Entrepreneurial Assistance: Opportunities Exist to Improve Programs' Collaboration, Data-Tracking, and Performance Management
Published: 2012-08-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Economic development programs that effectively provide assistance to entrepreneurs may help businesses develop and expand. GAO focused on 52 economic development programs, with an estimated $2.0 billion in funding, at Commerce, HUD, SBA, and USDA that support entrepreneurs. In response to a statutory requirement, this report discusses (1) the extent of overlap and fragmentation, the effects on entrepreneurs, and agencies' actions to address them; and (2) the extent of tracked program information and whether these programs have met their performance goals and been evaluated. To address these objectives, GAO analyzed program information and interviewed agency officials in headquarters and selected field offices, entrepreneurs, and third-party entities, such as nonprofits, that use federal grants to provide assistance directly to entrepreneurs.
section_title: What GAO Found
paragraphs: Federal efforts to support entrepreneurs are fragmented--including 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 terms 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 Centers--have 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 format, which cannot be easily aggregated or analyzed. According to government 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 performance 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. GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.
section_title: What GAO Recommends
paragraphs: GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.

section_title: Letter
paragraphs: Entrepreneurs play a 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. 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  departments and governmentwide, and report annually to Congress.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 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. 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. For each program, we reviewed information on  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.
subsections: section_title: Background
subsections: section_title: Fragmentation, Overlap, and Duplication
paragraphs: 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.
section_title: Defining Federal Economic Development Programs
paragraphs: In September 2000, we reported that there is no commonly accepted  definition for economic development. Absent a common definition, we  subsequently developed a list of nine activities most often associated with  economic development. 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 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.
section_title: GPRA Modernization Act of 2010
paragraphs: 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 (OMB) 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 OMB—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.
section_title: Fragmented Programs Overlap, and Agencies’ Efforts to Collaborate Have Been Limited
paragraphs: 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.
subsections: section_title: Many Programs Are Authorized to Provide Similar Types of Assistance and Target Similar Beneficiaries
paragraphs: 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:
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.
Government contracting assistance: Five programs, all of which are  administered by SBA, can support entrepreneurs by helping them  qualify for federal procurement opportunities.
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. Eight additional programs can support limited types  of technical assistance or industries. For example, Commerce’s Trade  Adjustment Assistance for Firms only supports existing businesses  negatively affected by imports, and USDA’s Small Socially- Disadvantaged 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  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.
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. support to entrepreneurs are focused on serving beneficiaries in  economically distressed areas or target benefits at low- to moderate- income 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. 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.
The 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 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.
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
SBA’s SCORE and Small Business Development Centers;
USDA’s1890 Land Grant Institutions, Rural Business Enterprise  Grants, and Rural Business Opportunity Grants.
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.
HUD’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.
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
SBA’s 7(a) Loan Program and Small Business Investment
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 overlap 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  the contracts made available at these other agencies, in addition to  providing business development assistance during their 9-year term.
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  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 Re- lending 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 nonprofits, 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.
section_title: Some Entrepreneurs Struggle to Navigate Technical Assistance Programs
paragraphs: 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 third- party 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.
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.
section_title: Agencies’ Collaboration Has Been Limited
paragraphs: 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. 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.
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  agencies.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.
This agreement is intended to strengthen and diversify the  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. 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  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.
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 service- delivery 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.
section_title: Agencies Lack Information to Track Program Activities and Measure Performance
paragraphs: 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.
subsections: section_title: Agencies Do Not Maintain Information to Enable Tracking of Activities for Most Programs
paragraphs: 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. 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 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. 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:
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.
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  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 OMB 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.
section_title: Some Programs Failed to Meet Their Goals
paragraphs: 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  (see table 2). 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.
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.
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.
section_title: Agencies Have Not Evaluated the Majority of Programs That Support Entrepreneurs
paragraphs: Over the past 12 years, agencies have conducted program evaluations of  20 of the 52 programs that support entrepreneurs. 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.
