Entrepreneurial Assistance:

Opportunities Exist to Improve Programs' Collaboration, Data-Tracking, and Performance Management

GAO-12-819: Published: Aug 23, 2012. Publicly Released: Aug 23, 2012.

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What GAO Found

Federal efforts to support entrepreneurs are fragmented--including among 52 programs at the Department of Agriculture (USDA), Commerce, and Housing and Urban Development (HUD) and the Small Business Administration (SBA). All overlap with at least one other program in terms of the type of assistance they are authorized to offer, such as financial (grants and loans) and technical (training and counseling), and the type of entrepreneur they are authorized to serve. Some entrepreneurs struggle to navigate the fragmented programs that provide technical assistance. For example, some entrepreneurs and technical assistance providers GAO spoke with said the system can be confusing and that some entrepreneurs do not know where to go for assistance. Collaboration could reduce some negative effects of overlap and fragmentation, but field staff GAO spoke with did not consistently collaborate to provide training and counseling services to entrepreneurs. The agencies have taken initial steps to improve how they collaborate by entering into formal agreements, but they have not pursued a number of other good collaborative practices GAO has previously identified. For example, USDA and SBA entered into a formal agreement in 2010 to coordinate their efforts to support businesses in rural areas; however, the agencies' programs that can support start-up businesses--such as USDA's Rural Business Enterprise Grant program and SBA's Small Business Development Centers--have yet to determine roles and responsibilities, find ways to leverage each other's resources, or establish compatible policies and procedures. Without enhanced collaboration and coordination agencies may not be able to make the best use of limited federal resources in the most effective and efficient manner.

Agencies do not track program information on entrepreneurial assistance activities for many programs, a number of programs have not met their performance goals, and most programs lack evaluations. In particular, the agencies do not generally track information on the specific type of assistance they provide or the entrepreneurs they serve, in part because they do not rely on this information to administer the programs. Rather, agencies may rely, for example, on data summaries in narrative format, which cannot be easily aggregated or analyzed. According to government standards for internal control, this information should be available to help inform management in making decisions and identifying risks and problem areas. GAO also found that 19 programs failed to meet their annual performance goals related to entrepreneurial assistance, including USDA's Rural Business Opportunity Grants, Commerce's Economic Development/Support for Planning Organizations, HUD's Indian Community Development Block Grants, and SBA's 504 loans to finance commercial real estate. Programs could potentially rely on results from program evaluations to determine the reasons why they have not met their goals, as well as to gauge overall effectiveness. However, the agencies lack program evaluations for 32 of the 52 programs. Therefore, information on program efficiency and effectiveness is limited, and scarce resources may be going toward programs that are less effective. In addition, without more robust program information, agencies may not be able to administer programs in the most effective and efficient manner. GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.

Why GAO Did This Study

Economic development programs that effectively provide assistance to entrepreneurs may help businesses develop and expand. GAO focused on 52 economic development programs, with an estimated $2.0 billion in funding, at Commerce, HUD, SBA, and USDA that support entrepreneurs. In response to a statutory requirement, this report discusses (1) the extent of overlap and fragmentation, the effects on entrepreneurs, and agencies' actions to address them; and (2) the extent of tracked program information and whether these programs have met their performance goals and been evaluated. To address these objectives, GAO analyzed program information and interviewed agency officials in headquarters and selected field offices, entrepreneurs, and third-party entities, such as nonprofits, that use federal grants to provide assistance directly to entrepreneurs.

What GAO Recommends

GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.

For more information, contact William B. Shear at (202) 512-8678 or shearw@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: Through BusinessUSA, a federal website developed to make it easier for businesses to access the services and information they need, the Department of Agriculture (USDA) and other federal agencies are able to increase public awareness of the resources they offer. This single website directs customers to various federal services that match their requirements (i.e., financing, export assistance, federal contracting), rather than a customer needing to visit disparate websites. In December 2015, the Office of Management and Budget (OMB) noted that BusinessUSA plays the critical role of the convener of these resources to promote interagency dialogue. In addition, OMB noted that the BusinessUSA Steering Committee, composed of staff from across several agencies, continues to meet regularly and assemble agency stakeholders to collect feedback and create the strategic vision for moving the tool forward. It will be important for USDA to continue to work with OMB and other agencies to pursue good collaborative practices and for the BusinessUSA steering committee to follow through on any key areas identified to improve interagency collaboration.

