, did the GAO 

take into account programs that are designed for targeted populations, such as under-represented minorities and women? 

Mr. SHEAR. Yes, we did. And we tried to draw on that as far as 

what are the purposes of the program. And this is one reason why 

we refer to overlap and fragmentation. 

So we still represent—again, I will use the example of Mr. 

Chodos’ three programs. Women’s Business Centers are targeted to 

a lower-income population than Small Business Development Centers, for example. So we take that into account in describing it. 

Nonetheless, they are programs that do provide similar services. 

So one of the questions here—again, we are not picking the winners and losers—is, is there a way to provide services in a better 

way, or is there a restructured program that could be done, where 

those populations, including those that are reached by the Women’s 

Business Centers, could be done in a more efficient manner? 

Mr. PAYNE. So, you know, in trying to understand what you do, 

you deal primarily in the facts, and you transfer or make a recommendation to the SBA or the agency, correct? 

Mr. SHEAR. Yes, we have made recommendations to the four 

agencies and to the Office of Management and Budget about serving entrepreneurs and small businesses. 

Mr. PAYNE. And the program that you did mention, HUBZone, 

and your findings and seeing that it is not achieving its goal, Mr. 

Chodos, when you get information like that, what do you do with 

it? 

Mr. CHODOS. Well, every time we get information from the GAO, 

we take it extremely seriously, and we evaluate it and try to understand what it is that they were looking at and what the opportunities are for making decisions going forward. 

SBREP-219 with DISTILLER

22 

I will say that the HUBZone program falls within the Office of 

Government Contracting and Business Development at the agency, 

so it is not primarily under my purview. 

Mr. PAYNE. Okay. 

Mr. CHODOS. So I am happy to go back and to submit further information to the Committee about what was done after the 2008 

GAO report in order to provide sort of a historical context of what 

occurred from that point forward. 

But the effectiveness of the programs is a key area of focus, and 

I am happy to provide further information on the HUBZone program. 

Mr. PAYNE. Thank you. 

In an effort to try to remain positive on a very frustrating topic, 

nice tie. 

And I would like to ask you and Mr. O’Brien, in response to the 

GAO report, the Department of Commerce stated that the GAO 

should consider the complementary role many agencies play in the 

field of economic development and need for varied but complementary activities to address the complexities of entrepreneurs. 

Can you provide examples within your agency where complementary services may be confused with duplication or overlap? 

Mr. CHODOS. I think I can provide at least one example. There 

are examples within our network of the three programs virtually 

every day. 

Our SBDCs, our Women’s Business Centers, and our SCORE volunteers work with each other on the ground in communities across 

America in order to evaluate entrepreneurs when they come in the 

door, find out are they nascent, just getting started, do they already have 30 employees and they are looking for the next round 

of financing, are they developing new products and materials. And 

they find them the help that is right for them at that particular 

stage in the life of the business. That is something we do within 

our own programs every day. 

But, more broadly, there are programs across the government, 

many of which were identified in Mr. Shear’s report, which do powerfully valuable work supporting entrepreneurship, either through 

providing capital, grant-based funding, technical assistance, counseling, et cetera. 

And so we have worked in the joint regional cluster initiatives, 

we have worked with Commerce, Labor, Energy, NIST, agencies 

across the Federal Government, and Ag, in order to make the real 

analysis that Mr. Shear has been talking about, which is: What are 

all of the things that we all do? And how can we bring them together in a single, focused, combined, and coordinated effort so that 

communities can get the benefit of all those programs and services, 

can understand what they all are, can navigate through them and 

get the benefit of them, and have the most bang for the taxpayer 

buck. 

So, that kind of coordination is something at the heart of what 

all of us are trying to do. 

Mr. PAYNE. Mr. Chairman, if I could just allow Mr. O’Brien a 

brief answer on that. 

Mr. O’BRIEN. Thank you, Congressman. 

SBREP-219 with DISTILLER

23 

And I would associate myself with the response from Mr. Chodos. 

And, certainly, there has been, I think, some unprecedented collaboration across the Federal agencies in this administration here 

in Washington, D.C. I just want to mention, though, some collaboration on the ground. 

As we have mentioned, SBA has a very unique field structure, 

essentially, the way that they work with their intermediaries. We 

at Rural Development, primarily, almost exclusively, the folks that 

we work with are our employees in the 400 offices throughout the 

country. So those Federal employees that live in rural America, are 

part of that community, really understand the needs of those. And 

the unique programs that Rural Development has many times can 

be complemented by the programs from SBA and others. 

So we now, partially in response to the GAO report, we send out 

an evaluation to our staff at Rural Development every other year 

asking them, how much you collaborating and coordinating with 

SBA? 

I will just mention two or three data points. This is from the 

2011 survey. And we asked States—and there were 41 States that 

responded—do you advise borrowers and grantees about SBA’s program? It was universal; every one of our States has now picked up 

that habit. And to be honest with you, as a field-based organization, if what we talk about in Washington, D.C., doesn’t hit the 

ground, you know, in rural Missouri, then it doesn’t matter what 

we talk about here. 

So we found some real highlights about the collaboration that is 

happening out there, and we found some soft spots. And we continue to do some training to make sure that collaboration happens. 

Mr. PAYNE. Thank you very much. 

Mr. O’BRIEN. Thank you. 

Chairman GRAVES. Mr. Tipton? 

Mr. TIPTON. Thank you, Mr. Chairman. 

And I would like to thank our panel for being here today. 

Mr. Chodos, I just want to make sure that I understood. Part of 

your testimony, you had indicated, you said that you are working, 

USDA, SBA, together to be able to recruit small businesses from 

rural communities into the HUBZone program? Is that accurate? 

Mr. CHODOS. Yes. Among the initiatives that we have undertaken with Ag pursuant to our MOU, in addition to co-training and 

cross-referring through our field networks, is to try to spread the 

world about the availability of the HUBZone program in order to 

make it more available and accessible to small businesses in rural 

communities, because many of our HUBZones are in rural communities. 

Mr. TIPTON. Great. 

Then I guess I would like to ask you a question on behalf of my 

rural communities. We have in Archuleta County 8.5 percent unemployment; Delta County, 8.1 percent; Montrose County, 9.6 percent unemployment; Montezuma County, 7.9 percent unemployment; Ouray County, 8 percent unemployment; Rio Grande County, 

8.6 percent unemployment; San Miguel County, 10.5 percent unemployment. 

SBREP-219 with DISTILLER

24 

And they just had their HUBZones pulled. How are you reaching 

out and helping those communities? All rural communities. I drive 

them. 

Mr. CHODOS. So, what I imagine you are referring to is that 

there was just a realignment of all of the HUBZone designations 

across the country as a result of the last census. And the agency 

does not dictate or decide what is a HUBZone. It is determined by 

the census tract and the various data in the tract. 

I don’t know specifically about what happened in the HUBZones 

and the designations in those counties—— 

Mr. TIPTON. I would truly invite you to take a look at that. 

Mr. CHODOS. Yes. 

Mr. TIPTON. Because I just read your criteria. Every one of these 

countries, perhaps save the census, meet that criteria. 

Mr. CHODOS. May I get back to you with a specific county-bycounty explanation of what occurred? 

Mr. TIPTON. I would certainly appreciate that. This is important 

for our areas. 

Mr. TIPTON. And I would like to follow up on my colleague from 

New York’s comments in regards to seeking out some volunteerism. 

You are familiar with SCORE? 

Mr. CHODOS. Extremely. SCORE is one of the networks under 

my supervision. 

Mr. TIPTON. Right. You know, I just met with them yesterday, 

and SCORE’s independent research of their 2012 client impact 

shows that they assisted over 38,000 businesses being formed, 

82,000 jobs created. So they are obviously able to actually do some 

real measurement. 

So how does SBA use this data to be able to promote and advocate for SBA programs like SCORE that are effective and efficient? 

Mr. CHODOS. So, as we describe the number of clients we counsel 

and train, the number of businesses that we start, the number of 

small businesses that we help counsel in specific areas, and the 

number of trainings that we offer, SCORE’s figures are included 

within those. And, if requested, I can give you very specific numbers for specific locations within SCORE. 

But let me just back up to say, there is no force in the world as 

powerful as that in the heart of a volunteer. We are so grateful for 

what SCORE and its 13,000 volunteers do across the country every 

day. They give of their own time and their own experience. We 

have a collection of over 300,000 years of accumulated experience 

in the SCORE network. And they go out into communities across 

the country every day and help small businesses start and grow by 

offering the benefit and the gift of their experience. It is a powerful 

tool. 

Mr. TIPTON. No question, you know, very positive. And I think 

Mr. Collins’ point and my point is in tough economic times let’s 

take advantage of that and be able to promote it. Because these are 

people that did grow businesses and do know how to be able to actually see the results and to be able to stick with the mentoring. 

Mr. O’Brien, I did want to ask you about the USDA Rural Development loans. I am concerned about those. It is set to remove communities from qualification, I think, on March 27th. Similar issues 

SBREP-219 with DISTILLER

25 

that I am talking about in regards to unemployment with the 

HUBZone programs. 

We have two communities, Fruita and Palisade, in my district 

that will lose their eligibility for these Rural Development loans 

based, again, on the latest census formula and calculation. 

Mr. O’BRIEN. Yes. 

Mr. TIPTON. The unemployment in these areas is about 8.4 percent. 

When a community is eligible to utilize a program for 10 years 

and then all of a sudden this is just pulled, can you see why folks 

in my district are actually angry about this? This is a rural, depressed—we don’t have a recession, we have a depression going on 

there. 

Mr. O’BRIEN. Yes. Thank you for that question, Congressman. 

And we certainly understand. We have heard from many communities and stakeholders who are concerned about the implementation of the 2010 Decennial. 

The three different laws that provide us the authority at Rural 

Development to implement our housing, business, and utilities programs, each of them essentially says that we must implement the 

programs pursuant to the latest census. Because of the new 2010 

Decennial data, it took us a little bit of time to be able to accumulate that data, and, by that time, we were in continuing resolutions. 

Our general counsel advised us that, at the end of this continuing resolution, the one that we are in right now, we have a 

legal requirement to implement the law, which is to implement the 

2010 Decennial, unless Congress extends eligibility in the continuing resolution—which there is some language you probably 

know about in both of the vehicles that are out there right now. 

We understand it is a serious issue, but we look to the law for 

our authority. 

Mr. TIPTON. Thank you, Mr. Chairman. My time has expired. 

Chairman GRAVES. Mr. Hanna? 

Mr. HANNA. There is a premise—hi, Mr. Shear. It is nice of you 

to be here 2 days in a row. Thank you. 

Thank you, Chairman. 

There is a premise, kind of overriding premise here that things 

are measurable, that somehow there is an empirical method embodied in what you do and that you how to apply it. I don’t take 

that for granted. I doubt if you do either. 

But how much of what you do can draw the kinds of conclusions 

that we need to draw? And how much of what you do and all of 

you do is fundamentally more subjective? And how do you decide 

how to weight all of that when you think? If that isn’t too obscure 

a question. 

Mr. SHEAR. I think it is a very good question, and it is a good 

question to draw the distinction of what we might do as a factbased audit agency that doesn’t make the value judgments and the 

role of those of you who are put into the challenging position of determining the use of taxpayers’ money. 

There is not a magical evaluation that is going to, simply put, 

rank-order programs. But, nonetheless, when you do conduct evaluations that get to how well are businesses doing that receive cerSBREP-219 with DISTILLER

26 

tain forms of assistance, what businesses are getting that assistance, what does that suggest for what benefits are generated from 

the program, whether it be counseling and training or loans or 

whatever it may be, it helps inform those decisions. 

As far as a lot of the discussion, in our report we certainly point 

out certain deficiencies, and, based on that, we make recommendations. I mean, one of the things that you have heard from this 

panel, and, I will echo, we certainly have gotten responses from the 

agencies that, whether they agree or disagree with us or not, they 

have taken actions to implement our recommendations. 

Mr. HANNA. Uh-huh. 

Mr. SHEAR. Now, as happens with committees across the government, and I will say this Committee, which I have had the pleasure 

of working with for a number of years, is that there is a need to 

follow up and just say, okay, are those actions actually being taken, 

and what are they leading to? 

It is promising to us that there is a cross-cutting goal that has 

been established by the administration to serve small businesses 

and entrepreneurs, but the idea is that we are looking for something much further. We are glad that there are MOUs between 

these two agencies and other agencies, but we are looking for, well, 

are you going to specify roles and responsibilities in those MOUs? 

Are you going to specify joint strategies for how to achieve things? 

And all that requires some form of evaluation. It doesn’t necessarily have to be rocket science, but, yet, there just seems to be 

a lack of information used to figure out how to best serve America’s 

entrepreneurs. 

Mr. HANNA. Sure. And the interpretation of that has got to be 

an extremely difficult part because it must fraught with both empirical/mathematical and subjective outcomes and processes. 

I guess my point is that if you make a mistake in this business, 

in your analysis, it doesn’t necessarily lead to the conclusion that 

the program is good or bad. Is that fair? 

Mr. SHEAR. I think that, yes, it is important to basically recognize whatever the limitations of your evaluation are and to respond 

to the information based on that. So I would agree with that. 

Let me put it that way. There are certain times we have taken 

SBA data on, let’s just say, their credit program, their 7(a) program, and geocoded them so that we can analyze who is being 

served and things of that nature. There have been times where we 

take data that is available and will evaluate and will say how well 

we think a program is working or who it is serving. 

But, in this case, there is still a lot of information out there that 

isn’t being collected for anybody to evaluate. 

Mr. HANNA. Uh-huh. Thank you. 

I yield back. 

Chairman GRAVES. Any other questions? 

Well, I want to thank you all for participating today. 

You know, the government has long recognized the need to aid 

entrepreneurs, but with 52 entrepreneur assistance programs, I 

think we have more confusion than clarity. And sometimes we can 

do a whole lot more with less. And I hope today’s hearing is going 

to inspire the USDA and the SBA to reexamine their collaborative 

SBREP-219 with DISTILLER

27 

efforts to truly align with the GAO’s recommendations and benefit 

entrepreneurs. 

Further, as we seek solutions to our budget crisis, this Committee is going to continue to examine these programs and discover 

which serve entrepreneurs most effectively, and we are going to 

look for opportunities to replace the duplicative and ineffective programs. That is all there is to it. 

And, with that, I would ask unanimous consent that Members 

have 5 legislative days to submit statements and supporting materials for the record. 

And, without objection, that is so ordered. 

Chairman GRAVES. And, with that, this hearing is adjourned. 

Thank you. 

[Whereupon, at 2:22 p.m., the Committee was adjourned.] 

SBREP-219 with DISTILLER

28 

A P P E N D I X 

SBREP-219 with DISTILLER


Insert offset folio 028 here 80171.011

GAO 

GAO-13-452T 

United States Government Accountability Office 

Testimony 

Before the Committee on Small 

Business, House of Representatives 

ENTREPRENEURIAL 

ASSISTANCE 

Opportunities Exist to 

Improve Programs' 

Collaboration, 

Data-Tracking, and 

Performance Management 

Statement of William B. Shear, Director 

Financial Markets and Community Investment 

GAO 

Accountability * Integrity * Reliability 
29 

SBREP-219 with DISTILLER


Insert offset folio 29 here 80171.012

Chairman Graves, Ranking Member Velazquez, and Members of the 

Committee: 

I am pleased to be here today to discuss our work on economic 

development programs that provide entrepreneurial assistance, 

Entrepreneurs playa vital role in the U,S, economy, and the federal 

government provides a variety of support and assistance to them, In 

August 2012, we reported information on 52 programs at the 

Departments of Commerce (Commerce), Housing and Urban 

Development (HUD), Agriculture (USDA), and the Small Business 

Administration (SBA) that support entrepreneurs, 1 According to agency 

officials, these programs, which typically fund a variety of activities in 

addition to supporting entrepreneurs, spent an estimated $2 billion on 

economic development efforts in fiscal year 2011, Economic development 

programs that effectively provide assistance to entrepreneurs, in 

conjunction with state and local government and private sector economic 

development initiatives, may help businesses develop and expand, 

However, the ways that these programs are administered could lead to 

inefficient delivery of services, such as requiring entrepreneurs to fill out 

applications to multiple agencies with varying program requirements, 

These inefficiencies could compromise the government's ability to 

effectively provide the needed services and meet the shared goals of the 

programs, 

In January 2011, Congress updated the Government Performance and 

Results Act of 1993 (GPRA) with the GPRA Modernization Act of 2010 

(GPRAMA), GPRAMA establishes a new framework aimed at taking a 

more crosscutting and integrated approach to focusing on results and 

improving government performance, Among other things, GPRAMA 

requires the Office of Management and Budget (OM B) to coordinate with 

agencies to establish outcome-oriented federal government priority goals 

covering a limited number of policy areas, as well as goals to improve 

management across the federal government The President's 2013 

budget submission includes the first interim federal government priority 

goals, including one to increase federal services to entrepreneurs and 

small businesses, with an emphasis on start-ups and growing firms and 

underserved markets, 

Entrepreneurial Assistance: Opportunities Exist to Improve 

Collab'Jrat,;on, Data-Tracking, and Performance Management, 

2012), 

Page 1 

(Washington, 

GAO·13-452T 
30 

SBREP-219 with DISTILLER


Insert offset folio 30 here 80171.013

My testimony today is based on information on these 52 programs that is 

discussed in our August 2012 report. Specifically, this testimony 

discusses (1) the extent of overlap, fragmentation, and duplication and 

their effects on entrepreneurs, as well as agencies' actions to address 

them; and (2) the extent to which agencies collect information necessary 

to track program activities and whether these programs have met their 

performance goals and have been evaluated. This testimony also 

provides information on the agencies' actions to address 

recommendations we made in our August 2012 report. 

In summary, we found the following: 

Federal programs that support entrepreneurs are fragmented and 

overlap based on the type of assistance they are authorized to offer, 

such as financial (grants and loans) and technical (training and 

counseling), and the type of entrepreneur they are authorized to 

serve. Much of the overlap among these 52 programs tends to be 

concentrated among programs that provide a broad range of technical 

and financial assistance. In addition, while agencies have taken steps 

to collaborate more in administering these programs, they have not 

implemented a number of good collaborative practices we have 

previously identified, and some entrepreneurs struggle to find the 

support they need. GPRAMA's crosscutting framework requires that 

agencies collaborate in order to address issues such as economic 

development that transcend more than one agency, and GPRAMA 

directs agencies to describe how they are working with each other to 

achieve their program goals. Without enhanced collaboration and 

coordination, agencies may not be able to make the best use of 

limited federal resources in the most effective and efficient manner. 

Agencies do not track program information on entrepreneurial 

assistance activities for many programs, a practice that is not 

consistent with government standards for internal controls. In addition, 

we found that 33 of the 52 programs had set goals for their programs, 

but 19 of these 33 programs did not meet any of their goals or only 

met some of their goals. 2 Further, agencies have conducted 

programs have goals but did not have goal accomplishment information, Goal 

accomplishment information for HUO's Section 4 Capacity Building for Affordab!e Housing 

and Community Development program is unknown because HUD did not provide it. In 

addition, goal accomplishment information for USDA's Sma!! Business Innovation 

Research program is not available because the program goals are based on 2-year time 

periods and the current period has not yet ended. 

Page 2 GAO-13-452T 
31 

SBREP-219 with DISTILLER


Insert offset folio 31 here 80171.014

evaluations of only 20 of the 52 active programs since 2000. As a 

result, information on program efficiency and effectiveness is limited, 

and scarce resources may be going toward programs that are less 

effective. GPRAMA requires agencies to set and measure annual 

performance goals, and recognizes the value of program evaluations 

because they can help agencies assess programs' effectiveness and 

improve program performance. Without more robust program 

information, agencies may not be able to administer programs in the 

most effective and efficient manner. 

Based on our findings, we recommended that the four agencies and OMB 

explore opportunities to enhance collaboration among programs, both 

within and across agencies, and that the four agencies track program 

information and conduct more program evaluations. The agencies neither 

agreed nor disagreed with the recommendations but did provide 

information on their plans to address them. 

For our August 2012 report, on which this testimony is based, we focused 

our analyses on 52 economic development programs at Commerce, 

HUD, USDA, and SBA that are authorized to support entrepreneurs. We 

reviewed statutory and regulatory authority on the activities and services 

the agencies can conduct to administer each of the programs, and we 

found significant overlap and fragmentation among programs that provide 

technical assistance to entrepreneurs (35 of the 52 programs). Therefore, 

we focused on how the agencies provide this assistance. We reviewed 

agency documents and conducted interviews in both headquarters and 

field offices to determine how technical assistance is provided to 

entrepreneurs and the extent of agency collaboration at the local level, 

including both urban and rural areas. We assessed this technical 

assistance information against promiSing collaborative practices that we 

have previously identified. 3 For all 52 programs, we also evaluated the 

agencies' methods for tracking the activities conducted and assistance 

provided against standards for internal controls that we have previously 

identified. 4 For each program, we reviewed information on program 

mission and goals, performance goals and accomplishments, and 

Results-Oriented Government: Enhance and Sustain 

Collabora.tionamong Federal Agencies, D.C .. Oct. 21, 2005) 

4GAO, Standards for Internal Control in the Federal Government, GAO/A1MD-OO-21 

(Washington, D.C .. Nov. 1, 1999). 

Page 3 GAO·13-452T 
32 

SBREP-219 with DISTILLER


Insert offset folio 32 here 80171.015

Fragmented Programs 

Overlap, and 

Agencies' Efforts to 

Collaborate Have 

Been Limited 

program evaluations conducted during the last decade. We evaluated this 

information against promising practices of leading organizations and the 

requirements of GPRAMA. In addition, we obtained and reviewed the 

agencies' statements on their plans for implementing the 

recommendations made in our August 2012 report. The work on which 

this statement is based was performed from June 2011 through March 

2013 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. 

Federal efforts to support entrepreneurs are fragmented, which occurs 

when more than one agency or program is involved in the same broad 

area of national interest. In fiscal year 2011, the 52 programs we 

reviewed that support entrepreneurial efforts were distributed across four 

agencies: Commerce (8 programs), HUD (12 programs), SSA (19 

programs), and USDA (13 programs). Sased on a review of the statutes 

and regulations for these 52 programs, we determined that the programs 

overlap in both the type of assistance they provide and the characteristics 

of the beneficiaries they target. The programs generally can be grouped 

according to at least one of three types of assistance that address 

different entrepreneurial needs: (1) technical assistance, (2) financial 

assistance, and (3) government contracting assistance. Many of the 

programs can provide more than one type of assistance, and most focus 

on technical assistance, financial assistance, or both: 

Technical assistance: Thirty-five programs distributed across the four 

agencies provide technical assistance, including business training, 

counseling and research, and development support. SSA administers 

10 of the 35 programs. 

Financial assistance: Thirty programs distributed across the four 

agencies support entrepreneurs through financial assistance in the 

form of grants, loans, and venture capital. SSA administers 10 of the 

30 programs. 

Government contracting assistance: Five programs, all of which are 

administered by SSA, support entrepreneurs by helping them qualify 

for federal procurement opportunities. 

Page 4 GAO·13-452T 
33 

SBREP-219 with DISTILLER


Insert offset folio 33 here 80171.016

Appendix I lists the programs GAO identified that may have similar or 

overlapping objectives, provide similar services, or be fragmented across 

government missions. 

We found that overlap tends to be concentrated among programs that 

provide technical and financial assistance. Within the technical assistance 

category, 24 of the 35 programs are authorized to provide or fund a broad 

range of technical assistance both to entrepreneurs with existing 

businesses and to nascent entrepreneurs-that is, entrepreneurs 

attempting to start a business-in any industry, including SBA's Small 

Business Development Centers Program. Similarly, 16 of the 30 financial 

assistance programs can provide or guarantee loans that can be used for 

a broad range of purposes to existing businesses and nascent 

entrepreneurs in any industry, including SBA's 7(a) Loan Program. 

In addition, a number of programs overlap based on the characteristics of 

the targeted beneficiary. Most programs either target or exclusively serve 

one of four types of businesses: businesses in rural areas, businesses in 

economically distressed areas, disadvantaged businesses, and small 

businesses5 For example, SBA's 19 programs are all limited to serving 

small businesses, with several programs that either target or exclusively 

serve disadvantaged businesses. Entrepreneurs may fall into more than 

one beneficiary category-for example, an entrepreneur may be in an 

area that is both rural and economically distressed. Therefore, these 

entrepreneurs would be eligible, based on program authority, for more 

than one subset of programs. For example, a small business in a rural, 

economically distressed area, such as Susquehanna County, 

Pennsylvania, could, in terms of program authority, receive a broad range 

of technical assistance through at least nine programs at all four of the 

5The definition of rural varies among these programs, but according to USDA-the agency 

that administers many of the economic development programs that serve rural areas-the 

term rural typically covers areas with population limits ranging from less than 2,500 to 

50,000, Based on statutory language, we characterize economically distressed areas as 

communities with high concentrations of low- and moderate-income families or high rates 

of unemployment, underemployment, or both. See, e,g., 42 U.S,C. § 3141; 42 U.S.C. § 

5301. Likewise, based on statutory language, we characterize disadvantaged businesses 

as those owned by women, minority groups, or veterans, among other factors. See, e.g., 

15 U.S.C. § 637(a); 15 u.s-c. § 656 The definition of sma I! business varies among these 

programs, but according to SBA-the agency that administers many of the economic 

development programs that serve small businesses-the term small business refers to 

businesses that have annual receipts or total employee numbers under an agency-defined 

value for their specific industry 

Page 5 GAO· 13-452T 
34 

SBREP-219 with DISTILLER


Insert offset folio 34 here 80171.017

agencies, including SBA's SCORE and Small Business Development 

Centers programs and USDA's Rural Business Enterprise Grants and 

Rural Business Opportunity Grants programs. Similarly, a small business 

that is both minority- and women-owned in an urban, non-economicallydistressed area, such as Raleigh, North Carolina, could receive financial 

assistance in the form of guaranteed or direct loans for a broad range of 

uses through at least four programs at two of the four agencies, including 

SBA's 7(a) Loan and Small Business Investment Companies programs. 

While many programs overlap in terms of statutory authority, 

entrepreneurs may in reality have fewer options to access assistance 

from multiple programs. For example, while entrepreneurs seeking 

technical assistance in Susquehanna County, Pennsylvania, are eligible 

to receive this support through USDA's1890 Land Grant Institutions 

program, the closest funded third-party intermediary (e.g., nonprofit or 

local government) that actually provides this service is in Delaware, 

making it unlikely that such an entrepreneur would utilize services through 

this program. 

SBA administers five programs that provide government contracting 

assistance to entrepreneurs, but our analysis did not identify significant 

overlap in the types of assistance these programs provide or the types of 

entrepreneurs they serve. These programs tend to target specific types of 

entrepreneurs and provide unique types of assistance. For example, the 

Procurement Assistance to Small Businesses program coordinates 

access to government contracts for small and disadvantaged businesses 

with other federal agencies, while the 8(a) Business Development 

Program coordinates certification of eligible disadvantaged businesses for 

the contracts made available at these other agencies, in addition to 

providing business development assistance during their 9 years of 

eligibility. 6 

Although we identified a number of examples of statutory overlap, we did 

not find evidence of duplication among these programs (that is, instances 

when two or more agencies or programs are engaged in the same 

activities to provide the same services to the same beneficiaries) based 

on available data. However, as discussed later, most agencies were not 

6SBA's 8(a) program, named for a section of the Small Business Act, is a development 

program created to help small, disadvantaged businesses compete in the U,S. economy 

and access the federal procurement market Participating businesses, which are generally 

referred to as 8(a) firms, are eligible to participate in the program for 9 years. 

PageS GAO·13452T 
35 

SBREP-219 with DISTILLER


Insert offset folio 35 here 80171.018

able to provide the programmatic information, such as data on users of 

the program, that would be necessary to determine whether or not 

duplication actually exists among the programs. 

Some entrepreneurs struggle to navigate the fragmented programs that 

provide technical assistance. For example, some entrepreneurs and 

various technical assistance providers with whom we spoke-including 

agency field offices, intermediaries, and other local service providerstold us that the system can be confusing and that some entrepreneurs do 

not know what services are available or where to go for assistance. 7 

Technical assistance providers sometimes attempt to help entrepreneurs 

navigate the system by referring them to other programs, but these efforts 

are not consistently successful. In addition, programs' Internet resources 

can also be difficult to navigate. Each agency has its own separate 

website that provides information to entrepreneurs, but they often direct 

entrepreneurs to other websites for additional information. SBA, 

Commerce, USDA, and other agencies have collaborated to develop a 

joint website called BusinessUSA with the goal of making it easier for 

businesses to access services. Some technical assistance providers and 

entrepreneurs we spoke with suggested that a single source to help 

entrepreneurs quickly find information instead of sorting through different 

websites would be helpful. 

Enhanced collaboration between agencies could help address some of 

the difficulties entrepreneurs experience and improve program efficiency. 

In prior work we identified practices that can help to enhance and sustain 

collaboration among federal agencies, which can help to maximize 

performance and results, and we have recommended that the agencies 

follow them.' These collaborative practices include identifying common 

outcomes, establishing joint strategies, leveraging resources, determining 

roles and responsibilities, and developing compatible policies and 

procedures. In addition, GPRAMA's crosscutting framework requires that 

agencies collaborate in order to address issues such as economic 

7Federal funds typically flow from the federal agencies to different eligible intermediaries, 

which are third-party entities that receive federal funds, such as non profits or universities. 

These intermediaries in turn may provide technical assistance to entrepreneurs by, for 

example, helping them to develop a business plan or put together a loan package to 

obtain financing. Although intermediaries are the primary providers of technical 

assistance, agency field offices may also provide some technical assistance 

'GAO·06·15 

Page 7 GAO·13-452T 
36 

SBREP-219 with DISTILLER


Insert offset folio 36 here 80171.019

Agencies Lack 

Information to Track 

Program Activities 

and Measure 

Performance 

development that transcend more than one agency, and GPRAMA directs 

agencies to describe how they are working with each other to achieve 

their program goals. While the agencies have agreed to work together by 

signing formal agreements to administer some of their similar programs, 

they have not implemented a number of other good collaborative 

practices we have previously identified. For example, SBA and USDA 

entered into a formal agreement in April 2010 to coordinate their efforts 

aimed at supporting businesses in rural areas. We previously testified that 

USDA's April 2011 survey of state directors indicates progress under the 

memorandum of understanding in several areas, including field offices 

advising borrowers of SBA's programs, referring borrowers to SBA and its 

resource partners, and exploring ways to make USDA and SBA programs 

more complementary. 9 However, as we reported in August 2012, the 

agencies have not implemented other good collaborative practices, such 

as establishing compatible policies and procedures to better support rural 

businesses. 

While the four agencies collect at least some information on program 

activities in either an electronic records system or through paper files, 

most were unable to summarize the information in a way that could be 

used to help administer the programs. Table 1 summarizes the type of 

information that the agencies maintain in a readily available format that 

could be tracked to help administer the programs. For example, SBA 

collects detailed information on the type of technical assistance provided 

and type of entrepreneur served for 5 of its 10 technical assistance 

programs. SBA categorizes the types of technical assistance it provides 

into 17 categories of training and counseling, such as helping a business 

develop its business plan. All of this information is maintained in an 

electronic database that is accessible by agency staff. Although USDA 

does not collect detailed information on the type of technical assistance 

provided for its eight programs that provide technical assistance, it does 

collect detailed information on the industry of each of the entrepreneurs it 

supports for all of its programs. USDA also collects detailed information 

(19 categories) on how entrepreneurs use proceeds, such as for working 

capital, provided through five of its financial assistance programs. USDA 

PageS 

Entrepreneurial Assistance: Efficiency and Effectiveness of Fragmented Programs 

GAO-12-60n (Washington, D.C .. Mar. 29, 2012) 

GAO-13-452T 
37 

SBREP-219 with DISTILLER


Insert offset folio 37 here 80171.020

maintains this information in an electronic database, and officials stated 

that they can provide this type of detailed information upon request. 

Table 1: Programs that Can Support Entrepreneurs and Maintain Readily Available Information, by Agency 

35 Technical Assistance Programs 

Use of proceeds? 

Industry entrepreneur is working in? yes 

~n~o----------~~------~10~------~--------~------~1~5 

Type of entrepreneur by targeted 

categories? 

Source GAO analysIs of mforrnalion provided by Commerce, HUO, USDA and S8A 

Note: This table is based on 50 of the 52 programs that can support entrepreneurs because we 

excluded the 2 SBA programs that only support government contracting assistance. Some of the 50 

programs can provtde both financial and technical assistance. 

aTargeted categories can include businesses in rural or economically distressed areas, 

disadvantaged businesses, or small businesses. 

According to OMB, being able to track and measure specific program 

data can help agencies diagnose problems, identify drivers of future 

performance, evaluate risk, support collaboration, and inform follow-up 

actions. Analyses of patterns and anomalies in program information can 

also help agencies discover ways to achieve more value for the 

taxpayer's money. In addition, agencies can use this information to 

assess whether their specific program activities are contributing as 

planned to the agency goals. Government internal control standards state 

that agencies should promptly and accurately record transactions to 

Page 9 GAO-13452T 
38 

SBREP-219 with DISTILLER


Insert offset folio 38 here 80171.021

maintain their relevance and value for management decision making.'° 

Furthermore, this information should be readily available for use by 

agency management and others so that they can carry out their duties 

with the goal of achieving all of their objectives, including making 

operating decisions and allocating resources. 

We also found that for fiscal year 2011, a number of programs that 

support entrepreneurs failed to meet some or all of their performance 

goals. Table 2 summarizes accomplishment data for the programs that 

support entrepreneurs and set goals for fiscal year 2011. For example, 7 

of the 14 SBA programs that set goals either did not meet any of their 

goals or only met some of their goals. 

Table 2: Accomplishment Data for Programs that Support Entrepreneurs and Set 

Goals, Fiscal Year 2011 

Source GAO ana!YSls of data from Comrn<Orce, HUD, SSA, and USDA 

Note: Two programs have goals but did not have goa! accomplishment information. Goa! 

accomplishment information for HUD's Section 4 Capacity Building for Affordable Housing and 

Community Development program is unknown because HUD did not provide goal accomplishment 

information Goal accomplishment information for USDA's Small Business Innovation Research 

program is not available because the program goals are based on 2-year time periods and the current 

period has not yet ended. 

Measuring performance allows organizations to track the progress they 

are making toward their goals and gives managers crucial information on 

which to base their organizational and management decisions. Leading 

organizations recognize that performance measures can create powerful 

incentives to influence organizational and individual behavior. Some of 

their good practices include setting and measuring performance goals. 

GPRAMA also requires agencies to develop annual performance plans 

that include performance goals for an agency's program activities and 

10GAOJAlfviD-OO-21.31. 

Page 10 GAO·13452T 
39 

SBREP-219 with DISTILLER


Insert offset folio 39 here 80171.022

accompanying performance measures. According to GPRAMA, these 

performance goals should be in a quantifiable and measurable form to 

define the level of performance to be achieved for program activities each 

year. 

Further, since 2000 the agencies have conducted program evaluations of 

only 20 of the 52 programs that support entrepreneurs. Based on our 

review, we found that SBA has conducted performance evaluation studies 

on 9 of its 19 programs, including 3 programs that provide counseling and 

training. We also found that USDA has conducted an evaluation on 1 of 

its 13 programs, but the study did not address the extent to which the 

program was achieving its mission. Although GPRAMA does not require 

agencies to conduct formal program evaluations, it does require agencies 

to describe program evaluations that were used to establish or revise 

strategic goals, as well as program evaluations they plan to conduct in the 

future. Additionally, while not required to do so, agencies can use periodic 

program evaluations to complement ongoing performance measurement. 

Program evaluations that systematically study the benefits of programs 

may help identify the extent to which overlapping and fragmented 

programs are achieving their objectives. In addition, program evaluations 

can help agencies determine reasons why a performance goal was not 

met and give an agency direction on how to improve program 

performance. 

To address these issues and to help improve the efficiency and 

effectiveness of federal efforts to support entrepreneurs, in our August 

2012 report, we made the following recommendations: 

The Director of the Office and Management and Budget; the 

Secretaries of the Departments of Agriculture, Commerce, and 

Housing and Urban Development; and the Administrator of the Small 

Business Administration should work together to identify opportunities 

to enhance collaboration among programs, both within and across 

agencies. 