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.
In 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 Performance, GAO-07-769 (Washington, D.C.: Jul. 13,  2007). 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.
section_title: Conclusions
paragraphs: 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  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.
section_title: Recommendations
paragraphs: 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.
section_title: Agency Comments and Our Evaluation
paragraphs: 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  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 inter- agency 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  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 all eight of its programs that can provide technical assistance;  however, the report notes that Commerce does not collect 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 collect 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 dollars 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.
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 play a 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  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 cost- effective, such as relying on their own data instead of purchasing data  from a vendor.
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 report, please  contact William B. Shear, at (202) 512-8678, or shearw@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. Key contributors to  this report are listed in appendix IX.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: 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.
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. 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  5 years.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.
This review included publications from a variety of sources,  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   This list  provided the list of programs to all of the administering agencies. of additional federal programs may not be comprehensive because not all  agencies provide data to CFDA (see app. IV).
We 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. OMB 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.
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.
section_title: Appendix II: Illustrative Examples of Economic Activities
paragraphs: In September 2000, we reported that there is no commonly accepted  definition for economic development. Absent a common definition for  economic development, we subsequently developed a list of nine  activities most often associated with economic development. 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.the nine economic activities.
subsections: section_title: Illustrative Examples of Economic Activities
paragraphs: 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:  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:
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,  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:
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  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:
A publicly funded regional technology center in New York provides  a range of resources for local manufacturing and technology  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:
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.  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:
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.
Program Name and Mission  Grants for Public Works and  Economic Development Facilities  Supports the construction or  rehabilitation of essential public  infrastructure and facilities necessary  to support job creation, attract  private-sector capital, and promote  regional competitiveness, innovation,  and entrepreneurship, including  investments that expand and  upgrade infrastructure to attract new  industry, support technology-led  development, accelerate new  business development, and enhance  the ability of regions to capitalize on  opportunities presented by free trade.
Fiscal year 2011 Actual  Performance  Private investment  leveraged–9 year totals  (in millions): $3,960  Private investment  leveraged–6 year totals  (in millions): $1,617  Private investment  leveraged–3 year totals  (in millions): $1,475  leveraged (3, 6, and 9  years after award)
Grants for Public Works and  Economic Development Facilities  (3, 6, and 9 years after  award)
Program Name and Mission  Economic Adjustment Assistance  Supports economically distressed  communities in their ability to compete  economically by stimulating private  investment and promoting job creation in  targeted areas. Current investment  priorities include proposals that foster  innovation and enhance regions’ global  economic competitiveness by supporting  existing industry clusters, developing  emerging new clusters, or attracting new  regional economic drivers.
Fiscal year 2011  Actual Performance  Private investment  leveraged–9 year totals  (in millions): $3,960  Private investment  leveraged–6 year totals  (in millions): $1,617  Private investment  leveraged–3 year totals  (in millions): $1,475  leveraged (3, 6, and 9  years after award)
Jobs created/retained– 9 year totals: 56,058  Jobs created/retained– 6 year totals: 26,416  Jobs created/retained– 3 year totals: 14,842  (3, 6, and 9 years after  award)
Global Climate Change Mitigation  Incentive Fund  Supports economic development  projects that create jobs through, and  increase private capital investment in,  efforts to limit the nation’s dependence  on fossil fuels, enhance energy  efficiency, curb greenhouse gas  emissions, and protect natural systems.  The program helps to cultivate  innovations that can fuel “green growth”  in communities suffering from economic  distress.
Private investment  leveraged–9 year totals  (in millions): $3,960  Private investment  leveraged–6 year totals  (in millions): $1,617  Private investment  leveraged–3 year totals  (in millions): $1,475  leveraged (3, 6, and 9  years after award)
Global Climate Change Mitigation  Incentive Fund  (3, 6, and 9 years after  award)
Program Name and Mission  Economic Development/Technical  Assistance  Provides focused assistance to public  and nonprofit leaders to help in  economic development decision making  (e.g., project planning, impact analyses,  feasibility studies). The program also  supports the University Center Economic  Development Program, which makes the  resources of universities available to the  economic development community.
