Small Business Administration: Opportunities Exist to Improve Oversight of Women's Business Centers and Coordination among SBA's Business Assistance Programs
Published: 2007-11-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Women's Business Center (WBC) Program provides training and counseling services to women entrepreneurs, especially those who are socially and economically disadvantaged. In fiscal year 2007, the Small Business Administration (SBA) funded awards to 99 WBCs. However, Congress and WBCs expressed concerns about the uncertain nature of the program's funding structure. Concerns have also been raised about whether the WBC and two other SBA programs, the Small Business Development Center (SBDC) and SCORE programs, duplicate services. This report addresses (1) uncertainties associated with the funding process for WBCs; (2) SBA's oversight of the WBC program; and (3) actions that SBA and WBCs have taken to avoid duplication among the WBC, SBDC, and SCORE programs. GAO reviewed policies, procedures, examinations, and studies related to the funding, oversight, and services of WBCs and interviewed SBA, WBC, SBDC, and SCORE officials.
section_title: What GAO Found
paragraphs: Until 2007, SBA funded WBCs for up to 10 years, at which time it was expected that they would become self-sustaining. Specifically, since 1997, SBA has made annual awards to WBCs for up to 5 years. Because of concerns that WBCs could not sustain operations without continued SBA funding, in 1999, Congress created a pilot program to extend funding an additional 5 years. Due to continued uncertainty about WBCs' ability to sustain operations without SBA funding, in May 2007, Congress passed legislation authorizing renewable 3-year awards to WBCs that "graduated" from the program after 10 years and to current program participants. Like the current awards, the 3-year awards are competitive. SBA is revising its award process and plans to provide the 3-year awards in fiscal year 2008. Though SBA has oversight procedures in place to monitor WBCs' performance and use of federal funds, GAO found indications that staff shortages from the agency's downsizing and ineffective communication was hindering SBA's oversight efforts. SBA relies extensively on district office staff to oversee WBCs, but these staff members have other agency responsibilities and may not have the needed expertise to conduct some WBC oversight procedures. SBA provides annual training and has taken steps to adjust its oversight procedures to adapt to staffing changes, but concerns remain. Some WBCs also cited problems with communication, and one study reported that 54 percent of 52 WBCs responding to its survey said that SBA could improve its communication with the centers. Ineffective communication led to confusion among some WBCs about how to meet program requirements. Under the terms of the WBC award, SBA requires WBCs to coordinate with local SBDCs and SCORE chapters. However, GAO found that SBA provided limited guidance or information on successful coordination. Most of the WBCs that GAO spoke with explained that in some situations they referred clients to an SBDC or SCORE counselor, and some WBCs took steps to more actively coordinate with local SBDCs and SCORE chapters to avoid duplication and leverage resources. Still, some WBCs said that coordinating services was difficult, as the programs have similar performance measures and could end up competing for clients. Such concerns thwart coordination efforts and could increase the risk of duplication in some geographic areas.

section_title: Letter
paragraphs: The Women’s Business Center (WBC) program, one of several business  The Women’s Business Center (WBC) program, one of several business  assistance programs offered by the Small Business Administration (SBA),  assistance programs offered by the Small Business Administration (SBA),  provides long-term training, counseling, networking, and mentoring to  provides long-term training, counseling, networking, and mentoring to  women entrepreneurs, especially those who are socially and economically  women entrepreneurs, especially those who are socially and economically  disadvantaged. In 1989 when the program began, SBA funded 13 WBCs.  disadvantaged. In 1989 when the program began, SBA funded 13 WBCs.
The Women’s Business Ownership Act of 1988, Pub. L. No. 100-533, § 201, 102 Stat. 2689,  2690 (1988) created the WBC program with demonstration projects that would expire in  1991. Although the act was passed in 1988, WBCs were initially funded in 1989.
Business Ownership (OWBO) in SBA’s Office of Entrepreneurial  Development (OED). However, Congress and WBCs participating in the  program have expressed concerns about the centers’ ability to continue  operating without SBA funding and about the uncertain funding structure  of the program. Congress has made changes to the WBC program in  several reauthorizations to extend the program since it was first  established in 1988. In its 1999 reauthorization, Congress made a  significant change by establishing the sustainability pilot program to make  funding available to WBCs after the initial 5-year funding limit, which  many believed did not offer WBCs enough time to become self-sustaining.  Because the pilot also had a 5-year limit, WBCs could no longer receive  funding from SBA after 10 years, and the pilot raised additional concerns  because of uncertainty about its reauthorization and funding. In May 2007,  to address the uncertainties about the pilot program, Congress replaced it  by allowing WBCs—including those that had “graduated” from the  program—to receive 3-year renewable awards.
While there have been changes in the WBC program’s funding structure,  the budget available for WBC awards has remained relatively constant for  the past 5 years. During that same time, SBA has downsized and has fewer  agency resources. Concerns have also been raised about whether SBA’s  business assistance programs are duplicating each other’s efforts. In a  previous report, we noted the need for the federal government, during this  time of constrained resources, to reexamine federal programs that may  have overlapping missions and responsibilities. The two other primary  business assistance programs that SBA administers are the Small Business  Development Center (SBDC) and SCORE (formerly called the Service  Corps of Retired Executives) programs. These programs also provide  training and counseling services to aspiring and existing small business  owners but are not expected to target a particular group. Under the terms  of the SBA award, WBCs are required to coordinate with local SBDCs and  SCORE chapters when appropriate.
To assist you in oversight of SBA programs and because of your interest in  the WBC program, you requested that we evaluate key issues related to the  program, including funding for WBCs and the potential for duplication  among the WBC, SBDC, and SCORE programs. Accordingly, this report  addresses (1) the uncertainties associated with the funding process for  WBCs; (2) SBA’s oversight of the WBC program, including policies and  procedures for monitoring compliance with program requirements and  assessing program effectiveness; and (3) the services that WBCs provide  to small businesses and actions that SBA and WBCs have taken to avoid  duplicating the services offered by the SBDC and SCORE programs.
To address these objectives, we reviewed the legislative history of the  WBC program, our previous reports, SBA’s policies and procedures for  administering the program, and studies of the program conducted by SBA,  SBA’s Office of Inspector General, and external organizations. For 7 of the  10 WBCs that we visited, we reviewed documentation that SBA uses to  oversee WBCs and interviewed WBC officials about their services,  relationship with SBA, and coordination with SBDCs and SCORE. We also  interviewed SBA officials about the WBC, SBDC, and SCORE programs. In  addition, we compared the statutory authority for the three programs;  interviewed a random sample of 17 WBCs about their services,  relationship with SBA, and coordination with SBDCs and SCORE; and  visited 6 SBDCs and the SCORE national office.
We conducted our work in California, Georgia, Illinois, Maryland,  Massachusetts, Virginia, and Washington, D.C. between August 2006 and  November 2007 in accordance with generally accepted government  auditing standards. Appendix I discusses our scope and methodology in  greater detail.
subsections: section_title: Background
paragraphs: The WBC program is administered through OWBO. The program was  established by the Women’s Business Ownership Act of 1988 to provide  long-term training, counseling, networking, and mentoring to women who  own businesses or are potential entrepreneurs after Congress found that  existing business assistance programs for small business owners were not  addressing women’s needs. The program’s goal is to add more well-trained  women entrepreneurs to the U.S. business community and to specifically  target services to women who are socially and economically  disadvantaged. In fiscal year 2007, SBA funded 99 WBCs throughout the  United States and its territories (fig. 1).
