Small Business Programs: Efforts to Address Internal Control Weaknesses and Potential Duplication
Published: 2011-06-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Economic development programs-- administered efficiently and effectively--can contribute to the well-being of the economy at the least cost to taxpayers. Such programs can encompass small business development and contracting. To encourage such contracting, Congress created programs--such as the Historically Underutilized Business Zone (HUBZone), service-disabled veteran-owned small business, and 8(a) Business Development programs--that give contracting preferences to some types of small businesses: in economically distressed communities; to those owned by service-disabled veterans; and to those with eligible socially and economically disadvantaged owners. This testimony addresses (1) potential duplication in economic development programs and (2) internal controls weaknesses in three small business programs. This testimony is based on related GAO work from 2008 to the present and updates it as noted. GAO examined programs at the Departments of Commerce, Housing and Urban Development, and Agriculture and the Small Business Administration (SBA) to assess program overlap, collaboration, and measures of effectiveness (GAO-11-477R). GAO also reviewed data from SBA and the Department of Veterans Affairs (VA) and conducted site visits. The reports identified opportunities to increase program efficiencies and made recommendations to improve internal controls and develop outcome-oriented measures.
section_title: What GAO Found
paragraphs: Results of GAO's work on 80 economic development programs at the four agencies indicate that the design of each appears to overlap with that of at least one other in terms of the economic development activities they can fund. For example, the agencies administer 54 programs that fund "entrepreneurial efforts," which include business development. SBA has 19 such economic development programs. To address issues arising from potential overlap and fragmentation, GAO relied on previously identified collaborative practices agencies should consider using to maximize performance and results. GAO found that agencies' collaborative efforts were not comprehensive but conducted on a case-by case basis. Further, the agencies generally have not measured outcomes. For instance, SBA has not yet developed outcome measures that directly link to the mission of its HUBZone program. In 2005 and 2008, GAO made recommendations to Commerce and SBA, respectively, aimed at improving the data and methods they rely on to measure the outcomes of some of their economic development programs. Generating key information on outcomes (that measure effectiveness) could help agencies better manage programs. Such information also would enable decision makers to better identify opportunities to realign resources, and if necessary, consolidate or eliminate some programs. As GAO has reported, three small business programs have had varying degrees of internal control weaknesses that affected program oversight. First, in a June 2008 report, GAO determined that SBA's mechanisms for certifying and monitoring firms in the HUBZone program gave limited assurance that only eligible firms participated. For certification and recertification (of initial and continued eligibility), SBA requested documentation or conducted site visits to validate self-reported data in limited instances. In response to GAO's recommendations, SBA has issued guidance requiring supporting documentation upon application and conducted site visits to certified firms. Second, in a May 2010 report, GAO reported that VA has faced challenges in effectively responding to a 2006 statutory mandate to verify the eligibility of small businesses owned by service-disabled or other veterans. Although such businesses self-certify their contracting eligibility, VA (unique among federal agencies) must maintain a database of these firms, verify their status, and only give contracting preferences to verified firms. GAO reported that VA had verified only about 14 percent of firms in its database. Since GAO recommended that VA develop a plan for a more effective verification program, VA stated that it has taken steps to improve its verification process, including awarding contracts to expedite the processing of applications. And finally, in a March 2010 report, GAO found that while SBA conducts annual reviews of 8(a) firms to help ensure continued eligibility, GAO found that key controls needed to be strengthened. GAO's review of a sample of 8(a) firms identified an estimated 55 percent in which SBA staff failed to complete required procedures to assess eligibility criteria. In response to GAO's recommendation that SBA provide more guidance to staff on annual review procedures, SBA stated that it issued a new guide in August 2010.