The Secretaries of the Departments of Agriculture, Commerce, and 

Housing and Urban Development and the Administrator of the Small 

Business Administration should consistently collect information that 

would enable them to track the specific type of assistance programs 

provide and the entrepreneurs they serve and use this information to 

help administer their programs. 

Page 11 GAO·13452T 
40 

SBREP-219 with DISTILLER


Insert offset folio 40 here 80171.023

The Secretaries of the Departments of Agriculture, Commerce, and 

Housing and Urban Development and the Administrator of the Small 

Business Administration should conduct more program evaluations to 

better understand why programs have not met performance goals and 

the programs' overall effectiveness. 

The agencies, together with the administration, have taken some steps to 

address our recommendations. For example, the administration has 

initiated steps that provide the agencies with a mechanism to work 

together to identify opportunities to enhance collaboration among 

programs. I n particular, it introduced a cross-agency priority goal to 

increase services to entrepreneurs and small businesses in the fiscal year 

2013 budget submission. 11 One of the objectives under this goal is to 

utilize programs and resources across the federal government to improve 

and expand the reach of training, counseling, and mentoring services to 

entrepreneurs and small business owners. According to the fiscal year 

2012 fourth quarter status update for this goal, the administration 

established an interagency group (including Commerce, SBA, USDA, and 

others) that aims to streamline existing programs, improve cooperation 

among and within agencies, ease entrepreneurs' access to the programs, 

and increase data-based evaluation of program performance. The update 

also notes that the interagency group will develop an action plan outlining 

opportunities to enhance collaboration among programs across agencies 

and a strategy for increasing data collection and outcome-based program 

evaluation. However, the update does not specify a timeframe for the 

completion of these actions. It will be important for the interagency group 

to follow through on developing an action plan, including milestones, that 

identifies opportunities to enhance collaboration among programs across 

agencies and for the agencies to pursue such opportunities. 

In addition, the four agencies said that they have taken steps to improve 

program evaluation and collect information to help track program activities 

and administer programs that support entrepreneurs. For example, 

l1GPRAMA, among other things, required OMS to coordinate with agencies to establish 

outcome-oriented federal government priority goals-otherwise referred to as crosscutting 

goals-covering a limited number of policy areas, as weI! as goals to improve 

management across the federal government Entrepreneurship and small businesses was 

one of 14 interim crosscutting priority goals included in the President's 2013 budget 

submission 

Page 12 GAO·13-452T 
41 

SBREP-219 with DISTILLER


Insert offset folio 41 here 80171.024

Contacts and Staff 

Acknowledgements 

SBA noted that it is engaged in a comprehensive analysis and review 

of its performance measures and metrics to identify opportunities to 

make them more efficient and transparent. SBA added that in 

coordination with its Office of Performance Management, all of its 

offices are working together to achieve more efficient and effective 

data-driven performance measures. 

Commerce's Economic Development Administration noted that it has 

partnered with two universities to develop a comprehensive set of 

performance measures that can be used to evaluate the effectiveness 

of its programs and has engaged a third-party firm to assess best 

practices within the agency's University Center Program, with the 

findings scheduled to be completed in 2015. 

USDA noted that its Rural Business-Cooperative Service is 

developing a strategic plan that includes an initiative to improve the 

quality of performance measurement within the next 2 years. 

HUD noted that it included a proposed study of its Community 

Development Block Grant economic development activities in its draft 

research roadmap for fiscal years 2014 to 2018. 

Chairman Graves and Ranking Member Velazquez, this concludes my 

prepared statement. I would be happy to answer any questions at this 

time. 

For further information on this testimony, please contact me at (202) 512-

8678 or shearvv@gao.gov. Contact points for our Offices of 

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

of this statement. Key contributors to this testimony include Marshall 

Hamlett, Assistant Director; John McGrail; and Jennifer Schwartz. 

Page 13 GAO· 13-452T 
42 

SBREP-219 with DISTILLER


Insert offset folio 42 here 80171.025

Appendix I: List of Programs That Support 

Entrepreneurs and Related Budgetary 

Information 

U,S. Department of Agriculture 

Facilities 

Economic Development! Support for Planning Organizations 

Economic Development! Technical Assistance 

Economic Adjustment Assistance 

Trade Adjustment Assistance 

Global Climate Change Mitigation Incentive Fund 

Minority Business Centers 

Native Amencan Business Enterpnse Centersb 

Woody Biomass Utilization Grant Program 

1890 Land Grant Institutlons Rural Entrepreneunal Outreach 

Program/Rural Business Entrepreneur Development InitiativeC 

Small Business Innovation Research 

Biomass Research and Development Initiative Competitive Grants 

Program 

31,352,000 

13,373,000 

78,720,000 

15,418,000 

17,466,000 

17,948,122 

3,000,000 

22,635,200 

2,075,000 

Value Added Producer Grants 1,318,000 

Agriculture Innovation Center 0 

Small Socially-Disadvantaged Producer Grants 2,940,000 

Intermediary Re~lending 7,364,000 

Business and Industry Loans 70,202,000 

Rural Business Enterprise Grants 38,586,000 

Rural Cooperative Development Grants 8,424,000 

Rural Business Opportunity Grants 2,581,000 

Rural Microentrepreneur Assistance Program 6,668,000 

Department of Housing and Urban Community Development Block Grant (CDBG)/Entitlement Grantsd 325,549,306 

Development CDBG/Specia! Purpose/Insular Areas'" 214,396 

~C~D~B~G~!S~t~at~e'sl--~------------------------------------~5~579,~9671~,9~6~1 

CDBG/Non-entitlement CDBG Grants in Hawaiig 

CDBG/Brownfields Economic Development Initiat!ve 

CDBG/Section 108 Loan Guarantees 

Section 4 Capacity Building for Affordable Housing and Community 

Development 

Rural Innovatlon Fundh 

CDBG D!saster Recovery Grants 

Page 14 

338,257 

6,000,000 

50,000,000 

64,000,000 

GAO·13452T 
43 

SBREP-219 with DISTILLER


Insert offset folio 43 here 80171.026

Agency 

Small Business Administration 

Appendix I: List of Programs That Support 

Entrepreneurs and Related Budgetary 

Infonnation 

Program 

Alaska Native/Native Hawaiian Institutions Assisting Communities 

8(a) Business Development Program 

7(j) Technical Assistance 

Procurement Assistance to Small Businesses 

Small Business Investment Companies 

7(a) Loan Program 

Surety Bond Guarantee Program 

SCORE 

Small Business Development Centers 

504 Loan Program 

Women's Business Centers 

Veterans' Business Outreach Centers 

Mlcroloan Program 

PRIME 

New Markets Venture Capital Programl 

International Trade 

Source GAO analYSIS of mformat1on provided by COlnl1l<lrce, HUD, SBA. and USDA 

FY 2011 obligations" 

58,274,000 

6,502,000 

21,171,000 

26,305,000 

88,000,000 

4,865,000 

12,980,000 

130,323,000 

38,888,000 

19,446,000 

8,995,000 

38,729,000 

8,863,000 

aFisca! year 2011 obligations were provided by agency officials for each program. HUD's figures 

represent fiscal year 2011 actual budget authority rather than obligations. SBA figures represent fiscal 

year 2011 fully allocated costs rather than obligations 

bCommerce's Native American Business Enterprise Centers program incurred obligations in fiscal 

year 2011, but Commerce officials could not provide funding data at the program level. Funding for 

this program is Included in the fiscal year 2011 obligations for Commerce's Minority Business Center 

program. 

"USDA's 1890 program does not have a congressional appropriation but is instead funded through 

USDA's Salaries and Expenses account. Funding is not reported separately for this program and is 

listed as $0 here, but the program is active and funded 

dThis figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services 

"This figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services 

Page 15 GAO·13452T 
44 

SBREP-219 with DISTILLER


Insert offset folio 44 here 80171.027

(250706) 

Appendix I: list of Programs That Support 

Entrepreneurs and Related Budgetary 

Information 

fThis figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services. 

9This figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services 

hHUD officials noted that $31 .355,236 in 5-year grants was awarded in September 2011 through this 

program, but those funds wi!! not be obligated until after fiscal year 2011. These funds include 

$25,000,000 that was appropriated in fiscal year 2010 for the program and additIonal funds 

recaptured through HUD's Rural Housing and Economic Development program 

'According to SBA officials, the New Markets Venture Capital program IS a one-time pilot program that 

received one-time funding in fiscal year 2001. 

Page 16 GAO· 13-452T 
45 

SBREP-219 with DISTILLER


Insert offset folio 45 here 80171.028

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 

copyrighted images or other materia!, permission from the copyright holder may be 

necessary if you wish to reproduce this matena! separately 
46 

SBREP-219 with DISTILLER


Insert offset folio 46 here 80171.029

GAO's Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

Connect with GAO 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO's commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO's website (http://www.gaa.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select .. E-mail Updates." 

The price of each GAO publication reflects GAO's actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and information is posted on GAO's website, 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TOD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Connect with GAO on Facebook, Flickr. Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact: 

Website: 

system: (800) 424-5454 or (202) 512-7470 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Please Print on Recycled Paper. 
47 

SBREP-219 with DISTILLER


Insert offset folio 47 here 80171.030

GAO 

Angust2012 

GAO-12-819 

United States Government Accountability Office 

Report to Congressional Committees 

ENTREPRENEURIAL 

ASSISTANCE 

Opportunities Exist to 

Improve Programs' 

Collaboration, DataTracking, and 

Performance 

Management 

GAO 

Accountability * Integrity * Reliability 
48 

SBREP-219 with DISTILLER


Insert offset folio 48 here 80171.031

HIgnHghtsof 0AO-t2~819, a report to 

congressional committees 

Why GAO Did This Study 

Economic development programs that 

effectively provide ~ssi$tat:ce to 

e'1trepreneurs,m~y h~lt? businesses 

develop and expand, GAO focused on 

52 ecqnpmic development programs, 

with an estimated $2,0 billion in 

f!-mding, at Commerce, HUD, SBA, and 

USDA that support entrepreneurs. In 

~esponse to a statutory r~quirement, 

this report discusses (1) the extent 01 

overlap and fragmentation, the effects 

On entrepreneurs, and agendes: 

adions to address them; and (2) the 

extet'lt,of tracked program Information 

and wheth~r these 'programs have met 

their performance goals and been 

evaluated,' r 0 ad(tress these 

objectives, GAO analyzed program 

information }md i{'lterviewed agency 

officials in headql.!arters and selected 

field offices, entrepr~neurs, arid third: 

party enfities, such as nonprofits, that 

use federal grants to provi,de 

assistanc~ di~ectly to, entrepreneurs. 

What GAO Recommends 

GAO recommends that theagenGies 

and the Office of Management and 

Budget e~plore opportunities to 

enha,nce collaboration among 

programs, both within and across 

agencies; trac~ program information; 

and conduct mor~' program 

evaluations. Commerce, HUQ, and 

USDA provided written comments and 

ea9h neither agreed Dor disagreed with 

the ~ecommendations. However, 

USDA commehted that the 

recommelidations, were not explicit 'It) 

the report, GAO provides specific 

actions that agencies can take to 

addresS each recommendation, 

ENTREPRENEURIAL ASSISTANCE 

Opportunities Exist to Improve Programs' 

Collaboration, Data-Tracking, and Performance 

Management 

What GAO Found 

Federal efforts to support entrepreneurs are fragmented-lncluding among 52 

programs at the Department of Agriculture (USDA), Commerce, and Housing and 

Urban Development (HUD) and the Small Business Administration (SBA). All 

overlap with at least one other program in teons of the type of assistance they 

are authorized to offer, such as financial (grants and loans) and technical 

(training and counseling), and the type of entrepreneur they are authorized to 

serve. Some entrepreneurs struggle to navigate the fragmented programs that 

provide technical assistance. For example, some entrepreneurs and technical 

assistance providers GAO spoke with said the system can be confusing and that 

some entrepreneurs do not know where to go for assistance. Collaboration could 

reduce some negative effects of overlap and fragmentation, but field staff GAO 

spoke with did not consistently collaborate to provide training and counseling 

services to entrepreneurs. The agencies have taken initial steps to improve how 

they collaborate by entering into formal agreements, but they have not pursued a 

number of other good collaborative practices GAO has previously identified. For 

example, USDA and SBA entered into a formal agreement in 2010 to coordinate 

their efforts to support businesses in rural areas; however, the agencies' 

programs that can support start-up businesses-such as USDA's Rural Business 

Enterprise Grant program and SBA's Small Business Development Centershave yet to determine roles and responsibilities, find ways to leverage each 

other's resources, or establish compatible policies and procedures. Without 

enhanced collaboration and coordination agencies may not be able to make the 

best use of limited federal resources in the most effective and efficient manner. 

Agencies do not track program information on entrepreneurial assistance 

activities for many programs, a number of programs have not met their 

performance goals, and most programs lack evaluations. In particular, the 

agencies do not generally track information on the specific type of assistance 

they provide or the entrepreneurs they serve, in part because they do not rely on 

this information to administer the programs, Rather, agencies may rely, for 

example, on data summaries in narrative fonnat, which cannot be easily 

aggregated or analyzed, According to govemment standards for internal control, 

this information should be available to help inform management in making 

decisions and identifying risks and problem areas. GAO also found that 19 

programs failed to meet their annual petiormance goals related to 

entrepreneurial aSSistance, including USDA's Rural Business Opportunity 

Grants, Commerce's Economic Development/Support for Planning 

Organizations, HUD's Indian Community Development Block Grants, and SBA's 

504 loans to finance commercial real estate. Programs could potentially rely on 

results from program evaluations to determine the reasons why they have not 

met their goals, as well as to gauge overall effectiveness. However, the agencies 

lack program evaluations for 32 of the 52 programs. Therefore, information on 

program efficiency and effectiveness is limited, and scarce resources may be 

going toward programs that are less effective. In addition, without more robust 

program information, agencies may not be able to administer programs in the 

most effective and efficient manner. 

_____________ United States Government Accountability Office 
49 

SBREP-219 with DISTILLER


Insert offset folio 49 here 80171.032

Contents 

Letter 

Appendix I 

Appendix II 

Appendix l![ 

Appell.dix[\,' 

Appendix 

Appendix VI 

Appendix VI[ 

AppendixVln 

Bac]<groUlld 

Fr"Qrr,pnteri Pn)grams Overlap; Efforts to 

Have Been Limited 

Inforrnatlon to Track Program Activities and 

Performance 

Conclusions 

Recommendations 

AgPl1cy Comments and Our Evaluation 

Objectives) Scope and Methodology 

IUustrative Examples of Economic Activities 

Performance Gouls am.-l Accomplishment~ for Programs that Can 

Support Entreprenpufs) Fiscal Year 2011 

Additional Feder,81 Programs that Can J:i'und Economic .Aclivities 

19 

28 

20 

29 

41 

47 

Evaluations of Programs 1hat Can Support Entn~preneurs,' 2000-2012 85 

Comments from the Departml"nt of Agriculture 80 

Comments from tlw Df'partme-l1J' of Commerce 0;:) 

Comments from the Department of Housing and Urban Dc\'C'Jopment 97 

Page j GAO~12...g19 Entrepreneurial Assistance 
50 

SBREP-219 with DISTILLER


Insert offset folio 50 here 80171.033

Appendix XI 

Tables 

Figures 

GAO Contact ami Staff J\cknovfledgments 

Table L Can Support Entrepreneurs and Maintain 

Informa1 iOTI, by i'igellcy 

Table Accomplishment Data for ;)a Program.s that Support 

Entrepreneurs and Set GO(lJs, Fiscal Year 2011 

Table 3: Additional Federal Programs That Can Fund Economic 

Activities, DS Listed in tIle 2011 Catalng of Federal 

Domestic Assistance 74 

1: f'ragrnented Deliver,V Syslenl {if Feaf:l'ally Funded 

Technical Assistance to Entre]J!'Etl1t''UfS 

Figure Eyaluations of Programs th<lt 

2000-2012 

Entrepreneurs, 

14 

Page ii GAO·12-819 Entrepreneurial Assistance 
51 

SBREP-219 with DISTILLER


Insert offset folio 51 here 80171.034

Abbreviations 

BEDI 

CDBG 

CDC 

CFDA 

Commerce 

EDA 

FAST 

GPRA 

GPRAMA 

HUBZone 

HUD 

MBC 

MBDA 

NABEC 

NMVC 

OMB 

PRIME 

SBA 

SBDC 

SBIC 

SBIR 

STTR 

TAA 

USDA 

VAPG 

WBC 

Brownfields Economic Development Initiative 

Community Development Block Grant 

Community Development Corporation 

Catalog of Federal Domestic Assistance 

Department of Commerce 

Economic Development Administration 

Federal and State Technology Partnership 

Government Performance and Results Act 

GPRA Modernization Act of 2010 

Historically Underutilized Business Zone 

Department of Housing and Urban Development 

Minority Business Center 

Minority Business Development Agency 

Native American Business Enterprise Centers 

New Markets Venture Capital 

Office of Management and Budget 

Program for Investment in Micro-Entrepreneurs 

Small Business Administration 

Small Business Development Center 

Small Business Investment Company 

Small Business Innovation Research 

Small Business Technology Transfer 

Trade Adjustment Assistance 

U.S. Department of Agriculture 

Value Added Producer Grants 

Women's Business Center 

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 distnbuted in its entirety 

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

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately 

Page iii GAO~12.s19 Entrepreneurial Assistance 
52 

SBREP-219 with DISTILLER


Insert offset folio 52 here 80171.035

United States Government Accountability Office 

Washington, DC 20548 

August 23, 2012 

Congressional Committees 

Entrepreneurs playa vital role in the U.S. economy. The federal 

government provides a variety of support and assistance to them, and 

dozens of programs exist to support entrepreneurs across numerous 

federal agencies. Economic development programs that effectively 

provide assistance to entrepreneurs, in conjunction with state and local 

government and private sector economic development initiatives, may 

help businesses develop and expand. However, we have previously 

raised questions about the potential negative effects of fragmentation and 

overlap among federal programs that can support entrepreneurs. 

Specifically, we have questioned how efficiently federal agencies are 

administering these programs and how effective the programs are at 

achieving their mission. This report focuses on 52 programs administered 

by the U.S. Departments of Agriculture (USDA), Commerce (Commerce), 

and Housing and Urban Development (HUD) and the U.S. Small 

Business Administration (SBA) that provide assistance to entrepreneurs. ' 

In 2011 , we examined these programs and found that each program 

overlapped with at least one other program in terms of the economic 

development activities that they are authorized to fund. 2 According to 

agency officials, these programs, which typically fund a variety of 

activities in addition to supporting entrepreneurs, spent an estimated $2.0 

billion on economic development efforts in fiscal year 2011. 

Section 21 of Public Law 111-139, enacted in February 2010, requires 

GAO to conduct routine investigations to identify federal programs, 

agencies, offices, and initiatives with duplicative goals and activities within 

1The number of programs admmistered by Commerce, HUD, SBA, and USDA that we 

identified in February 2012 as supporting entrepreneurial efforts decreased from 53 to 52 

because USDA's Empowerment Zones program was ended by Congress during fiscal 

year 201 0 and has been excluded from this review_ See GAO, 2012 Annual Report 

Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and 

Enhance Revenue, GAO··12-342SP (Washington, D.C .. Feb. 28, 2012). 

2GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, GAO-11-318SP (Washington D.C .. Mar. 1, 2011) and 

Efficiency and Effectiveness of Fragmented EconomiC Development Programs Are 

Unclear, GAO-1-1-477R (Washington, D.C .. May 19, 2011). 

Page 1 GAO~12..g19 Entrepreneurial Assistance 
53 

SBREP-219 with DISTILLER


Insert offset folio 53 here 80171.036

departments and governmentwide, and report annually to Congress. 3 

This report discusses (1) the extent of overlap, fragmentation, and 

duplication and their effects on entrepreneurs, and agencies' actions to 

address them; and (2) the extent to which agencies coliect information 

necessary to track program activities and whether these programs have 

met their performance goals and have been evaluated. 

While we identified a more comprehensive list of federal programs that 

can fund economic activities more generally, we focused our analyses on 

these 52 economic development programs that are authorized to support 

entrepreneurs because these are the programs that appeared to overlap 

the most within the four agencies whose missions focus on economic 

development. We reviewed statutory and regulatory authority for each 

program on the activities and services the agencies can conduct to 

administer each of the programs. Because there was significant overlap 

and fragmentation among programs that provide technical assistance (for 

example, business training and counseling and support for research and 

development) to entrepreneurs (35 of the 52 programs), we focused on 

how the agencies provide this assistance. We reviewed agency 

documents and conducted interviews in both headquarters and the field 

to determine how technical assistance is provided to entrepreneurs and 

the extent of agency collaboration at the local level. We interviewed 14 

officials from four federal agencies, 9 officials from two regional 

commissions, four entrepreneurs who have received federal support, and 

five state and local partners in select geographic areas where there was 

evidence of ongoing collaboration between the federal agencies. These 

geographic areas included both urban and rural areas. We assessed this 

technical assistance information against promising collaborative practices 

that we have previously identified. 4 For all 52 programs, we also 

evaluated the agencies' methods for tracking the activities conducted and 

assistance provided against standards for internal controls that we have 

previously identified. 5 For each program, we reviewed information on 

a letter dated August 31,2011, to the Comptroller General, the Chairwoman of the 

Senate Committee on Agriculture, Nutrition and Forestry asked, among other things, that 

we address a number of issues involving the potential for overlap, duplication, and 

fragmentation in economic development programs administered by the four agencies. 

4GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-OS-i5 (Washington, 0 C" Oct 21, 2005) 

5GAO, Standards for Internal Control in the Federal Government, GAOJAtMO-OO-21.3.1 

(Washington, D.C .. Nov. 1, 1999). 

Page 2 GAO~12·819 Entrepreneurial Assistance 
54 

SBREP-219 with DISTILLER


Insert offset folio 54 here 80171.037

Background 

Fragmentation, Overlap, 

and Duplication 

program mission and goals, performance goals and accomplishments, 

and program evaluations conducted during the last decade. We evaluated 

this information against promising practices of leading organizations and 

the requirements of the GPRA Modernization Act of 2010. Appendix I 

provides more information on our scope and methodology. 

We conducted this performance audit from June 2011 to July 2012 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. 

Fragmentation refers to circumstances in which more than one federal 

agency (or more than one organization within an agency) is involved in 

the same broad area of national interest. Overlap involves programs that 

have similar goals, devise similar strategies and activities to achieve 

those goals, or target similar users. Duplication occurs when two or more 

agencies or programs are engaged in the same activities or provide the 

same assistance to the same beneficiaries. In some instances, it may be 

appropriate for multiple agencies or entities to be involved in the same 

programmatic or policy area due to the nature or magnitude of the federal 

effort. However, we have previously identified instances where multiple 

government programs or activities have led to inefficiencies, and we 

determined that greater efficiencies or effectiveness might be 

achievable. 6 

GAO·12·342SP 

Page 3 GAO~12..s19 Entrepreneurial Assistance 
55 

SBREP-219 with DISTILLER


Insert offset folio 55 here 80171.038

Defining Federal 

Economic Development 

Programs 

In September 2000, we reported that there is no commonly accepted 

definition for economic development. 7 Absent a common definition, we 

subsequently developed a list of nine activities most often associated with 

economic development. 8 In general, we focused on economic activities 

that directly affected the overall development of an area, such as job 

creation, rather than on activities that improved individuals' quality of life, 

such as housing and education. The nine economic activities are 

supporting entrepreneurial efforts, 

supporting business incubators and accelerators, 

constructing and renovating commercial buildings, 

constructing and renovating industrial parks and buildings, 

strategic planning and research, 

marketing and access to new markets for products and industries, 

supporting telecommunications and broadband infrastructure, 

supporting physical infrastructure, and 

supporting tourism. 

Appendix II provides illustrative examples of each of these economic 

activities. Appendix III provides more information on the 52 economic 

development programs we focused on for this report. Appendix IV 

includes a list of additional programs that are administered by federal 

agencies we identified that can fund at least one of these activities. 

Fund Similar Economic 

Ivvasnlnalan. D.C .. Sept. 29, 2000). 

8See GAO, Rural Economic Development: More Assurance Is Needed That Grant 

Funding Information Is Accurately Reported, GAO-06-294 (Washington, D. C 

Feb. 24, 2006) 

Page 4 GAO·12·819 Entrepreneurial Assistance 
56 

SBREP-219 with DISTILLER


Insert offset folio 56 here 80171.039

GPRA Modernization Act 

of 2010 

Fragmented Programs 

Overlap,and 

Agencies' Efforts to 

Collaborate Have 

Been Limited 

In January 2011, Congress updated the Government Performance and 

Results Act of 1993 (GPRA) with the GPRA Modernization Act of 2010 

(GPRAMA). GPRAMA establishes a new framework aimed at taking a 

more crosscutting and integrated approach to focusing on results and 

improving government performance. Effective implementation of 

GPRAMA could play an important role in clarifying desired outcomes; 

addressing program performance spanning multiple organizations; and 

facilitating future actions to reduce unnecessary duplication, overlap, and 

fragmentation. Among other things, GPRAMA requires the Office of 

Management and Budget (OM B) to coordinate with agencies to establish 

outcome-oriented federal government priority goals covering a limited 

number of policy areas, as well as goals to improve management across 

the federal government. It also requires OMS-in conjunction with the 

agencies-to develop a federal government performance plan that 

outlines how they will make progress toward achieving goals, including 

federal government priority goals. The President's 2013 budget 

submission includes the first interim federal government priority goals, 

including one to increase federal services to entrepreneurs and small 

businesses with an emphasis on start-ups and growing firms and 

underserved markets 9 

The identified economic development programs that support entrepreneurs 

overlap based on both the type of assistance they provide and the 

characteristics of the beneficiaries they target. This overlap among 

fragmented programs can make it difficult for entrepreneurs to navigate the 

services available to them. In addition, while agencies have taken steps to 

collaborate more in administering these programs, they have not 

implemented a number of good collaborative practices we have previously 

identified, and some entrepreneurs struggle to find the support they need. 

9GAO, Managing for Results: GAO's Work Related to the Interim Crosscutting Priority 

Goals under the GPRA Modernization Act, GAO-12-620R (Washington, O.C,: May 12, 

2012), We identified additional programs at Commerce, HUO, SBA, and USDA that can 

assist entrepreneurs with access to financing, mentorship and counseling services, and 

government contracts and research grants, and we recommended that the Director of 

OMS review the additional departments, agencies) and programs that we identified, and 

consider including them in the federal government's performance pian, as appropriate 

OMB staff agreed with our recommendation that OMB review the additional departments, 

agencies, and programs that we have identified and determine jf they are relevant to 

achieving the crosscutting goals 

Page 5 GAO~12..s19 Entrepreneurial Assistance 
57 

SBREP-219 with DISTILLER


Insert offset folio 57 here 80171.040

Many Programs Are 

Authorized to Provide 

Similar Types of 

Assistance and Target 

Similar Beneficiaries 

Federal efforts to support entrepreneurs are fragmented, which occurs 

when more than one agency or program is involved in the same broad 

area of national interest. Commerce (8), HUD (12), SBA (19), and USDA 

(13) administered 52 programs that could support entrepreneurial efforts 

in fiscal year 2011. Several types of overlap-which occurs when 

programs have similar goals, engage in similar activities or strategies to 

achieve them, or target similar beneficiaries-exist among these 

programs, based on the type of assistance the programs offer and 

characteristics of the programs' targeted beneficiaries. 

Many of the programs provide entrepreneurs with similar types of 

assistance. The programs generally can be grouped according to at least 

one of three types of assistance that address different entrepreneurial 

needs: help obtaining (1) technical assistance, (2) financial assistance, 

and (3) government contracts. Many of the programs can provide more 

than one type of assistance, and most focus on technical assistance, 

financial assistance, or both: 10 

Technical assistance: Thirty-five programs distributed across the four 

agencies can provide technical assistance, including business 

training, counseling and research, and development support." 

Financial assistance: Thirty programs distributed across the four 

agencies can support entrepreneurs through financial assistance in 

the form of grants and loans. 12 

aarnlmsters 1VI0 programs that so!ely provide entrepreneurs with assistance in 

obtaining government contracts: the Historically Underutilized Business Zone (HUBZone) 

program, which supports small businesses located in economically distressed areas, and 

the Procurement Assistance to Small Businesses program, which serves small 

businesses located in any area 

11The administered by Commerce, HUD, SBA, and USDA that were 

Identified in as supporting technical assistance decreased from 36 to 35 

because USDA's Empowerment Zones program is no longer active 

12The number of programs administered by Commerce, HUD, SBA, and USDA that were 

identified in G.AO-12-342SP as supporting financial assistance decreased from 33 to 30 

because USDA's Empowerment Zones program is no longer active and because 

subsequent to that report, Commerce told us that its Minority Business Centers and Native 

American Business Enterprise Centers programs only support technical assistance 

Page 6 GAO~12"819 Entrepreneurial Assistance 
58 

SBREP-219 with DISTILLER


Insert offset folio 58 here 80171.041

Government contracting assistance: Five programs, all of which are 

administered by SBA, can support entrepreneurs by helping them 

qualify for federal procurement opportunities. 13 

We reviewed the statutes and regulations for each program and found 

that overlap tends to be concentrated among programs that provide a 

broad range of technical and financial assistance. Within the technical 

assistance category, 24 of the 35 programs are authorized to provide or 

fund a broad range of technical assistance both to entrepreneurs with 

existing businesses and to nascent entrepreneurs-that is, entrepreneurs 

attempting to start a business-in any industry. This broad range of 

support can include any form of training or counseling, including start-up 

assistance, access to capital, and accounting. Examples of programs in 

this category include Commerce's Minority Business Centers, five of 

HUD's Community Development Block Grant (CDBG) programs, SBA's 

Small Business Development Centers, and USDA's Rural Business 

Opportunity Grants. 14 Eight additional programs can support limited types 

of technical assistance or industries. 15 For example, Commerce's Trade 

Adjustment Assistance for Firms only supports existing businesses 

negatively affected by imports, and USDA's Small SociallyDisadvantaged Producer Grants only serves agricultural businesses. 

Similarly, 16 of the 30 financial assistance programs can provide or 

guarantee loans that can be used for a broad range of purposes to 

existing businesses and nascent entrepreneurs in any industry. Examples 

of programs in this category include Commerce's Economic Adjustment 

Assistance programs, six of HUD's CDBG programs, SBA's 7(a) Loan 

Program, and USDA's Business and Industry Loans. Five other programs 

aOlnlnlSterea by Commerce, HUD, SBA, and USDA that were 

identified in GAO-12-342E:P as supporting government contracting assistance decreased 

from seven to five because subsequent to that report, Commerce told us that its Minority 

Business Centers and Native American Business Enterprise Centers programs only 

support technical assistance 

HOf the eight HUD CDBG programs, five operate in different areas of the United States 

that do not geographically overlap, one can only provide support to areas recovering from 

presidentiaUy declared disasters, and two can operate in any area of the United States 

15The other three technical assistance programs are Commerce's Economic 

Development-Support for Planning Organizations, Economic Development-Technical 

Assistance, and Grants for Public Works and Economic Deve!opment Facilities, which 

support assistance to economic development organizations and local governments, which 

in turn support businesses 

Page 7 GAO-12..s19 Entrepreneurial Assistance 
59 

SBREP-219 with DISTILLER


Insert offset folio 59 here 80171.042

can support loans for a more narrow range of purposes or industries, 

while the other nine programs can only support other types of financial 

assistance, such as grants, equity investments, and surety guarantees. 16 

In addition, a number of programs overlap based on the characteristics of 

the targeted beneficiary. Most programs either target or exclusively serve 

one of four types of businesses: businesses in rural areas, businesses in 

economically distressed areas, disadvantaged businesses, and small 

businesses. 17 For example, all of HUD's 12 programs that can provide 

support to entrepreneurs are focused on serving beneficiaries in 

economically distressed areas or target benefits at low- to moderateincome individuals. SBA's 19 programs are all limited to serving small 

businesses, with several programs that either target or exclusively serve 

disadvantaged businesses and microenterprises. '8 Eight of USDA's 13 

programs are limited to rural service areas, and four of these programs 

are limited to small businesses or microenterprises. Among Commerce's 

eight programs, six are limited to serving beneficiaries in economically 

distressed areas, while two exclusively serve disadvantaged businesses. 

16Equity investments are capital provided to a busmess to purchase common or preferred 

stock, or a similar instrument. SBA can guarantee surety bonds (that is, an agreement 

between a surety company and the owner of a project that a contract will be completed) 

for contracts up to $2 miUion_ These contracts can cover bonds for small and emerging 

contractors who cannot obtain surety bonds through regular commercial channels. SBA's 

guarantee gives sureties an incentive to provide bonding for eligible contractors and 

thereby strengthens a contractor's ability to obtain bonding and greater access to 

contracting opportunities 

17The definition of rural varies among these programs, but according to USDA-the 

agency that administers many of the economic development programs that serve rural 

areas-the term rural typically covers areas with population limits rangmg from less than 

2,500 to 50,000, Based on statutory language, we characterize economically distressed 

areas as communities with high concentrations of low- and moderate-income families or 

high rates of unemployment and/or underemployment. See, e.g., 42 U.S.C. § 3141; 42 

U.S.C. § 5301. Likewise, based on statutory language, we characterize disadvantaged 

businesses as those owned by women, minority groups, and veterans, among other 

factors. See, e.g., 15 U.S.C. § 637(a); 15 U.S.C. § 656. The definition of small business 

varies among these programs, but according to SBA-the agency that administers many 

of the economic development programs that serve small businesses-the term small 

business refers to businesses that have annual receipts or total employee numbers under 

an agency-defined value for their specific industry. 

18Microenterprises are generally defined as commercial enterprises that have ten or fewer 

employees 

PageS GAO~12..s19 Entrepreneurial Assistance 
60 

SBREP-219 with DISTILLER


Insert offset folio 60 here 80171.043

Entrepreneurs may fall into more than one beneficiary category-for 

example, an entrepreneur may be in an area that is both rural and 

economically distressed. Therefore, these entrepreneurs would be 

eligible, based on program authority, for more than one subset of 

program. For example, a small business in a rural, economically 

distressed area, such as Susquehanna County, Pennsylvania, could, in 

terms of program authority, receive a broad range of technical assistance 

through at least nine programs at all four of the agencies, including: 

Commerce's Economic Adjustment Assistance; 

HUD's CDBG/States, Rural Innovation Fund, and Section 4 Capacity 

Building; 

SBA's SCORE and Small Business Development Centers; 19 and 

USDA's1890 Land Grant Institutions, Rural Business Enterprise 

Grants, and Rural Business Opportunity Grants. 20 

Similarly, a small business that is both minority- and women-owned in an 

urban, noneconomically distressed area, such as Seattle, Washington, 

could in terms of program authority, receive a broad range of technical 

assistance through at least seven programs at three of the four agencies, 

including: 

Commerce's Minority Business Centers; 

HUD's CDBG/Entitlement and Section 4 Capacity Building; and 

SBA's Program for Investment in Micro-entrepreneurs (PRIME), 

SCORE, Small Business Development Centers, and Women's 

Business Centers. 

formerly Service Corps of Retired Executives, provides technical assistance 

support for small business, start-ups and entrepreneurs 

2oHUD's Rural Innovation Fund program did not receive funding in fiscal year 2011 but is 

still active. USDA's1890 Land Grant Institutions received an unspecified amount of 

funding through USDA's Salaries and Expense account rather than program 

appropriations 

Page 9 GAO-12·819 Entrepreneurial Assistance 
61 

SBREP-219 with DISTILLER


Insert offset folio 61 here 80171.044

Entrepreneurs may also be eligible for multiple subsets of financial 

assistance programs based on their specific characteristics. For example, 

a small business in a rural, economically distressed area, such as 

Bourbon County, Kansas, could in terms of authority, receive financial 

assistance in the form of guaranteed or direct loans for a broad range of 

uses through at least eight programs at the four agencies, including: 

Commerce's Economic Adjustment Assistance; 

HUD's CDBG/States, Rural Innovation Fund and Section 4 Capacity 

Building; 

SBA's 7(a) Loan Program and Small Business Investment 

Companies; and 

USDA's Business and Industry Loans and Rural Business Enterprise 

Grants. 