Economic Development/Support for  Planning Organizations  Provides planning assistance to provide  support to Planning Organizations (as  defined in 13 CFR 303.2) for the  development, implementation, revision,  or replacement of a Comprehensive  Economic Development Strategy, short- term planning efforts, and state plans  designed to create and retain higher- skill, higher-wage jobs, particularly for  the unemployed and underemployed in  the nation’s most economically  distressed regions.
subsections: section_title: Agency
paragraphs: Program Name and Mission  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.
Native American Business Enterprise  Centers (NABEC)  The program promotes the growth and  competitiveness of businesses owned by  Native Americans and eligible minorities.  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 limited to, initial consultations and  assessments, business technical  assistance, and access to federal and  nonfederal procurement and financing  opportunities.
section_title: Agency
paragraphs: Program Name and Mission  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.
Community Development Block Grant  (CDBG)/Insular Areas  HUD annually allocates $7 million of  CDBG funds to the Insular Areas  program in proportion to the populations  of the eligible territories. The program is  administered by HUD’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.
section_title: Agency
paragraphs: Program Name and Mission  develop viable communities by providing  decent housing, a suitable living  environment, and opportunities to  expand economic opportunities,  principally for low- and moderate-income  persons.
CDBG/States  The primary statutory objective of the  CDBG States program is 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. The state  must ensure that at least 70 percent of  its CDBG grant funds are used for  activities that benefit low- and moderate- income persons over a 1-, 2-, or 3-year  time period selected by the state.
CDBG/Non-entitlement CDBG Grants in  Hawaii  HUD continues to administer the program  for the non-entitlement counties in the  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.
section_title: Agency HUD
paragraphs: 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 of the 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 108-guaranteed loan authority.  CDBG Disaster Recovery Grants  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 CDBG Disaster  Recovery Grants program may be  expanded or limited per the individual  appropriation that it receives each year.
section_title: Agency HUD
paragraphs: Permanent jobs created  (tracked by low income,  moderate income and total)  (tracked by low income,  moderate income and total)
Section 4 Capacity Building for Affordable  Housing and Community Development  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 community  development and affordable housing  activities and to attract private investment  for housing, economic development, and  other community revitalization activities  that benefit low-income families. $50,000,000  Number of trainings  created and provided to  Community Development  Corporations (CDC)
section_title: Agency
paragraphs: Program Name and Mission  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.
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.
section_title: Agency HUD
paragraphs: Program Name and Mission  Alaska Native/Native Hawaiian  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, principally 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.
Indian CDBG  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 1003.4. 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.
Program Name and Mission  The 7(a) Loan Program is SBA’s primary  program for helping start-up and existing  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  improvements, and debt refinancing  (under special conditions).
Jobs supported     Active lending partners    Underserved markets– 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 private- sector 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 SBA-guaranteed 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.
section_title: Agency SBA
paragraphs: Microloan Program  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.
Surety Bond Guarantee Program  SBA provides and manages surety bond  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 event the contractor should  breach the terms of the contract.
section_title: Agency SBA
paragraphs: Program for Investment in Micro- Entrepreneurs (PRIME)  PRIME provides assistance to various  organizations. These organizations help  low-income entrepreneurs who lack  sufficient training and education to gain  access to capital to establish and  expand their small businesses.
section_title: Agency SBA
paragraphs: Program Name and Mission  Women’s Business Centers (WBC)  WBCs provide long-term training as well  as counseling and mentoring services.  By statute, WBCs fill a gap by focusing  on women who are socially and  economically disadvantaged. WBCs  offer classes during regular working  hours as well as during the evenings and  weekends to serve clients who work  during the day. The WBCs often provide  counseling in multiple languages.