section_title: Letter
paragraphs: I am pleased to be here to discuss (1) potential duplication in economic  development programs and (2) internal controls in place to help ensure  that only eligible small businesses participate in federal procurement  programs that provide them certain contracting preferences such as set- asides. In March 2011 and more recently in May 2011, we reported on  potential duplication among federal economic development programs, and  in this statement I will discuss this work. We focused on this area because  economic development programs that are administered efficiently and  effectively can contribute to the well-being of the nation’s economy at the  least cost to taxpayers. Absent a common definition for economic  development, we previously developed a list of nine activities most often  associated with economic development. These activities include: planning  and developing strategies for job creation and retention, developing new  markets for existing products, building infrastructure by constructing  roads and sewer systems to attract industry to undeveloped areas, and  establishing business incubators to provide facilities for new businesses’  operations.
We recently completed an examination of  80 economic development  programs at four agencies—the Departments of Commerce (Commerce),  Housing and Urban Development (HUD), and Agriculture (USDA) and the  Small Business Administration (SBA)—where we assessed potential for  overlap in the design of the programs, the extent to which the four  agencies collaborate to achieve common goals, and the extent to which  the agencies have developed measures to determine the programs’  effectiveness. SBA administers 19 of the 80 programs. According to the  agencies, funding provided for these 80 programs in fiscal year 2010  amounted to $6.2 billion, of which about $2.9 billion was for economic  development efforts, largely in the form of grants, loan guarantees, and  direct loans. The 80 programs and their fiscal year 2010 funding are listed  in appendix I.
Small business contracting programs are a subset of the 80 economic  development programs we examined. To encourage small business  contracting, Congress has created programs—such as the Historically  Underutilized Business Zone (HUBZone), service-disabled veteran-owned  small business, and 8(a) Business Development programs—that give  contracting preferences to specific categories of small businesses. The  HUBZone program provides set-aside and other contracting preferences to  small businesses in economically distressed communities, or HUBZones,  with the intent of stimulating economic development in those areas. The  service-disabled veteran-owned small business program permits awards of  set-aside and sole-source contracts to any small business owned and  controlled by one or more service-disabled veterans. The 8(a) program  helps eligible socially and economically disadvantaged small businesses by  providing business development support, such as counseling and technical  assistance, and providing opportunities to obtain federal contracts on a  set-aside basis or noncompetitively up to specified dollar amounts.
SBA is responsible for administering the HUBZone and 8(a) programs.  SBA, along with federal procuring agencies, also administers the service- disabled veteran-owned small business program. Pursuant to the Veterans  Benefits, Health Care, and Information Technology Act of 2006 (or 2006  Act), the Department of Veterans Affairs (VA) has the unique authority to  award contracts to veteran-owned small businesses and service-disabled  veteran-owned small businesses on a priority basis. The 2006 Act also  requires VA to maintain a database of veteran-owned and service-disabled  veteran-owned small businesses and verify the ownership, control, and  veteran or service-disabled status of businesses listed in its database.
My testimony today discusses several reports we have issued in the past  few years. Specifically, I will discuss our work on (1) potential duplication  and fragmentation in economic development programs and (2) internal  controls in small business contracting programs. My discussion of internal  controls in small business contracting programs will focus on the  HUBZone program, VA’s efforts to verify the veteran-owned and service- disabled veteran-owned small businesses to which it awards contracts,  and the 8(a) program.
This testimony draws primarily from reports we issued from 2008 through  May 2011, and updates that information where noted. For our March 2011  and May 2011 reports on potential duplication and fragmentation in  economic development programs, we relied on our previous work,  ongoing work following up on recommendations from the previously  issued reports, and the preliminary results of our ongoing evaluation of  economic development programs at four federal agencies. For example,  for the most recent work we gathered new information related to program  missions, targeted populations, and funding for the programs. Agency  officials self reported the data on program funds, which were determined  to be sufficiently reliable for the purposes of this review. We focused on  Commerce, HUD, SBA, and USDA. Using the Catalog of Federal Domestic  Assistance and other agency documents, we identified 80 federal programs  administered by the four agencies that could fund economic development  activities. We also met with officials from each of the agencies to discuss  each program and the program missions. Because SBA officials view all of  their programs as being related to economic development, we included all  SBA programs in this review.