A small business that is both minority and women-owned in an urban, 

noneconomically distressed area, such as Raleigh, North Carolina, could 

receive financial assistance in the form of guaranteed or direct loans for a 

broad range of uses through at least four programs at two of the four 

agencies, including: 

HUD's CDBG/Entitlement and Section 4 Capacity Building; and 

SBA's 7(a) Loan Program and Small Business Investment 

Companies. 

Five programs provide government contracting assistance to 

entrepreneurs, but our analysis did not identify significant overtap in the 

types of assistance these programs provide or the types of entrepreneurs 

they serve. While these five programs are all administered by SBA and 

can serve businesses in any industry, they tend to target specific types of 

entrepreneurs and provide unique types of assistance. For example, the 

Procurement Assistance to Small Businesses program coordinates 

access to government contracts for small and disadvantaged businesses 

with other federal agencies, while the 8(a) Business Development 

Program coordinates certification of eligible disadvantaged businesses for 

Page 10 GAO~12..s19 Entrepreneurial Assistance 
62 

SBREP-219 with DISTILLER


Insert offset folio 62 here 80171.045

the contracts made available at these other agencies, in addition to 

providing business development assistance during their 9-year term. 21 

While many programs overlap in terms of statutory authority, 

entrepreneurs may in reality have fewer options to access assistance 

from multiple programs. Agencies often rely on intermediaries (that is, 

third-party entities such as nonprofit organizations, higher education 

institutions, or local governments that use federal grants to provide 

eligible assistance directly to entrepreneurs) to provide specific support to 

entrepreneurs, and these intermediaries vary in terms of their location 

and the types of assistance they provide. For example, while 

entrepreneurs seeking technical assistance in Susquehanna County, 

Pennsylvania, are eligible to receive this support through USDA's1890 

Land Grant Institutions program, the closest funded intermediary is in 

Delaware, making it unlikely that such an entrepreneur would utilize 

services through this program. Additionally, intermediaries we spoke to in 

several areas said they typically provide a more limited range of services 

to entrepreneurs than are allowed under their statutory authority. For 

example, two intermediaries that we interviewed in Texas that were 

authorized to provide a broad range of technical support to entrepreneurs 

through SBA's Small Business Development Center and Commerce's 

Minority Business Center noted that they each specialized in a narrower 

subset of services and referred beneficiaries to each other and other 

resources for some services outside of their niches. Specifically, the 

intermediary at the Small Business Development Center noted that they 

provide a range of long-term services to small businesses over different 

phases of development, while the intermediary at the Minority Business 

Center noted that they focused specifically on larger minority-owned firms 

as well as start-up companies. 

Overlapping programs may also employ different mechanisms to provide 

similar types of support to entrepreneurs. For example, programs may 

support technical assistance through different types of intermediaries that 

provide services to entrepreneurs. USDA's Rural Business Opportunity 

Grants program can provide technical assistance through local 

governments, nonprofit corporations, Indian tribes, and cooperatives that 

are located in rural areas, while SBA's SCORE program utilizes retired 

21SBA's 8{a) program, named for a sectIon of the Small Busmess Act, is a development 

program created to help small, disadvantaged businesses compete in the American 

economy and access the federal procurement market 

Page 11 GAO~12·819 Entrepreneurial Assistance 
63 

SBREP-219 with DISTILLER


Insert offset folio 63 here 80171.046

business professionals and others that volunteer their time to provide 

assistance. Additionally, programs may support financial assistance in the 

form of loans through loan guarantees, direct loans, or support for 

revolving loan funds. SBA's 7(a) Loan program provides guarantees on 

loans made by private sector lenders, while USDA's Intermediary Relending program provides financing to intermediaries to operate revolving 

loan funds. 

Additionally, some programs distribute funding through multiple layers of 

intermediaries before it reaches entrepreneurs. For example, HUD's 

Section 4 Capacity Building program is only authorized to provide grants 

to five national organizations, which pass funding on to a number of local 

grantees, including community development corporations that may use 

the funding to provide technical or financial assistance to entrepreneurs. 

HUD officials also noted that most of their programs allow local grantees 

discretion on whether to use funds to support entrepreneurs or for other 

authorized purposes. Other programs may competitively award grants to 

multiple intermediaries working jointly in the same community to serve 

entrepreneurs. For example, Commerce's Economic Adjustment 

Assistance program can provide grants to intermediaries, such as 

consortiums of local governments and non profits, which in turn provide 

technical or financial assistance to entrepreneurs. 

Although we identified a number of examples of statutory overlap, we did 

not find evidence of duplication among these programs (that is, instances 

when two or more agencies or programs are engaged in the same 

activities to provide the same services to the same beneficiaries) based 

on available data. However, most agencies were not able to provide the 

programmatic information, such as data on users of the program that is 

necessary to determine whether or not duplication actually exists among 

the programs. The agencies' data-collecting practices will be discussed at 

greater length later in this report. 

Page 12 GAO~12"819 Entrepreneurial Assistance 
64 

SBREP-219 with DISTILLER


Insert offset folio 64 here 80171.047

Some Entrepreneurs 

Struggle to Navigate 

Technical Assistance 

Programs 

As previously discussed, 35 programs distributed across the four 

agencies provide technical assistance, including business training and 

counseling. While the existence of multiple programs in and of itself is not 

a problem, the delivery system of these fragmented and overlapping 

technical assistance programs contains many components (see fig. 1). 

Several entrepreneurs and various technical assistance providers with 

whom we spoke-including agency field offices, intermediaries, and other 

local service providers-told us that the system can be confusing and that 

some entrepreneurs do not know what services are available or where to 

go for assistance. As discussed earlier, federal funds typically flow from 

the federal agencies to different eligible intermediaries, which are thirdparty entities that receive federal funds, such as nonprofits or universities. 

These intermediaries in turn may provide technical assistance to 

entrepreneurs by, for example, helping them to develop a business plan 

or put together a loan package to obtain financing. For instance, SBA's 

Women's Business Center and Commerce's Minority Business Center 

programs can provide technical assistance through different 

intermediaries, such as the Arkansas Women's Business Center and the 

University of Hawaii. Although intermediaries are the primary providers of 

technical assistance, agency field offices may also provide some 

technical assistance. For example, USDA's Rural Development state 

offices may provide advice on how to complete their respective grant 

applications. SBA's district offices may also discuss the different business 

structures available. 

Page 13 GAO~12..s19 Entrepreneurial Assistance 
65 

SBREP-219 with DISTILLER


Insert offset folio 65 here 80171.048

Figure 1: Fragmented Delivery System of Federally Funded Technical Assistance to Entrepreneurs 

Note: WhHe our work focuses on the four federal agencies' economic development programs that 

support entrepreneurs, many state governments also have economic development departments that 

assist, plan, and support economic development activities. Local governments and nonprofit 

organizations may also offer programs that can be used to support economic development activities 

In addition, there may be other federal agencies involved with supporting economic development 

Some intermediaries receive support from multiple public- and private-sector institutions, and some 

entrepreneurs we spoke with indicated that they had received assistance from multiple sources 

Page 14 GAO~12·819 Entrepreneurial Assistance 
66 

SBREP-219 with DISTILLER


Insert offset folio 66 here 80171.049

Technical assistance providers sometimes attempt to help entrepreneurs 

navigate the system by referring them to other programs, but these efforts 

are not consistently successful. Some of these providers told us that they 

assess the entrepreneur's needs to determine whether to assist them or 

refer them to another entity that could provide the assistance more 

effectively, For example, if an 1890 Land Grant intermediary were not able 

to assist an entrepreneur, it might refer the entrepreneur to SBA, USDA, or 

a local provider. However, such referrals are not always successful. For 

example, an entrepreneur we spoke with described a case in which he 

needed assistance with developing a business plan but was unable to 

receive this aSSistance, even after several referrals. Some technical 

assistance providers that we spoke with either did not appear to fully 

understand other technical assistance programs or thought that others did 

not fully understand their programs. For example, one technical assistance 

provider told us that some technical assistance providers were focused on 

more established businesses, but when we reached out to some of these 

providers, they said they served all entrepreneurs. This lack of 

understanding could prevent providers from making helpful referrals and 

leveraging other programs and limit the effectiveness of the programs. 

In addition, programs' Internet resources can also be difficult to navigate. 

Each agency has its own separate website that provides information to 

entrepreneurs, but they often direct entrepreneurs to other websites for 

additional information. For example, the SBA website directs users to 

another website that lists the Small Business Development Centers, 

which then directs users to another website that provides some 

information on the centers' available services. SBA, Commerce, USDA, 

and other agencies have recently collaborated to develop a joint website 

called BusinessUSA with the goal of making it easier for businesses to 

access services. However, the site was not fully operational as of June 

2012, and none of the entrepreneurs and almost all the technical 

assistance providers we spoke with were not yet aware of it. As of June 

2012, this website listed a number of potential technical assistance 

programs across different federal agencies with links to the programs' 

websites. Some technical assistance providers and entrepreneurs 

suggested that a single source to help entrepreneurs quickly find 

information instead of sorting through different websites would be helpful. 

Page 15 GAO~12"819 Entrepreneurial Assistance 
67 

SBREP-219 with DISTILLER


Insert offset folio 67 here 80171.050

Agencies' Collaboration 

Has Been Limited 

Enhanced collaboration between agencies could potentially address 

some of the difficulties entrepreneurs experience and improve program 

efficiency. In prior work we identified practices that can help to enhance 

and sustain collaboration among federal agencies, which can help to 

maximize performance and results, and have recommended that the 

agencies follow them. 22 These collaborative practices include identifying 

common outcomes, establishing joint strategies, leveraging resources, 

determining roles and responsibilities, and developing compatible policies 

and procedures. In addition, GPRAMA requires agencies to describe in 

annual performance plans how they are working with other agencies to 

achieve their performance goals and relevant federal government 

performance goals. 23 

The agencies have taken initial steps to improve how they collaborate to 

provide technical assistance to entrepreneurs by, for example, entering 

into formal agreements with each other, but they have not pursued a 

number of other good collaborative practices we have previously 

identified, as the following examples illustrate: 

USDA and SBA entered into a formal agreement in April 2010 to 

coordinate their efforts aimed at supporting businesses in rural areas. 

In April 2011, USDA began to survey its state offices to help the 

agency gauge the level of collaboration between its field staff and 

SBA, as well as to identify additional opportunities to enhance 

collaboration. However, the agencies' business development 

programs that can support start-up businesses-USDA's Rural 

Business Enterprise Grant and SBA's Small Business Development 

Centers-have yet to determine roles and responsibilities, find ways 

to leverage each other's resources, or establish compatible policies 

and procedures to collaboratively support rural businesses. 

The Appalachian Regional Development Initiative is a formal 

agreement, which began in November 2010, among the Appalachian 

Regional Commission (which coordinates economic development 

activities in the Appalachian region), the four agencies, and other 

23pub. L. No. 111-352, 124 Stat 3866 (2011) 

Page 16 GAO~12...g19 Entrepreneurial Assistance 
68 

SBREP-219 with DISTILLER


Insert offset folio 68 here 80171.051

agencies.'4 This agreement is intended to strengthen and diversify the 

Appalachian economy through better deployment and coordination of 

federal resources. According to officials at the Appalachian Regional 

Commission, the agencies did participate in a joint workshop to 

present the locally available resources from business development to 

infrastructure in the fall 2011, and USDA is one of its stronger 

partners. However, the agencies have not established jOint strategies, 

determined roles and responsibilities, or developed compatible 

policies and procedures for carrying out the common outcomes 

outlined in their agreements at the local level where technical 

assistance is provided. 

In August 2011 SBA and the Delta Regional Authority (which 

coordinates economic development activities in the Delta region) 

entered into a formal agreement to better deploy and coordinate 

resources for small businesses located in the Delta region. 25 As part 

of this agreement, in April 2012 the two entities announced a joint 

effort to launch an program to support entrepreneurs called Operation 

JumpStart. Operation JumpStart is designed as a hands-on, 

microenterprise development program that is intended to help 

entrepreneurs test the feasibility of their business ideas and plan to 

launch new ventures. However, their effort thus far has been limited. 

While they entered into a formal agreement to launch the program, 

this agreement did not include any determinations of specific roles 

and responsibilities or establish compatible policies and procedures to 

collaboratively support these small businesses. 

In June 2011, the President created the White House Rural Council to 

promote economic prosperity in rural areas. It is chaired by the 

Secretary of Agriculture and includes HUD, Commerce, SBA, and 

other agencies. The council is working to better coordinate federal 

programs in order to maximize the impact of federal investment in 

rural areas. Even though the council has announced a number of 

initiatives, such as helping rural small businesses access capital, the 

is made up of 420 counties in parts of 12 states-Alabama, 

Mississippi, New York, North Carolina, Ohio, Pennsylvania, 

and Virginia-as well as aU of West Virginia 

25The Delta region is made up of 252 counties and parishes in parts of eight statesAlabama, Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee 

Page 17 GAO·12"819 Entrepreneurial Assistance 
69 

SBREP-219 with DISTILLER


Insert offset folio 69 here 80171.052

agencies have yet to implement many of our other good collaborative 

practices. 

In addition, while most of these agencies at the headquarters level have 

agreed to work together by signing formal agreements to administer some 

of their similar programs, the agencies generally have yet to develop 

compatible guidance to implement these agreements in the field. As 

noted previously, some intermediaries we spoke with that provide 

technical assistance through agency programs collaborate by referring 

entrepreneurs to other federal programs and agencies that they believe 

may better meet their needs. However these efforts are inconsistent and 

do not always result in entrepreneurs obtaining the services they are 

seeking. OMB and the four agencies also have recently taken steps to 

implement GPRAMA, which requires them to coordinate better; however, 

implementation was still in the early phases as of May 2012 and had not 

yet affected how they administer their programs. 

Implementing additional good collaborative practices could improve how 

the federal government supports entrepreneurs by, for example, helping 

agencies make more useful referrals, meet more diverse needs of 

entrepreneurs, and present a more consistent delivery system to 

entrepreneurs: 

Collaborating agencies that agree upon roles and responsibilities can 

clarify who will do what, organize their joint and individual efforts, and 

facilitate coordinated decision making. This effort could help agencies 

not only initiate and sustain collaboration but also determine who is in 

the best position to support an entrepreneur based on the client's 

need, which could lead to more effective referrals. 

Because collaborating agencies bring different resources and 

capacities to their efforts, they can look for opportunities to leverage 

each other's resources, thus obtaining additional benefits that would 

not be available if they were working separately. Being able to 

leverage each other's resources could help agencies more effectively 

and efficiently support entrepreneurs because they may be able to 

meet more diverse needs by drawing on one another's strengths. 

Page 18 GAO~12.s19 Entrepreneurial Assistance 
70 

SBREP-219 with DISTILLER


Insert offset folio 70 here 80171.053

Agencies Lack 

Information to Track 

Program Activities 

and Measure 

Performance 

Agencies Do Not Maintain 

Information to Enable 

Tracking of Activities for 

Most Programs 

Compatible standards, policies, procedures, and data systems could 

help to sustain collaborative efforts. As agencies standardize, for 

example, procedures for supporting entrepreneurs, they can more 

efficiently support entrepreneurs through more consistent servicedelivery methods across agencies and programs. This could be 

particularly helpful for entrepreneurs who are not familiar with the 

federal programs. 

In addition, GPRAMA's crosscutting framework requires that agencies 

collaborate in order to address issues such as economic development 

that transcend more than one agency, and GPRAMA directs agencies to 

describe how they are working with each other to achieve their program 

goals. As discussed previously, without more substantial collaboration, 

the delivery of service to entrepreneurs, particularly those who are 

unfamiliar with federal economic development programs, may not be as 

effective and efficient as possible. 

Agencies do not maintain information in a way that would enable them to 

track activities for most of their programs. Further, the agencies lack 

information on why some programs have failed to meet some or all of 

their goals. While information from program evaluations can help 

measure program effectiveness, agencies have conducted evaluations of 

only 20 of the 52 active programs since 2000. 

While the four agencies collected at least some information on program 

activities in either an electronic records system or through paper files, 

most were unable to summarize the information in a way that could be 

used to help administer the programs. Promising practices of program 

administration that we have identified include a strong capacity to collect 

and analyze accurate, useful, and timely data. 26 According to OMB, being 

able to track and measure specific program data can help agencies 

diagnose problems, identify drivers of future performance, evaluate risk, 

support collaboration, and inform follow-up actions. Analyses of patterns 

26Harold L Steinberg, Using Performance Information to Drive Performance Improvement, 

Association of Government Accountants CPAG Research Series: Report No. 29 

(Alexandria, VA Dec. 2011) 

Page 19 GAO·12..s19 Entrepreneurial Assistance 
71 

SBREP-219 with DISTILLER


Insert offset folio 71 here 80171.054

and anomalies can also help agencies discover ways to achieve more 

value for the taxpayer's money. In addition, agencies can use this 

information to assess whether their specific program activities are 

contributing as planned to the agency goals. 

In addition, government internal control standards state that agencies 

should promptly and accurately record transactions to maintain their 

relevance and value for management decision making. Furthermore, this 

information should be readily available for use by management and 

others so that they can carry out their duties with the goal of achieving all 

of their objectives, including making operating decisions and allocating 

resources. 27 This guidance calls for agencies to go beyond merely 

collecting information, stating that they should systematically analyze, or 

track, it over time to inform decision making. For example, the agencies 

could track this information to identify trends on how the programs are 

being used in different areas of the country. This information could help 

the agencies strategically target program resources to support the unique 

needs in each geographic area. 

All four agencies collect program information but do not track detailed, 

readily available information for most programs, such as the type of 

technical assistance that their programs provide or fund, which is 

necessary to effectively administer their programs. For example, 

Commerce's Economic Adjustment ASSistance, HUD's Section 4 

Capacity Building, SBA's PRIME, and USDA's Rural Business 

Opportunity Grant Program can all support a broad range of technical 

assistance to various types of entrepreneurs, but agencies are unable to 

provide information on the types of services provided that would be 

necessary to compare activities across programs. Similarly, the agencies 

typically do not track detailed information on the characteristics of 

entrepreneurs that they serve, such as whether they are located in rural 

or economically distressed areas or the entrepreneurs' type of industry. 

Most of the agencies collect detailed information on several of their 

programs in a way that could potentially help them more efficiently 

administer their programs, as the following examples illustrate: 

Page 20 GAO~12..s19 Entrepreneurial Assistance 
72 

SBREP-219 with DISTILLER


Insert offset folio 72 here 80171.055

SBA collects detailed information on the type of technical assistance 

provided and type of entrepreneur served for 5 of its 10 technical 

assistance programs. SBA categorizes the types of technical 

assistance it provides by 17 categories of training and counseling, 

such as helping a business develop its business plan. All of this 

information is maintained in an electronic database that is accessible 

by agency staff. 

For all of its programs, USDA collects detailed information on the 

industry of each of the entrepreneurs it supports. In addition, USDA 

collects detailed information (19 categories) on how entrepreneurs 

use proceeds, such as for working capital, provided through five of its 

financial assistance programs. USDA maintains this information in an 

electronic database, and officials stated that they can provide this type 

of detailed information upon request 

For all eight of its technical assistance programs, Commerce collects 

information on the type of entrepreneur served and the entrepreneurs' 

industry. 

While HUD tracked limited program information on the type of support it 

provides to entrepreneurs, the agency collects information on other 

program activities and uses it to monitor program compliance. HUD staff 

meet quarterly with the Secretary of HUD to discuss these program data 

and determine changes that should be made to improve how they carry 

out program activities. Table 1 summarizes the type of information that 

agencies maintain in a readily available format that could be tracked to 

help administer the programs. 

Page 21 GAO~12·819 Entrepreneurial Assistance 
73 

SBREP-219 with DISTILLER


Insert offset folio 73 here 80171.056

Table 1: Programs that Can Support Entrepreneurs and Maintain Readily Available Information, by Agency 

no 

Industry entrepreneur IS yes 

working in? 

no 

yes 

no 

yes 

provided? 

no 

Use of proceeds? yes 

no 

Industry entrepreneur IS yes 

working in? 

no 

Type of entrepreneur by yes 

targeted categories? 

28 

21 

15 

15 

15 

12 

Source GAO analYSIs of information prov,ded oy Commerce HUD USDA and S8A 

Note: This table is based on 50 of the 52 programs that can support entrepreneurs because we 

excluded the 2 SBA programs that only support government contracting assistance. Some ofthe 50 

programs can provide both financial and technical assistance 

aTargeted categories can include businesses in rural or economically distressed areas, 

disadvantaged businesses, or small businesses, 

Officials who administer these programs provided a number of reasons 

why they do not track detailed program information for all programs in a 

way that could be used for program administration purposes. For 

example, some officials stated they do not rely on program information 

with this level of detail to make decisions about their programs. As 

previously discussed, many of these programs are administered by 

intermediaries, and these intermediaries may maintain detailed 

information on the services they provide. Agencies do not always require 

the intermediaries to forward all of this detailed information to 

headquarters. Rather, an intermediary may, for example, submit data 

Page 22 GAO·12..s19 Entrepreneurial Assistance 
74 

SBREP-219 with DISTILLER


Insert offset folio 74 here 80171.057

Some Programs Failed to 

Meet Their Goals 

summaries of the support they have provided during the reporting period 

in a narrative format-a format that cannot be easily aggregated or 

analyzed. Other agency officials noted that this type of summary-level 

information they collect and maintain at headquarters is sufficient for their 

purposes and complies with OMS reporting guidelines. However, without 

tracking more detailed program information, such as the specific type of 

support provided and the entrepreneurs served, agencies may not be 

able to make informed decisions or identify risks and problem areas 

within their programs based on factors such as how entrepreneurs make 

use of program services or funding. Furthermore, agencies may not be 

able to understand the extent that their programs are serving their 

intended purposes. 

Our review found that for fiscal year 2011, a number of programs that 

support entrepreneurs failed to meet some or all of their performance 

goals. Measuring performance allows organizations to track the progress 

they are making toward their goals and gives managers crucial 

information on which to base their organizational and management 

decisions. Leading organizations recognize that performance measures 

can create powerful incentives to influence organizational and individual 

behavior. Some of their good practices include setting and measuring 

performance goals. GPRAMA requires agencies to develop annual 

performance plans that include performance goals for an agency's 

program activities and accompanying performance measures. According 

to GPRAMA, these performance goals should be in a quantifiable and 

measurable form to define the level of performance to be achieved for 

program activities each year. The agencies should also be able to identify 

which external factors might affect goal accomplishment and explain why 

a goal was not met. Such plans can help to reinforce the connection 

between the long-term strategic goals outlined in their strategic plans and 

the day-to-day activities of their managers and staff. 

We found that of the 33 programs that support entrepreneurs and set 

goals, 19 did not meet any of their goals or only met some of their goals 

Page 23 GAO~12..s19 Entrepreneurial Assistance 
75 

SBREP-219 with DISTILLER


Insert offset folio 75 here 80171.058

(see table 2).28 These programs include Commerce's Economic 

Development/Support for Planning Organizations, HUD's Indian 

Community Development Block Grant, SBA's 504 loan, and USDA's 

Rural Business Opportunity Grant programs. Appendix III provides more 

information on fiscal year 2011 goals and accomplishments for each 

program that has goals and accomplishment data available. 

Table 2: Accomplishment Data for 33 Programs that Support Entrepreneurs and Set 

Goals, Fiscal Year 2011 

USDA 

Total 10 12 

Source GAO analysIS of data from Commerce, HUD SBA, and USDA 

Note: Two programs have goals but did not have goa! accomplishment information. Goal 

accomplishment information for HUO's Section 4 Capacity BUilding for Affordable Housing and 

Community Development program is unknown because HUD did not provide goa! accomplishment 

information. Goa! accomplishment information for USDA's Small Business Innovation Research 

program is not available because the program goals are based on 2-year time periods and the current 

period has not yet ended 

Agency officials provided a number of reasons why they thought these 

programs did not meet their goals, including that the goals were estimates 

and program funding was lower than anticipated. In addition, some 

agency officials could not identify any causes for the failure to meet goals 

nor had they attempted to determine the specific reasons for the failures. 

28Nineteen programs did not have fIscal year 2011 performance goals: HUO's COBG 

Insular Areas, COBG Entitlement, COBG States, CDBG Non-entitlement Grants in Hawaii, 

Section 108, CDBG Disaster Recovery, Rural Innovation Fund, Hispanic Serving 

institutions Assisting Communities, and Alaska Native/Native Hawaiian Institutions 

Assisting Communities; SBA's PRIME, Small Business Innovation Research, Small 

Business Technology Transfer, New Markets Venture Capital, and Federal and State 

Technology Partnership programs; and USDA's Small Socially-Disadvantaged Producer 

Grants, 1890's Land Grants institutions, Agriculture Innovation Center, Biomass Research 

and Development Initiative, and Woody Biomass Utilization Grants. While the agencies 

are not required to have goals for each program, agency officials said that 6 of the 19 

programs did not have goals because they were either temporary, were not funded, or 

were marked for elimination by agencies. One of the 19 programs that did not meet its 

goals was not funded in fiscal year 2011 

Page 24 GAO~12~819 Entrepreneurial Assistance 
76 

SBREP-219 with DISTILLER


Insert offset folio 76 here 80171.059

Agencies Have Not 

Evaluated the Majority of 

Programs That Support 

Entrepreneurs 

Programs that are failing to meet performance goals without a clear 

understanding of the reasons could result in agencies not being able to 

identify and address specific parts of programs that may not be working 

well. Additionally, without more detailed data on the activities of individual 

intermediaries, determining which of these third-parties are effectively 

administering these programs and helping meet program goals is difficult. 

Making decisions without this information could result in scarce resources 

being directed away from programs, or intermediaries, that are effective 

and towards those that are not meeting their objectives or struggling to 

meet their objectives. 

Over the past 12 years, agencies have conducted program evaluations of 

20 of the 52 programs that support entrepreneurs. '9 Most of these 20 

programs were evaluated once in the past decade. The studies that were 

conducted focus on a variety of areas, including customer satisfaction 

and the programs' economic impacts, and report an array of findings 

related to the effectiveness of the programs. For example, some 

evaluations reported the actual number of jobs produced as a result of 

program investments, while one evaluation reported that programs were 

more useful for larger firms than smaller firms. Some of the differences 

among the findings are tied to the varying questions the studies sought to 

answer and the methods that were used to answer them. The questions 

and methods employed are typically informed by the organization's 

purpose for pursuing these studies. These purposes could include, for 

example, assessing program impact, identifying areas for improvement, 

or guiding resource allocation. Figure 2 describes the scope of each 

program evaluation and the findings related to program effectiveness. 

Appendix V provides more information on each program evaluation. 

29We reviewed the methodologies of these studies to ensure they were sound and 

determined they were sufficiently reliable to report high-level findings related to the 

programs' overall effectiveness 

Page 25 GAO·12-819 Entrepreneurial Assistance 
77 

SBREP-219 with DISTILLER


Insert offset folio 77 here 80171.060

Figure 2: Evaluations of Programs that Support Entrepreneurs, 2000-2012 

Page 26 GAO~12..s19 Entrepreneurial Assistance 
78 

SBREP-219 with DISTILLER


Insert offset folio 78 here 80171.061

Although GPRAMA does not require agencies to conduct formal program 

evaluations, it does require agencies to describe program evaluations that 

were used to establish or revise strategic goals as well as program 

evaluations they plan to conduct in the future. Additionally, while not 

required, agencies can use periodic program evaluations to complement 

ongoing performance measurement. Program evaluations that 

systematically study the benefits of programs may help identify the extent 

to which overlapping and fragmented programs are achieving their 

objectives. In addition, program evaluations can help agencies determine 

reasons why a performance goal was not met and give an agency 

direction on how to improve program performance. For instance, 8 of the 

33 programs that were not evaluated by the administering agency failed 

to meet all of their performance goals. Performance evaluations could 

have helped agencies understand why these programs' goals were not 

met. Further, program evaluations, which examine a broader range of 

information than is feasible on an ongoing basis through performance 

measures, can help assess the impact and effectiveness of a program. 30 

While many of the agencies agree that performance evaluations can add 

value, some stated that they have limited funds and cannot afford 

performance evaluation studies. Other agency officials stated that they 

are not allowed to use program funds for evaluation. For example, USDA 

officials stated that they are not allowed to use program funds to study the 

effectiveness of the Small Business Innovation Research program. While 

program evaluations can be expensive, there are various methods that 

agencies can employ to make them more cost-effective. For example, 

agencies could conduct a program evaluation that relies on their own data 

to prevent them from purchasing data from a vendor. 31 Without periodic 

program evaluations, the agencies' ability to manage programs effectively 

and efficiently may be limited. Program evaluations can also potentially 

help agencies understand why some programs have failed to meet some 

or all of their goals, as previously discussed. Moreover, without this type 

30GAO, Program Evaluation: Studies He/ped Agencies Measure or Explain Program 

Performance, GAO/GGD-OO-204 (Washington, D.C .. Sept 29, 2000) 

31!n July 2007, we recommended that SBA further utilize the loan performance information 

it already collects to better report how small businesses fare after they participate in the 

7(a) program. While SBA agreed with the recommendation, the agency has not 

implemented it See GAO, Small Business Administration: Additional Measures Needed to 

Assess 7(a) Loan Program's Pet1ormance, GAO-07-769 (Washington, D.C .. Jut 13, 

2007) 

Page 27 GAO~12..a19 Entrepreneurial Assistance 
79 

SBREP-219 with DISTILLER


Insert offset folio 79 here 80171.062

Conclusions 

of information, Congress and the agencies may not be able to better 

ensure that scarce resources are being directed to the most effective 

programs and activities. 

In order to support entrepreneurs, federal economic development 

programs must be efficient and accessible to the people they are 

intended to serve. However, navigating these overlapping and 

fragmented programs can be an ongoing challenge for some 

entrepreneurs. While the agencies have a number of interagency 

agreements in place, our review found that agency field staff do not 

consistently collaborate and may not be able to help entrepreneurs 

navigate the large number of programs available to them. We have 

identified practices that can help to support collaboration among federal 

agencies and programs. In addition, greater collaboration is one way 

agencies can help overcome overlap and fragmentation among programs 

within and across agencies. Moreover, without enhanced collaboration 

and coordination, agencies may not be able to make the best use of 

limited federal resources and may not reach their intended beneficiaries 

in the most effective and efficient manner. 

In addition, given the number of federal programs focused on supporting 

entrepreneurs, agencies need specific information about these programs 

to best allocate limited federal resources and make decisions about better 

administering and structuring the programs. In our February 2012 report 

on duplication, overlap, and fragmentation, we expected to recommend 

that Congress tie funding to program performance and that OMB and the 

agencies explore opportunities to restructure programs through such 

means as consolidation or elimination. However, decisions about funding 

and restructuring would be difficult without better performance and 

evaluation information. Thus, making these recommendations would be 

premature until the agencies address a number of deficiencies. 

Specifically, agencies typically do not collect information that would 

enable them to track the services they provide and to whom they provide 

those services. This practice is not consistent with government standards 

for internal controls. Without such information, the agencies may not be 

able to administer the programs in a way that will result in the most 

efficient and effective federal support to entrepreneurs. 

Moreover, most of the programs that set goals did not meet them or only 

met some of them, and agency officials could not always identify reasons 

why program goals were not met. Additionally, many of these programs 

have not been evaluated in 10 years or more. GPRAMA requires 

Page 28 GAO~12..s19 Entrepreneurial Assistance 
80 

SBREP-219 with DISTILLER


Insert offset folio 80 here 80171.063

Recommendations 

Agency Comments 

and Our Evaluation 

agencies to set and measure annual performance goals, and recognizes 

the value of program evaluations because they can help agencies assess 

programs' effectiveness and improve program performance. Agencies' 

lack of understanding of why programs have failed to meet goals may 

limit decision makers' ability to understand which programs are most 

effective and allocate federal resources accordingly. 

To help improve the efficiency and effectiveness of federal efforts to 

support entrepreneurs, we make the following recommendations: 

The Director of the Office and Management and Budget, the 

Secretaries of the Departments of Agriculture, Commerce, and 

Housing and Urban Development, and the Administrator of the Small 

Business Administration should work together to identify opportunities 

to enhance collaboration among programs, both within and across 

agencies. 

The Secretaries of the Departments of Agriculture, Commerce, and 

Housing and Urban Development, and the Administrator of the Small 

Business Administration should consistently collect information that 

would enable them to track the specific type of assistance programs 

provide and the entrepreneurs they serve and use this information to 

help administer their programs. 

The Secretaries of the Departments of Agriculture, Commerce, and 

Housing and Urban Development, and the Administrator of the Small 

Business Administration should conduct more program evaluations to 

better understand why programs have not met performance goals and 

their overall effectiveness. 

GAO provided a draft of this report to OMB, Commerce, HUD, SBA, and 

USDA for review and comment. We also provided excerpts of appendix 

IV to all of the agencies with programs listed for their review. Commerce, 

HUD, and USDA provided written comments. Commerce, HUD, and SBA 

also provided technical comments, which were incorporated where 

appropriate. OMB did not provide comments on the draft report. All 

written comments are reprinted in appendixes VI, VII and VIII. 

The Acting Secretary of Commerce stated that we may wish to consider 

the complementary role many agencies play in the field of economic 

development and the need for varied but complementary activities to 

Page 29 GAO~12..s19 Entrepreneurial Assistance 
81 

SBREP-219 with DISTILLER


Insert offset folio 81 here 80171.064

address the complexities of entrepreneurs. She commented that what 

may appear as duplication at a higher level is in reality a portfolio of 

distinct services meeting unique needs. Our report notes that in some 

instances it may be appropriate for multiple agencies or entities to be 

involved in the same programmatic or policy area due to the nature or 

magnitude of the federal effort. We found that many of the 52 programs 

we examined overlap in terms of statutory authority; our report does not 

state that duplication exists among these programs. However, we found 

that most of these agencies were not able to provide programmatic 

information, such as data on users of the programs that is necessary to 

determine whether or not duplication actually exists. 

The Acting Secretary also stated that federal agencies do successfully 

collaborate and forge policy partnerships, and noted that EDA plays a key 

role in leading and shaping federal policy for fostering collaborative 

regional economic development. As noted in our report, Commerce, 

HUD, SBA, and USDA have taken initial steps to improve how they 

collaborate to provide technical assistance to entrepreneurs and cites 

specific examples of these collaborative efforts. However, GAO found that 

the four agencies, including Commerce, have not pursued a number of 

other good collaborative practices we have previously identified. For 

example, our report states that the White House Rural Council, comprised 

of Commerce and other federal agencies, is working to better coordinate 

federal programs in order to maximize the impact of federal investment in 

rural areas. Although the council has announced a number of initiatives, 

such as helping rural small businesses access capital, we found that the 

agencies have yet to implement many of our other good collaborative 

practices such as developing compatible guidance to implement interagency agreements. For example, we found that while most of these 

agencies at the headquarters level have agreed to work together by 

signing formal agreements to administer some of their similar programs, 

the agencies generally have yet to develop compatible guidance to 

implement these agreements in the field. 

Finally, the Acting Secretary stated that EDA agrees with our report's 

focus on the need for more specific information tracking and more 

frequent performance evaluation. She noted that EDA has established 

performance measures for each of its programs, and that these 

performance measures were subject to thorough review and validation 

procedures. She also noted that EDA routinely conducts evaluations of its 

programs (often limited only by lack of resources). However, the Acting 

Secretary stated that efforts to monitor and track project progress seem to 

have been outside of the scope of our report, based on many of the 

Page 30 GAO~12..s19 Entrepreneurial Assistance 
82 

SBREP-219 with DISTILLER


Insert offset folio 82 here 80171.065

general statements made in the report about the need for additional work 

in this area. As previously stated, we found that most of the agencies 

were not able to provide programmatic information for programs that can 

support entrepreneurs. Our report also states that Commerce does collect 

information on the type of entrepreneur served and the entrepreneur's 

industry for ali eight of its programs that can provide technical assistance; 

however, the report notes that Commerce does not coliect information on 

the specific type of technical assistance provided to entrepreneurs for six 

of these eight programs-information necessary to compare activities 

across programs. We provided summary information on evaluations 

conducted by the agencies in the report, including Commerce. We also 

found that Commerce, HUD, SBA, and USDA had not evaluated the 

majority of the 52 programs that can support entrepreneurs, including four 

of the eight programs Commerce administers. We concluded that 

program evaluations, when combined with efforts to coliect information, 

can be a positive step toward greater understanding of programs' 

effectiveness. 