Private nonprofit organizations are eligible to apply for funds to set up  WBCs, and successful applicants are initially awarded cooperative  agreements for a maximum of 5 years. WBCs must raise matching funds  from nonfederal sources such as state and local public funds, private  individuals, corporations and foundations, and program income derived  from WBC services. In the first 2 years of the 5-year award, each WBC is  required to match SBA award funding at 1 nonfederal dollar for each 2  federal dollars. In the last 3 years, the match is 1 nonfederal dollar for each  federal dollar. Award amounts may vary depending upon a WBC’s  location, staff size, project objectives, performance, and agency priorities.  However, awards cannot exceed $150,000 each fiscal year per recipient.
WBC funding is performance-based, and each additional 12-month budget  period beyond the initial award may be exercised at SBA’s discretion.  Among the factors involved in deciding whether to exercise an option for  continued funding are the availability of funds, the extent to which past  WBC funds have been spent, and satisfactory performance against SBA- established performance measures, including the number of clients served  and jobs created. SBA requires WBCs to provide this performance data in  quarterly reports.
Under the sustainability pilot program, WBCs that had been receiving  funding for 5 years could receive sustainability awards for an additional 5  years. Criteria for receiving awards under the pilot program were similar  to those for receiving the initial awards. WBCs were assessed on their  record of performance and had to provide nonfederal matching funds  equal to 1 dollar for each federal dollar. Unlike the WBC regular award,  WBC sustainability award amounts could not exceed $125,000 each fiscal  year per recipient. As noted earlier, Congress recently replaced these  sustainability awards with 3-year renewable awards. SBA has not yet  begun making these new awards, which are a maximum of $150,000 each  year per recipient.
In addition to the WBC program, SBA’s SBDC and SCORE programs also  provide training and counseling services to small business clients. The  SBDC program was created by Congress in 1980. SBDC services include,  but are not limited to, assisting prospective and existing small businesses  with financial, marketing, production, organization, engineering, and  technical problems and feasibility studies. Each state and U.S. territory  has a lead organization that sponsors and manages the SBDC program.  The lead organization coordinates program services offered to small  businesses through a network of centers and satellite locations in each  state that are located at colleges, universities, vocational schools,  chambers of commerce, and economic development corporations. In fiscal  year 2007, the SBDC program received $87 million to make awards to 63  lead SBDCs throughout the United States.
The SCORE program was founded in 1964 as a nonprofit organization.  Under the Small Business Act, as amended, SCORE is sponsored by and  may receive appropriations through SBA. The SCORE program is designed  to provide free expert advice to prospective and existing small businesses  in all aspects of business formation, advancement, and problem solving.  SCORE counselors are volunteers who assist clients through a Web site,  SCORE chapter offices, SBA district offices, and other establishments. In  fiscal year 2007, the SCORE program received $5 million to support its  activities and currently has 389 chapters throughout the United States.
SBA’s Office of Small Business Development Centers and Office of  Business and Community Initiatives are components of OED, along with  OWBO, and oversee the SBDC and SCORE programs, respectively. SBA’s  Division of Procurement and Grants Management (DPGM) monitors  financial activities and transactions and maintains award files for most of  SBA’s award programs. The Office of SBDCs has its own grants specialists  that conduct similar activities. With respect to the WBC program, DPGM is  involved in, among other aspects, reviewing and making decisions on new  WBC applications, providing final approval for all contracts, analyzing  proposed budgets and negotiating budgets with OWBO, issuing  modifications to terms and conditions of awards, reviewing matching  funds documentation, and reviewing WBC financial reports and payment  requests to authorize payment.
section_title: Recent Legislation Addressed Concerns about the WBC Program’s Funding
paragraphs: Before Congress passed recent legislation addressing concerns about long- term funding for WBCs, the WBC program’s funding structure had been in  flux since its inception in 1988. In establishing the WBC program in 1988,  Congress authorized SBA to help private nonprofit organizations conduct  projects that benefit small business concerns owned and controlled by  women. The 1988 act allowed for SBA to fund demonstration projects that  terminated in 1991. However, in 1991, Congress authorized SBA to make  awards for 3-year projects, and in 1997, Congress authorized SBA to make  awards to WBCs for 5-year projects. In its 1999 reauthorization of the WBC  program, as noted earlier, Congress added 5-year sustainability funding for  WBCs that successfully completed 5-year projects to provide additional  time for the centers to become self-sustaining (fig. 2). WBCs continue to  receive SBA funds for the 5-year period as long as their performance is  satisfactory although under the performance-based system, the award  amount can vary from year to year.
WBCs that we spoke with identified two related factors that had largely  been responsible for their funding uncertainties. First, because until  recently the WBC program offered limited-term funding—in contrast to  the SBDC and SCORE programs, which receive continuous funding— WBCs graduated from SBA support after 5 or 10 years. Second, Congress  did not make the additional 5-year term for sustainability funding  permanent. Instead, Congress extended the pilot program with each SBA  reauthorization, raising concerns among the WBCs about its commitment  to the program. Several WBCs that we spoke with expressed concern  about the funding term limits and pointed out that the SBDC and SCORE  programs did not have the same limits, even though SBA also administers  those programs. Some WBCs in both the regular and sustainability  programs also said that they were concerned about their ability to  continue operations after losing SBA support. Because WBCs sometimes  established their operations with SBA funds and depended on SBA funds  to leverage other support, many were concerned about their ability to  continue operations after 5 to 10 years of receiving SBA funding. One  center that was receiving sustainability funds said that long-term funding  would allow WBCs to continue operating without concerns of an end date  after taking years to develop a valuable program. The center director  added that a short-term program was less practical for the service that the  WBC program provides, because it takes time to have client successes.  Another center that graduated from SBA’s program in 2007 told us that  although SBA funding had decreased each fiscal year, the WBC’s  membership in SBA’s program and the funds it received were beneficial to  the center’s ongoing success. One center president said that seamless  funding for the program would greatly benefit centers that were meeting  the needs of their communities, and the director of another center that  was in the process of applying for sustainability funding told us that she  was anxious to see the recent legislative changes that would make SBA  funding for WBCs permanent. A district office official that we spoke with  echoed the WBCs’ concern about sustainability, noting that the long-term  viability of the WBC he oversaw might be threatened after the center  graduated from SBA’s program in 2007.
The WBC program’s funding structure also created uncertainty that limited  SBA’s ability to manage the program effectively. OMB’s 2007 PART report  found that frequent changes by Congress in the WBC program’s funding  structure, delays in extending sustainability funding, and uncertainty  about the future had created challenges for the program. OMB’s report  also noted that SBA had taken steps to foster more consistent  management of the WBC program, but added that long-term planning was  problematic because of the program’s funding structure. When we spoke  with officials at OMB, they emphasized that SBA appeared to be making a  significant effort to assist WBCs, given the program’s limitations. The  officials also noted that the funding challenges that WBCs faced after  graduating from the sustainability pilot could be related to the fact that  these organizations operated resource-intensive programs and collected  nominal revenues in program fees, largely because of their focus on  economically disadvantaged clients, causing them to rely heavily on  external support.
SBA will fund WBCs through the project term, subject to availability of  funds, and our review indicates that WBCs that perform satisfactorily will  continue to receive funds until they complete the program. SBA officials  provided us with a list of eight centers that had terminated prior to  completing the program and noted that the program had funded a total 150  WBCs since its inception. However, SBA officials in headquarters and the  district offices were aware of the challenges WBCs faced in planning  annual budgets without knowing how much they would receive or  whether sustainability funds would continue to be available. According to  SBA, two of the eight centers that left the program did so as a result of  challenges securing matching funds, and one WBC not included in SBA’s  list left the program during our review, in part due to funding challenges.  In discussing the WBC program’s limited-term funding, some SBA district  office officials emphasized that the agency had invested in creating  successful WBCs and should be working to make those that performed  well permanent SBA partners.