For our June 2008 report on internal controls in the HUBZone program, we  compared the actions that SBA takes to certify HUBZone firms with its  policies and procedures and selected internal control standards. For  example, we reviewed data for 125 applications to determine the extent to  which SBA requested documentation from firms to support applications.  We also compared HUBZone performance measures with our guidance on  the attributes of effective performance measures. For our May 2010 report  on VA’s efforts to contract with veteran-owned and service-disabled  veteran-owned small businesses, we reviewed the agency’s verification  guidelines and procedures for reviewing applications and conducting site  visits to determine VA’s progress in verifying the veteran status, control,  and ownership of businesses. We also reviewed files for a sample of  verified businesses to determine how well VA followed its procedures and  to identify any deficiencies in the process. For our March 2010 report on  internal controls in the 8(a) program, we visited 5 of the 68 SBA districts  and reviewed files of 136 8(a) firms to assess SBA’s compliance with its  eligibility review procedures. We collected recent annual review  information from each file, including evidence supporting eligibility  criteria. For more information on our scope and methodology, see the  referenced reports.
The work on which this statement is based was performed from August  2007 to May 2011 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
paragraphs: The purpose of the HUBZone program, established by the HUBZone Act of  1997, is to stimulate economic development in economically distressed  communities (HUBZones) by providing federal contracting preferences to  eligible small businesses. The types of areas in which HUBZones may be  located are defined by law and consist of census tracts, nonmetropolitan  counties, Indian reservations, redesignated areas (that is, census tracts or  nonmetropolitan counties that no longer meet the criteria but remain  eligible until after the release of the first results from the 2010 census or 3  years after they ceased being qualified), and base closure areas.
To be certified to participate in the HUBZone program, a firm must meet  the following four criteria:    must be small by SBA size standards;    must be at least 51 percent owned and controlled by U.S. citizens;    principal office—the location where the greatest number of employees  perform their work—must be located in a HUBZone; and    at least 35 percent of the full-time (or full-time equivalent) employees must  reside in a HUBZone.
The Veterans Benefits Act of 2003, which established the service-disabled  veteran-owned small business program, permits contracting officers to  award set-aside and sole-source contracts to any small business concern  owned and controlled by one or more service-disabled veterans. Veteran  means a person who served in the active military services, and who was  discharged or released under conditions other than dishonorable. Service- disabled means that the disability was incurred or aggravated in the line of  duty in active service. A firm also must qualify as a small business under  the North American Industry Classification System (NAICS) industry-size  standards.
A firm must meet several initial eligibility requirements to qualify for the  8(a) program (a process known as certification), and then meet other  requirements to continue participation. A concern meets the basic  requirements for admission to the program if it is a small business that is  unconditionally owned and controlled by one or more socially and  economically disadvantaged individuals who are of good character and  U.S. citizens, and demonstrates the potential for success.
section_title: What GAO Has Found to Indicate Potential Duplication, Overlap, or Fragmentation among Economic Development Programs
paragraphs: Our work involving 80 economic development programs at four  agencies—Commerce, HUD, SBA, and USDA—indicates that the design of  each of these fragmented programs appears to overlap with that of at least  one other program in terms of the economic development activities that  they are authorized to fund. For example, as shown in table 1, the four  agencies administer a total of 54 programs that can fund “entrepreneurial  efforts,” which include helping businesses to develop business plans and  identify funding sources. SBA accounts for 19 of these 54 programs, and it  administers programs contained in six of the nine economic activities.  (The 19 SBA programs are listed in the table in appendix I.)
Our prior work going back more than 10 years also identified potential  overlap and fragmentation in economic development programs. Among  other things, we found that legislative or regulatory restrictions that target  funding on the basis of characteristics such as geography, income levels,  and population density (rural or urban) differentiated many programs.