HUD's Assistant Secretary for Public and Indian Housing expressed 

concern regarding our reference on the highlights page of the report to 

the Indian CDBG program as one of 19 economic development programs 

that failed to meet their entrepreneurial performance goals. She stated 

that the entire program may be unfairly perceived as ineffective as a 

result of this statement. Our report states that 33 of 52 programs we 

examined set goals related to entrepreneurial assistance and that 19 of 

these 33 programs did not meet any of their goals or only met some of 

their goals. Our report does not state that these 19 programs were 

ineffective. We added language on the highlights page of the report to 

clarify that our findings were only based on each program's goals related 

to entrepreneurial assistance. 

The Assistant Secretary also stated that our report misrepresents the 

Indian CDBG program as an economic development program. She noted 

that while economic development is an eligible program activity, only 3 

percent of the doliars awarded under the program since 2005 funded 

economic development activities. She further noted that most of the 

program's grants were used for community development activities, such 

as building community buildings, developing infrastructure of various 

types, and rehabilitating housing units on Indian lands. As noted in our 

report, the 52 programs we examined for this report typically fund a 

variety of activities in addition to supporting entrepreneurs. In addition, the 

report notes that most of these programs either target or exclusively serve 

particular types of businesses. 

Page 31 GAO~12"819 Entrepreneurial Assistance 
83 

SBREP-219 with DISTILLER


Insert offset folio 83 here 80171.066

The Assistant Secretary noted that an independent evaluation of the 

Indian CDBG program was conducted in 2006. HUD had not previously 

provided us with this evaluation. We revised our report to state that the 

Indian CDBG program had been evaluated within the past 12 years. 

Finally, the Assistant Secretary stated that HUD supports efforts to 

accurately measure the performance of its programs. She noted that 

HUD's Office of Native American Programs had recognized limitations in 

its method of projecting and measuring performance in the Indian CDBG 

program. She also stated that the office had begun drafting a revised form 

to be used at grant application and grant closeout to better collect 

performance measurement data, and that the office was examining its 

data collection procedures as well as the methodology used to establish 

program targets. These actions are consistent with our recommendation 

that the agencies collect program information and use it to help 

administer their programs. 

USDA's Under Secretary for Rural Development stated that he agreed 

with our report's statements that entrepreneurs playa vital role in the U.S. 

economy and that no duplication exists among federal programs that 

assist entrepreneurs. However, he disagreed with some of the other 

observations in our report. First, he stated that our report broadly portrays 

federal programs that assist entrepreneurs and does not highlight the 

unique characteristics of each agency, such as USDA's Rural 

Development's specialization in rural economic development and its 

network of state and local area offices. Our report notes that most of 

USDA's 13 programs that can support entrepreneurs are limited to areas 

with a rural statutory definition. We also include discussion based on our 

outreach to participants in rural economic development, including regional 

commissions and authorities, on their experiences with the four federal 

agencies in rural economic development efforts. More importantly, 

however, when considering the unique characteristics of the various 

programs, we emphasize the need for agencies to conduct program 

evaluations to assess effectiveness. While the Under Secretary suggests 

that the rural focus and the network of state and local area offices 

enhance program effectiveness, USDA has not conducted evaluations to 

support this conclusion. 

Second, USDA's Under Secretary stated that our report highlights 

examples where entrepreneurs may be eligible for multiple federal 

programs based on an entrepreneur's specific characteristics, but that the 

report does not mention whether this was a pervasive or problematic 

issue, He stated that rural entrepreneurs may be eligible for multiple 

programs, and that a business's unique situation dictates which programs 

Page 32 GAO~12..s19 Entrepreneurial Assistance 
84 

SBREP-219 with DISTILLER


Insert offset folio 84 here 80171.067

best meets its needs. Again, our report emphasizes the need for 

evaluations to determine the relative effectiveness of different programs 

serving similar purposes. Third, regarding our findings related to the 

information agencies collect on program activities, the Under Secretary 

cited a number of tools that the Rural Business-Cooperative Service 

(RBS) uses to identify and improve the effectiveness of its programs. As 

noted in this report, we determined that USDA collected detailed 

information on the industry of each of the entrepreneurs it supports for all 

of its programs. In addition, we determined that USDA collected detailed 

information (19 categories) on how entrepreneurs use proceeds provided 

through 5 of its financial programs. However, we found that over the past 

12 years USDA had conducted a program evaluation for only 1 of its 13 

programs that can support entrepreneurs, including USDA programs that 

RBS does not administer. 

Finally, the Under Secretary stated that the recommendations in our 

report are not explicit, which makes it unclear how RBS would effectively 

address them. Our report does provide information on how agencies 

could address our recommendations. First, we recommended that OMB, 

Commerce, HUD, SBA, and USDA work together to identify opportunities 

to enhance collaboration among programs, both within and across 

agencies. Our report identifies several practices that can help agencies 

and their offices enhance and sustain collaboration, which include 

indentifying common outcomes, establishing joint strategies, leveraging 

resources, determining roles and responsibilities, and developing 

compatible policies and procedures, among others. Second, we 

recommended that Commerce, HUD, USDA and SBA conSistently collect 

information that would enable them to track the specific type of assistance 

provided and the entrepreneurs they serve and use this information to 

help administer their programs. Our report identifies programs that 

Commerce, HUD, SBA, and USDA administer for which the agencies did 

and did not maintain information in a readily available format that could be 

tracked to help administer the programs. Finally, we recommended that 

Commerce, HUD, SBA, and USDA conduct more evaluations to better 

understand why programs have not met performance goals and their 

overall effectiveness. Our report acknowledges that program evaluations 

can be costly; however, the report also notes that there are various 

methods agencies can employ to make the evaluations more costeffective, such as relying on their own data instead of purchasing data 

from a vendor. 

Page 33 GAO~12..s19 Entrepreneurial Assistance 
85 

SBREP-219 with DISTILLER


Insert offset folio 85 here 80171.068

We are sending copies of this report to the appropriate congressional 

committees and other interested parties. In addition, this report will be 

available at no charge on the GAO website at http://www.gao.gov. Should 

you or your staff have any questions concerning this please 

contact William B. Shear, at (202) 512-8678, or shE,anN@lgao.gov. 

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. Key contributors to 

this report are listed in appendix IX, 

William B. Shear 

Director 

Financial Markets 

and Community Investments 

Page 34 GAO~12..s19 Entrepreneurial Assistance 
86 

SBREP-219 with DISTILLER


Insert offset folio 86 here 80171.069

List of Congressional Committees 

The Honorable Debbie Stabenow 

Chair 

The Honorable Pat Roberts 

Ranking Member 

Committee on Agriculture, Nutrition, and Forestry 

United States Senate 

The Honorable Kent Conrad 

Chairman 

The Honorable Jeff Sessions 

Ranking Member 

Committee on the Budget 

United States Senate 

The Honorable Barbara Boxer 

Chair 

The Honorable James M. Inhole 

Ranking Member 

Committee on Environment and Public Works 

United States Senate 

The Honorable Mary Landrieu 

Chair 

The Honorable Olympia J. Snowe 

Ranking Member 

Committee on Small Business and Entrepreneurship 

United States Senate 

The Honorable Mark Warner 

Chairman 

Task Force on Government Performance 

Committee on the Budget 

United States Senate 

The Honorable Paul Ryan 

Chairman 

The Honorable Chris Van Hollen 

Ranking Member 

Committee on the Budget 

House 01 Representatives 

Page 35 GAO~12..s19 Entrepreneurial Assistance 
87 

SBREP-219 with DISTILLER


Insert offset folio 87 here 80171.070

The Honorable Spencer Bachus 

Chair 

The Honorable Barney Frank 

Ranking Member 

Committee on Financial Services 

House of Representatives 

The Honorable Darrell E. Issa 

Chair 

The Honorable Elijah Cummings 

Ranking Member 

Committee on Oversight and Government Reform 

House of Representatives 

The Honorable Sam Graves 

Chair 

The Honorable Nydia Velazquez 

Ranking Member 

Committee on Small Business 

House of Representatives 

The Honorable Timothy V. Johnson 

Chairman 

Subcommittee on Rural Development, Research, 

Biotechnology, and Foreign Agriculture 

Committee on Agriculture 

House of Representatives 

Page 36 GAO·12-819 Entrepreneurial Assistance 
88 

SBREP-219 with DISTILLER


Insert offset folio 88 here 80171.071

Appendix I: Objectives, Scope and 

Methodology 

This report discusses (1) the extent of overlap, fragmentation, and 

duplication and their effects on entrepreneurs, and agencies' actions to 

address them; and (2) the extent to which agencies collect information 

necessary to track program activities and whether these programs have 

met their performance goals and been evaluated. 

To determine the extent of overlap and fragmentation among federal 

programs that fund economic development activities, we focused our 

analyses on 52 programs administered by the Departments of Agriculture 

(USDA), Commerce, and Housing and Urban Development (HUD) and 

the Small Business Administration (SBA) that are authorized to support 

entrepreneurs. Based on past work, these programs appeared to overlap 

the most within the four agencies with missions focused on economic 

development We reviewed the statutes and regulations that authorize the 

activities that can be conducted under each program. We categorized the 

types of activities into three categories: (1) technical assistance, (2) 

financial assistance, and (3) government contracting assistance. Many of 

the programs can provide more than one type of assistance, and most 

focus on technical assistance, financial assistance, or both. To identify 

the effects of overlap and fragmentation on entrepreneurs and agencies' 

actions to address them, we focused on 35 of the 52 programs that 

provide technical assistance because there was significant overlap and 

fragmentation among these programs. We reviewed agency documents, 

such as inter-agency agreements, and conducted interviews to determine 

how technical assistance is provided to entrepreneurs, including the 

extent of agency collaboration at the local level. More specifically, we 

interviewed technical assistance providers, including 14 federal agency 

officials from four federal agencies located in the field, nine officials from 

two regional commissions, and 14 representatives of intermediaries (that 

is, third-party technical assistance providers); four entrepreneurs who 

have received assistance federal support; and five state and local 

partners in three geographic areas. These geographic areas included 

both urban and rural areas. We selected geographic areas based on, the 

presence of an active regional commission and evidence of collaboration 

among at least two of the four federal agencies being located within the 

same region. We assessed this technical assistance information against 

promising collaborative practices that we have previously identified. 1 

Results-Oriented Government: 

Collab,oraiiion among Federal Agencies, 

Page 37 

That Can Help Enhance and Sustain 

(Washington, D.C .. Oct. 21, 2005). 

GAO·12·819 Entrepreneurial Assistance 
89 

SBREP-219 with DISTILLER


Insert offset folio 89 here 80171.072

Appendix I: Objectives, Scope and 

Methodology 

To determine the extent to which agencies collect information necessary 

to track program activities, we reviewed agency manuals and data 

collection forms that describe information collected on program activities 

and methods for analyzing and using the information. Specifically, we 

assessed each agency's capacity to track specific types of 

entrepreneurial assistance they provided to specific types of beneficiaries, 

as well as their ability to report this information in a readily available 

format at the program level. We compared these processes against 

standards for internal controls we have previously identified to determine 

how well agencies track the support they provide to entrepreneurs. 2 To 

determine the extent to which these 52 economic development programs 

have met their performance goals, we reviewed agency documents on 

their fiscal year 2011 program goals and accomplishments. We also 

interviewed agency officials to determine reasons why goals were not met 

(see app. III). 

To describe results from program evaluations related to the effectiveness 

of the 52 economic development programs that we reviewed, we 

requested all studies that have been conducted on these programs from 

the four agencies that administer the programs. Our document request 

resulted in 19 studies. We refined the list of 19 studies by choosing to 

focus on studies that were published in or after 2000. The resulting list of 

program evaluations totaled 16. Because some evaluations studied more 

than one program, these 16 evaluations covered 20 of the 52 programs in 

our review. We reviewed the methodologies of these studies to ensure 

that they were sound and determined that they were sufficiently reliable 

for our purpose, which was to report high-level findings related to the 

program's overall effectiveness (see app. V). Other evaluations of these 

programs may exist. 

To provide illustrative examples of each of the nine economic activities 

related to economic development that we previously identified (see app. II), 

we conducted a review of the literature that has been published in the past 

Standards for !nternal Control in the Federar Government, GAO/AIMO-OO-21.3.1 

D.c.. Nov. 1999) 

Page 38 GAO~12"819 Entrepreneurial Assistance 
90 

SBREP-219 with DISTILLER


Insert offset folio 90 here 80171.073

Appendix I: Objectives, Scope and 

Methodology 

5 years.3 This review included publications from a variety of sources, 

including academic journals and trade publications. These sources 

contained examples of how these economic activities were being 

conducted at the national, state, and local levels in the United States. The 

list of examples we developed is not meant to be comprehensive but is 

intended to provide a range of economic activities that could be funded by 

federal programs. 

We also used these nine economic activities to identify additional federal 

programs that may be able to fund at least one of the activities (these 

programs are listed in app. IV). During previous reviews, we focused on 

federal programs at Commerce, HUD, SBA, and USDA because these 

agencies have missions focused on economic development. For this 

report, we identified additional federal programs that could fund the nine 

economic activities. While many of the agencies that administer these 

additional programs do not have missions that focus on economic 

development, their programs may be able to fund at least one of the nine 

economic activities. We reviewed information on all programs contained 

in the 2011 Catalog of Federal Domestic Assistance (CFDA) and 

provided the list of programs to all of the administering agencies. 4 This list 

of additional federal programs may not be comprehensive because not all 

agencies provide data to CFDA (see app. IV). 

3The nine economic activities are supporting entrepreneurial efforts, supporting business 

incubators and accelerators, constructing and renovating commercial buildings, 

constructing and renovating industrial parks and buildings, strategic planning and 

research, marketing and access to new markets for products and industries, supporting 

telecommunications and broadband infrastructure, supporting physical infrastructure, and 

supporting tourism 

4We have previously identified incomplete or inaccurate data in the CFDA, but we chose 

to rely on it for our purposes in this report because it is the only source that contains 

information on programs from many different federal agencies. We did not assess the data 

reliability of the CFDA OMS has compiled initIal lists of agencies and programs that 

contribute to crosscutting goals, as required by GPRAMA, on performance.gov, including 

those related to the entrepreneurship and small business goal. However, OMB noted that 

this was not meant to be comprehensive of all programs with any contribution to the 

crosscutting goals, and that they are continuing to update these lists 

Page 39 GAO~12~819 Entrepreneurial Assistance 
91 

SBREP-219 with DISTILLER


Insert offset folio 91 here 80171.074

Appendix I: Objectives, Scope and 

Methodology 

We conducted this performance audit from June 2011 to July 2012 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. 

Page 40 GAO~12..s19 Entrepreneurial Assistance 
92 

SBREP-219 with DISTILLER


Insert offset folio 92 here 80171.075

Appendix II: Illustrative Examples of 

Economic Activities 

Illustrative Examples of 

Economic Activities 

In September 2000, we reported that there is no commonly accepted 

definition for economic development. 1 Absent a common definition for 

economic development, we subsequently developed a list of nine 

activities most often associated with economic development. 2 In general, 

we focused on economic activities that directly affected the overall 

development of an area, such as job creation and economic growth, 

rather than on activities that improved individuals' quality of life, such as 

housing and education. We previously relied on these economic activities 

to identify 80 economic development programs administered by the U.S. 

Departments of Agriculture (USDA), Commerce, and Housing and Urban 

Development (HUD) and the Small Business Administration (SBA) 

because these agencies have missions that focus on economic 

development. 3 In this report, we identified illustrative examples of each of 

the nine economic activities. 

The following examples, which resulted from a review we conducted of 

academic journals and trade publications, illustrate a range of activities 

that could be supported by programs that can fund at least one of the 

economic activities. Examples include projects that are both publicly and 

privately funded, with many receiving funding from multiple sources in 

both sectors. They also had an explicit or implicit economic development 

goal, such as job creation or economic growth. 

1. Supporting entrepreneurial efforts. This activity is the focus of this 

report, with programs grouped according to at least one of three types 

of assistance that address different entrepreneurial needs: help 

obtaining (1) technical assistance, which includes business training 

and counseling and research and development support; (2) financial 

aSSistance, which includes grants, loans, and venture capital; and (3) 

government contracts, which involves helping entrepreneurs qualify 

for federal procurement opportunities. Illustrative examples of this 

activity include the following initiatives: 

1GAO, Economic Fund Similar Economic 

Development Activities, G,A.O/f'Cf'D/GGD·(I0-2:20 lI'va"n1n01On. D C .. Sept. 29, 2000). 

2GAO, Rural Economic Development: More Assurance Is Needed That Grant Funding 

Information Is Accurately Reported, GAO~06-294 (Washington, D.C Feb. 24, 2006) 

3GAO-11-318SP, GAO-i1-477R and GAO·'12':i42SP. 

Page 41 GAO~12..s19 Entrepreneurial Assistance 
93 

SBREP-219 with DISTILLER


Insert offset folio 93 here 80171.076

Appendix II: Illustrative Examples of Economic 

Activities 

Individuals in an Iowa community formed an association of 

entrepreneurs to provide a broad range of services to 

entrepreneurs, including technical assistance in the form of 

mentor counseling, training sessions on various topics, and 

hosting conferences. 

A California community provided both financial and technical 

support to local small businesses in order to redevelop a business 

district. Businesses received micro-grants-small grants of $5,000 

each-and were also required to participate in free workshops 

designed to give them additional tools and resources to succeed 

in a challenging marketplace. These workshops were produced by 

an SBA-funded Small Business Development Center. 

Iowa provided financial assistance to entrepreneurs through loan 

guarantees and a publicly funded limited liability corporation that 

could coordinate venture capital investments. The initiative was 

designed to increase capital levels and stimulate the creation of 

more local seed funds. 

2. Supporting business incubators and accelerators. This activity can 

include all of the elements of entrepreneurial efforts, but combines 

these types of assistance with a facility that supports multiple 

businesses and may provide shared access to office space, 

technology, and other support services. Illustrative examples of this 

activity include the following initiatives: 

Page 42 

A technology business incubator was established at a Florida 

university so its faculty and service partners can provide business 

opportunities to client companies. The facility has grown to 

support a number of services to assist start-up businesses, 

including office and laboratory space, educational programs, and 

networking and mentoring opportunities with other experienced 

entrepreneurs. 

An Ohio community created a business accelerator that is 

designed to assist small, established companies, rather than 

businesses in their infancy, in becoming finanCially viable and 

creating jobs in the region. This facility includes office space, 

access to technology, and a variety of support services. The 

accelerator also collaborates with a center funded by SBA's Small 

Business Development Centers program and a local community 

college, which provide coaching and mentoring sessions, 

GAO~12.s19 Entrepreneurial Assistance 
94 

SBREP-219 with DISTILLER


Insert offset folio 94 here 80171.077

Appendix II: Illustrative Examples of Economic 

Activities 

business plan reviews, workshops, training, referrals, and 

assistance in obtaining capital. 

An economic development organization in Pennsylvania created a 

network of business incubators and accelerators focused on 

developing and commercializing technology to create high-paying, 

sustainable jobs. The initiative supports early-stage and 

established companies with funding, support services, and a 

network of experts in related industries and academia. 

3. Constructing and renovating commercial buildings. This activity can 

include support for the construction and renovation of buildings 

established for commercial purposes, such as for retail and office 

space. Illustrative examples of this activity include the following 

initiatives: 

A community in Iowa renovated a historic building that used to be 

a store to attract a large technology firm's service center. The 

renovations were designed to meet the firm's sustainability vision 

and were financed by public and private sources. 

A community in Arizona renovated a high school to create a new 

research laboratory. Further buildings were constructed in the 

area around this project to create a biomedical campus for both 

commercial and academic purposes. 

A community in Iowa renovated buildings in a historic millwork 

district to create urban mixed-use developments, which are 

designed to attract both commercial and residential activity. 

4. Constructing and renovating industrial parks and buildings. This 

activity can include support for the construction and renovation of 

buildings and campuses established for industrial purposes, such as 

for manufacturing. Illustrative examples of this activity include the 

following initiatives: 

Page 43 

A public-private partnership in Nevada constructed an industrial 

park with new access to a freeway and energy infrastructure. The 

facility was zoned for heavy industry and designed to be away 

from population centers. 

A community in Massachusetts administered the transition of a 

former military base into a light industrial area focused on 

GAO~12..s19 Entrepreneurial Assistance 
95 

SBREP-219 with DISTILLER


Insert offset folio 95 here 80171.078

Appendix II: Illustrative Examples of Economic 

Activities 

sustainable development and attracted both small and large firms 

to the redeveloped area. 

A public-private partnership in a North Carolina created several 

multi-jurisdictional business parks intended to improve local 

economies. These parks serve a number of industrial purposes, 

including technology, manufacturing, distribution, and logistics. 

Local governments obtained funding to conduct site evaluations 

and certification through Commerce's Economic Development 

Administration and HUD's Community Development Block Grant 

program. 

5. Strategic planning and research. This activity includes plans for 

recruiting new businesses or industry clusters, economic research 

and analyses, and regional coordination and planning across 

jurisdictions and sectors. Illustrative examples of this activity include 

the following initiatives: 

Local officials in a southeastern state formed a regional economic 

development organization to better coordinate economic and 

workforce development The organization engages in marketing 

and recruitment of businesses and fosters partnerships between 

various public- and private-sector entities in the region. 

A California community developed a plan for a business district to 

create jobs and produce savings for businesses. The plan defined 

resources, timeframes, and types of assistance needed to execute 

this strategy. 

A regional consortium operating in areas of two southern states 

conducted research on their area's economic strengths and 

developed an action plan to leverage these strengths. Research 

included the identification of industry clusters that could be well 

suited to the area. 

6, Marketing and access to new markets for products and industries. 

This activity may include marketing of both new and existing products 

and industries, facilitating access to new markets, and supporting new 

uses for existing products. Illustrative examples of this activity include 

the following initiatives: 

Page 44 

A publicly funded regional technology center in New York provides 

a range of resources for local manufacturing and technology 

GAO~12"819 Entrepreneurial Assistance 
96 

SBREP-219 with DISTILLER


Insert offset folio 96 here 80171.079

Appendix II: Illustrative Examples of Economic 

Activities 

companies, including assistance with developing sales and growth 

strategies, conducting marketing activities for increased market 

share and revenue in existing or new markets, and identifying new 

customers and market niches. 

A regional economic development organization in North Carolina 

formed an energy industry cluster that included a bio-energy 

facility where businesses are colocated with a landfill. These 

businesses are able to sell what were formerly waste products in 

new markets, such as alternative fuels and wood pallets. 

Several southern and Midwestern states have leveraged federal 

and state funds to assist rural businesses with e-commerce 

strategies, including assistance reaching global markets and 

strengthening competitive market advantages. Both USDA and 

Commerce provided some funding for this initiative. 

7. Supporting telecommunications and broadband infrastructure. This 

activity may include building, refurbishing, and enhancing 

infrastructure used to expand access and improve the speed and 

reliability of Internet access, wireless phone services, and other 

electronic communication methods. Illustrative examples of this 

activity include the following initiatives: 

Page 45 

A public-private partnership in a city in Ohio provides businesses 

and residents with an underground conduit network that supports 

multiple fiber-based systems for voice, data, and video 

communications, intended to provide high-speed access to the 

global marketplace. 

A multi-state rural regional development organization in the 

southwestern United States coordinated the construction of a 

broadband Internet network that was intended to generate new 

opportunities for economic development. The initiative was funded 

by both private and public investments and covered a large 

geographic area. 

Regional leaders collaborated with a state commission to expand 

broadband infrastructure to businesses, schools, and industrial 

parks in a Virginia city. The high-speed network is noted to be 

comparable to or faster than that of any other metropOlitan area of 

the country, is available at a relatively low cost, and is intended to 

attract businesses to the area. 

GAO~12"819 Entrepreneurial Assistance 
97 

SBREP-219 with DISTILLER


Insert offset folio 97 here 80171.080

Appendix II: Illustrative Examples of Economic 

Activities 

8. Supporting physical infrastructure. This activity includes constructing 

and repairing infrastructure related to (1) transportation, such as 

roads, airports and rail; (2) water and sewer; (3) energy; and (4) other 

amenities, such as pedestrian areas, parking, and beautification 

projects. Illustrative examples of this activity include the following 

initiatives: 

A community in New York is planning to renovate a business district 

by creating new rail service, a pedestrian mall, and green space. 

A community in Ohio renovated their underdeveloped downtown 

area by constructing better roads and pedestrian space, improving 

green space, and moving power lines underground. The project 

was part of a plan to reduce blight and make the area more 

accessible for visitors. 

A community in North Carolina renovated a vacant textile 

manufacturing space and downtown area to create a scientific 

research campus, facilitating this work through water line 

replacements, the addition of a pedestrian tunnel, and road 

improvements. 

9. Supporting tourism. This activity includes marketing, infrastructure 

improvement, planning, and research specifically related to 

developing and improving tourism, as well as supporting special 

events and festivals to attract visitors. Illustrative examples of this 

activity include the following initiatives: 

Page 46 

A community in Kentucky improved trails in natural areas to attract 

tourists for horseback riding and other recreational uses. In addition 

to trail improvements, the community utilized survey research, 

marketing, and special events to draw visitors to the area. 

A community in North Carolina entered into public-private 

partnerships to construct a cluster of tourist venues that included 

sports and arts museums, an arena, convention center, and 

performing arts venues. The community utilized a strategic plan 

for development and a branded name to market the area. 

A county in Mississippi partnered with other regional entities to 

market their gaming industry and other amenities as part of a 

broader regional campaign. This new partnership promoted 

region-wide tourism and focused on key markets that the area 

may draw visitors from. 

GAO·12·819 Entrepreneurial Assistance 

Insert offset folio 98 here 80171.081SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments 

for 52 Programs that Can Support Entrepreneurs, Fiscal 

Year 2011 

Me! 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Actual Individua

Performanceb Agency Program Name and Mission Obligations<l Performance Measures Performance Goal Goals 

Oepartment of Grants for Public Works and $114,529,000 Private investment Private investment Private investment Yes 

Commerce Economic Development Facilities leveraged (3, 6, and 9 leveraged-9 year leveraged-9 year totals 

(Commerce) - Supports the construction or years after award) totals (in millions): (in millions): $3,960 Economic rehab!lItation of essential public $1,940 Private investment Development mfrastructure and facilities necessary Pnvate investment leveraged-6 year totals Administration to support job creation, attract leveraged-6 year (in millions): $1,617 (EDA)' private-sector capital, and promote totals (in millions): Private investment 

regional competitiveness, innovation, $674 leveraged-3 year totals and entrepreneurship, including Private investment (in millions): $1,475 investments that expand and leveraged-3 year upgrade infrastructure to attract new tota!s (in millions): industry, support technology-led $244.6 development, accelerate new 

business development, and enhance 

the ability of regions to capitalize on 

opportunities presented by free trade 

Commerce Grants for Public Works and Total jobs created/retained Jobs createdlretalned Jobs created/retained 9 Partia! 

EDA Economic Development Facilities (3, 6, and 9 years after -9 year totals: 57,800 year totals 56,058 Jobs 

award) Jobs created/retained created/retained-6 year 

-6 year totals 18,193 totals 26,416 Jobs 

Jobs created/retained created/retained-3 year 

-3 year totals. 6,256 totals 14,842 

Page 47 GAO-12·819 Entrepreneurial Assistance 

Insert offset folio 99 here 80171.082SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

Commerce Economic Adjustment Assistance $78,720,000 Private investment Private investment Private investment Yes 

EDA Supports economically distressed leveraged (3, 6, and 9 leveraged-9 year totals !everaged-9 year totals 

communities in their ability to compete years after award) (in millions): $1,940 (in millions): $3,960 

economically by stimulating private Private investment Private investment 

investment and promoting job creation in leveraged-6 year totals leveraged-6 year totals 

targeted areas, Current investment (in millions): $674 (in millions): $1,617 

priorities include proposals that foster Private investment Private investment 

innovation and enhance regions' global leveraged-3 year totals leveraged-3 year totals economic competitiveness by supporting (in millions): $244.6 (in millions): $1,475 industry clusters, developing 

new clusters, or attracting new 

economic drivers. 

EDA 

Commerce Global Climate Change Mitigation $17,466,000 Private investment Private investment Private investment Yes 

EDA Incentive Fund leveraged (3, 6, and 9 leveraged-9 year totals leveraged-9 year totals 

Supports economic development years after award) (in millions): $1,940 (in millions): $3,960 

projects that create jobs through, and Private investment Private investment 

increase private capital investment in, leveraged-6 year totals leveraged-6 year totals 

efforts to limit the nation's dependence (in millions): $674 (in millions): $1,617 

on fossil fuels, enhance energy Private investment Private investment 

efficiency) curb greenhouse gas leveraged-3 year totals leveraged-3 year totals emissions, and protect natural systems, (in millions): $244.6 (in millions): $1,475 The program helps to cultivate 

innovations that can fuel "green growth" 

in communities suffering from economic 

distress 

Commerce Global Climate Change Mitigation Total jobs created/retained Jobs created/retained- Jobs createdl retained- Partial 

EDA Incentive Fund (3, 6, and 9 years after 9 year totals: 57,800 9 year totals: 56,058 

award) Jobs created/retained- Jobs createdl retained6 year totals: 18,193 6 year totals 26,416 

Jobs created/retained- Jobs createdl retained3 6,256 3 14,842 

Page 48 GAO·12...s19 Entrepreneurial Assistance 

Insert offset folio 100 here 80171.083SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

Commerce Economic Development/Technical $13,373,000 Percentage of University 75% 68% No 

EDA Assistance Center clients taking action 

Provides focused assistance to public as a result of the 

and nonprofit leaders to help in assistance facilitated 

economic development decision making 

(e.g., project planning, impact analyses, 

feasibility studies). The program a!so 

supports the University Center Economic 

Development Program, which makes the 

resources of universities available to the 

economic development community 

Commerce Economic Development/Technical Percentage of those 80% 83% Yes 

EDA Assistance actions taken by University 

Center clients that 

achieved 

districts and 

Provides planning assistance to provide implementing 

support to Planning Organizations (as economic development 

defined in 13 CFR 303.2) for the projects from the 

development, implementation, revision, comprehensive economic or replacement of a Comprehensive development strategy that 

Economic Development Strategy, short- lead to private investment 

term planning efforts, and state plans and jobs 

designed to create and retain higherskill, higher-wage jobs, particularly for 

the unemployed and underemployed in 

the nation's most economically 

distressed 

jurisdiction members 

actively participating in the 

economic development district program 

Commerce Trade Adjustment Assistance (TAA) for $15,418,000 Percentage of T AA Center 90% 73% No 

EDA Firms clients taking action as a 

result of the assistance 

facilitated 

Page 49 GAO·12-819 Entrepreneurial Assistance 

Insert offset folio 101 here 80171.084SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

exports and thereby create jobs, The 

program provides technical assistance to 

u.s. businesses that have lost sales and 

employment due to increased imports of 

similar or competitive goods and 

services. Technical assistance is 

provided through a nationwide network 

of eleven Economic Development 

Administration-funded Trade Adjustment Assistance Centers 

Commerce Trade Adjustment Assistance for Firms Percentage of actions 95% 100% Yes 

EOA taken by T AA Center 

clients that achieved expected results 

Commerce Native American Business Enterprise $0 Dollar value of contract $1.1 bIllion $2.1 billion Yes 

Minority Centers (NABEC)' awards obtained 

Business The program promotes the growth and Development competitiveness of bUsinesses owned by Agency Native Americans and eligible minorities. (MOBA) NABEC operators leverage project staff 

and professional consultants to provide a wide range of direct business 

assistance services to Native American 

tribal entities and eligible minority-owned 

firms. NABEC services include, but are 

not limtted to, initial consultations and 

assessments, business technical assistance, and access to federal and 

nonfedera! procurement and financing 

Commerce Native American Business Enterprise Number of jobs created 5,000 5,787 Yes 

MBOA Centers 

Commerce Minority Business Center (MBC) $17,948,122 Dollar value of contract $1.1 billion $2.1 billion Yes 

MBOA The program promotes the growth and awards obtained 

competitiveness of eligible minorityowned businesses. MBC operators 

Page 50 GAO·12-819 Entrepreneurial Assistance 

Insert offset folio 102 here 80171.085SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 Fiscal year 2011 

Met 

Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

Commerce 

MBDA 

Commerce 

MBDA 

consultants to provide a wide range of direct business assistance services to eligible minority-owned firms. Services 

include initial consultations and 

assessments, business technical assistance, and access to federal and 

nonfederal procurement and financing 

opportunities. MBDA currently funds a 

network of 30 MBC projects located 

throughout the United States 

Minority Business Center Minority Business Center 

Department of Community Development Block Grant 

Housing and (CDBG}/lnsular Areas 

Urban HUD annually allocates $7 million of Development CDBG funds to the Insular Areas 

(HUD) 

HUD HUD 

program in proportion to the populations 

of the eligible territories. The program is administered by HUO's field offices in 

Puerto Rico and Hawaii The CDBG 

programs allocate annual grants to 

develop viable communities by providing decent housing, a suitable living 

environment, and opportunities to expand economic opportunities, 

principally for low- and moderate-income persons 

COBG/lnsular Areas CDBG/Entitlement Grants 

The COBG program works to ensure 

decent affordable housing, to provide 

services to the most vulnerable in our 

communities, and to create jobs through 

the expansion and retention of 

businesses. The COBG entitlement 

program a!locates annual grants to 

larger cities and urban counties to 

Dollar value of financial 

awards obtained 

Number of jobs created 

$0.9 billion 

5,000 

$ 214,396e Jobs created and retained None 

BUsinesses assisted None 

$325,549,306f Jobs created and retained None 

Page 51 

$1.8 biHion Yes 

5,787 Yes 

15,549 N/A 

24,331 N/A 

15,549 N/A 

GAO-12..819 Entrepreneurial Assistance 

Insert offset folio 103 here 80171.086SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

develop viable communities by providing 

decent housing, a suitable living environment, and opportunities to 

expand economic opportunities, 

principally for low- and moderate-income 

persons 

HUD CDBG/Entitlement Grants Businesses assisted None 24,331 NIA HUD CDBGIStates $559,961,9619 Jobs created and retained None 15,549 NIA 

The primary statutory objective of the 

CDBG States program is to develop 

v!able communities by providing decent 

housing, a suitable living environment, 

and opportunities to expand economic 

opportunities, principally for low- and 

moderate-income persons. The state 

must ensure that at least 70 percent of 

its COSG grant funds are used for 

activitIes that benefit low- and moderate2-, or 3-year 

state. 

$338,257' 

HUO continues to administer the 

for the non-entitlement counties i 

state of Hawaii because the state has 

permanently elected not to participate in 

the State CDBG program. The CDBG 

programs allocate annual grants to 

develop viable communities by providing 

decent housing, a suitable living 

environment, and opportunities to expand 

economic opportunities, principally for 

low- and moderate-income persons 

HUD CDBG/Non-entitlement CDBG Grants in Businesses assisted None 24,331 NIA 

Hawaii 

Page 52 GAO·12-819 Entrepreneurial Assistance 

Insert offset folio 104 here 80171.087SBREP-219 with DISTILLER

Agency 

HUD HUD HUD 

Program Name and Mission 

CDBG/Section 108 Loan GUarantees 

Section 108 is the loan guarantee 

provision of the CDBG program. Section 

108 provides communities with a source 

of financing for economic development, 

housing rehabilitation, public facilities, 

and large-scale physical development 

projects. It allows them to transform a 

small portion of their CDBG funds into 

federally guaranteed loans large enough 

to pursue physical and economic 

revitaliZation projects that can renew 

entire neighborhoods. 