As we have seen, recent legislation for the WBC program replaces the  sustainability pilot program with 3-year renewable awards, providing an  opportunity for SBA to continue funding WBCs. Current program  participants and those that have successfully graduated will be eligible to  apply for continuous funding through these 3-year awards (table 1). SBA  officials told us that by the end of fiscal year 2007, 21 WBCs that have  graduated since the beginning of the program would be eligible to apply  for the renewable awards. The award process will remain competitive, and  the maximum amount for renewable awards will be $150,000 each year per  recipient, as in the first 5 years of the WBC program. Also, the number of  organizations competing could increase, but SBA’s annual budget for the  WBC program may not increase beyond the approximate $12 million  provided in the past 5 years. However, increased award competition  provides an opportunity for SBA to continue funding high-performing  centers. Prior to the new program changes, SBA officials emphasized that  the WBC program is the agency’s only performance-based program and  said that they believed this fact provided an incentive for WBCs to  continuously improve. Because the WBC program is a competitive  discretionary award program, WBCs in the program compete annually for  the maximum award amount but continue to receive SBA funds for the  length of the project as long as their performance is satisfactory. SBA has  criteria for ranking new award applicants and performance-based criteria  for placing existing program participants into three funding categories for  annual awards. In September 2007, SBA made WBC awards for fiscal year  2007 to fund activities in fiscal year 2008, and SBA officials told us that  they plan to begin providing the 3-year renewable awards in fiscal year  2008 as soon as practicable after appropriations are received.
As a result of the new legislation, which allows graduated WBCs to reenter  the pool of applicants for continuous funding and changes the existing 5- year sustainability project terms going forward, SBA has begun revising its  existing WBC award process. SBA officials said that they would have to  create a new program announcement and update other documents to  reflect the new program structure, and that they also anticipated revising  the qualifying criteria and adding new considerations because they  expected the competition for awards to increase with the availability of  continuous funding.
section_title: SBA Has Oversight Procedures in Place, but Imbalances in Its Staff Resources and Ineffective Communication with WBCs Have Hindered Their Effectiveness
paragraphs: SBA has developed oversight procedures for the WBC program, but  imbalances in the agency’s staff resources for WBC oversight and  ineffective communication with WBCs reduce the effectiveness of these  procedures. SBA’s oversight of WBCs includes ongoing assessments for  performance-based funding, as required by the act authorizing the  program; and SBA has requirements for WBCs to report quarterly on their  program activities, performance, and finances. Although SBA had these  oversight procedures in place, its staff resources for the WBC program  have been limited, with the agency relying heavily on district office staff  who may have too many responsibilities or lack relevant experience and  training. Also, ineffective communication with WBCs has led to confusion  about how to meet program requirements and on how their performance is  being assessed.
subsections: section_title: SBA’s Oversight of WBCs Includes Ongoing Performance Assessments and Reporting Requirements
paragraphs: We found that SBA had developed written procedures for assessing the  performance and financial management activities of WBCs and had taken  steps to measure the WBC program’s effectiveness. Since 1997, as a  condition of continued funding, SBA has been required to assess WBCs’  performance at least annually through programmatic and financial  examinations, and SBA District Office Technical Representatives (DOTR)  conduct these examinations semiannually, typically on site at the WBC  location. SBA’s policies and procedures for the WBC program require the  district office to make a recommendation on continued SBA funding for  the WBC in the final or second examination report each year. As an added  measure, SBA also requires WBCs to have an independent certified public  accountant (CPA) certify the condition of their financial management  system each year as part of the final programmatic and financial  examination. We reviewed fiscal year 2006 final examination reports for 7  of the 10 WBCs that we visited and verified that the examination included  a checklist of questions on the WBC’s personnel and facilities, financial  management—including details of the funding match, data collection,  program activities, and Web site support and other Internet activity. None  of the examination reports that we reviewed included a recommendation  from the district office that SBA discontinue funding to the WBC.
In addition to conducting semiannual examinations, SBA requires that  WBCs submit quarterly reports on their program activities, performance,  and financial status and transactions. Quarterly program activity reports  include data on counseling, training, and information transfers; and SBA  requires WBCs to report these data directly through its Entrepreneurial  Development Management Information System (EDMIS) database. Most  of the WBCs that we spoke with said that they tracked and maintained  program data in a separate internal database and later uploaded the data  to EDMIS for SBA reporting. The information that WBCs are required to  provide in quarterly performance reports includes the WBCs’ actual  accomplishments, compared with their performance goals for the  reporting period; actual budget expenditures, compared with an estimated  budget; cost of client fees; success stories; and names of WBC personnel  and board members. Fourth quarter performance reports must also  include a summary of the year’s activities and economic impact data that  the WBCs collect from their clients, such as number of business start-ups,  number of jobs created, and gross receipts. SBA reports some of these  data in its annual performance reports to Congress through several output  and outcome measures that are meant to reflect the WBC program’s  performance and effectiveness (table 2). Quarterly financial reports detail  the WBCs’ financial status and program expenses that qualify for SBA  payment under the terms of the award. Fourth quarter financial reports  may include adjustments to previous financial reports for the program  year. Quarterly reporting is directly tied to the WBCs’ ability to access  their award funds. OWBO and DPGM review WBC quarterly reports and  separate award payment requests, and DPGM has the authority to  authorize WBC requests for advance or reimbursement payments.
As noted, SBA reports to Congress annually on the performance of the  WBC program. In addition to collecting output and outcome data from  WBCs, and as part of a broader impact assessment of its business  assistance programs, in 2004 SBA initiated a 3-year longitudinal study of  the WBC program that surveys the program’s clients. In our review of the  WBC portion of reports for the first 2 years of the study, we found that  although the study had a sound design, low response rates from WBC  clients in the second report may limit SBA’s ability to generalize the results  to all WBCs. Appendix II includes additional information on our review of  SBA’s study and other studies assessing the economic impact of WBCs and  discusses the difficulty of obtaining high response rates from private  citizens for voluntary surveys.
section_title: SBA Has Limited Staff Resources for the WBC Program and Relies Heavily on District Office Staff Who May Have Too Many Responsibilities or Lack Relevant Experience and Training
paragraphs: Within OWBO, program managers monitor a caseload of WBCs that are  grouped by geographic region and perform a variety of functions such as  communicating with the centers and DOTRs, reviewing WBC documents  and maintaining a project file for each center, and coordinating with  DPGM on funding matters. However, SBA relies heavily on its district  offices, and specifically DOTRs, to carry out many WBC program  responsibilities, although OED and OWBO do not have direct supervision  of district office staff. Rather, SBA’s Office of Field Operations oversees  the district offices and district directors assign responsibilities to  individual staff. In 2001, we reported that DOTRs had been given an  increased role in assessing WBCs’ performance to ensure that the  programs were fiscally sound and functioning smoothly. To this end, we  reported that DOTRs were receiving intensive training each year at the  postaward conference at SBA headquarters on how to monitor the WBCs’  programmatic and financial activities. As noted earlier, DOTRs are  expected to conduct the WBCs’ programmatic and financial examinations  semiannually, but they also have other WBC program duties and other full- time agency responsibilities. District directors assign the role of DOTR as  a collateral duty to district office staff, and DOTRs whom we met with  held separate positions as business development specialists and assistant  district directors. SBA has a list of 23 responsibilities for DOTRs, some of  which involve oversight, including (1) reviewing WBCs’ requests for  project revisions, (2) determining the extent to which WBCs are meeting  the match requirement, (3) reviewing the scope and quality of services  provided to clients, (4) reviewing all WBC signage and media, and (5)  helping to resolve problems. According to the list of responsibilities  provided to us, DOTRs are also expected to act as advocates for the WBCs  within their district. Some of the responsibilities related to this role  include (1) ensuring that the district office displays and distributes WBC  brochures; (2) collecting success stories from WBCs to be used for  publicizing the program; and (3) including WBCs in district office  conferences, workshops, and other events for women business owners.  SBA officials told us that ideally DOTRs should focus on the oversight  responsibilities and act as a liaison between WBCs and the district office.  In the past, district offices also had a Women’s Business Ownership  Representative (WBOR) who would act as an advocate for all activities  involving women’s business issues. However, SBA officials and some  district offices that we spoke with said that this role was often performed  by the same person who was the DOTR. OED and OWBO officials said that  since they do not control the assignment of staff responsibilities, they  could not influence whether a district office employee acted both as an  overseer and advocate for WBCs.