While some of the 80 programs we assessed fund several of the nine  economic development activities, almost 60 percent (46 of 80) fund only  one or two activities. These smaller, narrowly scoped programs appear to  be the most likely to overlap because many can only fund the same,  limited types of activities. For example, narrowly scoped programs  comprise 21 of 54 programs that can fund entrepreneurial efforts.  Moreover, most of the 21 programs target similar geographic areas.
To address issues arising from potential overlap and fragmentation in  economic development programs, we previously have identified  collaborative practices agencies should consider using to maximize the  performance and results of federal programs that share common  outcomes. These practices include leveraging physical and administrative  resources, establishing compatible policies and procedures, monitoring  collaboration, and reinforcing agency accountability for collaborative  efforts through strategic or annual performance plans. Preliminary  findings from our ongoing work show that Commerce, HUD, SBA, and  USDA appear to have taken actions to implement some of the  collaborative practices, such as defining and articulating common  outcomes, for some of their related programs. However, the four agencies  have offered little evidence so far that they have taken steps to develop  compatible policies or procedures with other federal agencies or searched  for opportunities to leverage physical and administrative resources with  their federal partners. Moreover, we found that most of the collaborative  efforts performed by program staff on the front line that we have been  able to assess to date have occurred only on a case-by-case basis. As a  result, the agencies do not appear to be consistently monitoring or  evaluating these collaborative efforts in a way that allows them to identify  areas for improvement. We reported in September 2008 that the main  causes for limited agency collaboration include few incentives to  collaborate and lack of a guide on which agencies could rely for consistent  and effective collaboration. In that same report, we recommended that  SBA and USDA take steps to adopt a formal approach to encourage  further collaboration. To date, the two agencies have entered into a  memorandum of understanding and USDA has recently taken some action  to monitor the collaborative efforts of its field office staff. In failing to find  ways to collaborate more, agencies may miss opportunities to leverage  each other’s unique strengths to more effectively promote economic  development and efficiently use taxpayer dollars set aside for that  purpose.
In addition, a lack of information on program outcomes has been a long- standing concern. This information is needed to determine if potential  overlap and fragmentation has resulted in ineffective or inefficient  programs. More specifically:    Commerce’s Economic Development Administration (EDA), which  administers eight of the programs we reviewed, continues to rely on a  potentially incomplete set of variables and self-reported data to assess the  effectiveness of its grants. This incomplete set of variables may lead to  inaccurate claims about program results, such as the number of jobs  created. Moreover, in only limited instances have EDA staff requested  documentation or conducted site visits to validate the self-reported data  provided by grantees. We first reported on this issue in March 1999 and  issued a subsequent report in October 2005. In response to a  recommendation we made in 2005, EDA issued revised operational  guidance in December 2006 that included a new methodology that regional  offices were to use to calculate estimated jobs and private-sector  investment attributable to EDA projects. However, during our recently- completed review we found that the agency still primarily relies on grantee  self-reported data and conducts a limited number of site visits to assess  the accuracy of the data. While acknowledging these findings, EDA  officials stated that they do employ other verification and validation  methods in lieu of site visits. These methods include reviews to ensure the  data are consistent with regional trends and statistical tests to identify  outliers and anomalies.
SBA has not yet developed outcome measures that directly link to the  mission of its HUBZone program, or implemented its plans to evaluate the  program based on variables tied to program goals. We reported in June  2008 that while SBA tracks a few performance measures, such as the  number of small businesses approved to participate in the program, the  measures do not directly link to the program’s mission. Therefore, we  recommended that the agency further develop measures and implement  plans to assess the effectiveness of the program. While SBA continues to  agree that evaluating the outcomes of the HUBZone program is important,  to date the agency has not yet committed resources for such an evaluation.