CDBG/Brownfields Economic 

Development Initiative (BEDI) 

The purpose ofthe BEDI program is to 

spur the return of brownfields to 

productive economic use through 

financial assistance to public entities in 

the redevelopment of brownfields and 

enhance the security or improve the 

viability of a project financed with 

Section 1 DB-guaranteed loan authority 

CDBG Disaster Recovery Grantsl 

Grantees may use CDBG Disaster 

Recovery funds for recovery efforts 

involving housing, economic 

development, infrastructure, and 

prevention of further damage to affected 

areas, if such use does not duplicate 

funding available from the Federal 

Emergency Management Agency, the 

Small Business Administration, and the 

U.S. Army Corps of Engineers. The 

mission and goals of the CDSG Disaster 

Recovery Grants program may be 

expanded or limited per the individual 

appropriation that it receives each year 

Appendix III: Perfonnance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Obligations:) Performance Measures 

$6,000,000 Jobs proposed to be 

created Of retained 

$0 Jobs proposed to be 

created or retained 

$0 Businesses assisted 

Fiscal year 2011 Performance Goal None 

3,157 

None 

Fiscal year 2011 

Actual Performanceb 

7,306 

2,409 

NIA 

Page 53 GAO·12..s19 Entrepreneurial Assistance 

Met 

Individu

Goals 

NIA 

No 

NIA 

Insert offset folio 105 here 80171.088SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

HUD CDBG Disaster Recovery Grants N/A N/A 

Through funding of national intermediaries, 

the Section 4 Capacity Building program 

enhances the capacity and ability of 

community development corporations and community housing development 

organizations to carry out communrty 

development and affordable housing activities and to attract private investment 

for housing, economic development, and 

other community revitalization activities 

that benefit low-income famifies. 

Development development projects 

funded by CDCs 

HUD Section 4 Capacity Budding for 6,060 Not reported Unknown 

Affordable Housing and Community 

Development 

HUD Rural Innovation FundJ $01< Number of full-time and None N/A N/A 

part-time jobs created 

Page 54 GAO·12-819 Entrepreneurial Assistance 

Insert offset folio 106 here 80171.089SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 Fiscal year 2011 

Met 

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal 

Fiscal year 2011 Individu

Actual Performanceb Goals 

programs_ The program is designed to 

support 

(1) job creation through bUsiness 

development and expansion, 

(2) investment in human capital through 

job training and education; and 

(3) expanding the supply of affordable 

housing with access to job centers or 

transportation 

Rural Innovation Fund grantees are 

selected through a competitive process. 

HUD Rura!!nnovatlon Fund HUD Rural Innovation Fund HUD Rural Innovation Fund 

HUD Rural Innovation Fund HUD Hispanic-Serving Institutions Assisting 

Communities 

The Hispanic-Serving Institutions 

Assisting Communities program helps 

Hispanic-Serving Institutions expand 

their role and effectIVeness in 

addressing community development 

needs in their localities, including 

revitalization, housing, and economic 

development, principally for persons of 

low and moderate income. Accredited 

Hispanic-Serving Institutions of higher 

education that provide 2- and 4-year 

degrees are eligible to participate in this 

program. For an institution to qualify as a 

Hispanic-Serving Institution, at least 25 

percent of the undergraduate enrollment 

must be Hispanic students 

Page 55 Entrepreneurial Assistance 

Insert offset folio 107 here 80171.090SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

HUD Alaska Native/Native Hawaiian $0 None NIA NIA NIA 

institutions Assisting Communities 

The Alaska Native/Native Hawaiian 

Institutions program helps these 

institutions expand their role and 

effectiveness in addressing community 

development needs in their localities, 

including revitalization, housing, and 

economic development, principaHy for 

persons of low and moderate income, 

The program encourages colleges and 

universities to integrate community 

engagement themes into their curriculum, academic studies, and 

student activities 

HUD Indian COBG $64,000,000 Jobs created 24 No 

The purpose of the Indian CDBG 

program is the development of viable 

Indian and Alaska Native communities, 

including the creation of decent housing, 

sUitable living environments, and 

economic opportunities primarily for 

persons with low and moderate incomes 

as defined in 24 CFR 10034. Funds 

may be used to improve housing stock, 

provide community facilities, improve 

infrastructure, and expand job 

opportunities by supporting the 

economic development of the communities in some instances 

HUD Indian COBG Rehabi!itated housing units 701 409 No 

HUD Indian COBG Constructed community 49 30 No 

buildings 

HUD Indian CDBG Average cost per None NIA NIA 

community bu!lding 

HUD Indian CDBG None NIA NIA 

Page 56 GAO·12..s19 Entrepreneurial Assistance 

Insert offset folio 108 here 80171.091SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligations!} Performance Measures Performance Goal Actual Performanceb Goals 

Business The 7(a) Loan Program is SBA's primary 

Administration program for helping start-up and existing 

(SBA) small businesses, with financing 

guaranteed for a variety of general 

business purposes. 7(a) loans are the most basic and most commonly used type 

of loans. They are also the most flexible, 

since financing can be guaranteed for a 

variety of general business purposes, 

including working capital, machinery and 

equipment, furniture and fixtures, land and 

bUilding (including purchase, renovation 

and new construction), leasehold 

and debt refinancing 

small bUSinesses assisted 

SBA 504 Loan Program 

The 504 Loan Program provides growing 

businesses with long-term, fixed-rate 

financing for major fixed assets, such as 

land and buildings. A typical 504 project includes a loan secured from a privatesector lender with a senior lien covering up to 50 percent of the project cost, a 

loan secured from a Certified 

Development Company (backed by a 

100 percent debenture) 

with a junior lien covering up to 40 

percent of the total cost, and a 

contribution from the borrower of at least 

10 percent equity. 

SBA 504 Loan Program Small businesses assisted 8,100 7.752 No 

Page 57 GAO·12-819 Entrepreneurial Assistance 

Insert offset folio 109 here 80171.092SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligations3 Performance Measures Performance Goal Actual Performanceb Goals 

SBA 504 Loan Program Jobs supported 88,800 87,337 No SBA 504 Loan Program Underserved market - 4,800 4.548 No 

small businesses assisted 

SBA 504 Loan Program Active lending partners 267 249 No SBA 504 Loan Program Cost per small business None $5,017 NfA 

assisted 

SBA Microloan Program $38,729,000 Small businesses assisted 4,600 3,999 No 

SBA's Microloan Program provides small 

businesses with small, short-term loans 

for working capital or the purchase of 

inventory, supplies, furniture, fixtures, machinery or equipment SBA makes 

funds available to specially designated 

intermediary lenders, which are nonprofit 

organizations with experience in lending 

and technical assistance. These 

intermediaries then make loans to 

eligible borrowers in amounts up to a 

maximum of $50,000. 

SBA Surety Bond Guarantee Program $4,865,000 Contract value of bid and $3.3 billion Yes 

SBA provides and manages surety bond final bonds 

guarantees for qualified small and 

emerging businesses through the Surety 

Bond Guarantee Program. Participating 

sureties receive guarantees that SBA 

will assume a predetermined percentage 

of loss in the contractor should 

Page 58 GAO·12..s19 Entrepreneurial Assistance 

Insert offset folio 110 here 80171.093SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligationsa Performance Measures Performance Goal Actual Performanceb Goals 

SBA Surety Bond Guarantee Program Bid and final bonds 7,600 8,638 Yes 

guaranteed 

SBA Surety Bond Guarantee Program Jobs supported 6,400 17,421 Yes SBA Surety Bond Guarantee Program Cost per job supported None $279 N/A SBA Program for Investment in Micro- $8,863,000 None None N/A N/A 

Entrepreneurs (PRIME) 

SBDCs assist clients in gaining access to 

SBA loan programs and private capital to 

start up and expand their businesses 

SBDC services are available to all small 

business populations. There are 

specialized programs for minorities, 

women, international trade, technology, 

energy efficiency, veterans, people with 

disabilities, and 8(a) firms in all stages, as 

well as individuals in low- and moderateincome urban and rural areas. The 

ultimate objective of the SBDC program is 

to support, strengthen, sustain, and grow 

tocat economies and business entities 

SBA Small Business Development Centers Small businesses created 12,500 13,664 Yes SBA Small Business Development Centers Jobs supported None N/A N/A SBA Small Business Development Centers Capital infusions $3.7 billion $3.6 billion No SBA Small Business Development Centers Cost per job supported None N/A N/A SBA Small Business Development Centers Cost per small business None $9,538 N/A 

created 

Page 59 GAO-12...s19 Entrepreneurial Assistance 

Insert offset folio 111 here 80171.094SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligations3 Performance Measures Performance Goal Actual Performanceb Goals 

SBA Women's Business Centers (WBC) $19,446,000 Small businesses assisted 135,000 138,923 Yes 

WBCs provide long-term training as well 

as counseling and mentoring services. 

By statute, WBCs fil! a gap by focusing 

on women who are socially and 

economically disadvantaged. WBCs 

offer classes during regular working 

hours as wen as during the evenings and 

weekends to serve clients who work 

during the day. The WBCs often provide counseling in multiple languages 

SBA Women's Business Centers Small businesses created 618 701 Yes SBA Women's Business Centers Cost per small business None $140 NIA 

assisted 

SBA SCORE $12,980,000 Small businesses assisted 349,867 356,837 Yes 

SCORE is a nonprofIt association 

comprised of more than 13,000 

volunteer business professionals in more 

than 350 chapters and on-line 

nationwide, dedicated to educating and 

assisting entrepreneurs and small 

business owners in the formation, 

growth, and expansion of their small 

businesses through mentoring, business 

advising and training 

SBA SCORE Small businesses created 1,082 816 No SBA SCORE Cost per smaU business None $36.38 NIA 

assisted 

SBA Veterans Business Outreach Centers $8,995,000 Veterans assisted 100,000 137,011 Yes 

The Veterans Business Outreach 

program is designed to provide 

entrepreneurial development selVices 

such as business training, counseling 

and mentonng, and referrals for eligIble 

veterans owning or considering starting 

a small business. 

SBA Veteran's Business Outreach Centers Customer satisfaction 91% 91% Yes 

Page 60 Entrepreneurial Assistance 

Insert offset folio 112 here 80171.095SBREP-219 with DISTILLER

Appendix III: Perfonnance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Met 

Fiscal year 2011 Fiscal year 2011 Fiscal year 2011 Individu

Agency Program Name and Mission Obligations3 Performance Measures Performance Goal Actual Performanceb Goals 

SBA Veteran's BUsiness Outreach Centers Cost per veteran assisted None $65.65 N/A SBA 7(j) Technical Assistance $6,502,000 Small businesses assisted 3,550 3,550 Yes 

The 70) program provides qualifying 

businesses with counseling and training 

in the areas of financing, business 

management, accounting, 

marketing, and other small 

SBA 8(a) Business Development Program 

The 8(a) Business Development 

program provides various forms of 

assistance (management and technical assistance, government contracting assistance, and advocacy support) to 

foster the growth and development of 

businesses owned and controlled by 

socially and economically disadvantaged 

individuals. SBA assists these 

businesses, during their nine year tenure 

in the 8(a) Business Development 

program, in gaining equal access to the resources necessary to develop their 

businesses and improve their ability to 

SBA 8(a) Business Development Program 

The HUBZone program helps small 

businesses located in both urban and rural communities gain preferential 

Page 61 GAO·12..819 Entrepreneurial Assistance 

Insert offset folio 113 here 80171.096SBREP-219 with DISTILLER

Agency 

SBA SBA SBA SBA SBA SBA 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Program Name and Mission Obligationsa Performance Measures 

small businesses that obtain HUBZone 

certification in part by employing staff who 

live in a HUBZone. The company must 

also maintain a "principal office" in one of 

these specially designated areas. 

HUBZone Annual value of federal 

contracts 

HUBZone HUBZone HUBZone 

Procurement Assistance to Small 

Businesses 

The program assists small businesses 

obtaining federal government contracts 

and subcontracts. 

Small BUsiness Innovation Research 

Program (SBIR) 

The SBIR program encourages small 

businesses to explore their technologica! potential and provides the incentive to profit from its commercialization. Each 

year, 11 federal departments and 

agencies are required by SBIR to 

reserve a portion of their research and 

development funds for awards to small 

businesses. SBA is the coordinating 

agency for the SBIR program. It directs 

the agencies' implementation of SBIR, 

reviews their progress, and reports 

annually to Congress on the program's 

operation. 

Cost per small businesses 

assisted 

Cost per federal contract 

dollar 

Contracts to HUBZone 

firms 

$21,171,000 Percent offedera! prime 

and subcontracting dollars awarded to small 

businesses 

$781,000 Commercialization! 

Innovation 

Number of companies 

Number of Phase II 

awards 

Aggregate amount of 

SB1R award monies 

awarded to cohort 

Aggregate sales! 

revenue from cohort 

Aggregate additional 

investment in cohort 

Number of exitsInttial Public Offerings 

or Merger and 

Acquisition activity 

Value of exits, in 

dollars 

Fiscal year 2011 Performance Goal 

$12 billion 

None 

For prime contracting, 

statutory goa! is 23%; 

for subcontracting, 

there is no statutory 

goal, but SBA has set a goal of 35.9%. 

None 

Fiscal year 2011 

Actual Performanceb 

$9.9 billion $2,684 

21.65% 

N/A 

Page 62 Entrepreneurial Assistance 

Met 

Individu

Goals 

No N/A No N/A 

Insert offset folio 114 here 80171.097SBREP-219 with DISTILLER

Agency Program Name and Mission 

SBA SBIR SBA SBIR 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 Fiscal year 2011 

Obligationsa Performance Measures Performance Goal 

Number of employees 

employed by awardees 

Percent of awards that 

brought products to market (Note: Multip!e 

awards may lead to 

only one product, but 

all awards should be 

given credit) 

Women and Minorities None 

Percentage of 

awardees that are 

minority owned 

Percentage of 

awardees that are 

women owned 

Percentage of 

awardees that are 

HUBZone 

Percentage of 

applicants that are 

minority owned that received an award 

Percentage of 

applicants that are 

women owned that 

received an award 

Efficiency and None Effectiveness 

Time between close of 

solicitation and 

selection 

Time between 

selection and cash 

awarded 

Total sum of time 

between close of 

solicitation and cash 

awarded 

Fiscal year 2011 

Actual Performanceb 

N/A N/A 

Page 63 GAO·12..819 Entrepreneurial Assistance 

Met 

Individu

Goals 

N/A N/A 

Insert offset folio 115 here 80171.098SBREP-219 with DISTILLER

Agency 

SBA SBA 

Program Name and Mission 

SBIR Small Business Technology Transfer 

Program (STTR) 

The STTR program encourages small 

bUsinesses to explore their technological potentral and provides the incentive to 

profit from its commercialization. Each 

year, five federal agencies are required 

to reserve a portion of their research and 

development funds for awards to small 

businesses. S8A is the coordinating 

agency for the STTR program. It directs 

the agencies' implementation of STTR, 

reviews their progress, and reports 

annually to Congress on its operation. 

STIR requires cooperation with a 

university or approved research 

institution. 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Obligationsa Performance Measures 

Repeat-award winners 

Percentage of firsttime Phase II 

awardees per year per agency 

Percent age of firsttime Phase I awardees 

per year per agency 

Fiscal year 2011 Performance Goal 

None 

$352,000 Commercialization I None 

Innovation 

Number of companies Number of Phase II 

awards 

Aggregate amount of 

S81R award monies 

awarded to cohort 

Aggregate 

saleslrevenue from 

cohort 

Aggregate additional 

investment in cohort 

Number of exitsInitial Public Offerings 

or Merger and 

Acquisition activity 

Value of exits, in 

dollars 

Number of employees 

employed by awardees 

Percent of awards that 

brought products to market (Note: Multiple 

awards may lead to only one product, but all awards should be 

given credit) 

Fiscal year 2011 

Actual Performanceb 

N/A N/A 

Page 64 GAO-12-819 Entrepreneurial Assistance 

Met 

Individu

Goals 

N/A N/A 

Insert offset folio 116 here 80171.099SBREP-219 with DISTILLER

Agency Program Name and Mission 

SBA STTR SBA STTR SBA STTR 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 Fiscal year 2011 

Obligationsil Performance Measures Performance Goal 

Women and Minorities None 

Percentage of 

awardees that are 

minority owned 

Percentage of 

awardees that are 

women owned 

Percentage of 

awardees that are 

HUBZone 

Percentage of 

applicants that are 

minonty owned that received an award 

Percentage of 

applicants that are 

women owned that 

received an award 

Time between close of 

solicitation and selection 

Time between 

selection and cash 

awarded 

Total sum of time 

between close of 

solicitation and cash 

awarded 

Repeat-award winners None 

Percentage of firsttime Phase II 

awardees per year per agency 

Percentage of firsttime Phase I awardees 

per year per agency 

Fiscal year 2011 

Actual Performanceb 

NIA NIA 

Page 65 GAO·12--819 Entrepreneurial Assistance 

Met 

Individu

Goals 

NIA NIA 

Insert offset folio 117 here 80171.100SBREP-219 with DISTILLER

Agency 

SBA 

Program Name and Mission 

Small Business Investment Company 

ISBIC) Program 

The SBIC program aims to increase the 

availability of venture capital to small 

businesses, SBICs are privately owned 

and managed investment funds, licensed and regulated by SBA, that use their own capital plus funds borrowed with an SBA 

guarantee to make equity and debt 

investments in qualifying small businesses 

SBA SBIC SBA SBIC SBA SBIC SBA New Markets Venture Capital INMVC) 

Program 

The purpose of the NMVC program is to 

promote economic development and the 

creatIon of wealth and job opportunities in 

low-income geographic areas and among 

individuals living in such areas through 

developmental venture capital 

investments in smaller enterprises located in such areas. Through pubhcprivate partnerships between SBA and 

businesses, the program is designed to 

serve the unmet equity needs of local 

entrepreneurs through developmental 

venture capital investments, provide 

technical assistance to small businesses, 

create quality employment opportunities 

for low-income area residents, and build 

wealth within low-income areas. 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Obligationsa Performance Measures 

$26,305,000 Small business assisted 

Underserved marketssmall businesses assisted 

Amount of debenture 

leveraged committed to 

SBIC Cost per small business 

assisted 

$Om Eligible small bUsinesses 

assisted 

Fiscal year 2011 Performance Goal 

1,150 

345 

$2.6 million 

None 

None 

Fiscal year 2011 

Actual Performanceb 

1,339 

430 

$2.8 million 

$19,645 

NfA 

Page 66 GAO-12...s19 Entrepreneurial Assistance 

Met 

Individu

Goals 

Yes Yes 

Yes 

NfA NfA 

Insert offset folio 118 here 80171.101SBREP-219 with DISTILLER

Agency 

SBA SBA SBA 

Program Name and Mission 

Federal and State Technology 

Partnership (FAST) Program 

The purpose of the FAST program is to 

strengthen the technological 

competitiveness of small business concerns in the U.S. by improving the 

participation of small technology firms in 

the innovation and commercialization of 

new technology 

FAST 

international Trade 

The International Trade program helps 

small bUsiness exporters by providing 

loans for a number of activities 

specifically designed to help them 

develop or expand their export activities 

SBA International Trade SBA International Trade SBA International Trade 

U.S. Intermediary Relending Program 

of The purpose of the program is to alleviate 

Agnculture poverty and increase economic activity 

(USDA) and employment in rural communities. 

USDA 

Under the program, loans are provided to 

local organizations (intermediaries) for the 

establishment of revolving [oan funds, 

These revolving loan funds are used to 

assist with financing business and economic development activity to create 

or retain jobs in disadvantaged and 

remote communities 

Rural Business Enterprise Grants 

Program 

The program provides grants for rural 

projects that finance and facihtate 

development of small and emerging rural 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Obligations3 Performance Measures 

$1,885,096 Eligible small businesses 

assisted 

Outreach events held 

$7,681,000 Loans approved 

Small and medium sized 

exporters assisted 

Lenders counseledltrained 

Fiscal year 2011 Performance Goal None 

None 

$400 million 

990 

4,000 

Cost per small and medium None 

sized exporter assisted 

$7,364,000 Jobs created and saved 14,600 

$ 38,586,000 Jobs created or saved 14,330 

Fiscal year 2011 

Actual Performanceb 

N/A N/A 

$924 million 

1,346 

6,790 $5,707 

14,601 13,265 

Page 67 GAO·12..s19 Entrepreneurial Assistance 

Met 

Individu

Goals 

N/A N/A 

Yes 

Yes Yes 

N/A 

Yes 

No 

Insert offset folio 119 here 80171.102SBREP-219 with DISTILLER

Agency 

USDA USDA USDA 

Program Name and Mission 

businesses, help fund business 

incubators, and help fund employmentrelated adult education programs. To 

assist with business development, the 

program may fund a broad array of 

activities 

Rural Business Opportunity Grant 

Program 

The program promotes 

economic development in 

communities with exceptional needs 

through provision of training and technical 

assistance for business development, 

entrepreneurs, and economic 

development officials and to assist with economic development planning 

Rural Microentrepreneur Assistance 

Program 

The purpose of the program is to support 

the development and ongoing success of 

rural microentrepreneurs and 

microenterprises. Direct loans and grants 

are made to selected microenterprise 

development organizations 

Rural Cooperative Development Grants 

The primary objective of this grant 

program is to improve the economic 

condition of rural areas through the 

creation or retention of jobs and 

development of new rural cooperatives, 

value-added processing, and other rural 

businesses. Grant funds are provided for 

the establishment and operation of 

centers that have the expertise Of that 

can contract out for the expertise to 

assist individuals or entities in the startup, expansion, or operational 

improvement of rural businesses, 

especially cooperative or mutually owned businesses. 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 Fiscal year 2011 

Obligations3 Performance Measures Performance Goal 

$2,581,000 BUsinesses assisted 950 $6,668,000 Jobs created or saved 580 $8,424,000 Businesses assisted 326 

Met 

Fiscal year 2011 Individu

Actual Performanceb Goals 

586 No 

1240 Yes 

324 No 

Page 68 GAO·12.819 Entrepreneurial Assistance 

Insert offset folio 120 here 80171.103SBREP-219 with DISTILLER

Agency 

USDA USDA USDA 

USDA 

Program Name and Mission 

Business and Industry Guaranteed Loans 

The purpose of the program is to 

improve, develop, or finance business, 

industry, and employment and improve 

the economic and environmental climate 

in rural communities. This purpose is 

achieved by bolstering the existing 

private credit structure through the 

guarantee of quality loans 

Value Added Producer Grants 

The purpose of this program is to assist 

eligible independent agricultural commodity producers, agriculture 

producer groups, farmer and rancher 

cooperatives, and majority-controlled 

producer-based businesses in 

developing strategies and business 

plans to further refine or enhance their products, thereby increasing their value 

to end users and increasing returns to 

producers. 

Small Socially-Disadvantaged Producer 

Grants 

The primary objective of the program is 

to provide technical assistance to small, 

socially disadvantaged agricultural 

producers through eligible cooperatives 

and associations of cooperatives. Grants 

are awarded on a competitive basis. 

1890 Land Grant Institutions Rural 

Entrepreneurial Outreach Program/Rural 

Business Entrepreneur Development 

Initiativerl 

The purposes of this program are to 

encourage 1890 Institutions to provide 

technical assistance for business 

creation in economically challenged rural communities, to conduct educational 

programs that develop and improve 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Obligationsa Performance Measures 

$70,202,000 Jobs created or saved 

$1,318,000 Businesses assisted 

$2,940,000 None 

$0 None 

Fiscal year 2011 Performance Goal 

11,705 

151 

None 

None 

Fiscal year 2011 

Actual Performanceb 

27,806 

N/A NIA 

Page 69 GAO·12-819 Entrepreneurial Assistance 

Met 

Individu

Goals 

Yes 

No N/A N/A 

Insert offset folio 121 here 80171.104SBREP-219 with DISTILLER

Agency 

USDA USDA USDA 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 Fiscal year 2011 

Program Name and Mission Obligationsa Performance Measures Performance Goal 

upon the professional skills of rural 

entrepreneurs, and to provide outreach 

and promote USDA Rural Development 

programs in small rural communities with 

the greatest economic need. 

Agriculture Innovation Center Award grants to centers around the 

country to provide technical and 

business development assistance to 

agricultural producers seeking to enter 

into ventures that add value to 

commodities or products they produce. 

Small Business Innovation Research 

This program aims to stimulate 

technological innovation in the private 

sector; strengthen the role of small 

businesses in meeting federal research 

and development needs; Increase 

private-sector commercialization of 

innovations derived from USDAsupported research and development 

efforts; and foster and encourage 

participation by women-owned and 

socially disadvantaged small business 

firms In technological innovation 

Biomass Research and Development 

Initiative Competitive Grants Program 

This program awards grants to support 

the research and development and 

demonstration of biofuels and biobased 

products. It is a joint effort between 

USDA and the U.S. Department of Energy. 

$0 None 

$22,635,200 Percentage of Phase 2 

businesses that have 

achieved commercial 

success, as a result of 

increased sales 

$2,075,000 Number of technologies 

successfully deployed 

NIA 

50% 

None 

Met 

Fiscal year 2011 Individu

Actual Performanceb Goals 

NIA NIA 

Data collection ongoing Not 

because performance available 

data are collected over a 2-year time period 

NIA NIA 

Page 70 GAO·12..819 Entrepreneurial Assistance 

Insert offset folio 122 here 80171.105SBREP-219 with DISTILLER

Agency 

USDA 

Program Name and Mission 

Woody Biomass Utilization Grant 

Program 

This program provides financial grants to 

businesses and communities that use 

woody biomass removed from National 

Forest System hazardous fuel reduction 

projects. Grants are awarded on a 

competitive basis. 

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

Fiscal year 2011 

Obligationsa Performance Measures 

$3,000,000 Green tons of woody 

biomass removed and 

used 

Fiscal year 2011 Performance Goal None 

Source. GAO analYSIs of Information provided by Commerce, HUD, SBA, and USDA 

Notes: 

Fiscal year 2011 

Actual Performanceb 

NIA 

"Fiscal year 2011 obligations were provided by agency officials for each program. HUO's figures 

represent fiscal year 2011 actual budget authority rather than obligations. SBA figures represent 

fiscal year 2011 fully allocated costs rather than obligations. 

bVVhile some programs listed in the table did not set fiscal year 2011 performance goals, most of the 

programs that had goals reported actual performance that could be compared with these goals 

cEDA does not collect performance information (i.e., jobs created and private investment) by 

program, rather this information is aggregated for aU EDA programs. 

dCommerce's Native American Business Enterprise Centers program incurred obligations in fiscal 

year 2011 , but Commerce officials could not provide funding data at the program level. Funding for 

this program is included in the fiscal year 2011 obligations for Commerce's Minority BUSiness 

Center program. Similarly, Commerce could not provide performance measure data at the program 

level because it tracks its activity as part of the Minority Business Center program. 

eThis figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or pubHc services. 

fThis figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services. 

9This figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services. 

hThis figure is an estimate of actual budget authority used for activities that GAO categorizes as 

economic development, rather than total program expenditures, and does not include other costs for 

activities such as housing or public services. 

'According to HUD officials, the performance measures for the CDBG Disaster Recovery Grant 

program can vary and they did not provide us any set fiscal year 2011 goals. 

IHUD officials stated that the Rural Innovation Fund program is new and they are in the process of 

establishing goals. 

Page 71 GAO·12-819 Entrepreneurial Assistance 

Met 

Individu

Goals 

NIA 

Insert offset folio 123 here 80171.106SBREP-219 with DISTILLER

Appendix III: Performance Goals and Accomplishments for 52 

Programs that Can Support Entrepreneurs, Fiscal Year 2011 

kHUD officials noted that $31 ,355,236 in 5-year grants was awarded in September, 2011 through 

this program, but they will not be obligated until after FY 2011. These funds include $25,000.000 

that was appropriated in FY 2010 for the program and additional funds recaptured through HUD's 

Rural Housing and Economic Development program. 

IThe performance goal and actual figures for this performance measure are for the two-year period 

consisting of FY 2010 and FY 2011. SBA officials indicated that a goa! was not set for FY 2011 

alone. 

mAccording to SBA officials, the New Markets Venture Capital program is a one-time pilot program 

that received one-time funding in fiscal year 2001. 

nUSDA's 1890 program does not have a congressional appropriation but is instead funded through 

USDA's Salaries and Expenses account. Funding is not reported separately for this program and is 

listed as $0 here, but this is an active and funded program. 

Page 72 GAO·12·819 Entrepreneurial Assistance 
124 

SBREP-219 with DISTILLER


Insert offset folio 124 here 80171.107

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

We reviewed the 2011 Catalog of Federal Domestic Assistance (CFDA) 

and identified 95 additional federal programs that can support at least one 

of the nine economic activities identified in appendix II (see table 3). 

These programs, while not comprehensive, are in addition to the 80 

economic development programs administered by Commerce, HUD, 

SBA, and USDA that we included in previous reports. We identified these 

94 programs based on our comparison of CFDA program descriptions 

with the nine economic activities as illustrated in appendix II. However, 

others conducting similar analyses may come to different conclusions on 

which federal programs support economic development. Additionally, 32 

of the 64 federal agencies and departments listed in the CFDA did not 

provide descriptions for their programs within the 2011 CFDA, which 

prevented us from assessing whether those programs are related to 

economic development. Many of the agencies that administer these 

additional programs have missions that do not directly focus on economic 

development. For example, a number of the programs listed for the 

Department of Health and Human Services focus on health-related 

research, but also participate in at least one of the economic development 

activities we have identified. 

Page 73 GAO·12,.g19 Entrepreneurial Assistance 

Insert offset folio 125 here 80171.108SBREP-219 with DISTILLER

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Table 3: Additional Federal Programs That Can Fund Economic Activities, as Listed in the 2011 Catalog of Federal Domestic Assistance 

Economic activities 

Telecommun

Strategic Business Industrial Marketing cations & 

Program planning & Commercial incubators & parks & Physical Entrepreneurial & new broadband 

Agency Name number research buildings accelerators buildings infrastructure efforts markets infrastructur

Appalachian Appalachian 23001 

Regional Regional X X X X X X X 

Commission Development 

Appalachian Appalachian Area 23002 

Regional Development X X X X X X 

Commission 

Appalachian Appalachian 23003 

Regional Development X 

Commission Highway System 

Appalachian Appalachian 23.009 

Regional Local 

Commission Development X 

District 

Assistance 

Appalachian Appalachian 23.011 

Regional Research, 

Commission Technical X Assistance, and 

Demonstration Projects 

Denali Denali 90.100 

Commission Commission X 

Program 

Department of Community 12.600 

Defense Economic X 

Adjustment 

Department of Nuclear Energy 81.121 Energy Research, X Development and 

Demonstration 

X X X 

Page 74 GAO·12..819 Entrepreneurial Assistance 

Insert offset folio 126 here 80171.109SBREP-219 with DISTILLER

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Industrial Marketing 

Physical Entrepreneurial & new broadband 

infrastructure efforts markets infrastructur

X 

Department of 81.126 

Energy 

Innovative X X X X 

Energy 

Technologies 

Department of Indian Health 93445 

Health and Service Human Sanitation X Services Facilities 

Construction 

X 

Services 

Department of Consumer 93.545 

Health and Operated and X Human Oriented Plan 

Services [CO-OP] Program 

Department of Community 93.570 

Health and Services Block Human Grant X X X X X X 

Services Discretionary 

Awards 

Department of Refugee and 93.576 

Health and Entrant Human Assistance X X 

Services Discretionary 

Grants 

Department of Job Opportunities 93.593 

Health and for Low-Income X X Human Individuals 

Services 

Page 75 GAO-12...819 Entrepreneurial Assistance 

Insert offset folio 127 here 80171.110SBREP-219 with DISTILLER

Human 

SeNices 

Department of Native American 

Health and Programs Human 

SeNices 

Diseases 

Research 

SeNices 

Department of Lung Diseases 

Health and Research Human 

Services 

Human 

Services 

Human 

Services 

Human 

SeNices 

HUman 

Services 

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Strategic Business Industrial 

Program planning & Commercial incubators & parks & Physical Entrepreneurial 

number research buildings accelerators buildings infrastructure efforts 

93.602 

x 

93.612 

x X' X X' X' X 

X 

93.838 

X X X X 

X 

Marketing 

& new 

markets 

X 

Telecommun

cations & 

broadband 

infrastructur

X 

Page 76 GAO·12..s19 Entrepreneurial Assistance 

Insert offset folio 128 here 80171.111SBREP-219 with DISTILLER

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Industrial Marketing 

Physical Entrepreneurial & new broadband 

infrastructure efforts markets infrastructur

Human X 

Services 

Human X 

Services 

Department of Aging Research 93.866 

Health and X Human Human X 

Services 

Department of Medical Library 93.879 

Health and Assistance X Human 

Services 

Cooperative X 

Agreement 

Program 

Department of Workforce 17.258 

Labor Investment Act- X 

Adult Program 

Department of Workforce 17.260 

Labor Investment Act- X Dislocated 

Workers 

X X X X X X 

Assistance 

Page 77 GAO·12..s19 Entrepreneurial Assistance 

Insert offset folio 129 here 80171.112SBREP-219 with DISTILLER

Maintenance 

Indian Roads 

Department of Minerals and 

the Interior Mining on Indian 

Lands 

Department of Indian Loans 

the Interior Economic 

Development 

Department of National Fire Plan 

the Interior - Wildland Urban 

Interface 

Community Fire 

Assistance 

and 

Reuse Program 

Department of WaterSMART 

the Interior (Sustain and 

Manage 

America's 

Resources for 

Tomorrow) 

Department of Colorado River 

the Interior Basin Salinity 

Control Program 

Department of Colorado Ute 

the Interior Indian Water 

Rights Settlement 

Act 

Rural Water 

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Strategic Business Industrial Marketing 

Program planning & Commercial incubators & parks & Physical Entrepreneurial & new 

number research buildings accelerators buildings infrastructure efforts markets 

15.022 x 15033 

x 

15.038 

x 

15.124 

x 

15.228 

x 

15504 

x 

15.507 

x 

15.509 

x 

15.510 

x 

15.516 

x 

Telecommun

cations & 

broadband 

infrastructur

Page 78 GAO·12·819 Entrepreneurial Assistance 

Insert offset folio 130 here 80171.113SBREP-219 with DISTILLER

Agency Name 

Department of Garrison 

the Interior Diversion Unit 

Department of Indian Tribal 

the Interior Water Resources 

Development, Management, 

and Protection 

Department of Lewis and Clark 

the Interior Rural Water 

System 

Department of Mni Wieoni Rural 

the Interior Water Supply 

Project 

Department of Perkins County 

the Interior Rural Water 

System 

Department of Rocky 

the Interior Boy's/North 

Central Montana 

Regional Water 

System 

Department of San Gabriel 

the Interior Basin Restoration 

Project 

Department of Yakima River 

the Interior Basin Water 

Enhancement Project 

Department of Colorado River 

the Interior Basin Projects 

Act of 1968 

Department of Lower Colorado 

the Interior River Multispecies 

Conservation 

Project 

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Strategic Business Industrial Marketing 

Program planning & Commercial incubators & parks & Physical Entrepreneurial & new 

number research buildings accelerators buildings infrastructure efforts markets 

15.518 x 15.519 

x 

15.520 

x 

15.522 

x 

15.523 

x 

15.525 

x 

15.526 

x 

15.531 

x 

15.541 

x 

15.538 

x 

Telecommun

cations & 

broadband 

infrastructur

Page 79 GAO·12..s19 Entrepreneurial Assistance 

Insert offset folio 131 here 80171.114SBREP-219 with DISTILLER

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Industrial Marketing 

Physical Entrepreneurial & new broadband 

infrastructure efforts markets infrastructur

X 

X X X 

X X X X X 

Historic 

Structures on the 

Campuses of X X X X 

Historically Black 

Colleges and 

Universities 

X X 

X 

X 

Program 

Department of Bank Enterprise 21.021 X the Treasury Award Program 

Department of Airport 20.106 

Transportation Improvement X 

Page 80 GAO·12-819 Entrepreneurial Assistance 

Insert offset folio 132 here 80171.115SBREP-219 with DISTILLER

Agency Name 

Department of Highway 

Transportation Planning and 

Construction 

Innovation Act 

Rehabilitation 

and Improvement 

Financing 

Program 

Department of Capital 

Transportation Assistance to 

Passenger Rail 

Service 

Department of Maglev Project 

Transportation Selection 

Program-SafeteaLu 

Department of Rail 

Transportation Corridors and 

Intercity 

Passenger Rail 

Service Capital 

Assistance 

Grants 

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Strategic Business Industrial 

Program planning & Commercial incubators & parks & Physical Entrepreneurial 

number research buildings accelerators buildings infrastructure efforts 

20.205 

x 

20.223 

x 

20.314 X 20.315 

X 

X X X X 

X 

20.318 

X 

X 

Marketing 

& new 

markets 

Telecommun

cations & 

broadband 

infrastructur

Page 81 GAO·12·819 Entrepreneurial Assistance 

Insert offset folio 133 here 80171.116SBREP-219 with DISTILLER

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Industrial Marketing 

Physical Entrepreneurial & new broadband 

infrastructure efforts markets infrastructur

Transportation Relocation and X Transportation Capital X Investment 

Grants 

Department of Paul S. Sarbanes 20.520 

Transportation Transit in the X 

Parks 

Department of Federal Ship 20.802 

Transportation Financing X X 

Guarantees 

Department of Assistance to 20.814 X X Transportation Small Shipyards 

Department of America's Marine 20.816 X Transportation Highway Grants Department of Bonding 20.904 

Transportation Assistance X 

Program 

Department of Disadvantaged 20.905 

Transportation Business 

Enterprises Short X 

Term Lending 

Program 

Department of Assistance to 20.910 

Transportation Small and X Disadvantaged 

Businesses 

Department of Payments for 20.930 

Transportation Small Community X 

Air Service 

Development 

Department of National 20.933 

Transportation Infrastructure X 

Investments 

Page 82 GAO·12.s19 Entrepreneurial Assistance 

Insert offset folio 134 here 80171.117SBREP-219 with DISTILLER

Protection Communities Protection Finance Center 

Grants 

Protection Grants for 

Agency Wastewater 

Treatment Works 

Environmental Capitalization 

Protection Grants for Clean 

Agency Water State 

Funds 

Protection 

Agency Drinking Water 

State Revolving 

Funds 

Environmental Environmental 

Protection Justice Small 

Agency Grant Program 

Environmental Pollution 

Protection Prevention 

Agency Grants Program 

National Challenge Grants 

Endowment for 

the Humanities 

Promotion of the 

the Humanities up Grants 

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Strategic Business Industrial Marketing 

Program planning & Commercial incubators & parks & Physical Entrepreneurial & new 

number research buildings accelerators buildings infrastructure efforts markets 

66.110 

x 

66.203 

x 

66.418 

x 

66.458 

x 

66.468 

x 

66.604 

x 

66.708 

x 

45.130 

x 

45.164 45.169 

x 

Telecommun

cations & 

broadband 

infrastructur

Page 83 GAO·12·819 Entrepreneurial Assistance 

Insert offset folio 135 here 80171.118SBREP-219 with DISTILLER

Agency 

National 

Science 

Foundation 

Name 

Engineering 

Grants 

Appendix IV: Additional Federal Programs 

that Can Fund Economic Activities 

Economic activities 

Strategic Business Industrial 

Telecommun

Marketing cations & 

Program planning & Commercial incubators & parks & Physical Entrepreneurial & new broadband 

number research buildings accelerators buildings infrastructure efforts markets infrastructur

47.041 

x 

Source GAO analYSIS ofthe Catalog of Federal Domestic Assistance (2011 aThe authority of Health and Human Service's Native American program is limited regarding 

construction. Its authority is limited to minor construction activities and does not allow for the 

building of structures from the ground up or other major construction activities. 