Women’s Business Centers  Women’s Business Centers  SCORE  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.
Veterans Business Outreach Centers  The Veterans Business Outreach  program is designed to provide  entrepreneurial development services  such as business training, counseling  and mentoring, and referrals for eligible  veterans owning or considering starting  a small business.
section_title: Agency SBA
paragraphs: Fiscal year 2011  Actual Performance  $65.65  7(j) Technical Assistance  The 7(j) program provides qualifying  businesses with counseling and training  in the areas of financing, business  development, management, accounting,  bookkeeping, marketing, and other small  business operating concerns. $6,502,000  Small businesses assisted  3,550  7(j) Technical Assistance  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  compete. $58,274,000  Small businesses assisted  9,457  8(a) Business Development Program  8(a) Business Development Program  disadvantaged businesses,  which includes 8(a)  program participants (%)
section_title: Agency
paragraphs: Program Name and Mission  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.
Procurement Assistance to Small  Businesses  The program assists small businesses in  obtaining federal government contracts  and subcontracts.
For prime contracting,  statutory goal is 23%;  for subcontracting,  there is no statutory  goal, but SBA has set a  goal of 35.9%.
Small Business Innovation Research  Program (SBIR)  The SBIR program encourages small  businesses to explore their technological  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.
section_title: Agency
section_title: Agency SBA
paragraphs: Small Business Technology Transfer  Program (STTR)  The STTR program encourages small  businesses to explore their technological  potential 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. SBA 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.  STTR requires cooperation with a  university or approved research  institution.
section_title: Agency SBA
section_title: Agency SBA
paragraphs: Program Name and Mission  Small Business Investment Company  (SBIC) 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.
New Markets Venture Capital (NMVC)  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 public- private 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.
section_title: Agency SBA
paragraphs: 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.
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.
Intermediary Relending Program  The purpose of the program is to alleviate  poverty and increase economic activity  and employment in rural communities.  Under the program, loans are provided to  local organizations (intermediaries) for the  establishment of revolving loan 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.
section_title: Agency
paragraphs: Program Name and Mission  businesses, help fund business  incubators, and help fund employment- related 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 sustainable  economic development in rural  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 or that  can contract out for the expertise to  assist individuals or entities in the start- up, expansion, or operational  improvement of rural businesses,  especially cooperative or mutually  owned businesses.
section_title: Agency USDA
paragraphs: 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.
section_title: Agency
paragraphs: Program Name and Mission  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 USDA- supported research and development  efforts; and foster and encourage  participation by women-owned and  socially disadvantaged small business  firms in technological innovation.
Data collection ongoing  because performance  data are collected over  a 2-year time period.
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.
section_title: Agency USDA
paragraphs: 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.
section_title: Appendix IV: Additional Federal Programs that Can Fund Economic Activities
paragraphs: 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.
section_title: Appendix V: Evaluations of Programs that Can Support Entrepreneurs, 2000-2012
paragraphs: Purpose of the study  To assess the economic impacts  and federal 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.
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  employment data. Study used  ordinary and two-stage least  squares regression.
To evaluate the local Technical  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.
The evaluation is based 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:  effectiveness in meeting  economic development needs,  effectiveness in targeting  distressed areas,  distribution of centers being  optimal under EDA budget  constraints,  duplication or overlap with other  federal programs, and  leveraging resources. interviews with EDA  national and regional staff,  compilation of a database  on University Center  characteristics and  activities from documents  such as grant  applications,  interviews with Center  directors,
Center client survey, and  site visits.
To evaluate the overall impact of  EDA’s Economic Development  District (EDD) Planning program,  which funds the EDDs; highlight  commonalities and differences  among the various EDDs; as well as  to assess if the program promotes  regional cooperation towards  making an impact on the economic  development goals of the  community.