    Recommendation: The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies.

    Agency Affected: Department of Agriculture

  2. Status: Open

    Priority recommendation

    Comments: OMB noted in December 2015 that through BusinessUSA--a federal website developed to make it easier for businesses to access the services and information they need--federal agencies, including Commerce, are able to increase public awareness of the resources they offer. This single website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), rather than a customer needing to visit disparate websites. OMB added that BusinessUSA plays the role of the convener of these resources to promote interagency dialogue. OMB further noted that the BusinessUSA Steering Committee, composed of staff from across Commerce and several other agencies, continues to meet regularly and assemble agency stakeholders to collect feedback on the tool. In June 2016, we contacted Commerce to determine what additional efforts the agency has taken to further collaborate with the other agencies among similar programs that support entrepreneurs. As of October 2016, we have not received a response.

    Recommendation: The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies.

    Agency Affected: Department of Commerce

  3. Status: Open

    Comments: Through BusinessUSA, a federal website developed to make it easier for businesses to access the services and information they need, the Department of Housing and Urban Development (HUD) and other federal agencies are able to increase public awareness of the resources they offer. This single website directs customers to various federal services that match their requirements (i.e., financing, export assistance, federal contracting), rather than a customer needing to visit disparate websites. In December 2015, the Office of Management and Budget (OMB) noted that BusinessUSA plays the critical role of the convener of these resources to promote interagency dialogue. In addition, OMB noted that the BusinessUSA Steering Committee, composed of staff from across several agencies, continues to meet regularly and assemble agency stakeholders to collect feedback and create the strategic vision for moving the tool forward. It will be important for HUD to continue to work with OMB and other agencies to pursue good collaborative practices and for the BusinessUSA steering committee to follow through on any key areas identified to improve interagency collaboration.

    Recommendation: The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies.

    Agency Affected: Department of Housing and Urban Development

  4. Status: Open

    Comments: In December 2015, OMB noted that through BusinessUSA, a federal website developed to make it easier for businesses to access the services and information they need, federal agencies are able to increase public awareness of the resources they offer. This single website directs customers to various federal services that match their requirements (i.e., financing, export assistance, federal contracting), rather than a customer needing to visit disparate websites. OMB added that BusinessUSA plays the critical role of the convener of these resources to promote interagency dialogue. In addition, OMB noted that the BusinessUSA Steering Committee, composed of staff from across several agencies, continues to meet regularly and assemble agency stakeholders to collect feedback and create the strategic vision for moving the tool forward. It will be important for OMB to continue to identify opportunities to work together and pursue good collaborative practices and for the BusinessUSA steering committee to follow through on any key areas identified to improve interagency collaboration.

    Recommendation: The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Open

    Priority recommendation

    Comments: SBA has taken steps to collaborate more with the other agencies in administering these programs. For example, SBA and the Department of Agriculture (USDA) entered into a formal agreement to coordinate their efforts to support businesses in rural areas. However, for the programs that can support start-up businesses--such as USDA's Rural Business Enterprise Grant program and SBA's Small Business Development Centers--the agencies had not, as of October 2016, provided evidence that they had implemented a number of other good collaborative practices we have previously identified that could improve how the federal government supports entrepreneurs, such as determining roles and responsibilities, finding ways to leverage each other's resources, and establishing compatible policies and procedures. In addition, OMB noted in December 2015 that through BusinessUSA--a federal website developed to make it easier for businesses to access the services and information they need--federal agencies, including SBA, are able to increase public awareness of the resources they offer, as the one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), rather than a customer needing to visit disparate websites. OMB added that BusinessUSA plays the critical role of the convener of these resources to ignite interagency dialogue. OMB further noted that the BusinessUSA Steering Committee, composed of staff from across SBA and several other agencies, continues to meet regularly and assemble agency stakeholders to collect feedback on the tool.