Page 84 GAO·12·819 Entrepreneurial Assistance 
136 

SBREP-219 with DISTILLER


Insert offset folio 136 here 80171.119

Appendix V: Evaluations of Programs that 

Can Support Entrepreneurs, 2000-2012 

Grant Thornton, 

Construction Grants 

Program 'mpect Assessment Report, 

September 2008 

and Michael C. 

Carroll, Center for 

Policy Analysis & 

Public Service, 

Bowling Green State 

University, Local 

Technical 

Assistance Program 

Evaluation, 2003 

Mt Auburn 

Associates, Inc., An 

EValuation of EOA's 

University Center 

Program, December 

2001 

Planning Program: 

Economic 

Development 

Districts, May 2002 

(Commerce) -

Economic 

Development 

Administration 

(EDA) 

Commerce EDA 

Economic 

Development 

Facilities 

Economic 

Adjustment 

Assistance 

DevelopmentTechnical 

Assistance 

Economic 

DevelopmentTechnical 

Assistance 

Page 85 

Purpose of the study 

To assess the economic Impacts 

and federa! costs of EDA's 

construction program, and to 

improve upon EDA's prior study in 

1997 in terms of using a more 

robust regression model. 

Assistance program for fiscal years 

1997 and 1998 to determine the 

extent to which the program has 

achieved its mission of helping 

communities solve specifiC 

problems, respond to economic 

development opportunities, and 

build and expand organIZational 

capacity in distressed areas 

To evaluate the University Center 

Program in five areas 

effectiveness In meeting 

economic development needs, 

effectiveness in targeting 

distressed areas, 

distribution of centers being 

optimal under EDA budget 

constramts, 

duplication or overlap with other 

federal programs, and 

leveraging resources. 

EDA's Economic Development 

District (EDD) Planning program, 

which funds the EDDs; highlight 

commonalities and differences 

among the various EDDs; as weI! as 

to assess if the program promotes 

regional cooperation towards 

making an lmpact on the economic 

development goals of the 

community 

Data and methods used 

Data for thiS study were taken 

from EDA's Operations and 

Planning and Control System 

for construction projects' status 

and funding between fiscal 

years 1990-2005 and Bureau 

of Labor Statistics county 

Study used 

least 

on 

data collected from 

project files and data 

obtained from EDA 

headquarters and six 

regional offices, 

surveys of 121 grant 

recipients, and 

two on-site case studies in 

each EDA region. 

Study collected data from 

numerous sources: 

interviews with EDA 

national and regional staff, 

compilation of a database 

on University Center 

charactenstics and 

activities from documents 

such as grant 

applications, 

interviews with Center 

directors, 

Center client survey, and 

site visits, 

general survey, 

additional site visits, and 

a second survey to 

respondents of first sUlvey 

Analysis of these data was 

done using statistical 

techniques such as principlecomponent analysis. 

GAO·12-819 Entrepreneurial Assistance 
137 

SBREP-219 with DISTILLER


Insert offset folio 137 here 80171.120

Author(s), title of Agency 

evaluation reviewed 

The Urban Institute, Department of 

The Impact of CDBG Housing and 

Spending on Urban Urban 

Neighborhoods, Development 

October 2002 (HUD) 

The Urban Institute, HUO 

Public-Sector Loans 

to Pn'vate-Sector 

Businesses: An 

Assessment of 

HUD-Supporled 

Local Economic 

Development 

Lending Activities, 

December 2002 

Evaluation 

Indian Community 

Block Grant 

Program, May 2006 

Appendix V: Evaluations of Programs 

that Can Support Entrepreneurs, 2000~ 

2012 

Program(s) 

reviewed 

Community 

Deve!opment Block 

Grant 

(CDBG)IEntltlement 

Grants 

CDBG/Entitiement 

Grants 

CDBGISta(es 

CDBG/Section 108 

Loan Guarantees 

CDBG/Brownfie!ds 

Economic 

Development 

Initiative (BEDI) 

Purpose of the study 

To find mdicators for the effect 

of CDBG spending and track 

changes in these indicators 

To report on neighborhoods 

that had received a large 

amount of CDBG fundmg. 

To determine the results of local 

third-party lending programs in 

terms of business development 

and job creation benefits. 

To determine whether some 

kinds of borrowers in certain 

types of neighborhoods create 

jobs or leverage private funds at 

lower cost than others. 

CDBG expenditures. The outcomes 

included amount of leveraged 

funding obtained by grantees, 

enhancements of partnering 

re"IlIOllsnIOS. and level of economic 

Data and methods used 

Classified cities into two 

categories: those that had 

available data that were 

more detailed and those 

that had less-detailed 

available data 

Identify CDBG investment 

levels that must be 

complemented with 

additional investment to 

produce significant 

improvements in 

neighborhood outcomes 

study was based on 

telephone intelViews with 

Economic Development 

directors in 460 ofthe 972 

entitlement communities 

that used CDBG funds, and 

interviews with 234 ofthe 

750 business borrowers 

sample of business loans 

to those areas, matched 

with Dun and Bradstreet 

information 

Study examines various 

indicators of program 

performance, including 

business survival rates, 

rates of total and !owincome job creation, 

retention relative to jobs 

planned at the time of 

loan origination, 

public costs of each job 

created, 

amount of private funding 

induced (or leveraged) by 

program loans, and 

rates at which public loan 

dollars substitute for 

private funds that would 

have otherwise been 

invested 

sources: (1) grant file reviews 

of program data, (2) telephone 

survey of grant participants, 

and (3) case study 

observations 

Page 86 GAO·12-819 Entrepreneurial Assistance 
138 

SBREP-219 with DISTILLER


Insert offset folio 138 here 80171.121

Author(s), title of Agency 

evaluation reviewed 

Socia! Compact and HUD 

Weinheimer & 

Associates, 

Assessing Section 4: 

Helping CDC's to 

Grow and Serve, 

February 2011 

Consulting Group, 

Impact Study of 

Entrepreneurial 

Development 

Resources, 2002 -

2010· 

Gwen Richtermeyer SBA 

and Karen FifeSamyn, Quality 

Research 

Associates, 

Analyzing the Impact 

of the Women's 

Business Center 

Program, July 2004. 

Leadership at 

Babson College, The 

Impact and Influence 

ofWomen·s 

Business Centers in 

the United States, 

A Performance 

Analysis of SBA 's 

Loan and 

Investment 

Programs, January 

2008 

Appendix V: Evaluations of Programs 

that Can Support Entrepreneurs, 2000~ 

2012 

Program(s) 

reviewed 

Section 4 Capacity 

Building for 

Affordable Housing 

and Community 

Development 

Women's Business 

Centers 

SCORE 

Women's Business 

Centers 

504 Loan Program 

Small Business 

Investment 

Company (SBIC) 

Program 

Page 87 

Purpose of the study Data and methods used 

To evaluate the effect of the Section From 2001 through 2009, data 

4 program on improving were collected from (1) 

organization capacity. The section 4 interviews of key staff at 

program was set up to support intermediaries, (2) online 

training for Community Development survey of 360 COCs that 

Corporations (CDC) and to help received Section 4 grants, and 

CDCs grow and serve. (3) interviews with leaders of 

34 Section 4-asssisted CDCs 

entrepreneurial dellelo'pment 

programs on small 

including businesses' perceptions of 

the programs and their economic 

growth as a result of the services 

provided 

To analyze the economic Impact of 

the SBA's Women's Business 

Center program. Specifically the 

study addressed the following 

between 2001 and 2003 

impact on growth of firms 

factors that account for success 

specific program model that 

predicts success 

predictors of positive economic 

outcomes, and 

effect of client demographics on 

outcomes 

guarantees are associated with 

positive firm outcomes, this study 

addressed the following questions: 

across all 

years-2007, 2008 and 2010 

with a smaller sample in 2007. 

Study includes a set of 

descriptive statistIcs on the 

rate of growth in the number of 

Women's Business Center 

clients and also the rate of 

jobs and profits at those 

centers 

Study used a regression to 

test the association between 

clients and other outcomes. 

obtained on firms participating 

in 7(a), 504 or SBIC programs. 

For these firms, data were 

What obtained from Dun and happens to sales, employment and survival before Bradstreet on firm outcomes 

and after firms receive the 

guarantee? 

GAO~12..s19 Entrepreneurial Assistance 
139 

SBREP-219 with DISTILLER


Insert offset folio 139 here 80171.122

Author(s), title of Agency 

evaluation reviewed 

An Assessment of 

Small Business 

Administration Loan 

and Investment 

Performance 

SU/vey of Assisted 

Businesses, January 

200S 

Deas, 

Microeconomic 

Applications, Inc., 

The HUBZone 

Program Report, 

May 200Sb 

Committee on 

Capitalizing on 

SCience, 

Technology, and 

innovation, An 

Assessment of the 

Smalf Business 

Innovation Research 

Program at the 

National Science 

Foundation, 2008. 

Appendix V: Evaluations of Programs 

that Can Support Entrepreneurs, 2000~ 

2012 

Program(s) 

reviewed 

Microloan Program 

SBIC 

program In 

stimulating technological 

innovation; 

using small businesses to meet 

federal needs; 

increasing private sector 

commercialization; and 

encouraging participation of 

minority and other 

disadvantaged groups 

The sUNeyed firms had 

received the loans 6 or 7 years 

prior to the questionnaire 

databases: applications for 

HUBZone certification, Central 

Contractor Registration on 

small businesses, and the 

Federal Procurement Data 

System for information on 

HUBZone businesses that 

have won HUBZone contracts 

The report primanly used an 

input-output approach to 

estimate the Impact on the 

HU8Zone areas. In this 

approach, direct and indirect 

impacts are measured using 

the above three databases 

Bureau of 

IS on 

Research Council sUNeys and 

reviews of agency materials 

Study includes sUNeys and 

also case studies 

Page aa GAO~12.g19 Entrepreneurial Assistance 
140 

SBREP-219 with DISTILLER


Insert offset folio 140 here 80171.123

Author(s), title of 

evaluation 

MA. Boland, J.e 

Crespi, and D 

Oswald, How 

Successful Was the 

2002 Farm Bill's 

Value-Added 

Producer Grant 

Program?, 

December 2007 

Agency 

reviewed 

Department of 

Agriculture 

(USDA) 

Appendix V: Evaluations of Programs 

that Can Support Entrepreneurs, 2000~ 

2012 

Program(s) 

reviewed 

Value Added 

Producer Grants 

(VAPG) 

Purpose of the study 

To Identify the determinants for 

success among USDA's VAPG 

Data and methods used 

Survey of 739 VAPG 

recipients, out of which 621 

responded. A statistical 

analysis was conducted using 

bmary logistical regression 

(logit) and cumulative legit 

models. 

Source GAO anatysls of loformatlon pfo"fded by Commerce, HUD, SBA and USDA 

"While SBA conducts annua! impact surveys ofthe SBDC, WBC, and SCORE programs, for 

purposes of this report we focused on the most recent impact study conducted ofthes8 programs 

bin a previous GAO report, Small Business Administration: Additiona! Actions Are Needed to Certify 

and Monitor HUBZone Businesses and Assess Program Results, GAO-08-643 (Washington, D.C 

Jun. 17,2008), we recommended that SBA further develop measures and implement plans to assess 

the effectiveness of the HUBZone program. SBA took steps to conduct such an assessment 

However, SBA has since decided to rely on the 2008 study conducted by SBA's Office of Advocacy 

listed in this appendix. 

Page 89 GAO~12..s19 Entrepreneurial Assistance 
141 

SBREP-219 with DISTILLER


Insert offset folio 141 here 80171.124

ppendix VI: Comments from the 

Department of Agriculture 

AUG 11012 

Page 90 GAO·12·819 Entrepreneurial Assistance 
142 

SBREP-219 with DISTILLER


Insert offset folio 142 here 80171.125

Appendix VI: Comments from the Department 

of Agriculture 

Mr. WilliarnShear 

Page 91 GAO·12..a19 Entrepreneurial Assistance 
143 

SBREP-219 with DISTILLER


Insert offset folio 143 here 80171.126

Appendix VI: Comments from the Department 

of Agriculture 

Mr. Willian) Sht\'l.f 

Page 92 GAO·12..819 Entrepreneurial Assistance 
144 

SBREP-219 with DISTILLER


Insert offset folio 144 here 80171.127

Appendix VII: Comments from the 

Department of Commerce 

Page 93 GAO~12..a19 Entrepreneurial Assistance 
145 

SBREP-219 with DISTILLER


Insert offset folio 145 here 80171.128

Appendix VII: Comments from the Department 

of Commerce 

Nafive i\.meriean BusifH,·SS Entt'rpris('" Centers 

Enlreprtncurial Assistance 

Page 94 GAO·12,.g19 Entrepreneurial Assistance 
146 

SBREP-219 with DISTILLER


Insert offset folio 146 here 80171.129

Appendix VII: Comments from the Department 

of Commerce 

Page 95 GAO·12..s19 Entrepreneurial Assistance 
147 

SBREP-219 with DISTILLER


Insert offset folio 147 here 80171.130

Appendix VII: Comments from the Department 

of Commerce 

Page 96 GAO~12,.g19 Entrepreneurial Assistance 
148 

SBREP-219 with DISTILLER


Insert offset folio 148 here 80171.131

Appendix VIII: Comments from the 

Department of Housing and Urban 

Development 

4l t G Slr(!ct NW 

20548 

Page 97 GAO~12·819 Entrepreneurial Assistance 
149 

SBREP-219 with DISTILLER


Insert offset folio 149 here 80171.132

Appendix VIII: Comments from the Department 

of Housing and Urban Development 

Page 98 GAO~12..s19 Entrepreneurial Assistance 
150 

SBREP-219 with DISTILLER


Insert offset folio 150 here 80171.133

Appendix XI: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(250610) 

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

In addition to the contact named above, Marshall Hamlett and Triana 

McNeil (Assistant Directors), Matthew Alemu, Ben Bolitzer, Julianne 

Dieterich, Cindy Gilbert, Geoffrey King, Terence Lam, Alma Lans, Marc 

Molino, Alise Nacson, Jennifer Schwartz, and Karen Villafana made key 

contributions to this report. 

Page 99 GAO·12...819 Entrepreneurial Assistance 
151 

SBREP-219 with DISTILLER


Insert offset folio 151 here 80171.134

GAO's Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

COlmect with GAO 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO's commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO's website (www.gao.gov). Each weekday afternoon, 

GAO posts on its website newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, 

go to www.gao.gov and select .. E-mail Updates." 

The price of each GAO publication reflects GAO's actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and information is posted on GAO's website, 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TOD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E·mail Updates. Listen to our Podcasts. 

Visit GAO on the web at \i\;ww.gao.gov. 

Contact: 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Please Print on Recycled Paper. 
152 

Testimony of Michael A. Chodos 

Associate Administrator for 

Entrepreneurial Development 

U.S. Small Business Administration 

Before the 

U.S. House of Representatives 

Committee on Small Business 

March 20, 2013 

Chairman Graves, Ranking Member Velazquez, and distinguished members of the Committee. Thank you for inviting me to 

testify about the Small Business Administration’s (SBA) work to 

enhance collaboration, avoid duplication and improve data tracking 

within our entrepreneurial assistance programs. I am grateful for 

the opportunity to discuss the wide range of business counseling, 

capital access and procurement assistance programs SBA makes 

available to America’s 28 million small businesses to help them 

start, grow, innovate and create jobs. I also look forward to discussing our extensive collaboration with other federal agencies and 

our ongoing efforts to evaluate our own programs and to make 

them more streamlined, effective and efficient. 

Entrepreneurs are the foundation of America’s economic success. 

Roughly two-thirds of all net new private sector jobs are created by 

small businesses; and over half of America’s working population either own or work for a small business. For 60 years SBA has been 

there to provide assistance and support for small business’ success; 

and since 2009, under Administrator Mills’ leadership, SBA has 

been there to address and meet critical gaps as small businesses 

struggled through the deep economic crises of the last four years. 

In the past year alone, SBA and its resource partners counseled 

and trained over 1 million small businesses and helped thousands 

of new businesses start. SBA and its network of lenders also supported over $30 billion in loans to small businesses through its 7(a) 

and 504 loan program, and we helped agencies across the federal 

government to put over $90 billion in federal contracts in the 

hands of small businesses. SBA also leveraged a record $3.3 billion 

in capital for small businesses through the SBIC program; and 

since 2009 has supported over $3.3 billion in lending in our export 

loan programs. 

Alongside the many ways in which SBA helps small businesses 

grow and create jobs, we’re also there for individuals and small 

businesses after a disaster. Most recently, within 90 days after 

Super Storm Sandy struck, SBA approved more than $1 billion in 

direct disaster loans. 

To implement its programs, services and disaster support, SBA 

connects directly with small businesses in communities across 

America. It does so directly through its nationwide network of SBA 

District Offices, Small Business Development Centers (SBDCs), 

SBREP-219 with DISTILLER

153 

Women’s Business Centers (WBCs), SCORE chapters and Veteran’s 

Business Opportunity Centers (VBOCs). And because so many of 

SBA’s programs are delivered in partnership with others, we also 

help small businesses every day by collaborating with our very 

large network of private lenders, micro-lenders and investment 

funds in our lending and capital programs; with federal and state 

partners in our procurement, Small Business Innovation Research 

and export programs; and with university and non-profit partners 

in several of our innovative programs for supporting veterans’ entrepreneurship. 

We work collaboratively every day to break down siloes and to 

work effectively with our federal, state and private-sector partners. 

But we know that there are always further opportunities to use 

taxpayer dollars wisely and to make things simpler and easier for 

our small business constituents. We know that navigating the federal government and its many programs and services can be 

daunting to a small business. For that reason SBA and our network of partners act as the ‘‘Front Door’’ to federal support for 

small businesses. We help them access our own programs and services, and also act as community-based and online guides to help 

small businesses get the help they need from whichever federal, 

state or local partner can serve that small business best. 

We appreciate the work of Mr. Shear and his team at the Government Accountability Office (GAO). Their reports on the important issues of fragmentation, overlap and data evaluation help SBA 

in its ongoing efforts to collaborate effectively with other federal 

agencies and to improve delivery of its own programs and services. 

Over the past several years, SBA has focused very intensively on 

opportunities for improving collaboration and coordination within 

its own network. Our research shows that counseling and business 

assistance services are vital to long-term success, and our network 

counsels and trains over 1 million entrepreneurs each year on topics ranging from business planning to financial analysis to marketing. We want to make sure that network is operating as efficiently and collaboratively as possible. 

For that reason, last year SBA’s Offices of Entrepreneurial Development (OED) and Field Operations (OFO) convened the firstever national meeting of representatives from each resource partner network. We identified concrete ways to break down barriers 

and collaborate effectively in local markets nationwide, and detailed strategies to improve their clients’ access to and utilization 

of SBA programs and services. We followed up this historic meeting 

with a series of regional meetings with SBA district Office staff to 

further refine the next actions to improve collaboration. And we 

modified all Resource Partner grant agreements to make effective 

collaboration a core part of each grant going-forward. Today, SBA’s 

District Offices, SBDCs, WBCs and SCORE chapters are more integrated and coordinated than at any time in SBA’s history. 

SBA focuses intensively on opportunities for external collaboration and coordination of services, as well. At the same time, we recognize the ongoing need to identify and use the most promising 

practices for inter-agency collaboration, and we look forward to 

building on existing initiatives. 

SBREP-219 with DISTILLER

154 

SBA has participated in and led efforts to collaborate and share 

resources with USDA, Department of Commerce and HUD. We 

have also worked to leverage each other’s outreach efforts to improve local small business access to the full range of economic development programs and services. For example, SBA participated 

in the Task Force on Travel & Competitiveness chaired by the Secretary of Commerce and the Secretary of the Interior, and contributed to the development of the Task Force’s National Travel & 

Tourism Strategy released in May 2012. In addition, in response to 

the historic drought, SBA, USDA, and the Department of Commerce, through its Economic Development Administration (EDA), 

worked collaboratively to conduct outreach to drought-impacted 

communities about available federal resources. Also, SBA has been 

working with the Department of Commerce and numerous other 

federal agencies on developing BusinessUSA.gov, the comprehensive, one-stop platform for businesses looking to access information, 

resources, programs and services available through the federal government. 

In another example, pursuant to their MOU executed in 2010, 

SBA and USDA are working together to promote awareness of each 

other’s programs and services and to cross-refer business clients 

through their online websites and form their field offices. For example, SBA and USDA are working together to recruit small businesses from rural communities into the Historically Underutilized 

Business Zone (HUBZone) program. The HUBZone program’s focus 

is to create jobs where they are needed most, and many designated 

HUBZones tend to be in rural communities. 

In another example, SBDCs partner with USDA to leverage both 

the USDA access to rural communities and the SBDCs business assistance services. SBDCs partner with the Cooperative Extension 

System, Rural Business Enterprise and the BioPreferred Program 

Offices to maximize assistance to small businesses in rural areas 

across the country. Several SBDCs across the country participate 

and receive USDA Rural Business Enterprise grants that finance 

and facilitate the development of small and emerging rural businesses through distance learning networks. And SBDCs are key to 

the counseling component of the E3 partnership led by DOC, EPA, 

USDA, Department of Energy and Department of Labor which has 

active projects in 20 states to integrate federal agency technical assistance tools and resources for more integrated factory and facility 

assessments and improvements. 

HUD and SBA have been collaboratively supporting small business development in distressed areas through HUD-financed Community Development Block Grant (CDBG) projects. Working together, the agencies are piloting ways to increase small and minority business utilization of HUD’s CDBG, HOME, public housing 

and multifamily programs through access to surety bonds for the 

smallest contractors. HUD and SBA have also worked together intensively in recent years to identify ways to address and eliminate 

duplication of benefits in disaster response, lending and granting 

programs. 

SBA also partners with the Departments of Commerce, Labor 

and Education to coordinate federal efforts and leadership in supSBREP-219 with DISTILLER

155 

porting regional innovation through the Taskforce for the Advancement of Regional Innovation Clusters (TARIC). Through TARIC, 

SBA and 15 other federal agencies coordinate and collaborate to 

make their respective programs and services available to small 

business innovators through joint regional innovation cluster initiatives, including the Advanced Manufacturing Accelerator Initiative 

and the Rural Accelerator Challenge. By way of example, the Rural 

Accelerator Challenge made available a combination of $9 million 

in funding from EDA, Department of Agriculture, the Delta Regional Authority, and the Appalachian Regional Commission, along 

with technical and program support from nine additional agencies 

including SBA. 

SBA has also increased its collaboration with the DOC in the administration of its International Trade programs. As directed by 

the Jobs Act, SBA increased its nationwide network of Trade Finance Specialists co-located with the Department of Commerce 

staff at U.S. Export Assistance Centers, and has built Exporting 

expertise across the SBDC network with the training of over 200 

new export counselors. The two agencies also participate actively in 

the inter-agency small business working group, chaired by SBA. 

While work remains to be done, I am very proud of our accomplishments and progress in the area of collaboration to date. A 

great deal of the credit should also go to our SBA District Office 

leadership; nation, state and local leadership in our SBDC, WBC, 

and SCORE networks; and our Cluster administrators and other 

partners. 

In addition to our work fostering collaboration within our own 

SBA family and with other agencies, the Agency has been working 

intensively on ways to improve the measurement and evaluation of 

our programs. SBA believes that measuring and evaluating effectiveness and outcomes is essential to maximizing performance. We 

teach this principle to small businesses every day; and we work 

hard to apply the same principles to our own management of the 

precious taxpayer resources entrusted to us. 

Internally, SBA already engages in extensive measurement of 

the activity and outcomes generated within our Resource Partner 

network. But we continually look for opportunities to improve that 

process. 

Starting in FY12, OED undertook a comprehensive modernization project for our Resource Partner data collection system, known 

as EDMIS (Entrepreneurial Development Management Information 

System) to enhance current data fields, improve budget and performance integration capabilities, and expand reporting capabilities. Additionally, we are also working with all our Resource Partners to identify and align all our respective surveying, polling and 

impact study methodologies to harmonize the data collected 

through these efforts and have a coordinated set of data sources between the Agency and its partners. 

Externally, in collaboration with DOC and other agencies, SBA 

is working with TARIC to implement rigorous data collection and 

evaluation for our cluster initiatives and to propagate best practices. In addition, our Office of International Trade is implementing 

joint outcome-based performance measures in collaboration with 

SBREP-219 with DISTILLER

156 

the Trade Promotion Coordinating Committee and its 18 member 

agencies. 

SBA is also participating in a series of inter-agency meetings in 

collaboration with the Performance Improvement Council to discuss 

data collection, program evaluation, and performance measures to 

create consistent and relevant standards across the agencies which 

support entrepreneurship. SBA is working with OMB and the 

Council of Economic Advisers on an interagency pilot with Commerce and USDA to pursue a cross-program study of business technical assistance programs. One goal of the pilot is to determine 

whether SBA program data can be matched with Census data to 

accomplish the broader objective of measuring the impact these 

programs are having related to their stated mission. SBA and the 

Department of Commerce also jointly sponsor a ‘‘Smarter Data, 

Smarter Policy’’ initiative, the goal of which is to develop a consistent data set that is widely accessible to government statistical 

and business agencies. 

In closing, I want to thank you for the opportunity to testify before you today. As you know, the SBA, its Resource Partners and 

its many lending, federal sector and other partners have a critical 

mission to fulfill as our economy continues its recovery. Our goal 

is to support and strengthen America’s 28 million small businesses. 

Through enhanced collaboration, improved performance metrics, 

and new service delivery tools, we are building an entrepreneurial 

ecosystem for the 21st Century and beyond. 

I look forward to answering any questions you may have. Thank 

You. 

SBREP-219 with DISTILLER

157 

Statement of Doug O’Brien, Deputy Under Secretary for 

Rural Development, United States Department of Agriculture 

Before the House Committee on Small Business 

MARCH 20, 2013 

Chairman Graves, Ranking Member Velazquez, and members of 

the committee, I am pleased to have this opportunity to discuss 

USDA Rural Development’s role in supporting and encouraging 

economic development of our Nation’s rural communities. 

Since 2009, President Obama’s plan for rural America has 

brought about historic investment in rural communities that has 

made them stronger and more vibrant. USDA Rural Development 

alone, has directly invested or guaranteed more than $131 billion 

over the last four years in broadband, businesses, housing, safe 

water, community facilities and more that have benefited not only 

the communities our agency serves, but also the overall economy. 

We view our programs as building blocks for a successful rural 

community. Quality infrastructure encourages business and economic growth which in turn encourages housing development to 

serve the influx of new employees, and leads to additional necessities such as schools, hospitals, and emergency resources. USDA 

Rural Development programs address all of these community needs 

through grants, direct loans or guaranteed loans. 

In the Consolidated Farm and Rural Development Act (Con Act), 

Congress charged USDA with leading the Federal Government’s efforts to ensure a prosperous rural America and declared this task 

‘‘so essential to the peace, prosperity, and welfare of all our citizens 

that the highest priority must be given to the revitalization and development of rural areas.’’ Four decades later, the agency that I 

represent today, is responsible for implementing a suite of programs with the sole mission to increase economic opportunity and 

improve the quality of life for all rural Americans. 

Building on this history, President Obama in June of 2010 created the White House Rural Council to improve coordination 

among Federal agencies and create more economic opportunity in 

rural America. Coordination between the Department of Agriculture and other government agencies to facilitate program delivery continues to strengthen. The comprehensive rural strategy is 

encouraging rural economic growth that is outpacing urban areas. 

President Obama and Secretary Vilsack have long believed that 

‘‘strong rural communities are key to a stronger America.’’ 

The economic literature confirms the importance of vibrant rural 

economies to the Nation’s economy. For example, the Organization 

for Economic Cooperation and Development (OECD) recently released a report, Promoting Growth in All Regions, which says investments in rural places are vital for aggregate national economic 

growth and in many cases such investments have found that rural 

regions have, on average, enjoyed faster growth than urban regions. 

SBREP-219 with DISTILLER

158 

We believe, particularly at such a tenuous point for our Nation’s 

economy, that we cannot leave significant growth opportunities in 

rural regions untapped. This study provides vigorous research and 

an explanation for why regional rural economies are so important 

to a Nation’s overall economic health. This isn’t the first report to 

make such a conclusion, nor is it news to those of us who work and 

live or represent rural America, but it is notable for its comprehensive analysis and recommendations that are important for rural 

economies. They include: investing in less-developed regions makes 

good economic sense; a pro-growth strategy on the assets of the region is the most beneficial and sustainable approach; policies that 

support education and training for low-skilled workers are critical; 

infrastructure development has the greatest impact when coordinated with other development policies; and formal and informal institutions that facilitate communication and collaboration in the region are vital. USDA and its partner agencies were already working on a number of these strategies. 

As you know, rural America has unique challenges and assets. 

Rural communities are characterized by their isolation from population centers and product markets and benefit most from initiatives that integrate local institutions and businesses with State 

and Federal agencies that have intimate knowledge of local needs. 

To address these unique challenges, Congress has provided USDA 

with a variety of programs that comprehensively attend to the 

rural dynamic. 

As the only Federal Department with the primary responsibility 

of serving rural areas, the presence of USDA field offices in every 

state helps us to serve the specific needs of local communities. 

USDA Rural Development employees are able to identify a wide 

range of community and economic development resources for locally 

elected officials, business owners, families, farmers and ranchers, 

schools, nonprofits, cooperatives and tribes. USDA Rural Development staffs are located throughout the nation and are members of 

the communities they serve and possess expert knowledge of the 

economic challenges and opportunities that exist in their particular 

region. 

Through USDA Rural Development’s infrastructure development 

programs, we make investments in rural utility systems that 

helped improve and expand the rural electrical grid, provide clean 

drinking water to rural communities, and deliver faster Internet 

service to rural families and to businesses, allowing them to compete in the global economy. In 2012, we provided nearly 64,000 

rural households, businesses and community institutions with new 

or better access to broadband Internet service, provided more than 

8 million consumers with new or improved electric service, and provided 2.5 million of our borrower’s customers with new or improved 

water or wastewater service. 

Through USDA Rural Development’s business and cooperative 

loan, grant, and technical assistance programs, the agency helped 

over 9,500 rural small business owners and agricultural producers 

improve their enterprises, including those related to renewable energy. Beyond direct assistance to these business owners and producers, financial support from USDA also creates lasting economic 

SBREP-219 with DISTILLER

159 

development opportunities in the rural communities where the 

projects are located. Business and cooperative funding created or 

saved an estimated 52,000 rural jobs in 2012. 

Not only have we supported small businesses, but we also support the social infrastructure that makes rural communities attractive to small business owners and their employees. USDA Rural 

Development’s Community Facilities loan and grant program provided assistance to construct or improve 215 educational facilities, 

and supported 168 health care projects—part of more than 1,400 

Community Facilities projects nationwide in 2012. Other key 

projects included support for local, rural emergency responders. 

The USDA Rural Development housing program ensures that 

rural families have access to safe well-built, affordable homes. In 

2012, more than 153,000 families with limited to moderate incomes 

purchased homes utilizing our housing programs. We also helped 

about 7,000 rural individuals or families repair their existing 

homes under our home repair loan and grant program. More than 

400,000 low and very-low income people were able to live in USDAfinanced multi-family housing thanks to rental assistance. 

While USDA Rural Development’s programs provide the critical 

tools for rural America’s success, perhaps the most important element is how we use those tools: by having over 400 offices in rural 

communities across the country that provide us the ability to deal 

directly with the businesses, individuals and communities that 

many times do not have the capacity to otherwise access Federal 

programs. 

Congress had the forethought to strategically place comprehensive programs for rural America in one agency: Rural Development. 

To make sure that the community economic development mission 

is met, we always look for opportunities to collaborate with other 

agencies to get the best results in rural communities. We appreciate the ongoing efforts of the U.S. Government Accountability Office (GAO) to look at ways that the Federal government can collaborate more effectively. 

In the August 2012 report, Entrepreneurial Assistance: Opportunities Exist to Improve Programs’ Collaboration, Data-Tracking, 

and Performance Management, GAO recommended that the Secretaries of Agriculture, Commerce, and Housing and Urban Development and the Administrator of the Small Business Administration 

(SBA) conduct more program evaluations to better understand why 

programs have not met performance goals and their overall effectiveness. In response, USDA Rural Development’s Rural BusinessCooperative Service is developing a strategic plan that includes an 

initiative to improve the quality of performance measurement within the next two years. GAO also recommended that the Secretaries 

of Agriculture, Commerce, and Housing and Urban Development, 

and the Administrator of SBA work together to identify opportunities to enhance collaboration among programs, both within and 

across agencies. The Obama Administration has initiated steps 

that provide agencies with a mechanism to work together to identify opportunities to enhance collaboration among programs. For 

example, in the Administration’s fiscal year 2013 budget submission, a cross-agency priority goal was introduced to increase servSBREP-219 with DISTILLER

160 

ices to entrepreneurs and small businesses. One of the objectives 

under this goal is to utilize programs and resources across the federal government to improve and expand the reach of training, 

counseling, and mentoring services to entrepreneurs and small 

business owners. Furthermore, the Administration established an 

interagency group—including Commerce, SBA and USDA—that 

aims to streamline existing programs, improve cooperation among 

and within agencies, ease entrepreneurs’ access to the programs 

that are right for them, and increase data-based evaluation of program performance. 