The DOTR’s total responsibilities for the WBC program appear to be  substantial, particularly since these responsibilities are part of a collateral  role. Given SBA’s downsizing in recent years, some DOTRs may have more  responsibilities than they had in the past, making it more challenging to  perform their WBC program duties effectively. Others new to the role may  lack the necessary experience and training or carry out DOTR  responsibilities by default. For example, an assistant district director, who  was familiar with the WBC in his district, told us that he had performed  the role of DOTR for less than a year. He also said that he had previously  supervised the DOTR, WBOR, and two other positions. The DOTR had  retired in fiscal year 2005, and another staff member who had filled the  position temporarily was no longer with SBA. The WBOR had also left the  agency, and neither position had been filled. Although most WBCs we  interviewed spoke positively of their relationship with their DOTR, several  told us that reductions in district office staff had led to changes, including  assigning DOTR responsibilities to a different district office staff member.  DOTRs still attend required training for the WBC program annually at SBA  headquarters, and SBA provides them with a handbook to assist them in  performing their duties. However, three of the six DOTRs that we spoke  with said that SBA’s training for DOTRs in WBC oversight had not always  been adequate. One DOTR said that there had been recent improvements  but that past training assumed that new DOTRs had prior knowledge of  the WBC program. The other two DOTRs made similar statements, with  one pointing out that a lack of guidance had led to challenges in  monitoring the WBC in her district at the time that she first assumed the  role of DOTR. In one location, the DOTR and other district office staff told  us specifically that they did not feel that DOTRs were adequately trained  to conduct the financial component of WBC programmatic and financial  examinations, adding that SBA headquarters had previously coordinated  financial examinations for WBCs.
A 2003 SBA Office of Inspector General (OIG) audit of a Texas WBC found  that the center had misused award funds and that SBA had not adequately  monitored its financial and accounting operations. The OIG report on the  audit specifically noted that the SBA reviewer had concluded that the  center had a good financial and client tracking record system, in contrast  with the audit’s finding that the center’s financial reporting lacked the  standards reasonably expected of such an entity. The report also noted  that the district office personnel assigned to perform oversight of the WBC  did not have the financial background or proper training to perform  financial reviews. When we followed up with OWBO officials, they said  that SBA added the 2004 requirement that a CPA review WBCs’ financial  records annually both because the agency recognized that some DOTRs  lacked this expertise and because there had been isolated incidents of  mismanagement of WBC award funds. The CPA reviewing a WBC’s  records must complete and sign a statement in the final examination  report stating whether the records were found to be acceptable in  accordance with federal standards. OWBO officials also told us that they  were coordinating with SBA’s Office of SBDCs to use SBDC financial  examiners for these on-site financial reviews of WBCs, but added that  recently there had not been enough staff to do all of the reviews. The  officials also said that OED was reviewing how future financial audits for  all of SBA’s business assistance programs would be conducted.
When we reviewed examination reports for 7 of the 10 WBCs that we  visited, we found some inconsistencies that may suggest the need for more  practical and ongoing DOTR training. First, in one report, the DOTR noted  that the funding match requirement did not apply to a WBC because the  center did not charge fees for SBA-sponsored programs and therefore did  not generate funds from such programs. As noted previously, SBA’s  funding match requirement applies to all WBCs in its program, with the  ratio changing from 1 nonfederal dollar for each 2 federal dollars in years  one and two to 1 nonfederal dollar for each federal dollar in year three and  thereafter. We followed up with the WBC, and the center director verified  that the WBC did charge fees for WBC program offerings and was meeting  its match requirement. Second, we found that most of the final  examination reports did not include a CPA’s statement and that two  reports included a note stating that the certification would be forthcoming  because the CPA was unavailable on the review (examination) date.
We found that SBA had taken some steps to adapt WBC program oversight  procedures to its limited staff resources and to increase efficiency in some  areas. For example, until January 2006 DOTRs conducted programmatic  and financial examinations quarterly, and SBA switched to semiannual  examinations to conserve its staff resources. SBA officials told us that  staff resources for WBC program oversight had been strained for some  time, and that OWBO recently received approval to fill two vacant  positions and was currently determining the roles and responsibilities for  these new staff. OWBO currently has five program managers that monitor  a caseload of between 15 and 30 centers each. In March 2007, SBA also  revised its reporting procedures for WBCs to streamline communication  and to reduce review and processing times. For example, WBCs previously  submitted original payment requests to the DOTR for review and  recommendation, the DOTR forwarded the paperwork to OWBO for  review and recommendation, and OWBO then forwarded the paperwork to  DPGM for approval. As a result of complaints from WBCs and DOTRs  regarding delayed award payments and misplaced WBC paperwork, SBA  revised this procedure, and WBCs now submit original payment requests  directly to OWBO. OWBO reviews the paperwork and makes a  recommendation for payment, forwarding the paperwork to DPGM for  authorization and notifying the DOTR and WBC of the recommendation.  Both WBCs and DOTRs that we spoke with following SBA’s revision of its  payment request procedure said that the new procedure had significantly  improved communication.
The new procedures also improved payment turnaround times. Many of  the WBCs that we spoke with mentioned that they had experienced  challenges with receiving payments in a timely manner. As noted, SBA was  aware of this issue. During the course of our review, the SBA OIG  conducted a study looking at award disbursements to WBCs for fiscal  years 2004 through 2007, surveying 21 of the 99 centers in SBA’s program  in fiscal year 2007. The OIG’s preliminary report, which was based on  responses received from 18 of the centers, found that in fiscal years 2005  and 2006, the majority of SBA’s payments to WBCs were not made in a  timely manner. The study did not determine the percentage of payment  delays that were caused by SBA’s untimely processing or the percentage  that were caused by errors the WBCs may have made in submitting their  paperwork. However, the OIG is making recommendations for SBA to  improve its reimbursement process. In a September 2007 congressional  testimony addressing the challenges facing the WBC program, the  Associate Administrator for OED pointed out that while the size of the  WBC network had grown from an initial 13 centers in 1989, SBA’s  resources assigned to OWBO and DPGM had declined due to reductions in  SBA’s overall budget. He also noted that as a result, the WBC program had  outgrown its original set of policies and procedures, and OWBO faced  challenges in managing and supporting the program. Continued  imbalances in SBA’s staff resources for the WBC program, including the  agency’s significant reliance on DOTRs, could reduce assurances that its  oversight of WBCs is effective and that WBCs are meeting the program’s  requirements.
section_title: Ineffective Communication from SBA Led to Confusion about WBC Program Requirements and Performance Reviews
paragraphs: The WBCs that we spoke with also raised issues related to SBA’s  communication on program procedure and their performance. One study  we reviewed reported that 54 percent of 52 WBCs surveyed said that SBA  could improve its communication with them. Timely and thorough  communication of operational procedures is critical to ensuring that the  agency and the WBCs are able to perform their responsibilities effectively.  Our Standards for Internal Control in the Federal Government state that  for an entity to run and control its operations, it must have relevant,  reliable, and timely communications relating to internal as well as external  events. For external communication, agency management should ensure  that there are adequate means of communicating with and obtaining  information from external stakeholders that may have a significant impact  on the agency achieving its goals.