Data were gathered in several  progressive stages:  site visits,  general survey,  additional site visits, and  a second survey to  respondents of first survey.
Analysis of these data was  done using statistical  techniques such as principle- component analysis.
To find indicators for the effect  of CDBG spending and track  changes in these indicators.  To report on neighborhoods  that had received a large  amount of CDBG funding.
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.
CDBG/Entitlement  Grants  CDBG/States  CDBG/Section 108  Loan Guarantees  CDBG/Brownfields  Economic  Development  Initiative (BEDI)
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. telephone interviews with  Economic Development  directors in 460 of the 972  entitlement communities  that used CDBG funds, and  interviews with 234 of the  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 low- income 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.
To measure the outcomes of Indian  CDBG expenditures. The outcomes  included amount of leveraged  funding obtained by grantees,  enhancements of partnering  relationships, and level of economic  activity in the communities.
Study had three main data  sources: (1) grant file reviews  of program data, (2) telephone  survey of grant participants,  and (3) case study  observations.
subsections: section_title: Agency reviewed HUD
paragraphs: Purpose of the study  To evaluate the effect of the Section  4 program on improving  organization capacity. The section 4  program was set up to support  training for Community Development  Corporations (CDC) and to help  CDCs grow and serve.
Data and methods used  From 2001 through 2009, data  were collected from (1)  interviews of key staff at  intermediaries, (2) online  survey of 360 CDCs that  received Section 4 grants, and  (3) interviews with leaders of  34 Section 4-asssisted CDCs.
To assess the impact of SBA’s  entrepreneurial development  programs on small businesses,  including businesses’ perceptions of  the programs and their economic  growth as a result of the services  provided.
Study included survey of  clients served by SBA’s  entrepreneurial businesses.  Sample size approximately  6,500 observations 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. 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.
To examine the economic impact  and effectiveness of Women’s  Business Centers.
Survey and focus group of 100  Women’s Business Centers.
In order to test whether SBA loan  guarantees are associated with  positive firm outcomes, this study  addressed the following questions:
What happens to sales,  employment and survival before  and after firms receive the  guarantee?
What explains the changes  observed?
section_title: Author(s), title of evaluation
paragraphs: Data and methods used  other factors (such as  business type) affect the  change in outcome.
To produce a survey that is intended  provide customer satisfaction  indicators for the 7(a), 504, SBIC,  and MicroLoan programs.
Beginning from a sample of  assisted firms from Dunn and  Bradstreet, a survey was sent  to approximately 3,000 firms.  The surveyed firms had  received the loans 6 or 7 years  prior to the questionnaire.
HUBZone  (Historically  Underutilized  Business Zone)
To examine the effectiveness of the  HUBZone program.
Data are from three  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 primarily used an  input-output approach to  estimate the impact on the  HUBZone areas. In this  approach, direct and indirect  impacts are measured using  the above three databases  and multipliers from Bureau of  Economic Analysis.
Small Business  Innovation Research  Program (SBIR)
Study is based on National  Research Council surveys and  reviews of agency materials.  Study includes surveys and  also case studies. stimulating technological  innovation;  using small businesses to meet  federal needs;  increasing private sector  commercialization; and  encouraging participation of  minority and other  disadvantaged groups.
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  binary logistical regression  (logit) and cumulative logit  models.
While SBA conducts annual impact surveys of the SBDC, WBC, and SCORE programs, for  purposes of this report we focused on the most recent impact study conducted of these programs.
section_title: Appendix VI: Comments from the Department of Agriculture
section_title: Appendix VII: Comments from the Department of Commerce
section_title: Appendix VIII: Comments from the Department of Housing and Urban Development
section_title: Appendix XI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: William B. Shear, (202) 512-8678 or shearw@gao.gov.
section_title: Staff Acknowledgments
paragraphs: 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 Laris, Marc  Molino, Alise Nacson, Jennifer Schwartz, and Karen Villafana made key  contributions to this report.