In 2012 USDA Rural Development provided five webinar training sessions for Rural Business employees in the field and national 

offices who track performance data in the agency’s Guaranteed 

Loan System (GLS) to improve the collection and maintenance of 

data related to program performance measures and to improve 

data quality. We restructured the field office GLS support team by 

designating a lead and backup for each region. These individuals 

received additional GLS training, including recording and tracking 

performance measures. We also conducted bi-annual surveys to assess the level of collaboration between SBA and USDA Rural Development and to identify best practices for increased collaboration. 

These actions, in conjunction with customer service scores, are 

helping us evaluate customer satisfaction. 

The memorandum of understanding (MOU) USDA signed with 

the SBA in 2010 helped lay the foundation for enhanced interagency collaboration on economic development and improve service 

delivery to small businesses in underserved rural areas. Over the 

course of the past year, USDA and SBA held a series of joint 

roundtables across the country focused on increasing investment in 

rural communities. I attended several of these roundtables and 

found the discussions to be terrifically valuable. The meetings have 

presented opportunities to hear from stakeholders of both agencies 

about the challenges—and benefits—of investing in rural America. 

In response to the roundtable discussions, USDA Rural Development leaders from our Rural Business team have been meeting 

with SBA to explore possibilities to increase micro lending availability to rural constituents. 

We determined that there are substantial amounts of resources 

in revolving funds created through several of our programs that are 

available for increasing investment in rural communities. We are 

actively pursuing the relending of these funds by meeting with our 

partners during the first quarter of this calendar year. Participants 

in these roundtables include our revolving loan fund partners, 

SBA, SBA Certified Development Companies, Small Business Development Centers, commercial lenders and other community and 

economic development stakeholders. 

Indeed, one suggestion we received was the need to create consistent and streamlined application processes. We are researching 

options with SBA to make improvements and standardize the process so it is less burdensome on applicants while also ensuring proper due diligence to protect the taxpayer from unnecessary defaults. 

Building on these successes, in 2012, USDA signed a MOU with 

the American Association of Community Colleges to strengthen 

SBREP-219 with DISTILLER

161 

rural economies throughout the Nation. National, State and local 

staffs around the Nation are diligently and creatively working to 

find ways to coordinate with stakeholders and colleagues in other 

Federal agencies to leverage resources and create jobs by supporting businesses. For example, USDA Rural Development in 

California has recently joined into a MOU with the California Community Colleges Chancellor’s Office. In conjunction with this effort, 

the two agencies are partnering with local community colleges and 

Small Business Development Centers—financed through SBA—to 

present capital readiness events throughout the State. The events 

provide information and resources for small businesses seeking financing. 

USDA Rural Development obviously takes pride in our uniquely 

rural focus and our local program delivery model which differentiates us from other Federal agencies. The direct personal contact 

between our agency personnel and lenders, borrowers, communities, families and individuals is invaluable and provides in-person 

technical assistance that would otherwise be unavailable. This intimate relationship encourages agency personnel to work collectively 

and creatively to make our programs more complementary to those 

of other agencies. By doing so, we are able to extend our reach and 

assist more communities. 

Engaging with members and stakeholders on the White House 

Rural Council has also opened doors to improved collaboration and 

coordination. Last summer, I participated in the Regional Innovation in Rural America forum to develop strategies for leveraging infrastructure investments in rural communities that help create jobs 

and boost economic development. Two programs highlighted at this 

forum were the Rural Jobs and Innovation Accelerator challenge 

and the Stronger Economies Together (SET) initiative. 

The Rural Jobs and Innovation Accelerator Challenge (RJIA) 

leverages existing financial and technical assistance resources from 

13 Federal agencies and bureaus. Grant winners were announced 

on August 1, 2012. To date, projects across 12 States have received 

Federal funding to help strengthen regional industry clusters by 

identifying and maximizing local assets, connecting to regional opportunities, and accelerating economic and job growth across rural 

regions. 

Meanwhile the Stronger Economies Together (SET) initiative enables rural communities and counties to work together to implement multi-county economic blueprints to build on a region’s current and emerging strengths. USDA Rural Development launched 

SET with land-grant university partners and Regional Rural Development Centers two years ago. SET is now active in nearly 40 regions in 19 States. 

These are but two examples of USDA’s collaborative efforts with 

other agencies across Federal government to support rural communities that are building durable, multi-county coalitions that foster 

economic development on a regional scale. In addition to providing 

direct economic benefits, regional collaboration allows rural communities to capitalize on economies of scale in infrastructure and 

public services, to encourage the development of specialization in 

industrial sectors that would make them more competitive, and to 

SBREP-219 with DISTILLER

162 

locate facilities and services where they provide the greatest benefit at the lowest cost. Leveraging Federal resources to more effectively support regional economic development efforts continues to 

be an agency best practice. 

USDA Rural Development has a long standing record of consistently implementing new collaborative procedures and meeting increased demand for our services in the face of declining funding 

levels and enormous staff loses. We’ve done so through hard work 

and determination and my implementing Secretary Vilsack’s ‘‘Blueprint for Stronger Service.’’ Under the blueprint, the Department 

identified 379 recommendations for improving USDA’s office support and operations. To realize further efficiencies, USDA Rural 

Development consolidated offices that were, in most cases, within 

20 miles of other USDA offices. In other cases, technology improvements, advanced service centers, and broadband service have reduced the need for significant numbers of brick and mortar facilities. 

Since the beginning of fiscal year 2012, USDA Rural Development has reduced nearly 18 percent of its workforce or 1,053 people. In spite of those reductions, USDA Rural Development has 

been able to maintain a unique connection to rural America—a connection like no other Federal agency—by aggressively implementing the Secretary’s Blueprint and Rural Development’s Seven 

Strategies for Economic Development. We are known as an agency 

that can build a community from the ground up. Today, we are 

helping rural America prepare for the global challenges of the 21st 

century by looking not only within a community for defining 

strengths and opportunities, but to regions and strategic partners, 

where one community or program can compliment and draw upon 

the resources of another to create jobs and strengthen economies. 

We remain committed to increasing economic opportunity and 

improving life for rural Americans. USDA Rural Development is 

helping rural America resolutely move forward. Our presence in 

the rural communities we serve, combined with our local knowledge and uniquely rural focus, continues to set us apart from other 

Federal programs. We know our investments will pay dividends for 

years to come. 

I appreciate the opportunity to testify before members of the 

Committee also appear on this panel with my distinguished colleagues at SBA and GAO. As you can see from the testimony 

above, we work well together and I anticipate that we will continue 

to do so in the future. I welcome the chance to engage in a dialog 

on even more ways we can further support American 

competiveness and growth. Thank you for your support of USDA 

Rural Development programs. And at this time, I am happy to answer your questions. 

SBREP-219 with DISTILLER

163 

SBREP-219 with DISTILLER


Insert offset folio 163 here 80171.135

United States Government Accountability Office 

Washington, DC 20548 

April 11 ,2013 

The Honorable Sam Graves 

Chairman 

The Honorable Nydia Velazquez 

Ranking Member 

Committee on Small Business 

House of Representatives 

On March 20, 2013, I testified before your committee in the hearing on examining 

inefficiencies and duplication across federal programs that provide entrepreneurial 

assistance,1 This letter responds to your request that I provide answers to questions 

for the record from the hearing, The responses are primarily based on work 

associated with our August 2012 report on federal programs that support 

entrepreneurs, 2 If you have any questions about this letter or need additional 

information, please contact me at (202) 512-8678 or shearw@gao,gov, 

William B. Shear 

Director 

Financial Markets and Community Investment 

Enclosure 

'GAO, Entrepreneurial Assistance: Opportunities Exist to Improve Programs' Collaboration, DataTracking, and Performance Management, GAO-13-452T (Washington, D,C,: Mar, 20, 2013), 

'GAO, Entrepreneurial Assistance: Opportunities Exist to Improve Programs' Collaboration, DataTracking, and Performance Management, GAO-12-819 (Washington, D,C" Aug, 23, 2012) 
164 

Enclosure 

Committee on Small Business 

Hearing: ‘‘Entrepreneurial Assistance: Examining 

Inefficiencies and Duplication 

Across Federal Programs,’’ March 20, 2013 

Responses to Questions for the Record 

William B. Shear, Director 

Financial Markets and Community Investment, 

Government Accountability Office 

Based on GAO’s analysis, how extensive is collaboration 

between SBA and USDA across rural America? 

In August 2012, we reported that agencies’ efforts to collaborate 

among programs that support entrepreneurs have been limited. 

The agencies have agreed to work together by signing formal agreements to administer some of their similar programs. For example, 

SBA and USDA entered into a memorandum of understanding 

(MOU) in April 2010 to coordinate their efforts aimed at supporting 

businesses in rural areas. Under the MOU, USDA and SBA agreed 

that their field offices would advise potential borrowers of the other 

agency’s programs that may meet their small business financing 

needs and coordinate the referral of small business applicants to 

one another where appropriate, work to make each agency’s programs more complementary by minimizing differences in program 

fees and processing and closing procedures, and develop joint training seminars on each agency’s programs. USDA’s April 2011 survey 

of state directors indicates progress under the MOU in several 

areas, including field offices advising borrowers of SBA’s programs, 

referring borrowers to SBA and its resource partners, and exploring ways to make USDA and SBA programs more complementary. 

However, the agencies have not yet implemented other good collaborative practices, such as establishing compatible policies and 

procedures to better support rural businesses. 

2. For the March 20, 2013 hearing USDA’s written testimony discussed potentially standardizing certain funding 

applications with SBA. How does this relate to GAO’s recommendations? 

In August 2012, we recommended that the Director of the Office 

of Management and Budget; the Secretaries of the Departments of 

Agriculture, Commerce, and Housing and Urban Development; and 

the Administrator of the Small Business Administration should 

work together to identify opportunities to enhance collaboration 

among programs, both within and across agencies. In prior work, 

we identified practices that can help to enhance and sustain collaboration among federal agencies, which can help to maximize 

SBREP-219 with DISTILLER

165 

3GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain Collaboration among Federal Agencies, GAO–06–15 (Washington, D.C.: Oct. 21, 2005). 

performance and results, and have recommended that the agencies 

follow them.3 These collaborative practices include identifying common outcomes, establishing joint strategies, leveraging resources, 

determining roles and responsibilities, and developing compatible 

policies and procedures. USDA’s discussion of potentially standardizing certain funding applications with SBA is consistent with the 

collaborative practice of establishing compatible policies, procedures, and other means to operate across agency boundaries. 

3. In February 2012, GAO’s annual duplication report 

notes an intention to recommend that Congress tie funding 

to program efficiency. However, GAO’s comprehensive August 2012 report did not make this recommendation. Please 

explain what changed as GAO put together the August 2012 

report that led away from this recommendation? 

In February 2012, we reported that we expected to recommend 

in a subsequent report that Congress tie funding more closely to 

a program’s demonstrated effectiveness. However, based on additional analysis, we concluded that decisions about funding and restructuring would be difficult for Congress without better performance and evaluation information about the various fragmented programs. Thus, we concluded that making this recommendation 

would be premature and that the agencies must first collect the 

necessary information and conduct program evaluations needed to 

inform funding decisions by Congress. 

Specifically, in August 2012, we concluded that agency performance and evaluation information had a number of deficiencies. 

Agencies typically do not collect information that would enable 

them to track the services they provide and to whom they provide 

those services. As a result, we recommended in August 2012 that 

the Secretaries of Commerce, Housing and Urban Development, 

and Agriculture and the Administrator of the Small Business Administration consistently collect information that would enable 

them to track the specific type of assistance programs provide and 

the entrepreneurs they serve and use this information to help administer their programs. Without such information, the agencies 

may not be able to administer the programs in a way that will result in the most efficient and effective federal support to entrepreneurs. 

4. Please provide a list with date and type of all agencies 

responses to the August 2012 report including 60-day letters, 

formal, and technical comments. 

Technical Comments Received on Draft Report 

HUD (August 1, 2012) 

SBA (August 3, 2012) 

Formal Comment Letters Received on Draft Report 

Commerce (dated August 6, 2012) 

HUD (dated August 10, 2012) 

USDA (dated August 1, 2012) 

SBREP-219 with DISTILLER

166 

60-day Letters Received on Final Report 

Commerce (dated October 22, 2012) 

HUD (dated December 5, 2012) 

SBA (dated February 13, 2013) 

USDA (dated November 12, 2012) 

SBREP-219 with DISTILLER

167 

SBREP-219 with DISTILLER


Insert offset folio 167 here 80171.001

House Committee on Small Bnsiness Hearing: 

"Entrepreneurial Assistance: Examining Inefficiencies and 

Duplication Across Federal Programs" 

March ]0, ]013 

Questions for Mr. Michael Chodos, Small Bnsiness Administration (SBA): 

1. Please list individually each pilot program that SBA is currently operating and the cost 

associated ~with each of the unauthorized programs. Spec(ficaIZv, please include Emerging 

Leaders, Business USA Website, Regional Clusters, and the National Vet Training program. 

SBA Response 

As an initial matter. SBA believes that all of its programs and services are established 

in accordance with the authorities provided to the Agency by Congress. Set forth 

below is information responsive to the question. 

Program, Initiative or activity FY13Amount 

Emerging Leaders $1.100.927 

BusinessUSA.gov $1,000.000 

National VET Training Program (Boots to Not funded under 

Business) Continuing Resolution 

Regional Innovation Clusters $3,350.000 

2. For the programs listed in question 1 (Emerging Leaders, Business USA Wehsite, Regional 

Clusters, and the National Vet Training, and an)' others SBA may note). please provide the 

Committee with copies of all metrics used to evaluate the programs and an)' evaluations (If 

the programs. 

SBA Response 

Emerging Leaders 

Since its inception five years ago, the Agency has received extensive ongoing metrics 

for participants in Emerging Leaders. Metrics are collected and reported to SBA by 

Interise. the non-profit entity which facilitates curriculum and delivery of Emerging 

Leaders pursuant to a contract with SBA. Metrics include demographic information 

on participant business owners. size. revenue and Full-Time Equivalent (FTE) count 

for the businesses beHlre the program, and information regarding change in revenue, 

financing and FTEs as a result of the program. A representative sample of the 20 II 

data is set forth below. The data includes demographic information about the 2011 

cohort as well as survey responses received from 2008-20 II cohort attendees. all of 

whom are sent surveys each year. This is the most current available complete annual 

data. The budget lor 2012 was approximately $1.101.000. 

Page 1 of 10 
168 

SBREP-219 with DISTILLER


Insert offset folio 168 here 80171.002

Emerging Leaders Performance Metrics 

Class enrollment 

Graduates 

Retention rate 

Number of participating locations 

SBA Budget 

Percentage Female 

Percentage Minority 

Percentage Located in Lower Income Census 

Tracts 

Average mnnber of employees (FTEs) 

before e200, per business 

A verage revenue before e200, per business 

Assessment Respondents 

% of businesses reporting an increase in 

revenue 

Number of businesses increasing revenue 

A verage value of revenue increase 

Total value of new financing secured 

Number of businesses securing new 

financing 

A verage value of new financing secured 

% of companies that hired new employees 

Number of FTEs created 

Average starting salary of new employees 

Total value of govennnent contracts 

% of businesses that seeured government 

contracts 

Number of businesses securing government 

contracts 

A verage value of government contracts 

secured 

Regional Innovation Clusters 

201 I 

437 

344 

79% 

27 

$1,389,000 

45% 

68% 

36% 

14 

$1,820,691 

549 

67% 

295 

$608,188 

$26,381,044 

79 

$333,937 

75% 

908 

$330,847,264 

48% 

249 

$1,328.704 

Through a third-party economic evaluation expert, the Agency has conducted 

extensive studies of the initial two years of activity within its ten contract-based 

Regional Innovation Clusters. A full copy of the first and second year's Data studies 

are available in either paper or PDF [clOnat. 

Page 2 of to 
169 

SBREP-219 with DISTILLER


Insert offset folio 169 here 80171.003

BusinessUSA 

BusinessUSA is in an ongoing development process. It maintains a host of 

information about website development, content mapping, agency participation and 

work flow. It also tracks a host of web-based data on user traffic, social media 

activity, web referral sources, etc. Any component of such information is available 

upon request. 

National VET Training Program (Boots to Business) 

The Boots to Business program is currently in its developmental, foundation-laying 

stage in anticipation ofa full national roll-out in FYI4, contingent upon enactment in 

the FY 14 budget. During this phase, the Agency is tracking the following activity: 

• Number of initial, early-stage two-day in-person and eight-week online 

courses held 

• Bases where held 

• Courses by service branch 

• Attendees by service branch 

• Gender/ethnicity and rank of attendees 

The data is collected by way of post class surveys, participant sign-in forms, and 

direct input from SBA's Resource Partner network. Both the surveys and sign-in 

forms were specifically created for the program to ensure proper calculations. 

SBA is working jointly with the Departments of Defense and Veterans Affairs in an 

effort to develop and synchronize data collection across all components of the TAP 

program. That process should be completed by year-end FY 13. 

3. SBA 's written testimony discussed a pilot program which matches SBA injiJrmation and 

census data. Please provide the cost ()/ operating Ihis program and resources, such as 

employees and time. which this program will utilize. Further, please provide the timelinefor 

results and delineate what results and achievements SBA expectsfrom this pilot program. 

SBA Response 

SBA is currently in discussions with OMR Council of Economic Advisers (CEA), 

and other agency stakeholders about creating and launching a pilot initiative to 

perform more wide-ranging analysis of program data. including identifying ways to 

compare that data to public databases. SBA has engaged in preliminary discussions 

with the Association of Small Business Development Centers (ASBDC) about the 

pilot. These discussions are in the very initial stages and are subject to identifying 

and addressing data and privacy matters and receipt of requested budget authority to 

fund implementation oflhe pilot. data collection. and analysis . 

.t. For each of the .fiJllowing programs - Small Business Development Centers. Women's 

Business Centers, and SCORE, please provide the Committee with the number of jobs 

crealed and number oj' businesses assisted for the past 5 fiscal years. Addi'ional~v, please 

explain the SBA '.I' method/iJr calculating these metrics. 

Page 3 of 10 
170 

SBREP-219 with DISTILLER


Insert offset folio 170 here 80171.004

SBA Response 

SBA developed and currently maintains a data collection mechanism, the 

Entrepreneurial Development's Management Information System (EDMIS). The 

system is used primary to collect dient demographic information, activity data, and 

outcome statistics for counseling clients across Small Business Development Centers 

(SBDCs). Women's Business Centers (WBCs), and SCORE. EDMIS also collects 

more basic, non-dient-specific demographic and training activity data for SBA's 

Resource Partner network (i.e., SBDC, WBC, and SCORE). 

As requested, the following data was generated to address the activity within the 

Resource Partner network over the past five fiscal years: 

IOOs(reated 

JoosRetained 

NumberoiNewBulinelsStJrts 

,Counseling 

12,l9fJ 14,60S 

16.202 11,001 

12,7Ji) 11,111 

n,SlO !S,770 19.111 

21293 32,431 34.68S 

13,639 13,664 14,317 

101 2.m 666 174 138 3S4 1&8 

263 m 446 199 182 300 116 

S'3 931 1,077 816 818 m m 

757 1119 

1,257 SSB 

689 701 

Tota!WerofClie!lts 

Counseled 

TotaiNumberofE'iternled 

EngagementdientsCounse!ed 

Total NumberoflJmgTerm 

diems Counseled 

1S4,716 108.374 109,118 205,408 211,091 180)18 103)36 170,387 135,818 166,109 16,400 14"15 2&)94 ll,118 

50,807 11.187 60.683 64,SOS 69,490 11,692 11.661 11.199 lOS11 12,224 3,m 3A67 J,471 3.114 

13.557 18,468 IW7 SUl7 67,012 10.011 9.701 8,421 7,015 1,136 3.168 1.921 1~94 1,908 

Total Hourso!Clienl$ 

1,141,103 1.m,836 l.2S0.771 1,190,041 1,376,1,0 HUll 360,881 300,389 243,661 314,388 BO,m npl 71,121 72,920 

ToralNumberofTraining 

368.7l1 37S,669 379,794 311,190 ll1.4l1 179,&01 176.611 136.813 1l1,019 m,164 133,479 131,065 135,941 115,805 

Total/lumberolTraming 

fimIrs 104,905 11,163 101.104 94,698 66.146 61.304 61,886 77.678 76,511 113,839 40.511 32.7S£ 30,6<17 27.7ll 

Totallfumileror(Traimng 

HOUfs*Tota!numbertrainedj 

Total NumberclTraining 

Sessions 

1.m,m 1,614,033 1,&14,391 1549,532 1.4·03,211 612,078 668,196 813$,1 -629.217 733,316 841.063 537}42 491231 415,015 

33,694 11,13S 33,841 l2.019 31.631 46,787 41,101 60,116 60,061 94,633 15,320 14,148 18,m 

5. During the hearing, the Ciovernment Accountability Office (CiAO) ,Ipecifically mentioned that 

the Historically Underutilized Business Zones (HUBZone) program was failing to meet its 

ohjectives, please explain SBA's plans to strengthen this program 's eflectiveness and what 

SBA has done since GAO's ]008 report on HUBZones. 

SBA Response 

Since June 2008, the IlUBZone Program has focused on monitoring and reviewing its 

portfolio, as well as enhancing the certification process. HUBZone is currently estahlishing 

a targeted outreach approach, identifying specific geographical areas and industries that have 

the potential to benefit from participating in the program. 

6. Further, SBA 's written testimony references collaboration between United Slaies Department 

of Agriculture (USDA) and SBA on rural HUBZones, please explain how SBA plans to 

Page 4 of 10 

16.198 

LO~ 

ill 

69' 

11.0101 

3,413 I 

1,980 

69,775 

114,931 

11,611 

388.JSJ 

14.m 
171 

SBREP-219 with DISTILLER


Insert offset folio 171 here 80171.005

generate positive and effective collaboration when utilizing a program identified hy GAO as 

ineffective, 

SBA Response 

Since the release of the 2008 GAO report, SBA has worked diligently to improve the 

oversight and effectiveness of the HUBZone program. In many ways, these improvements 

will depend on effective collaboration with our sister agencies, including USDA. 

7. When awarding funding or grants through SBA programs listed in GAO's August 2012 

Report entitled "Entrepreneurial Assistance: Opportunities Exist 10 Improve Programs' 

Collahoration, Data-Tracking, and PerfiJrmance Management," does the SBA consider 

geographic distance hef1.veen programs' 

SBA Response 

SBA's 63 grants to Lead Small Business Development Centers are made on a 

geographic basis with most states having a single Lead Center that operates 

throughout the state, Those states that have more than one Lead SBDC divide the 

slate into distinct Lead Center regions. 

In the WBC program, the approximately 106 centers are spread across the country. 

currently with at least one center in each state, WBCs are generally located at least 

50 miles from each other. 

In the SCORE program, the Agency makes a single grant to National SCORE, which 

in tum manages hundreds of chapters and counseling locations across the country to 

provide staffing and access to SCORE assistance at SBA District Offices, libraries, 

Chambers of Commerce and other locations where businesses can most readily access 

counseling and training, SBA's Resource Partner network is thus very broadly 

distributed across the country. 

8. As GAO found that SBA did not track program information on entrepreneurial assistance 

activities jilr various prow'ams, please explain how SBA is ensuring compliance with 

government standardsfilr internal controls, 

SBA Response 

SBA is not aware that GAO found that SBA does not track program infonnation for 

its entrepreneurial development programs. Rather, at the hearing, GAO noted that 

SBA's Office of Entrepreneurial Development (OED) engages in active and effective 

tracking of its program activities and outcomes. 

OED requires its Resource Partners to track and report detailed demographic 

information about our small business clients: infonnation about what services are 

provided to those clients; and information about what outcomes those clients report 

(e.g .. business starts, job creation, etc.) as a result of those services, 

Page 5 of 10 
172 

SBREP-219 with DISTILLER


Insert offset folio 172 here 80171.006

In addition to the data provided in response to Question 4, OED and our Resource 

Partners engage in annual evaluation through surveying of the client pool receiving 

our services to determine attitudinal changes, management changes, and the overall 

effectiveness of the programs. 

In addition to its tracking of program performance and outcomes, SBA's OED also 

engages in regular financial and programmatic oversight to ensure compliance by its 

Resource Partners with grant/cooperative agreement obligations and financial recordkeeping and reporting requirements. OED. as well as other SBA offices. complies 

with the Agency's annual internal control review and certification process. 

9. Both SBA's and USDA's written testimony references an interagency group which was 

created to develop an action plan for improved collaboration as well as a strategy for data 

collection. Please provide the Committee with a list olall meetings held thus far including 

the number (?I'agency representatives and locations. Further. please provide any action or 

strategic plans developed by this interagency group. 11' none have been made at this time, 

please provide a timelinefi)r when these are expected. 

SBA Response 

SBA is participating in a series of interagency meetings in collaboration with the 

Performance Improvement Council (PIC) to discuss data collection, program 

evaluation, and performance measures to create consistent and relevant standards 

across the agencies that support entrepreneurship. 

SBA and the Department of Commerce also jointly sponsor a "Smarter Data. Smarter 

Policy" initiative, the goal of which is to develop a consistent data set that is widely 

accessible to government statistical and business agencies. 

SBA is working with OMB, the Council of Economic Advisers. Commerce and 

USDA on an interagency pilot to pursue a cross-program study of business technical 

assistance programs. One goal of the pilot is to determine whether SBA program data 

can he matched with Census data to accomplish the broader objective of measuring 

the impact these programs are experiencing related to their stated mission. 

The "Evaluation of Business Technical Assistance Programs" working group has 

increased the collaboration of agencies that operate business related technical 

assistance programs. The primary goal of the group is to assess the effectiveness of 

technical assistance programs for small businesses and to facilitate the sharing of best 

practices in this area across the working group agencies. 

The numher of attendees has varied at each meeting, ranging from between I () and 25 

attendees per meeting. Attendees include representatives from OMB. the Council of 

Economic Advisers, USDA, and the Department of Commerce. Meeting dates and 

locations are shown in the table below: 

Page 6 of 10 
173 

SBREP-219 with DISTILLER


Insert offset folio 173 here 80171.007

Meeting Date Location 

11120112 New Executive Office Buildina 

12/18/12 White House Conference 

Center 

1115/13 New Executive Office Building 

1130113 White House Conference 

Center 

2/8/13 (Sub-group on White House Conference 

SBA) Center 

2/19/13 Conference Call 

4/2/13 White House Conference 

Center 

The Evaluation of Business Technical Assistance Programs working group is in the 

process of determining what information is currently available on involved agencies' 

business technical assistance programs, as well as what information could be obtained 

that could then be used to measure the impact and assess the effectiveness of the 

programs, Involved agencies are currently taking steps to assess the feasibility of 

doing a pilot evaluation, Once the pilot is complete, the group will assess the results 

and determine whether an evaluation model can be established for use across the 

federal government 

10. Many o/SBA '.I' prof.;rrams are delivered in partnership with others. What data does SBA 

collectfrom its partners to ensure effectiveness o/these programs? Further. how does SBA 

work with its resource partners to establish perj(mnance goals? 

SBA Response 

SBA's data collection from its Resource Partners is accomplished (I) through data 

collected through the 641 and 888 forms and then reported into EDMIS; and (2) 

through surveying and other follow-up conducted by SBA and also by the Resource 

Partners directly. With respect to other SBA entrepreneurial development initiatives 

and programs, see also the response to Question 2, above. 

Starting in FY 12, OED undertook a comprehensive modernization project for EDMIS 

to enhance current data fields, synchronize data outputs with our Resource Partner 

network, improve budget and performance integration capabilities, and expand 

reporting capabilities. OED is further seeking to collect more robust data on 

counseling and training in order to capture a more accurate and complete picture of 

the services and benefits that our Resource Partners provide. By year-end FYI3, we 

expect to have our modernization of the EDMIS system substantially completed. 

Additionally, we are also working with all Resource Partners to identify and align all 

our respective surveying and program evaluation study methodologies to harmonize 

the data collected through these efforts and have a coordinated set of data sources 

between EDM1S and these survey efforts. As part of this process, the Agency has 

Page 7 of 10 
174 

SBREP-219 with DISTILLER


Insert offset folio 174 here 80171.008

identified strengths and gaps in the EDMIS data collection system. as well as 

strengths and opportunities for further integration of EDMIS data collection with 

survey data collection. especially around "outcomes" measurement across the SBDC. 

SCORE and WBC networks. 

With respect to performance goals, each year SBA's OtTice of Entrepreneurial 

Development works with each of its Resource Partners to negotiate and set 

performance goals for the upcoming year. Such discussions are interactive and are 

based upon prior years' performance. available budget, economic conditions. and any 

other specific issues or challenges that might be pertinent to activity in the coming 

year. As a result of these discussions, specific goals are set for the coming year and 

then tracked over the course of the year. 

II. For the Memorandum (il' Understanding (MOU) hetween SBA and USDA regarding rural 

development. set to expire in April 2013, please answer: 

a. Whether the current MOU is heing extended, altered. or voided? 

SBA Response 

USDA and SBA are currently drafting proposed amendments to the Memorandum of 

Understanding (MOll). These amendments will extend the MOU nationwide. 

strengthen collaboration within the Agency's intermediaries and networks of resource 

partners. and broaden participation in the MOll by adding the USDA Farm Service 

Agency as a partner. 

i. Il'it is heing altered please provide the ('ommittee with a copy 01' the new 

MOU as soon as it is availahle. 

SBA Response 

The Agency will provide the Committee with a copy of the MOU as requested 

once it is available. 

h. Whether the /\I[OU, which was originally only in 10 states, was ever rolled out 

nationally? Il'not, will a.fi/ture MOll hetween USDA and SBA he nationwide:' 

SBA Response 

Yes. the MOll was rolled out nationally. On April 11.2011, USDA's Rural Business 

Cooperative Service (RBS) sent a letter to Rural Development State Directors to 

encourage all states to implement the MOL!. The letter specifically stated that 

·• ... RBS is grateful to the 17 states that initially implemented the MOl!; the MOl! 

applies to all USDA National and State Oftices." 

Furthermore. RBS used the 2011 collaboration surveys to assess whether the MOU 

was being implemented in all states and further encourage national implementation. 

The survey results showed that the MOU was being implemented nationally. The 

Page8ofl0 
175 

SBREP-219 with DISTILLER


Insert offset folio 175 here 80171.009

respondents demonstrated that they collaborate with SBA in a variety of ways, 

usually by providing reterrals and conducting joint training and outreach. 

As noted in the response to the previous question, USDA is currently drafting 

proposed amendments to the MOO that extends the partnership nationwide. 

c. The MOU states SBA and USDA will meet "every! 3 months to measure progress 

under this MOl!" Please provide the Committee with a list of all the locations and 

dates of all meetings hetween USDA and SBA as required hy this portion ollhe MOl! 

SBA Response 

SBA and USDA have met on numerous occasions to implement and discuss our 

collaboration under this MOU. Meetings specific to "measuring progress" 

include, but are not necessarily limited, to those shown in the following table: 

(,ncatin(\ Date 

USDA National Headquarters, August 29, 2010 

Washimrton DC 

USDA National Headquarters, September 9, 2010 

Washington DC 

USDA National Headquarters, April 25, 2012 

Washington DC 

Small Business Administration, January 23, 2013 

Headquarters, Washington, DC 

Small Business Administration, March 12,2013 

Headquarters Washington, DC 

[n addition to the meetings shown above, the MOU has fostered additional 

opportunities for USDA and SBA to collaborate. For example, the two agencies 

co-hosted six investment roundtables. These roundtables enabled both agencies 

to reach out in a collaborative effort to their respective stakeholders to identify 

new opportunities for leveraging each other's programs. In addition, USDA's 

State Offices frequently collaborate with SBA's Regional Offices to conduct 

outreach and meet regularly to discuss new opportunities for collaboration. 

d. Under the MOU set to expire in April 2013, please explain the factors used to 

measure proW'ess and any best practices ascertained under this 1140U 

SBA Response 

USDA conducted two surveys in 20 II and determined that there was significant 

collaboration between USDA and SBA. The survey questions asked respondents 

about their collaborative efforts with SBA and the factors measured mirrored the 

expectations outlined in the MOl!. For example. the survey asked respondents about 

how many projects and trainings they eonductedjointly with SBA. 

Page 9 ofl0 
176 

SBREP-219 with DISTILLER


Insert offset folio 176 here 80171.010

The survey results showed that all respondents collaborated with SBA. In fact. in 

June 2012, GAO agreed that the survey results demonstrated significant collaboration 

between USDA and SBA and closed its inquiry on the su~iect, stating that USDA 

fully implemented its recommendation to increase collaboration with SBA. 

Best practices identified as a result of the survey include: 

• Participating in networks of Federal, state, and local economic 

development organizations that host monthly conference calls to discuss 

key issues and areas for collaboration; 

• Co-hosting regular, joint outreach and training meetings; and 

• Co-hosting statewide conferences. 

Page 10 oflO 
177 

Committee on Small Business 

Hearing: ‘‘Entrepreneurial Assistance: Examining Inefficiencies and Duplication across Federal Program’’ 

March 20, 2013 

Questions for Mr. Doug O’Brien, United States Department of Agriculture (USDA): 

1. Please provide a list of all programs and operations, specifically those mentioned in responding to Rep. Luetkemeyer during 

the March 20, 2013 hearing, related to a Blueprint for Stronger 

Service, which delineates programs and savings occurred through 

streamlining and cuts. 

RESPONSE: USDA Rural Development made contributions to 

the $700 million saved under the Secretary’s Blueprint for Stronger 

Service by consolidating and reorganizing its field office structure, 

providing projected savings of $758,000 annually. These efforts are 

continuing and are expected to result in additional savings over the 

next few years. Rural Development achieved additional savings of 

$1.3 million with reductions in printing, supplies and promotional 

items. Furthermore, the Agency anticipates savings from data center 

consolidation at our National Information Technology Center and 

changes to the Working Capital Fund and Greenbook charges. 

Those savings are cumulative and have not been broken down by individual agencies. 

Blueprint for Stronger Service (Departmental Chart) 

Savings/Efficiency Breakdown Initiative Savings/Efficiency Realized 

Office Closures $37 million 

Real Property $259.2 million 

Disposals/Terminated Projects (not including Office Closures) 

Sustainability - Energy Savings $6.5 million 

Improved Space Management $13.2 million 

Strategic Sourcing $62 million 

IT Service and Hosting Efficiencies $20 million 

Streamlined IT Purchases $31 million 

Travel Efficiencies $129 million 

Reduced publications/printing $8 million 

Improved oversight - Advisory Contracts $56 million 

Centralized Supply Purchases $27 million 

Promotional Item Reductions $300,000 

SBREP-219 with DISTILLER

178 

Savings/Efficiency Breakdown Initiative Savings/Efficiency Realized 

Agency-specific initiatives (e.g., process improvements and organizational changes) $55 million 

Total $704.2 million 

In addition to the Blueprint for Stronger Service, since the beginning of fiscal year 2012, USDA Rural Development has reduced 

nearly 18 percent of its workforce or 1,053 people. Those reductions 

will save the Agency an estimated $95,359,680 per year in staff 

costs in future years. 

2. Please provide examples within the Rural Development branch 

of the USDA, other than salaries and expenses, where the Agency 

has instituted cuts to programs to generate savings. 

RESPONSE: Rural Development (RD) programs are financial 

assistance programs; that is, they provide grants, loans, and/or 

loan guarantees. Thus, cuts in budget authority, such as those experienced by the sequester, decreases the amount of financial assistance to rural constituents. 