OWBO conducts monthly conference calls with the WBCs and DOTRs, and  SBA officials said that the calls were intended to maintain contact with the  centers and to provide program updates and information on best practices.  OWBO program managers facilitate the conference calls each month; and  SBA officials also said that they send an agenda and handouts to DOTRs  and WBCs electronically, prior to making the calls, and record the calls so  that the information is available later. We reviewed handouts from  conference calls that OWBO conducted between February and July 2007  and noted that program updates and best practice presentations were  included on some of the calls. However, when we spoke with WBCs about  the calls, some told us that the calls were not meeting their  communication needs. Three of the WBCs that we spoke with said that  best practice presentations that allowed them to share information with  other centers were helpful. Others said that the calls were less effective  because administrative items were typically covered instead of new  information. Although WBCs have an opportunity to ask questions during  the calls, the WBCs that we spoke with had mixed opinions about whether  monthly conference calls provided a good forum for asking questions. One  experienced WBC said that questions unrelated to the call agenda  sometimes caused the discussion to be sidetracked and suggested that  OWBO officials address such questions off-line. The WBC director also  said that the varying experiences of the WBCs participating resulted in the  calls being more effective for some centers than for others and suggested  that OWBO consider restructuring the calls by WBC experience (years in  the program) to provide a more productive learning experience. SBA  officials told us that in January 2007, as an opportunity to provide  necessary instruction to newer DOTRs, OWBO reinstated separate  conference calls for DOTRs, although they can still participate in the WBC  conference calls.
OWBO also uses e-mail to communicate policy changes to the WBCs and  DOTRs and to make interim information requests of the WBCs, but some  WBCs told us that they had difficulty clarifying changes to requirements  and that SBA’s communications were often insufficient. Several WBCs said  that SBA had not responded in a timely manner when they submitted  payment requests and other administrative paperwork and that such  delays resulted in financial burden and led to confusion about whether  they had followed appropriate procedure and met program requirements.  For example, one WBC director said that the center’s request for an  advance payment was denied because she incorrectly submitted the  request to the DOTR during SBA’s procedural changeover and had not yet  been notified of the revised procedure, which required the request to go  directly to OWBO. According to the WBC director, the DOTR was out of  the office during the week that she submitted the request, and DPGM  denied the request several weeks after receiving it because it reached  DPGM after the deadline. The WBC director said that she received no  notification of receipt from DPGM until the request was denied.
While SBA removed the DOTRs from the payment request procedure to  eliminate potential bottlenecks, this action has not completely resolved  WBCs’ concern about communications with SBA headquarters offices.  Another WBC director who identified communication issues with SBA  when we initially spoke with her, later told us that the recent procedure  revisions had eliminated some of the confusion caused by multiple layers  of approval for payment requests but noted that the WBC still had  difficulty with DPGM’s denying requests without any communication  about items it may identify once the paperwork reached that office. The  Associate Administrator for OED highlighted the revised payment request  procedure as an example of recent efforts to address inefficiencies, saying  that the processing of payment requests had also been centralized to one  point of contact in OWBO. He added that OWBO had initiated a  prescreening process to identify missing documentation prior to reviewing  the payment request and said that OWBO’s new policy of notifying the  WBC when a payment request had been forwarded to DPGM would  increase transparency. In agreement with the OED official’s statement, the  WBC director said that OWBO appeared to have a clearer understanding of  DPGM’s requirements in conducting its initial review of payment requests  and that OWBO had not denied any recent requests. However, the WBC  director said that DPGM had still denied requests for minor items that the  WBC became aware of during a self-initiated follow-up with DPGM. For  example, the WBC director said that in one instance DPGM would not  accept copies of forms for which the WBC previously submitted originals  that were either lost or misplaced by OWBO. According to the WBC  director, OWBO intervened to resolve this particular issue.
It appears that limited communication within SBA has played a role in  some WBC communication issues, and the SBA OIG’s preliminary report  found that until recently the agency lacked an integrated tracking  mechanism to identify when a payment request was received, where it was  in the review process, and whether a disbursement had been made within  the required time frame. One DOTR also told us that there were  opportunities for SBA headquarters to improve its communication with  DOTRs on policy and procedural changes to assist DOTRs in their role,  and a WBC director said that she would like to see improved  communication between SBA headquarters and its district offices, noting  that some changes to paperwork requirements and program policy had not  been communicated to the district offices.
In addition to communication issues related to payment requests and other  administrative procedures, several WBCs told us that SBA had provided  inconsistent communication on setting annual performance goals. SBA has  established procedures for OWBO to negotiate annual performance goals  with WBCs as they work toward accomplishing their 5-year project goals.  Prior to fiscal year 2008, SBA’s requirement was that WBCs establish a  goal of increasing several performance measures by 10 percent each year  over the 5-year period of the award. One WBC said that for fiscal year  2007, the district office had requested that the WBC serve over 250  additional clients after OWBO and the WBC had agreed to a 10 percent  increase over the goal for fiscal year 2006. The WBC director expressed  concern that they had followed program guidelines in setting the initial  goal; had not received an official explanation for the revised goal; and had  received a smaller award than for the previous year, although they would  have to serve many more clients. She said that when the WBC inquired  about the change at the district office, they were told that the new goal  was an OWBO goal. Another WBC said that the district office had  communicated revised goals for fiscal year 2006 but was unable to explain  the basis for the new goals. The director of this WBC said that the new  goals were subsequently retracted without any official communication  from SBA. A third WBC specifically noted that several years ago, SBA had  issued a midyear requirement that WBCs package a certain number of  loans. Although the WBC had been packaging loans, this requirement was  not a WBC program measure, and the WBC did not include loan packaging  in its annual goals. The WBC director said that the added requirement  forced WBCs to comply with a goal they had not been working toward  previously, and the director added that the requirement would have been  especially difficult for smaller centers that may have added staff and other  resources to package loans, particularly since this was not a permanent  program requirement. When we followed up with OWBO officials, they  told us that the district offices had sometimes communicated different  goals to the WBCs to assist them with meeting district office goals, but  that the district offices’ goals were set by SBA’s Office of Field Operations,  which is a separate office in SBA outside of OED and OWBO. One district  office staff member did tell us that the district office would like the WBCs  to be more involved in helping the district office to meet its goals as part  of a joint effort in meeting the needs of their local communities. OWBO  officials did not address a solution for the miscommunication of goals, but  in agreement with what some WBCs told us, OWBO officials said that they  recognized that it was unrealistic for WBCs to continue to increase their  goals each year while receiving smaller awards. The officials said that  OWBO is revising its formula for WBCs to set annual goals, and removed  the 10 percent increase requirement in its fiscal year 2007 program  announcement for centers that will be funded in 2008.  They also said that  OWBO would begin to consider prior year funding amounts in setting  achievable goals.