The USDA’s Office of Rural Development, which administers 31 of the  programs we reviewed, has yet to implement the USDA Inspector  General’s (IG) 2003 recommendation on ensuring that data exist to  measure the accomplishments of one of its largest rural business  programs—the Business and Industry loan program, which cost  approximately $53 million to administer in fiscal year 2010. USDA officials  stated that they have recently taken steps to address the IG’s  recommendation, including requiring staff to record actual jobs created  rather than estimated jobs created. However, an IG official stated that  these actions are too recent to determine whether they will fully address  the recommendation.
Without quality data on program outcomes, these agencies lack key  information that could help them better manage their programs. In  addition, such information would enable congressional decision makers  and others to make decisions to better realign resources, if necessary, and  identify opportunities for consolidating or eliminating some programs.
Building on our past work, we are in the planning phase of a new, more in-  depth review that will focus on a subset of these 80 programs, including a  number of SBA programs. We plan to evaluate how funds are used,  identify additional opportunities for collaboration, determine and apply  criteria for program consolidation, and assess how program performance  is measured.
More generally, as the nation rises to meet the current fiscal challenges,  we will continue to assist Congress and federal agencies in identifying  actions needed to reduce duplication, overlap, and fragmentation; achieve  cost savings; and enhance revenues. As part of current planning for our  future annual reports, we are continuing to look at additional federal  programs and activities to identify further instances of duplication,  overlap, and fragmentation as well as other opportunities to reduce the  cost of government operations and increase revenues to the government.  We will be using an approach to ensure governmentwide coverage through  our efforts by the time we issue of our third report in fiscal year 2013. We  plan to expand our work to more comprehensively examine areas where a  mix of federal approaches is used, such as tax expenditures, direct  spending, and federal loan programs. Likewise, we will continue to  monitor developments in the areas we have already identified. Issues of  duplication, overlap, and fragmentation will also be addressed in our  routine audit work during the year as appropriate and summarized in our  annual reports.
section_title: Control Weaknesses Hinder the Effectiveness of Small Business Contracting and Business Development Programs
paragraphs: As GAO has reported, three small business programs have had varying  degrees of internal control weaknesses that affected program oversight.  For example, in a June 2008 report, GAO determined that SBA’s  mechanisms for certifying and monitoring firms in the HUBZone program  gave limited assurance that only eligible firms participated.
subsections: section_title: SBA Has Taken Some Steps to Improve Administration of the HUBZone Program, but the Agency Has Yet to Evaluate Its Effectiveness
paragraphs: In our June 2008 report on the HUBZone program, we found that (1) SBA’s  mechanisms for certifying and monitoring firms provided limited  assurance that only eligible firms participated in the program and (2) the  agency had not evaluated the effectiveness of the program. Specifically,  for certification and recertification, firms self-reported information on  their applications and SBA requested documentation or conducted site  visits of firms to validate the self-reported data in limited instances. Our  analysis of the 125 applications submitted in September 2007 showed that  SBA requested supporting documentation for 36 percent of the  applications and conducted one site visit. To address these deficiencies,  we recommended that SBA develop and implement guidance to more  consistently obtain supporting documentation upon application and  conduct more frequent site visits to help ensure that firms applying for  certification were eligible.
SBA has made some progress in better ensuring that participating firms  are eligible for the HUBZone program. According to agency officials, SBA  conducted 911 site visits to certified firms in fiscal year 2009 and made  1,142 site visits in fiscal year 2010. In March 2010, SBA issued a guide for  analysts to use when reviewing applications to help ensure a standardized  and more efficient review of applications. The guidance provides  examples of the types of documentation that SBA staff should collect from  applicants and also offers tips for identifying fraudulent claims and  documents.