Nevertheless, RD continues to improve the efficiency in the overall 

delivery of our programs, which results in savings. For example: 

• Regional Field Structure. Rural Business Service (RBS) improved program efficiency by developing a regional field structure 

across ten regions. This regional structure allows the National Office to (1) provide direction and oversight for all RBS programs nationally, with reliance on two Regional Coordinators and ten RBS 

Team Leaders who provide guidance to the State RBS Program Directors in their regions and (2) reduce the amount of travel and 

training expenses by reducing the number of staff that attend training. Typically, Regional Coordinators work with National Office 

staff to train Team Leaders who then provide guidance and direction to the Program Directors in their region. This approach also 

improves communication across the agency, resulting in greater consistency in program delivery. 

• Intermediary on-line reporting system. Implemented in 2011, 

RBS now requires all Intermediary Relending Program (IRP) and 

Rural Microentrepreneur Assistance Program (RMAP) intermediary 

lenders, and strongly encourages Rural Economic Development 

Grant and Rural Business Enterprise Grant revolving loan fund 

intermediaries, to provide their quarterly and semiannual reports 

through an on-line system, Lender Interface Network Connection 

(LINC). Previously, 450 IRP and nearly 100 RMAP lenders used 

spreadsheets and other software to develop their quarterly and semiannual reports, submitted the reports to the Agency in paper copy, 

and the Agency staff inputted the appropriate data into the Agency’s 

data system. With the new system lenders access the Agency data 

base through LINC and input their data directly into the Agency’s 

data system. In addition to benefiting efficiency, the LINC system 

also improves on the completeness and integrity of the lenders data. 

SBREP-219 with DISTILLER

179 

• Centralizing Guaranteed Housing Process. The Rural Housing 

Service (RHS) directed each State Office to centralize the loan guarantee process for the Single Family Housing Guaranteed program. 

The purpose of the initiative is to maximize efficiencies that enable 

a reduction in staff time while still meeting audit requirements and 

providing states flexibility. Each state was instructed to centralize 

the guarantee process into one entry point, and then electronically 

distribute workflow to the appropriate workstation where the designated employee was located. The purpose was not to reassign employees to a central office location, but to deploy technology for a 

process improvement as a remedy for staff reductions. The result of 

the centralization initiative has been a great success. All states have 

centralized their guarantee workflow process or are in the process 

of implementing it. Some states have implemented this process improvement to other Rural Development programs. 

• Rural Alaska Village Grant Program. The Rural Utilities Service has also undertaken streamlining initiatives to improve performance and accountability measures. In FY 2010, we launched a process improvement project to address issues related to the Rural Alaska Village Grant Program. A Steering Committee composed of senior officials from both the national and state offices of USDA Rural 

Development, Alaska Department of Environmental Conservation, 

Alaska Native Tribal Health Consortium, Indian Health Service, 

Environmental Protection Agency and the Denali Commission was 

formed and convened in Anchorage. In June of 2011, the partners, 

signed an MOU outlining a streamlined application process, new 

grant agreements, improved accountability measures and other critical documents. Today, we are seeing the results of those efforts with 

projects being built serving Alaskan villages, many for the first 

time. Based on these successes, we are in the process of codifying the 

streamlining of this program through a regulation that we plan to 

announce later this year. 

3. As the Government Accountability Office (GAO) August 2012 

report entitled, ‘‘Entrepreneurial Assistance: Opportunities Exist to 

Improve Programs’ Collaboration, Data-Tracking, and Performance 

Management,’’ found that USDA did not track program information 

on entrepreneurial assistance activities for various programs, 

please explain how USDA is ensuring compliance with government 

standards for internal controls. 

RESPONSE: USDA is continually seeking ways to better achieve 

agency missions and program results while working to address and 

implement program changes and improve operational processes. 

The GAO report indicated that for all its programs, USDA collects detailed information on the industry of each of the entrepreneurs it supports as well as on how entrepreneurs use program 

proceeds. USDA seeks to build on this foundation and continuously 

improve the ability to track and measure performance information. 

For example, Rural Business-Cooperative Service (RBS) has reviewed and updated its policies regarding collecting data relating to 

program performance measures. Objectives include building consistency with policies and procedures of other Federal agencies administering similar programs (e.g., SBA and EDA), building consistency 

SBREP-219 with DISTILLER

180 

across all RBS programs, and improving the integrity of data. The 

draft of updated policies was completed in October 2012. RBS provided training to National Office and field office staff through a series of webinars and published the updated policies and procedures 

in an Unnumbered Letter dated January 18, 2013. The text of the 

Unnumbered Letter is located on the USDA Rural Development 

website. 

RBS will continue to conduct training to improve data collection 

and maintenance of data related to program performance measures 

and to improve data quality. We now conduct bi-annual surveys to 

assess the level of collaboration between SBA and USDA Rural Development and to identify best practices for increased collaboration. 

These actions, in conjunction with Customer Service Scores, are 

helping us to continually evaluate program effectiveness and satisfaction. 

Currently, RBS gathers data on all its programs and projects, 

which is analyzed to assess program effectiveness. RBS conducts 

regular evaluations of programs on both national and state levels. 

These reviews rely on data maintained in an electronic database as 

well as project files. Management Control Reviews (MCRs) are a 

process that Rural Development uses to assess program effectiveness. The MCR process examines a particular program and how it 

is administered across the country. The Business and Cooperative 

Program Assessment Review is an RBS process that examines how 

individual states administer all of Business and Cooperative Programs. Both tools identify recommendations to enhance the effectiveness of RBS programs. 

USDA continuously evaluates opportunities to keep up with advances in information technology and implement changes when possible to address management and performance challenges in areas 

at the greatest risk of waste, fraud, abuse, and mismanagement. 

4. Both the Small Business Administration’s (SBA’s) and USDA’s 

written testimony references an interagency group which was created to develop an action plan for improved collaboration as well 

as a strategy for data collection. Please provide the Committee with 

a list of all meetings held thus far including the number of agency 

representatives and locations. Further please provide any action or 

strategic plans developed by this interagency group. If none have 

been made at this time, please provide a timeline for when these 

are expected. 

RESPONSE: The Evaluation of Business Technical Assistance 

Programs working group has increased the collaboration of agencies 

that operate business related technical assistance programs. The 

primary goal of the group is to assess the effectiveness of technical 

assistance programs for small businesses and to facilitate the sharing of best practices in this area across the working group agencies. 

The numbers of attendees have varied at each meeting, ranging 

from between 10 and 25 attendees per meeting. Attendees include 

representatives from the Office of Management and Budget, the 

Council of Economic Advisers, and the Department of Agriculture, 

the Department of Commerce, and the Small Business Administration. The meeting dates and locations are shown in the table below: 

SBREP-219 with DISTILLER

181 

Meeting Date Location 

11/20/12 New Executive Office 

Building 

12/18/12 White House 

Conference Center 

1/15/13 New Executive Office 

Building 

1/30/13 White House 

Conference Center 

2/8/13 (Sub-group on SBA) White House 

Conference Center 

2/19/13 Conference Call 

4/2/13 White House 

Conference Center 

The Evaluation of Business Technical Assistance Programs working group is in the process of determining what information is currently available on involved agencies’ business technical assistance 

programs, as well as what information could be obtained that could 

then be used to measure the impact and assess the effectiveness of 

the programs. Involved agencies are currently taking steps to assess 

the feasibility of doing a pilot evaluation. Once the pilot is complete, 

the group will assess the results and determine whether an evaluation model can be established for use across the Federal Government. Because of the early stages of these efforts, a more exact timeframe for this work is not available. 

5. USDA’s written testimony indicated that USDA’s Rural Business-Cooperative Service is developing a strategic plan that includes an initiative to improve the quality of its performance within the next two years. Please delineate the milestones within this 

plan and explain the benefits and goals of this strategic plan. 

RESPONSE: In 2012, Rural Business-Cooperative Service (RBS) 

began an agency-wide effort to develop a strategic plan aimed at enhancing effectiveness and efficiency. The plan included a focus specifically on program performance and evaluation. The goals were to: 

1. Maintain and promote justifiable performance measures 

with a continued emphasis on job creation; 

2. Maximize capabilities of current data collection system and 

process to better position the agency to conduct broader program analysis; and 

3. Evaluate potential for additional performance measures, 

which more thoroughly reflect outcomes of specific programs. 

The benefits to be obtained through the implementation of a strategic plan are primarily the ability of RBS to deliver its programs 

more effectively and efficiently to adjust to changes in its budget 

and staffing levels, and to help RBS plan a more orderly succession 

of leadership as personnel changes take place. 

SBREP-219 with DISTILLER

182 

The strategic plan referenced in the written testimony is in draft 

form pending final budget numbers as the Agency continues to seek 

opportunities to improve program performance. With this caveat in 

mind, the current draft identifies initiatives in six primary areas: 

• Budget and staffing 

• Outreach 

• Performance Measurement 

• Program Review Process 

• Leadership Development and Succession Planning 

• IT Needs and Technology 

As RBS was drafting the strategic plan in FY2012, we began to 

identifying general timeframes for implementing each of the six initiatives. These timeframes ranged from about 9 months (outreach) 

to about 30 months (IT Needs and Technology). The ability to meet 

and complete any of these initiatives will depend, in part, on the 

availability of funds. 

6. In terms of roundtables held with SBA as a form of collaboration, please provide the Committee with a list of each roundtable 

held, its location, number of attendants (please separate for number of USDA officials, number of SBA officials, and number of 

small firms/entrepreneurs), and a summary of responses. 

RESPONSE: There were six roundtable held. Their dates, location, and breakdown of participants are shown in the following 

table: 

Date Location Venue Total USDA 

officials 

SBA 

officials 

Other 

Participants 

9/27/2011 Raleigh, NC North 

Carolina 

State 

University Park 

Alumni 

Center.

32 3 3 26 

10/26/ 

2011.

Saint Paul, MN Agri Bank 

Conference 

Room.

19 3 2 14 

12/15/ 

2011.

Syracuse, NY Dairylea 

Cooperative 

Building.

40 3 2 35 

4/12/2012 Columbus, OH Columbus 

Dispatch 

Kitch 

Event 

Room.

27 2 2 23 

SBREP-219 with DISTILLER

183 

Date Location Venue Total USDA 

officials 

SBA 

officials 

Other Participants 

2/14/2012 Fresno, CA Fresno 

Council 

of Government 

Conference 

Room.

27 3 2 22 

6/20/2012 Denver, CO Rural Development 

State Office.

16 3 2 11 

Summary of Discussions—Challenges and Opportunities: Note: 

The following represent the views of the community participants, 

not the USDA or SBA. 

• Need to take advantage of existing programs and funding because it appears unlikely that new programs will be developed any 

time soon. At the same time, there is concern that we may be driving 

up demand for programs when we are experiencing a decrease in 

program funding. This has the potential to create ill will among 

current/future participants. 

• The SBIC platform could spur investment in low and moderate 

income areas of the country, especially rural areas. Research shows 

that funds that proactively invest in low and moderate income areas 

slightly outperform their peers. There are opportunities in these 

areas, and SBA wants to develop partnerships to take advantage of 

those opportunities. 

• The possibly of creating a rural SBIC was brought up. SBICs 

are asking how sustainable the agricultural economy is. While an 

SBIC with strictly a rural focus could be a challenge, a fund with 

rural incentives and rural targets would be a real possibility. USDA 

and SBA need to do a better job of education and connecting rural 

lenders with SBICs. 

Æ SBICs need to be educated about how they can best work 

with rural lenders. 

Æ The main challenge for having SBICs invest in rural is 

connecting dots, mitigating risks, and educating rural lenders 

about how SBICs could help. 

Æ A similar challenge is the uncertainty and a lack of knowledge from rural lenders about how SBICs could help. An organization such as Agribank or Agstar would be a good resource 

to educate SBICs about rural investment opportunities, or offer 

general insight on the agriculture and rural economy. This 

would all be part of the education process. 

• SBICs are looking to invest in proven companies with about $2– 

4 million in operating funds. Anything under $2 million typically 

goes to angel investors. SBICs are able to partner among each other 

for larger projects. Government programs that are available to leverage these investments should be promoted more than they are. 

SBREP-219 with DISTILLER

184 

• Angel investor attendees also stressed the importance of concen- trating some resources and investment on companies with $2 million or less in operating funds. How can angel networks access 

funding in a timely manner for vetted businesses? Access to capital 

for business with under $2 million in operating funds is concerning. 

These businesses need access to capital now and sometimes waiting 

for the government review process takes too long. A system where 

vetted businesses could qualify for immediate funding, which would 

be paired with angel investment, would be beneficial. 

• One challenge is finding a way to bring all of these different resources together and make them available to businesses and entrepreneurs in and easy-to-understand method. 

• USDA and SBA need to focus not just on jobs, but also on 

smaller self-employers and entrepreneurs that are not looking to 

constantly grow into something bigger. Most entrepreneurs just 

want to make enough to take care of their family. Partnering with 

‘‘big businesses’’ is very important, but USDA and SBA cannot forget about smaller firms. 

• One challenge frequently mentioned was the need for greater 

technical assistance to build capacity for small and micro businesses. 

• The current workforce does not align with education, especially 

technical education. Rural businesses, especially manufacturers, 

cannot find employees with the skills required due to a shortage of 

people with the necessary technical degrees. 

• One of the ways that USDA and SBA will be able to continue 

sustained contributions to rural communities and residents will be 

through meetings like these. 

Æ Rural investor roundtables like these should occur throughout the year. 

Æ Rural investor roundtables should include other colleagues 

and partners from various regions throughout the state. 

Æ Investor roundtables should also include a greater number 

of banks and lenders 

• More foundations should be participating with USDA to: 

Æ Conduct infrastructure and transfer of wealth studies/discussions with community leaders; 

Æ Identify philanthropic partnership opportunities 

Æ Further discuss ways to stop transfer of wealth/talent 

(brain drain) out of rural communities; and 

Æ Address challenges involved with access to capital in rural 

areas, such as upstate New York. 

• USDA and SBA should explore buying down risk through bank 

guarantees and investigate whether or not endowment dollars (from 

universities for example) could be used to make strategic investments (similar to loan guarantees) in rural communities. It was 

also pointed out that State pension funds are an ‘‘untapped resource’’ for investment in small businesses. 

• More lenders should move beyond reluctance to participate with 

USDA and loan guarantee programs. The process is easier than 

some would think. 

SBREP-219 with DISTILLER

185 

• There is interest from funders making local investments with 

endowments and they could be investment partners with some of the 

participants at the roundtable. 

• USDA and SBA should continue to reach out to existing stakeholders and to new lenders through periodic newsletters and emails 

detailing new programs, funding opportunities, and other roundtable functions. Share program funding opportunities and experience with government partners on past projects. 

7. USDA’s written testimony stated that bi-annual surveys are 

conducted to assess collaboration between USDA and SBA. Please 

provide the Committee with copies of the two most recent surveys, 

number of respondents, and a summarized list of the results to the 

survey questions. 

RESPONSE: In 2011, RBS conducted two surveys of state offices 

to assess the level of collaboration between USDA and SBA and 

identify best practices for increasing collaboration. The surveys conducted in April and October of 2011, had 40 and 41 respondents respectively. Each survey asked the same 17 questions, which mirrored the expectations outlined in the MOU. Results from both surveys were similar. 

General conclusions from the survey: 

1. Areas of strong collaboration include referrals, outreach, 

and interagency communication. For example, in both surveys 

all respondents said that they do encourage their resource partners to make referrals to SBA and its resource partners. 

2. Areas where collaboration could be improved include linking to websites and special projects. USDA is part of the interagency team that helped to develop content for 

BusinessUSA.gov, the website that will serve as a one-stop shop 

for entrepreneurs by linking all applicable federal assistance 

and resources. Additionally, since the survey was conducted, 

RBS and SBA co-hosted several roundtables across the country, 

as described in the response to the previous question. 

Below are the questions and responses from the two surveys. 

RBS - SBA Collaboration Survey: Summary of Results 

Highlights: 

• 17 questions 

• 40 states responded in April and 41 in October 

• Areas of strong collaboration include referrals, outreach, and 

interagency communication 

• Areas with weaker collaboration include linking to SBA website 

and identifying one special joint project. 

• Most commonly cited barriers to collaboration paperwork and 

that most lenders do not want to deal with two government agencies. 

SBREP-219 with DISTILLER

186 

8. For the Memorandum of Understanding (MOU) between SBA 

and USDA regarding rural development, set to expire in April 

2013, please address: 

a. Whether the current MOU is being extended, altered, or 

voided? 

RESPONSE: USDA is currently drafting proposed amendments 

to the MOU. These amendments will extend the MOU nationwide, 

strengthen collaboration within the Agency’s intermediaries and networks of resource partners, and broaden participation in the MOU 

by adding the USDA Farm Service Agency as a partner. 

i. If it is being altered please provide the Committee with a 

copy of the new MOU as soon as it is available. 

RESPONSE: The Agency will provide the Committee with an executed copy of the MOU as requested once it is available. 

b. Whether the MOU, which was originally only in 10 states, 

was ever rolled out nationally? If not, will a future MOU between USDA and SBA are nationwide? 

SBREP-219 with DISTILLER


Insert offset folio 175 here 80171.136 Insert offset folio 176 here 80171.137
187 

RESPONSE: Yes, USDA rolled out the MOU nationally. On 

April 11, 2011, RBS sent a letter to Rural Development State Directors to encourage all states to implement the MOU. The letter specifically stated that ‘‘. . . RBS is grateful to the 17 states that initially implemented the MOU; the MOU applies to all USDA National and State Offices.’’ 

Furthermore, RBS used the 2011 collaboration surveys to assess 

whether the MOU was being implemented in all states and further 

encourage national implementation. The survey results showed that 

the MOU was being implemented nationally. Forty-one out of 47 

State Offices responded to the survey. The respondents demonstrated that they collaborate with SBA in a variety of ways, usually by providing referrals and conducting joint training and outreach. 

As noted in the response to the previous question, USDA is currently drafting proposed amendments to the MOU that extends the 

MOU nationwide. 

c. The MOU states SBA and USDA will meet ‘‘every 3 

months to measure progress under this MOU.’’ Please provide 

the Committee with a list of all the locations and dates of all 

meetings between USDA and SBA as required by this portion 

of the MOU. 

RESPONSE: SBA and USDA have met on numerous occasions 

to implement and discuss our collaboration under this MOU. Meetings specific to ‘‘measuring progress’’ include, but are not necessarily 

limited to, those shown in the following table: 

Location Date 

USDA National Headquarters, Washington DC August 29, 2010 

USDA National Headquarters, Washington DC September 9, 2010 

USDA National Headquarters, Washington DC April 25, 2012 

Small Business Administration, Headquarters, Washington, 

DC January 23, 2013 

Small Business Administration, Headquarters Washington, 

DC March 12, 2013 

In addition to the meetings shown above, the MOU has fostered 

an additional number of collaboration opportunities between USDA 

and SBA. For example, the two agencies co-hosted six investment 

roundtables (as discussed previously in response to another question). These roundtables enabled both agencies to reach out in a collaborative effort to their respective stakeholders to identify new opportunities for leveraging each other’s programs. In addition, USDA 

State Offices frequently collaborate with SBA Regional Offices to 

conduct outreach and meet regularly to discuss new partnership opportunities, including joint lending for individual projects. Each 

agency’s unique lending parameters facilitate leveraging opportunities. For example, a rural business can use a B&I loan guarantee 

SBREP-219 with DISTILLER

188 

for the purchase of real estate and use a SBA guarantee for working 

capital or equipment. 

d. Under the MOU set to expire in April 2013, please explain 

the factors used to measure progress and any best practices 

ascertained under this MOU. 

RESPONSE: USDA conducted two surveys in 2011 and determined that there was significant collaboration happening between 

USDA and SBA. The survey questions asked respondents about 

their collaborative efforts with SBA and the factors measured mirrored the expectations outlined in the MOU. For example, the survey 

asked respondents about how many projects and trainings they conducted jointly with SBA. For a full list of factors, see the survey 

summary above. 

The survey results showed that all respondents collaborated with 

SBA. In fact, in June 2012, GAO agreed that the survey results 

demonstrated significant collaboration between USDA and SBA 

and closed its inquiry on the subject, stating that USDA fully implemented its recommendation to increase collaboration with SBA. 

Best practices reported through the survey include: 

• Participating in networks of Federal, state, and local economic 

development organizations that host monthly conference calls to discuss key issues and areas for collaboration; 

• Co-hosting regular, joint outreach and training meetings; and 

• Co-hosting statewide conferences. 

SBREP-219 with DISTILLER

189 

Memorandum of Understanding 

between the 

U.S. Small Business Administration 

and the 

U.S. Department of Agriculture 

PURPOSE 

The U.S. Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA), acting through the Rural Business-Cooperative Service (RBS or Rural Development) (together the 

‘‘Agencies’’ or the ‘‘Parties’’), believe that there are people and 

places in rural areas and small communities with underserved financial needs, especially current and prospective small businesses 

owned by minorities, women, and veterans, that would benefit from 

a joint effort by the Agencies to encourage sustainable growth and 

development financed by loans guaranteed by SBA and by loan 

guarantees, loans, and grants by RBS. The Agencies intend to coordinate their programs to assist small businesses in underserved 

rural areas. Each Agency will apply its expertise and experience 

according to its legislative mandate. 

The Agencies enter into this Memorandum of Understanding 

(MOU) to better serve rural areas by: 

1. Improving opportunities for small businesses to start and 

grow; 

2. Coordinating the delivery of development programs; 

3. Increasing the number of small business loans guaranteed by 

SBA and RBS; 

4. Developing relationships with Federal, State, county, and local 

agencies; private organizations; and commercial and financial institutions to facilitate and support the development of strong rural 

businesses; and 

5. Fostering and supporting sustainable development, livable 

wage jobs, and quality of life objectives and principles. 

The Agencies intend to fist begin the cooperative efforts discussed in this MOU within the 10 States listed in Attachment A. 

The Agencies will meet every 3 months to measure progress under 

this MOU, including results and best practices and to roll-out this 

initiative nationwide. 

BACKGROUND 

Department of Agriculture (USDA) 

RBS is one of the Agencies reporting to the Under Secretary for 

Rural Development. RBS offers many programs (‘‘Business ProSBREP-219 with DISTILLER

190 

grams’’) to promote small business development, including direct 

and guaranteed loans and grant assistance. These programs are 

authorized under the Consolidated Farm and Rural Development 

Act, the Food Security Act of 1985, and the Rural Electrification 

Act of 1936. 

RBS administers the Business Programs through a network of 

State Offices and field offices. Rural Development State Directors 

administer the Business Programs in the individual States. One 

such program is the Business and Industry Guarantee Loan Program (B&I) which guarantees quality loans made by lending institutions. 

Small Business Administration (SBA) 

SBA acts under the Small Business Act of 1953, as amended, and 

the Small Business Investment Act of 1958, as amended, to aid, 

counsel, assist, and protect the interests of small business. SBA 

guarantees loans and provides business development assistance to 

small businesses. SBA administers its programs through district offices throughout the United States. SBA provides additional services through its network of resource partners; the Small Business 

Development Centers (SBDC), SCORE, U.S. Export Assistance 

Centers (USEAC), Women’s Business Centers (WBC), and Veterans 

Business Outreach Centers (VBOC). 

SCOPE 

Many rural parts of the country have suffered decades of poverty 

reflected in unemployment and underemployment rates in excess of 

20 percent. Shifting demand, global competition, and changing demographics have escalated the conditions that cause pockets of persistent poverty, loss of jobs, and declining population and investment capital in many rural areas. SBA and RBS intend to work together to stimulate small business creation and expansion in rural 

areas. 

SBA and Rural Development each intend to use their respective 

resources to provide small businesses in rural areas with loan 

guarantees and technical assistance in an effort to help build diverse and sustainable economies, reverse population decline, create 

and sustain jobs, and improve quality of life. When possible, the 

Agencies will coordinate efforts with State, county, and local agencies; private organizations; financial institutions; industry associations; and local organizations, such as Chambers of Commerce and 

community development organizations. SBA resource partners, universities including Historically Black Colleges and Universities, 

and other education institutions may be asked to participate in 

various ways as SBA and RBS work together to help rural businesses start and grow. 

Through the cooperation outlined in this MOU, the Agencies will 

support smart growth strategies to enhance the livability and sustainability of rural communities, combat sprawl, and promote 

growth that strengthens and diversifies rural economies. 

SBREP-219 with DISTILLER

191 

Both Agencies realize that some joint training and outreach activities contemplated in this MOU may be subject to additional negotiation and a separate signed agreement pursuant to SBA’s cosponsorship authority (15 U.S.C. § 633(h)). 

AREAS OF COLLABORATION 

RBS and SBA intend to coordinate delivery of their respective 

programs to rural areas by joint activities which may include, but 

are not limited to, the following: 

Marketing and Outreach 

1. Each Agency’s field offices intend to advise potential small 

business borrowers of the other Agency’s credit programs that may 

support all or a portion of the small business’ financing needs. RBS 

and SBA field offices will exchange promotional and reference materials, including brochures and training schedules, and will distribute the other Agency’s information to its field network and its 

potential applicants when appropriate. 

2. Each Agency’s field offices intend to coordinate referrals of 

small business applicants to one another when appropriate and 

consistent with each Agency’s mission. 

3. Each Agency intends to coordinate its outreach to local and 

national financial institutions to increase awareness of the relevant 

SBA and RBS programs of the Agencies and the special characteristics of and potential for economic development in areas, subject 

to availability of funds. 

4. Both RBS and SBA will encourage their networks of resource 

partners to refer rural businesses to the other Agency’s resources, 

where appropriate. Rural Development’s network includes National 

and State Rural Partnership Councils, State and sub-State Offices, 

and Appropriate Technology Transfer to Rural Areas. SBA’s network includes Small Business Development Centers, SCORE Chapters, U.S. Export Assistance Centers, Veteran Business Outreach 

Centers and Women’s Business Centers. By mutual agreement, 

USDA and SBA may identify pairings of State and district offices 

to explore mutual best practices available to serve clients. 

5. The Agencies intend to develop working relationships with 

other Federal, State, county, and local agencies; private organizations; and educational and financial institutions to facilitate and 

support the development of strong rural businesses. 

Use of Technology 

6. The Agencies will link to each other’s Internet Home Pages. 

Each Agency will ensure that the locations and addresses of the 

other Agency’s field offices may be accessed from its Web site. To 

the extent available and practicable, other technology links will be 

explored and implemented by mutual consent. 

SBREP-219 with DISTILLER

192 

Agency Cross Training 

7. Each Agency, to the extent practical and to the extent funds 

are available, intends to develop joint field training seminars and 

provide representatives to explain programs, credit analysis techniques, and processing and servicing policies to the staff of the 

other Agency during these training seminars. 

Joint Lending Engagements 

8. SBA and RBS would like to explore ways each Agency may 

capitalize on the strengths of the existing SBA and RBS loan program processes and procedures already established by each Agency, 

such as delegated lending authority and lender oversight requirements. 

Local/Regional Food Supply Network Lending 

9. SBA and RBS would like to exchange information and discuss 

ways to increase lending to food processors and other borrowers 

who play a role in the local food supply chain. 

Harmonizing Loan Program and Forms 

10. In order to serve the largest number of rural businesses as 

efficiently as possible, SBA and RBS will explore the possibility of 

making their financial programs more complementary, such as 

minimizing differences in program fees, and processing and closing 

procedures, to the extent permitted by the statutes and regulations 

which govern the respective programs. Any harmonization efforts 

will be documented through a separate written agreement. 

Program Management and Review 

11. At least semiannually, each SBA District Director, Branch 

Manager, or designee will meet with his/her counterpart Rural Development State Director or designee to review previous joint activities and outline additional cooperative efforts. They should initiate, in cooperation with local organizations, at least one special 

joint project each year to support the growth and development of 

rural businesses in their districts. 

12. SBA District Directors and Rural Development State Directors will designate a senior staff member to implement the special 

projects under this MOU and coordinate service delivery. 

13. At least annually, SBA’s Associate Administrator for Field 

Operations, USDA’s Administrator for Business and Cooperative 

Programs, and RBS’s Deputy Administrator for Business Programs 

or their designees will review the previous year’s joint activities 

and outline additional cooperative efforts. 

SBREP-219 with DISTILLER

193 

TERM, AMENDMENTS AND TERMINATION 

This MOU will take effect on the date of execution and will remain in effect for 3 calendar years, at which time the Parties may 

extend the MOU for an additional 2 years by mutual written agreement. The Parties may amend this MOU at any time by mutual 

written agreement. Either Party may terminate this MOU upon 

giving 60 days written notice to the other Party. This agreement 

is subject to available funding and applicable statutes and regulations. 

CONTACT PERSONS 

For SBA, the Associate Administrator for Field Operations will 

be the officer responsible for this MOU. For RBS, the Deputy Administrator for Cooperative Programs will be the responsible officer. 

SIGNATURES 

The following individuals have authority to commit their respective Agencies to the terms of this MOU. 

SBREP-219 with DISTILLER


Insert offset folio 193 here 80171.138
194 

ATTACHMENT A 

LIST OF STATES 

Arkansas 

Indiana 

Iowa 

Kansas 

Louisiana 

Maine 

Michigan 

Minnesota 

New Mexico 

Nevada 

North Carolina 

North Dakota 

Ohio 

Oregon 

Virginia 

Vermont 

Washington 

SBREP-219 with DISTILLER

195 

A S B D C - ASSOCIATION OF SMALL BUSINESS DEVELOPMENT

CENTERS

REPRESENTING 

AMERICAS SBDC 

Statement of 

C. E. Rowe 

President/CEO 

Association of Small Business Development Centers 

Hearing on GAO Report 12–819 

Committee on Small Business 

US House of Representatives 

March 20, 2013 

SBREP-219 with DISTILLER

196 

Chairman Graves, Ranking Member Velazquez, Members of the 

Committee, thank you for the opportunity to submit testimony on 

the Government Accountability Office’s (GAO) report on Entrepreneurial Assistance Programs (GAO–12–819). 

As you know, for over 30 years the Small Business Development 

Centers has been providing front line services to entrepreneurs and 

small business owners while growing and developing an infrastructure dedicated to assisting all small business owners and providing 

them free one-to-one consulting and advice on how to improve, finance, market and manage their businesses. The result of our efforts and the support of our host states and institutions has been 

the establishment of a nationwide network of nearly 1,000 locations 

with over 4,500 dedicated professional business advisors that annually assist hundreds of thousands of small businesses and entrepreneurs of every conceivable type in every state and territory. 

Today’s hearing focuses on GAO’s report on the need to improve 

program collaboration, data tracking and performance management. At SBDCs we focus on those concepts every day and have 

been for decades. Program accountability is a basic tenet of our accreditation process as authorized in the Small Business Act. Each 

SBDC must develop and implement a strategic plan focused on continuously improving services and skills to provide to their clients— 

the small business community—with high value, up-to-date and 

needed services. SBDCs provide assistance to small business of all 

types, all demographics and all regions, but, those services can’t be 

stagnant our unresponsive to market, national or global changes. 

We are always expanding and improving our services in an effort 

to support the growing needs of the small business sector and to 

adapt to a changing business environment. 

We have evolved a very specific evaluation criteria that rely upon 

the confirmation and attribution of the entrepreneurs and small 

business owners we work with every day, often for extended periods, because they are the only ones truly able to knowledgeably 

comment. 

Each SBDC has performance goals on job creation, sales growth, 

capital infusion and business starts. All of this used to monitor the 

progress and quality of services provided to small business. These 

services must be timely, appropriate for the business and directly 

linked to the improvement or business results, or we won’t report 

the outcome. 

Every SBDC undergoes a program review from SBA program 

managers annually. They undergo a financial review from SBA analysts every two years and an in-depth Accreditation review every 

five years. These reviews are focused on program performance, 

marketing and attention to meeting needs of our local small businesses and ensuring quality and consistency in SBDC services. 

To support quality management, SBDCs constantly track and 

monitor the work they do and the services they provide in order to 

ensure the value to the small business client. Each client meeting 

or electronic exchange are recorded in their database and used to 

monitor progress as well as obtain timely feedback. The client’s 

progress and results are measured as well, not by our staff but by 

the client. For the past ten years, the ASBDC has commissioned 

SBREP-219 with DISTILLER

197 

an independent research project on the effectiveness and efficiency 

of SBDC assistance. This is in addition to the research that every 

program conducts throughout the year. 

Unfortunately, all of our goals and metrics don’t appear in the 

GAO report. In Appendix III, only the ‘‘capital infusion’’ and ‘‘business starts’’ goals of the SBDC program are reported. Our ‘‘job creation’’ and ‘‘sales growth’’ goals are not. ‘‘Cost per business start’’ 

and ‘‘Cost per job supported’’ are shown but, those aren’t goals. 

They are measurements from outcomes and support, though they 

do stem from the goals. 

The value of the SBDC networks’ efforts to apply metrics and 

performance management is reflected in the studies of SBDC client 

success. In particular, GAO cites the SBA study by Concentrance 

in Appendix V. That longitudinal survey detailed the results of 

SBDC assistance and confirmed the results of the annual ‘‘Economic Impact of SBDC Counseling Activities’’ in which SBDCs participate. Those results are all based on our goals of sales growth, 

job creation, capital infusion and business starts. 

The ASBDC Members agree with GAO that collaboration between government programs is a good idea. We strive to work with 

other programs to achieve better results for the small business 

community. That is why you will see that SBDCs are twice mentioned in the examples provided by GAO of ‘‘illustrative Examples 

of Economic Activities’’. We also can provide the Committee with 

examples of our collaboration with the Delta Regional Authority in 

Tennessee and Missouri; the US Department of Commerce in 

Maryland, New York, and Oregon; or the US Department of Agriculture in Texas and Iowa—just to name a few. 

Despite that, SBDC lack of coordination with the USDA Rural 

Business Enterprise Grant (RBEG) Program was mentioned specifically in the report. This is inconsistent with the general attitude 

among SBDCs to do what is best for the client using whatever resources are available. Other programs are often identified through 

our Accreditation process as SBDC Stakeholders because of the active coordination in support of the small business sector. 

It is true that SBA, SBDCs and the USDA RBEG Program don’t 

have shared policies and procedures. However, the lack of shared 

policies and procedures in this case isn’t due to a lack of collaboration. 

First, SBA doesn’t manage SBDCs in a ‘‘top down’’ fashion. SBA 

provides guidance on program requirements and services, sets 

goals, and reviews performance. SBDCs and SBA work to develop 

national programs like the programs for veterans but, in the main 

SBDCs operate in response to local/regional small business needs 

and concerns. 

Second, SBDCs (particularly those serving rural states like Iowa) 

are fully aware of the RBEG program. Several SBDCs receive 

RBEG funding but, RBEG is a competitive grant program funding 

rural economic development projects. SBDCs often apply and win 

awards, but, the funding can’t be considered steady. Also, because 

it is a competitive grant program it has a distinctly different purpose from SBDCs. 

SBREP-219 with DISTILLER

198 

Regardless, the goal of ASBDC’s testimony isn’t to criticize GAO. 

We think this report speaks to a serious issue and raises important 

questions. Frankly, the task GAO undertook was enormous. Giving 

an overview of 52 programs is a lot of work if you simply categorize 

those programs. That effort is only complicated by trying to define 

‘‘economic development’’ in each of the targeted areas and apply 

performance metrics to that definition. To understand the inter-relationships that exist in 50 states, individual districts and territories as well as the local communities seems insurmountable. 

Our goal is to focus on one corner—SBA and SBDCs in the context of the report. We can’t speak to other programs and how they 

perform, but, we know that SBDCs are regularly reviewed, regularly assessed for performance, challenged by goals and focused on 

leveraging the resources of other programs to enhance our impact. 

We agree with GAO’s findings—data tracking, goal setting, performance management and collaboration are the fundamental keys 

to success of any economic development program. To that end, we 

have attached a chart outlining how SBDCs apply the best practices in GAO’s report. That’s the path the SBDC networks have 

been following for years and will continue to follow. 

Thank you. 

SBREP-219 with DISTILLER


Insert offset folio 198 here 80171.139
199 

Æ 

SBREP-219 with DISTILLER


Insert offset folio 199 here 80171.140