    Recommendation: The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies.

    Agency Affected: Small Business Administration

  6. Status: Open

    Comments: In December 2015, USDA noted that its Rural Business-Cooperative Service provided training to loan specialists and technicians from its national and state offices in 2015 to improve the quality of data collected through the Guarantee Loan System. In addition, USDA participates in an OMB-led interagency working group to share best practices in program evaluation, data sharing, and technical assistance analysis. In December 2015, OMB noted that the group plans to publicly release a report in Spring 2016 that is to outline several best practices and work with agencies to implement the recommended practices.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs.

    Agency Affected: Department of Agriculture

  7. Status: Open

    Priority recommendation

    Comments: In December 2015, Commerce's Economic Development Administration (EDA) noted that it continues to evaluate the information it received through a university grant that assessed three EDA programs and provided recommendations on improving data collection methods and metrics, and that it is determining how the information can be used. Commerce did not provide a time frame for when this effort would be complete. In June 2016, we contacted Commerce to obtain an update on this effort, but as of October 2016 have not received a response.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs.

    Agency Affected: Department of Commerce

  8. Status: Open

    Comments: In November 2015, HUD noted that the department's effort to complete the clean-up of its Community Development Block Grant data had been delayed but would be completed by the end of fiscal year 2016.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs.

    Agency Affected: Department of Housing and Urban Development

  9. Status: Open

    Priority recommendation

    Comments: SBA noted that as of February 2016 the agency had incorporated new performance metrics for eight more of its programs into its fiscal year 2017 congressional budget justification/annual performance plan that will support assessments of several entrepreneurial development programs. However, these programs include only two of the eight programs we highlighted in our report as lacking information. Further, the new performance metric added for these two programs--percent of federal government dollars awarded to program proposals--does not appear to help the agency track the specific type of assistance provided and the entrepreneurs served for the programs.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs.

    Agency Affected: Small Business Administration

  10. Status: Open

    Comments: In December 2015, USDA noted that its Rural Business-Cooperative Service provided training to loan specialists and technicians from its national and state offices in 2015 to improve the quality of data collected through the Guarantee Loan System. In addition, USDA participates in an OMB-led interagency working group to share best practices in program evaluation, data sharing, and technical assistance analysis. In December 2015, OMB noted that the group plans to publicly release a report in Spring 2016 that is to outline several best practices and work with agencies to implement the recommended practices.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness.

    Agency Affected: Department of Agriculture

  11. Status: Open

    Priority recommendation

    Comments: While Commerce's Economic Development Administration conducted an evaluation of its Trade Adjustment Assistance for Firms program in 2014--one of the four programs we highlighted in our August 2012 report--it has not yet evaluated the remaining three programs: Global Climate Change Mitigation Incentive Fund, Native American Business Enterprise Centers, and Minority Business Center programs. We contacted Commerce in June 2016 to obtain an update on the status of its plans to evaluate these remaining programs. In July 2016, Commerce indicated that it would respond to us soon. As of October 2016, we have not received a response.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness.

    Agency Affected: Department of Commerce

  12. Status: Open

    Comments: In November 2015, HUD noted that the department's effort to complete the clean-up of its Community Development Block Grant data had been delayed but would be completed by the end of fiscal year 2016.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness.

    Agency Affected: Department of Housing and Urban Development

  13. Status: Open

    Priority recommendation

    Comments: As of October 2016, SBA has outlined several steps the agency has taken to prioritize resources and establish an implementation plan for future evaluations, which include hiring its first lead program evaluator to develop a long-term evaluation agenda and initiating four program evaluations. In addition, SBA continues to participate in the interagency working group that is made up of federal agencies that offer business assistance programs (including the Departments of Agriculture and Commerce) and the major statistical agencies. SBA chairs the working group subcommittee responsible for writing a white paper outlining best practices for evaluating federal business assistance programs. SBA and the Department of Commerce plan to co-publish the white paper, which is expected to be issued in 2016.

    Recommendation: The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness.

    Agency Affected: Small Business Administration

 

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