We also reported that SBA had not followed its policy of recertifying firms  (the process through which SBA can monitor firms’ continued eligibility)  every 3 years and as a result had a backlog of more than 4,600 firms that  had gone unmonitored for more than 3 years. We recommended that the  agency eliminate the backlog and take the necessary steps to better ensure  recertifications were completed in a more timely fashion. In September  2008, SBA eliminated the backlog by hiring more staff. The agency recently  provided us with a flow chart that describes the most recent steps they  had taken to recertify firms in a timely manner and the resources that they  planned to dedicate to this effort.
Finally, as discussed previously, we found that SBA had not implemented  plans to assess the effectiveness of the HUBZone program and  recommended that SBA develop performance measures and implement  plans to do so. In August 2008, SBA issued a notice of methodology in the  Federal Register for measuring the impact of the HUBZone program.  However, the proposed methodology was not well developed. For  example, it did not incorporate expert input or a previous study conducted  by SBA’s Office of Advocacy. We do not believe that this effort was useful  for addressing our recommendation. While SBA continues to agree that  evaluating program outcomes is important, to date the agency has not yet  committed resources for such an evaluation.
section_title: VA Faced Challenges in Verifying Veteran-Owned and Service-Disabled Veteran-Owned Firms
paragraphs: In May 2010, we reported that VA had made limited progress in  implementing an effective verification program. The 2006 Act requires  that VA give priority to veteran-owned and service-disabled veteran-owned  small businesses when awarding contracts to small businesses and  provides for the use of sole-source and set-aside contracts to achieve  contracting goals VA must establish under the Act. The Act also requires  VA to maintain a database of veteran-owned and service-disabled veteran- owned small businesses and verify the ownership, control, and veteran or  service-disabled status of businesses in the database. The database would  be available to other federal agencies. Furthermore, businesses  conducting contract work for VA must be listed in the database to receive  contracting preferences for veteran-owned and service-disabled veteran- owned small businesses. This verification requirement is unique to VA. For  other federal agencies, the service-disabled veteran-owned small business  program is a self-certification program and therefore is susceptible to  misrepresentation (that is, ineligible firms participating in the program).
While the 2006 Act requires VA to use the veteran preferences authorities  to award contracts only to verified businesses, VA’s regulation did not  require that this take place until January 1, 2012. Since our May 2010  report, Congress passed the Veterans Small Business Verification Act  requiring VA to accelerate its time frame for verifying all businesses in its  mandated database. VA has set a target date of July 31, 2011, to do so. In  fiscal year 2009, 25 percent of the contracts awarded using veteran  preference authorities went to verified businesses. At the time of our  report, VA had verified about 2,900 businesses––approximately 14 percent  of businesses in its database of veteran-owned and service-disabled  veteran-owned small businesses. Among the weaknesses we identified in  VA’s verification program were files missing required information and  explanations of how staff determined that control and ownership  requirements had been met. VA’s procedures call for site visits to further  investigate the ownership and control of higher-risk businesses, but the  agency had a large and growing backlog of businesses awaiting site visits.  Furthermore, VA contracting officers awarded contracts to businesses that  were denied after the verification process. Finally, although site visit  reports indicate a high rate of misrepresentation, VA had not developed  guidance for referring cases of misrepresentation for investigation and  enforcement action. Such businesses would be subject to debarment  under the 2006 Act.
To help address the requirement to maintain a database of verified  businesses, we recommended that VA develop and implement a plan for a  more thorough and effective verification program. More specifically, we  recommended that the plan address actions and milestone dates for  improving the program, including updating data systems to reduce manual  data entry and adding guidance on how to maintain appropriate  documentation, on when to request documentation from business owners  or third parties, and on how to conduct an assessment that addresses each  eligibility requirement. We also recommended that VA conduct timely site  visits at businesses identified as higher risk and take actions based on site  visit findings, including prompt cancellation of verified status.