Some WBCs also told us that they were not sure how well they were  performing because SBA did not provide them with feedback on  semiannual programmatic and financial examinations or the reports that  they submitted quarterly. One WBC told us that SBA did not provide  details on how programmatic and financial examination results were used  to place the center in a particular funding category, and another WBC said  that SBA should provide appropriate feedback to let the WBCs know what  they were doing well or could do better. The second WBC pointed out that  it could not tell whether anyone was actually reviewing the reports that it  submitted to SBA. SBA officials told us that they were aware of the WBCs’  concern regarding a lack of performance feedback and would take steps to  make the WBC program’s performance-based funding process more  transparent. SBA’s ineffective communication with the WBCs and between  its offices that oversee the WBC program has led to confusion among  WBCs, limiting their understanding of the program’s requirements and  potentially reducing their ability to effectively carry out these  requirements.
section_title: WBCs Make Some Efforts to Coordinate with SBDCs and SCORE, but SBA Provides Limited Guidance to Support These Efforts
paragraphs: The WBCs that we spoke with focused on a different type of client than  the SBDCs and SCORE chapters in their areas, and several WBCs actively  coordinated with the other programs to avoid duplicating services.  Consistent with SBA requirements and statutory authority, WBCs tailor  services to meet the needs of socially and economically disadvantaged  women and tend to serve clients with businesses that have fewer  employees and lower revenues than clients of SBDCs and SCORE. Though  WBCs serve different types of clients, most WBCs told us that they refer  clients to and coordinate services with SBDCs and SCORE when  appropriate to leverage resources and avoid duplication. Also, some of the  coordination efforts were facilitated by the SBA district office, but we  found that SBA provided limited guidance to WBCs on how coordination  should occur. In addition, coordinating services can be difficult because  WBCs, SBDCs, and SCORE have similar performance measures, which  could lead to competition among the service providers in some locations.  We also found that on some occasions, SBA encouraged WBCs to provide  services that were similar to services already provided by SBDCs in their  district. These issues and the lack of sufficient guidance could create  barriers to coordination and increase the risk of duplication in some  locations.
subsections: section_title: The WBC, SBDC, and SCORE Programs Provide Training and Counseling to Small Business Clients, but Have Different Target Groups
paragraphs: Like SBDCs and SCORE chapters, WBCs provide both counseling and  training services to small business clients. Unlike SBDC and SCORE,  however, WBCs tended to target services to women, socially and  economically disadvantaged clients, and clients with smaller businesses.  Our review of the statutory authorities governing the WBC, SBDC, and  SCORE programs found that each of the programs is required to provide  training and counseling, but the WBC program’s statutory authority  requires SBA to evaluate WBCs on, among other things, their ability to  target services to socially and economically disadvantaged clients.  Consistent with the WBC program’s statutory authority and SBA  requirements, WBCs targeted services to socially and economically  disadvantaged clients. A study of WBCs conducted by the Center for  Women’s Leadership at Babson College also confirmed that WBCs  responding to its survey predominantly served socially and economically  disadvantaged clients. According to the Babson College study, 67 percent  of WBC clients came from households with incomes that were less than  $50,000, and 55 percent of WBC clients had a high school diploma or less  education.
Three WBCs that we spoke with were able to provide support to socially  and economically disadvantaged clients through financial literacy, savings,  and credit repair programs. For example, a WBC in California had a  program that provided financial literacy and asset building services for its  economically disadvantaged small business clients. Through this program,  clients were able to attend financial literacy courses while gradually  increasing their savings through an individual development account and  savings club program. The individual development account and savings  club program allowed low-income clients to receive matching funds to  save toward the purchase of a home or to start a small business.
Consistent with the program’s statutory authority, we also found that  WBCs tended to focus their programs on female clients. A study  contracted by SBA on the impact of the WBC program reported that  women made up 77 percent of WBC clients. The Babson College study  also reported that the WBCs responding to its survey tailored their  programming to meet the needs of women clients. Consistent with the  findings of the SBA and Babson College studies, several WBCs that we  contacted provided services specific to the needs of women clients. For  example, a few WBCs had women’s networking or mentoring groups so  that experienced women entrepreneurs could share advice with those who  were new women business owners.
WBCs also tended to offer services that helped clients start and expand  existing microenterprises or very small businesses. For example, a WBC in  Chicago established a program to help its clients start home-based child  care centers, and a WBC in Baltimore helped low-income clients with  existing informal home-based businesses expand and increase their  income in order to assist them with becoming economically self-sufficient.  SBA’s impact study of WBCs also showed that they tended to serve clients  with businesses that had fewer employees and lower revenues than clients  of SBDCs and SCORE. According to the study, WBC clients had businesses  with an average of 2.5 employees and an average revenue of $63,694. In  contrast, SCORE worked with businesses with an average of 3.2  employees and $112,182 in average revenue, and SBDC worked with  businesses with an average of 6.3 employees and $272,552 in average  revenue.
We found that some WBCs offered services for clients with limited  business experience. WBC directors interviewed for the Babson College  study also reported that WBC clients had distinct needs that often  reflected a lack of experience in the business world. Several WBCs that we  contacted provided intensive long-term training and counseling to help  clients through each phase of small business development from start-up  through expansion. A WBC in California provided a 3-year long “virtual  business incubator” program that targeted first generation immigrant  entrepreneurs, helping them to develop their businesses and to set long- term asset-building goals. While in the virtual incubator program, WBC  clients, through coaching and training over a 3-year period, produced a  business plan, established a business accounting system and legal  structure, and developed a marketing plan to start and establish their  businesses. A WBC in Massachusetts also offered a 13-week and 20-week  multiphase training and counseling program for its clients that was  designed to help new small businesses through each phase of the business  development process.
section_title: Coordination among WBCs, SBDCs, and SCORE in Some Locations Was Extensive, but SBA Provides Limited Guidance to Support These Efforts
paragraphs: While SBA requires WBCs to coordinate with SBDCs and SCORE chapters,  SBA provides limited guidance or information on how these business  assistance programs should coordinate. Increasingly, the government  relies on new networks and partnerships to achieve critical results and  develop public policy, often including multiple federal agencies, domestic  and international non- or quasi-government organizations, for-profit and  nonprofit contractors, and state and local governments. Notwithstanding  the increased linkages in our system, each level of government often  makes decisions on these interrelated programs independently, with little  interaction or intergovernmental dialogue. According to the Grant  Accountability Project, a working group chaired by the U.S. Comptroller  General, coordination between federally supported programs that provide  similar services, such as the WBC, SBDC, and SCORE programs, is  important to avoid service duplication and to efficiently leverage federal  funds.
Through the WBC notice of award, SBA policy requires that WBCs work  collaboratively with SBDCs and SCORE chapters, with assistance from  SBA district offices, to coordinate efforts in order to expand services and  avoid duplication. When WBCs are located in communities with these  resource partners, the WBCs are to coordinate with them in offering  training and other forms of assistance to their clients. SBA headquarters  officials also confirmed that they expected district offices to ensure that  duplication between the programs did not occur.
Though SBA policy requires WBCs to coordinate, SBA does not provide  detailed guidance to WBCs on how coordination should occur in order to  efficiently leverage SBA funding. Through our review, we found that the  only guidance SBA provided to WBCs was in the notice of award, which  asks WBCs to coordinate with SBA resource partners and other WBCs,  where appropriate, under cosponsorship arrangements or memorandums  of understanding. However, neither the notice of award nor any other  document prescribes any specific practices or methods for these efforts.  When we asked SBA officials about the lack of guidance, they said that  they expect WBCs to initiate coordination on their own without specific  guidance from SBA. SBA officials also said that they had not issued  specific guidance because they did not want to be overly prescriptive or  dictate how coordination should occur, given that local conditions varied  and that some forms of coordination might be effective in some locations  but not in others.
Without specific SBA guidance, some WBCs used a variety of approaches  to initiate coordination with other business assistance providers. Most  WBCs said that they referred clients to SBDCs and SCORE chapters in  their areas when appropriate and coordinated services with these other  business assistance providers to leverage resources and avoid duplication.  Some WBCs provided services to both start-up and experienced clients,  but others referred more experienced or established small businesses to  SBDCs. Some WBCs tended to refer clients seeking short-term counseling  or specific industry expertise to SCORE. As an organization primarily  staffed by volunteer small business counselors instead of full-time  employees, SCORE services tended to be short-term and focused. For  example, a small business client seeking restaurant industry expertise may  be referred to a SCORE counselor that formerly owned his own  restaurant.
In several locations, WBCs were colocated or shared space with SBDCs  and SCORE chapters and were often able to benefit from reduced  overhead costs that came from shared facilities. Five colocated WBCs and  SBDCs we contacted shared administrative support and leveraged  counseling staff in order to better serve clients. For example, in California,  a WBC that was colocated with an SBDC often referred clients to SBDC  counselors if WBC counselors were not available in order to maximize  resources and provide better service.
Seven WBCs told us that the district office sometimes facilitated  coordination between WBC, SBDC, and SCORE. Two SBA district offices  that we contacted coordinated resource partner meetings at which  representatives from the WBC, SBDC, and SCORE programs and other  small business assistance providers met to discuss service coordination  and to organize small business events. A few SBA district offices were  involved in promoting WBC, SBDC, and SCORE activities but were not  often directly involved in facilitating communication among the programs.
Some WBCs told us that coordination was sometimes independently  initiated by WBC, SBDC, and SCORE representatives without assistance  from the SBA district office. For example, under a memorandum of  understanding, WBC, SBDC, and SCORE representatives in South Carolina  organized informal groups with other area small business assistance  providers to plan events, coordinate services, or facilitate training. In  Wisconsin, a WBC coordinated with SBDC, SCORE, and other small  business assistance providers to develop a detailed triage system for small  business clients in their area. In order to better coordinate services, the  WBC and its resource partners developed a flow chart to help service  providers divide their resources and determine where to refer clients.  Under this system, clients with existing businesses were referred to the  SBDC, and clients not yet in business were generally referred to the WBC.  Figure 3 illustrates some of the approaches that WBCs took to coordinate  with SBDC and SCORE.
Though several WBCs provided examples of successful coordination  efforts, a few WBCs that we contacted were unable to provide sufficient  information to demonstrate that they were coordinating with SBDC and  SCORE in order to decrease duplication of services. In two instances,  WBCs that we spoke with had made efforts to decrease service duplication  without coordinating with SBDCs and SCORE chapters in their area. For  example, one WBC had limited contact with SBDC and SCORE chapters  and attempted to eliminate duplication in services by reviewing some of  the course and service information on SBDC and SCORE chapter Web  sites.
Also, WBCs raised concerns about how to effectively coordinate by  colocating with an SBDC or SCORE chapter. Several WBCs told us that  they had considered coordinating with SBDC and SCORE by colocating or  sharing space in order to reduce costs and leverage staff, but feared that  doing so would inhibit their ability to maintain their identity and reach  their target client group of low-income women. Until recent policy  changes, WBCs and SBDCs were both measured on the number of clients  that participate in small business training and counseling services, and one  WBC told us that colocation would cause WBCs to compete for clients.  SBA officials told us that the potential for competition between WBCs and  SBDCs should have been reduced since SBDCs were no longer required to  set a goal for the number of clients they serve. Until recently, if a WBC and  an SBDC sponsored a joint training event, only one organization could  count an individual client and the total number of training hours. WBCs  and SCORE still have similar measures, and some measures could hinder  collaborative efforts.
Some WBCs experienced challenges in their attempts to coordinate  services with SBDC and SCORE. Some WBCs told us that coordinating  services could be difficult. In some instances, SBA encouraged WBCs to  provide services similar to those that SBDCs were already providing to  small businesses. For example, in the WBC notice of award, SBA  emphasizes that WBCs provide ongoing assistance to existing or  established small businesses. However, several WBCs told us that they  considered SBDCs and other service providers to be better equipped to  serve existing and experienced small businesses. In another example,  SBA’s WBC notice of award asks that each WBC make an effort to  increase its focus on providing procurement assistance to small  businesses; however this initiative could be interpreted as overlapping  with the existing goals of Procurement Technical Assistance Centers, a  program funded by the Department of Defense that provides procurement  assistance to small business owners through SBDCs and other institutions.  One WBC told us that the district office had encouraged the center to  develop a government procurement curriculum, although the WBC was  already referring clients to an SBDC in the area that provided this service  to small business clients.
As we have seen, some WBCs were effectively coordinating with SBDCs  and SCORE, but others faced challenges that SBA’s limited guidance has  not addressed. The examples of successful and effective coordination that  were shared with us demonstrate that a variety of approaches exists, and  that some WBCs have overcome some of the challenges expressed by  others. This type of information would be useful guidance to all WBCs.  Without it, WBCs, SBDCs, and SCORE may be duplicating efforts and  missing opportunities to use federal funds more efficiently.
section_title: Conclusions
paragraphs: The WBC program has undergone significant change since its inception in  1989. WBCs were initially envisioned as entities that would receive federal  funding for only 5 years. However, concerns about whether the federal  investment was sufficient to create sustainable WBCs led Congress to  create a pilot program to provide sustainability awards for an additional 5  years. The creation of the sustainability awards, which were meant to  provide some additional support to WBCs, also created some uncertainty  about the amount of funding older WBCs would obtain year to year and  whether sustainability awards would continue in the future. This year,  Congress created a more permanent funding stream for WBCs that  continue to meet the program’s requirements by establishing 3-year  renewable awards. This change should address the concerns raised by  existing WBCs. However, the program will remain competitive, and it is  unclear how the new awards will impact SBA’s ability to fund new centers  in the future. SBA is planning to begin providing the new 3-year renewable  awards in 2008.
SBA’s downsizing and the subsequent impact on staffing in district offices,  as well as the growth in the WBC program in terms of number of WBCs  participating, have had an impact on how SBA oversees WBCs. The  significant reliance on DOTRs in SBA’s district offices is particularly  problematic because we found instances in which some DOTRs may not  be able to carry out those responsibilities effectively. Some DOTRs had  other district office responsibilities that could limit their ability to oversee  WBCs, and others lacked the necessary skills and expertise. Because SBA  relies on DOTRs, it is important that the agency ensure that such staff have  the right mix of responsibilities and adequate guidance and training to  carry out those responsibilities. Otherwise, DOTRs may not succeed in  ensuring that WBCs are meeting all program requirements and that federal  funds are not being misused or wasted.
Communication between SBA and WBCs could also be improved.  Communication is a key internal control that ensures SBA’s policies and  procedures are understood. The fact that several WBCs said that they did  not obtain sufficient information on what it takes to be a successful WBC,  even though OWBO has monthly conference calls with them, suggests the  need to explore additional methods for providing information that will  help WBCs to be successful. Improved communication would reduce the  confusion expressed by many WBCs and increase the likelihood that the  centers meet program requirements and perform well.
SBA can facilitate efficient and effective use of its resources by  encouraging coordination among the WBC, SBDC and SCORE programs  when coordination makes sense for the geographic areas they are serving.  Though we found that the WBC program distinguishes itself from other  business assistance programs by providing services to economically and  socially disadvantaged populations, all of SBA’s business assistance  providers—WBCs, SBDCs, and SCORE—provide training and counseling  services to potential or existing entrepreneurs. As a result, the opportunity  for duplication exists. SBA is aware that duplication could occur and has  taken steps to encourage coordination but there is no explicit guidance on  how to successfully coordinate services. WBCs are expected to  demonstrate that they are coordinating with SBDCs and SCORE, and  several of the WBCs gave us examples of how they coordinated, but the  degree of coordination varied. Some WBCs had concerns about how they  should coordinate while also ensuring that they meet their own program  requirements. The instances of active coordination among SBA’s programs  and other local business assistance programs provide a range of methods  other geographic areas could also consider using. These examples  demonstrated how coordination can leverage resources and help  programs minimize or avoid duplication, but they are not necessarily  familiar to all WBCs because SBA has not provided guidance based on  these promising practices and examples of effective coordination.
section_title: Recommendations for Executive Action
paragraphs: To ensure that oversight of the WBC program is efficient and effective we  recommend that the Administrator take the following two actions:    evaluate and modify, as appropriate, the responsibilities assigned to  DOTRs to ensure that DOTRs can conduct appropriate and effective  monitoring of the centers, and   establish a communication strategy to ensure that WBCs have access to  up-to-date information on program requirements and help the centers  better understand how they are performing .