According to VA officials, they have taken a number of actions to address  our recommendations. For example, VA officials told us they had awarded  contracts to help expedite the processing of applications, including  conducting site visits and reviewing documentation supplied by  applicants. As of March 29, 2011, they said that 607 site visits had been  conducted and 195 of the applicants visited (32 percent) did not meet the  control requirement. Also, VA officials reported a queue of 6,431 active  applications pending verification and said they had acquired the capability  to process 500 applications per week and expected to have processed  about 15,000 applications by July 31, 2011. Furthermore, VA officials told  us that as part of their implementation of the requirements of the Veterans  Small Business Verification Act, all applicants are now required to submit  specified documents establishing their eligibility with respect to  ownership and control before a verification decision can be made. VA  officials told us they were in the process of testing a new case  management system that will reduce the manual input of data, which they  plan to implement by June 1, 2011. VA’s development of an effective  verification program could provide an important tool for SBA’s oversight  of the governmentwide contracting program for service-disabled veteran- owned small businesses. That is, VA’s database could serve as a resource  for federal agencies to use when assessing whether a firm is actually  service-disabled veteran-owned.
section_title: SBA’s Key Controls for Determining Continued 8(a) Eligibility Needed to Be Strengthened
paragraphs: We reported in March 2010 that while SBA relies primarily on its annual  reviews of 8(a) firms to help ensure the continued eligibility of firms in the  program, we observed inconsistencies and weaknesses in annual review  procedures related to determinations of continued eligibility. For  example, SBA did not consistently notify or graduate 8(a) firms that  exceeded industry averages for economic success or graduate firms that  exceeded the net worth threshold of $750,000 (see table 2). We noted that  the lack of specific criteria in the current regulations and procedures may  have contributed to the inconsistencies that we observed and that SBA  had taken steps to clarify some, but not all, of these requirements in a  proposed rule change.
We also reported that SBA’s program offices did not maintain  comprehensive data on or have a system in place to track complaints  about the eligibility of firms in the 8(a) program. District staff were not  aware of the types and frequency of complaints across the agency. As a  result, SBA staff lacked information that could be used to help identify  issues relating to program integrity and help improve the effectiveness of  SBA oversight. Although complaint data are not a primary mechanism to  ensure program eligibility, continuous monitoring is a key component in  detecting and deterring fraud.
We recommended that SBA provide more guidance to help ensure that  staff more consistently follow annual review procedures and more fully  utilize third-party complaints to identify potentially ineligible firms.  According to SBA officials, they have taken some actions to address these  recommendations. For example, SBA officials told us that in August 2010  they had provided staff with a new guide for conducting annual reviews of  the continuing eligibility of firms in the 8(a) program. Additionally, SBA  officials said they were providing training to staff on the recently  published revisions to regulations governing the 8(a) program. These  revisions provided more clarification on factors that determine economic  disadvantage (such as total assets, gross income, retirement accounts) for  continuing eligibility in the program. SBA officials also said that they have  been incorporating changes into their Web site that will allow third parties  to submit complaints about potentially ineligible firms in the 8(a) program.
Chair Landrieu, Ranking Member Snowe, this concludes my prepared  statement. I would be happy to respond to any questions you or other  Members of the Committee may have at this time.
section_title: Contacts and Staff Acknowledgments
paragraphs: For further information on this testimony, please contact me 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 statement. Key contributors to this testimony include Paige Smith,  Assistant Director; Tania Calhoun; Andy Finkel; Janet Fong; Triana  McNeil; Harry Medina; Barbara Roesmann; Kathryn Supinski; and   Bill Woods.
section_title: Appendix I: Economic Development Programs
paragraphs: Table 3 lists the 80 economic development programs and provides  information about their funding, when available. Using the Catalog of  Federal Domestic Assistance and other agency documents, we identified  80 federal programs administered by the four agencies listed below—the  Departments of Commerce (Commerce), Housing and Urban Development  (HUD), and Agriculture (USDA) and the Small Business Administration  (SBA)—that could fund economic development activities. We did not  include tax credit programs aimed at economic development in this  review.