To improve coordination and facilitate the efficient use of federally funded  resources, we recommend that the Administrator direct the Associate  Administrator of the Office of Entrepreneurial Development (OED) to take  the following action:    develop guidance or information for SBA’s district offices and WBCs,  SBDCs, and SCORE that will facilitate successful coordination of services.  This guidance or information could be developed by identifying promising  practices currently in place in some geographic areas or by developing  case studies or examples of successful coordination models. The guidance  should also assist district offices, WBCs, SBDCs and SCORE in providing  sound advice on how to coordinate services when doing so could conflict  with meeting individual program requirements or initiatives.
section_title: Agency Comments
paragraphs: We provided SBA with a draft of this report for review and comment. SBA  provided no comments on the draft report or its recommendations.
We will send copies of this report to the chair of the Committee on Small  Business, House of Representatives, the Administrator of the Small  Business Administration, and other interested parties. We will also make  copies available to others upon request. In addition, the report will be  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-8678. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Staff acknowledgments are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: In this report, we address (1) the uncertainties associated with the funding  process for Women’s Business Centers (WBC); (2) the Small Business  Administration’s (SBA) oversight of the WBC program, including policies  and procedures for monitoring compliance with program requirements  and assessing program effectiveness; and (3) the services that WBCs  provide to small businesses and actions that SBA and WBCs have taken to  avoid duplicating the services offered by the Small Business Development  Center (SBDC) and SCORE (formerly Service Corps of Retired  Executives) programs.
To address all three objectives, we reviewed the legislative history of the  WBC program, our previous reports, SBA’s policies and procedures for  administering the program, and studies of the program conducted by SBA,  SBA’s Office of Inspector General, and external organizations. We  conducted site visits in 6 states and the District of Columbia and  interviewed officials from 10 WBCs, 7 SBDCs, and 6 SBA district offices.  We selected these locations to represent geographic diversity and to  enable us to rely on staff from our field offices. We also conducted 17  telephone interviews with WBCs randomly selected from the universe of  99 WBCs that received SBA awards in fiscal year 2007, using criteria to  ensure that we obtained a mix of newer and more established WBCs that  would allow us to compare a range of experiences with the program. Table  3 lists the WBCs and SBDCs we contacted. We interviewed officials from  SBA’s Office of Entrepreneurial Development (OED) and Office of  Women’s Business Ownership (OWBO) who are responsible for  overseeing the program.
To address uncertainties associated with the funding process, we  interviewed officials in SBA’s Division of Procurement and Grants  Management (DPGM) regarding the WBC award process and new  legislation changing the WBC program’s funding structure. We interviewed  officials at the Office of Management and Budget (OMB) regarding specific  findings related to the WBC funding process in its Program Assessment  Rating Tool (PART). Additionally, as part of our interviews, we asked the  27 WBCs to provide their perspectives on the WBC funding process.
To assess SBA’s oversight of the program, we reviewed documentation  that SBA uses to oversee WBCs and the award applications and  programmatic and financial examination reports for 7 of the 10 WBCs that  we visited. We interviewed SBA district office staff on their role in  overseeing the WBCs and on the guidance that SBA provides to them. We  also interviewed officials in DPGM regarding DPGM’s role in WBC funding  and oversight. We asked the 27 WBCs about their relationship with SBA.
To identify the services WBCs provide and actions WBCs and SBA take to  avoid duplication with other SBA programs, we reviewed and compared  the statutory authority for the WBC, SBDC, and SCORE programs.  Additionally, we reviewed two reports from SBA’s contracted study and  studies by three external entities on the impact of WBCs. We describe  each study and provide an assessment of each study’s design in appendix  II. We asked the 27 WBCs, 7 SBDCs, and SCORE’s national office about the  services they provide and coordination among the programs. Additionally,  we reviewed the Web sites of 24 of the WBCs and 6 of the SBDCs that we  contacted, and SCORE to identify the services that they offer and  determine whether the Web sites provided any information on how the  three programs coordinate in their geographic areas (local markets).
We conducted our work in California, Georgia, Illinois, Maryland,  Massachusetts, Virginia, and Washington, D.C. between August 2006 and  November 2007 in accordance with generally accepted government  auditing standards.
section_title: Appendix II: Studies Evaluating the Impact of WBCs
paragraphs: We reviewed four studies that have evaluated various aspects of the  impact of WBCs. One study was sponsored by SBA. SBA contracted with  Concentrance Consulting Group—a management consulting firm offering  services to government and private sector clients—to conduct a  longitudinal impact study of its business assistance programs, including  the WBC program. We reviewed the first two reports of the SBA study and  only reviewed the sections addressing the WBC program. The three other  studies focused on the impact of WBCs and were sponsored by private  organizations. The Association of Women’s Business Centers (AWBC)—a  nonprofit organization representing WBCs—sponsored the study  conducted by the Center for Women’s Leadership at Babson College. The  National Women’s Business Council (NWBC)—a federal advisory council  created by Congress—sponsored a study conducted by Quality Research  Associates, a research firm. The fourth study was conducted by the Center  for Women’s Business Research—a nonprofit research organization—and  was sponsored by NWBC, AT&T, and American Express. We identified  these three studies through Internet literature searches during July and  August 2006 as being industry-conducted studies using the following  search terms: “Women’s Business Centers” AND “Study” OR “Studies”;  “WBC” AND “Study” OR “Studies.” Each study was reviewed by two staff  members. Using a template, the first reviewer took notes on author’s  affiliation, objectives, methodology, limitations, and other information.  The second reviewer then reviewed these notes after reading the study.  Where there was lack of agreement, the two reviewers discussed their  points of view and reached agreement.
Based on our assessment of the studies’ design and methodology, we  determined that the studies provide useful information on how some  WBCs have impacted their clients, but these studies are limited because of  low survey response rates and other study limitations. It is important to  note that there are a number of considerations in attempting to evaluate  the impact of service delivery programs like the WBC program. Voluntary  surveys of private citizens tend to yield much lower response rates than  surveys of organizations or nonvoluntary surveys, like the Census.  Response rate is a key statistic toward understanding whether study  results are representative of the population that has been sampled. As a  consequence, any study of WBC clients may be limited in describing the  universe of clients due to low response rates. The type of error associated  with low response rates is called survey nonresponse error. There are  some procedures that help mitigate against survey nonresponse error, and  in our review of the study conducted for SBA and the other studies, we  have noted when the study used these procedures. Also, when studies are  based on small numbers, such as the studies using WBCs as the unit of  analysis, it can be difficult to detect patterns in the data.
Overall, we believe that any inferences from these studies are largely  limited to the centers and clients actually providing data for the studies,  except perhaps in the first report for the SBA study, which included  procedures to increase the confidence that the results are more  representative of the population of clients served. In general, we found  that all four of the studies appear to have reasonable and well thought  through research designs. However, in some studies key information was  not reported that would have enabled us to more completely evaluate  them. Table 4 provides information on each of the studies and our  assessment of the studies’ design.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: The following individuals made key contributions to this report:   Kay Kuhlman, Assistant Director; Heather Atkins; Bernice Benta;   Carolyn Boyce; Michelle Bracy; Tania Calhoun; Emily Chalmers; and   Rudy Chatlos.