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: Closed - Implemented

    Comments: USDA has taken steps to collaborate more with the other agencies in administering these programs. For example, USDA's Rural Business-Cooperative Service (RBS) noted in March 2017 that it is engaged in several MOUs with other federal agencies that support coordination and collaboration on areas of mutual interest, including a MOU with Commerce's Economic Development Administration to leverage programs and resources to support regional economic development. In addition, RBS noted that it is coordinating with HUD and others to leverage programs and resources to create healthy, economically vibrant neighborhoods through the development of local food systems. In addition, USDA continues to participate on the BusinessUSA Steering Committee with several other agencies. BusinessUSA is a federal website developed to make it easier for businesses to access the services and information they need. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB noted that, in fiscal year 2016, the General Services Administration (GSA) took over the management of the BusinessUSA website and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.

    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: Closed - Implemented

    Priority recommendation

    Comments: Commerce has taken steps to collaborate more with the other agencies in administering these programs. For example, Commerce's Economic Development Administration (EDA) noted in March 2017 that it established an economic development integration team in fiscal year 2016 to facilitate direct engagement between communities and federal agencies with complementary economic development resources to collaboratively support regional economic development across the nation. EDA added that the team has executed a memoranda of understanding (MOU) with HUD's Office of Community Planning and Development and USDA Rural Development and is working with SBA to collaborate, enhance relationships, and cross-promote resources. In addition, Commerce continues to participate on the BusinessUSA Steering Committee with several other agencies. BusinessUSA is a federal website developed to make it easier for businesses to access the services and information they need. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB noted that, in fiscal year 2016, the General Services Administration (GSA) took over the management of the BusinessUSA website and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.

    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: Closed - Implemented

    Comments: HUD has taken steps to collaborate more with the other agencies in administering these programs, including developing a training module for small construction contractors with SBA to enable them to access performance bonds for HUD-funded construction projects. In addition, through BusinessUSA, a federal website developed to make it easier for businesses to access the services and information they need, HUD and other federal agencies are able to increase public awareness of the resources they offer. In November 2016, OMB noted that the General Services Administration (GSA) took over the management of BusinessUSA website in fiscal year 2016 and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.

    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: Closed - Implemented

    Comments: In November 2016, OMB noted that the General Services Administration (GSA) took over the management of BusinessUSA in fiscal year 2016, a federal website developed to make it easier for businesses to access the services and information they need. Through the website, federal agencies are able to increase public awareness of the resources they offer. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB added that GSA has integrated BusinessUSA's content and services in the USA.gov website. This provides users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow. Finally, 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.

    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: Closed - Implemented

    Priority recommendation

    Comments: SBA has taken steps to collaborate more with the other agencies in administering these programs. For example, SBA noted in March 2017 that it has engaged in a number of collaborative efforts with the other agencies, including the development of a training module for small construction contractors with HUD enabling them to access performance bonds for HUD-funded construction projects, and a MOU between SBA's Office of Veterans Business Development and USDA to explore opportunities for supporting veteran-owned businesses in agriculture-related sectors. In addition, SBA continues to participate on the BusinessUSA Steering Committee with several other agencies. BusinessUSA is a federal website developed to make it easier for businesses to access the services and information they need. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB noted that, in fiscal year 2016, the General Services Administration (GSA) took over the management of the BusinessUSA website and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.

    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 March 2017, USDA noted that its Rural Business-Cooperative Service had implemented procedures to improve data collected on program performance, including procedures to validate data entered into its Guarantee Loan System. In addition, USDA participates in an OMB-led interagency working group convened to share best practices in program evaluation, data sharing, and technical assistance analysis. In March 2017, OMB noted that SBA and Commerce?s Office of Performance and Risk Management plan to co-publish a report outlining several best practices in program evaluation, data sharing, and technical assistance. It will be important for USDA to follow through on the initiatives described above.

    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 March 2017, Commerce's Economic Development Administration (EDA) noted that it announced additional reporting requirements for grantees as part of its Fiscal Year 2017 Economic Development Assistance Programs federal funding opportunity that are intended to improve program evaluation. EDA added that it plans to work with the Office of Management and Budget (OMB) to finalize the new survey forms needed to implement the new requirements with a goal of piloting them in fiscal year 2017. In addition, Commerce participates in an OMB-led interagency working group convened to share best practices in program evaluation, data sharing, and technical assistance analysis. In March 2017, OMB noted that SBA and Commerce's Office of Performance and Risk Management plan to co-publish a report outlining several best practices in program evaluation, data sharing, and technical assistance. It will be important for Commerce to follow through on the initiatives described above.

    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 February 2017, HUD noted that the department had completed its effort to clean up its Community Development Block Grant data and is working to resolve issues with grantees for which costs have been disallowed. HUD expects to resolve these issues by December 2017.

    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: In March 2017, SBA noted that it continues to evaluate its entrepreneurial development programs through third-party evaluations and limited data collected from their resource partners and will use this information to guide program development. In addition, SBA participates in an OMB-led interagency working group convened to share best practices in program evaluation, data sharing, and technical assistance analysis. In March 2017, OMB noted that SBA and Commerce's Office of Performance and Risk Management plan to co-publish a report outlining several best practices in program evaluation, data sharing, and technical assistance. It will be important for SBA to follow through on the initiatives described above and collect information for the additional six programs identified in our report as lacking information.

    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 March 2017, USDA noted that its Rural Business-Cooperative Service had implemented procedures to improve data collected on program performance, including procedures to validate data entered into its Guarantee Loan System. In addition, USDA participates in an OMB-led interagency working group convened to share best practices in program evaluation, data sharing, and technical assistance analysis. In March 2017, OMB noted that SBA and Commerce's Office of Performance and Risk Management plan to co-publish a report outlining several best practices in program evaluation, data sharing, and technical assistance. It will be important for USDA to follow through on the initiatives described above that are intended to improve the evaluation of programs that provide assistance to entrepreneurs.

    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: In March 2017, Commerce's Economic Development Administration (EDA) noted that it announced additional reporting requirements for grantees as part of its Fiscal Year 2017 Economic Development Assistance Programs federal funding opportunity that are intended to improve program evaluation. EDA added that it plans to work with the Office of Management and Budget (OMB) to finalize the new survey forms needed to implement the new requirements with a goal of piloting them in fiscal year 2017. In addition, Commerce participates in an OMB-led interagency working group convened to share best practices in program evaluation, data sharing, and technical assistance analysis. In March 2017, OMB noted that SBA and Commerce's Office of Performance and Risk Management plan to co-publish a report outlining several best practices in program evaluation, data sharing, and technical assistance. It will be important for Commerce to follow through on the initiatives described above and conduct evaluations of the three economic development programs that have not yet been assessed.

    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 February 2017, HUD noted that the department had completed its effort to clean up its Community Development Block Grant data and is working to resolve issues with grantees for which costs have been disallowed. HUD expects to resolve these issues by December 2017.

    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: In March 2017, SBA noted that it had taken a number of steps to build its program evaluation function, including (1) hiring its first lead program evaluator in August 2016 to manage new and coordinate ongoing agency program evaluations, (2) drafting a program evaluation framework that will support the agency's efforts to conduct, monitor, and implement findings from evaluations, and (3) creating a performance and evaluation community of practice that meets on a monthly basis to discuss program evaluation principles and address questions for the framework (e.g., data sharing, definitions, learning agendas). SBA expects to start new program evaluations in 2017. In addition, SBA participates in an OMB-led interagency working group convened to share best practices in program evaluation, data sharing, and technical assistance analysis. In March 2017, OMB noted that SBA and Commerce's Office of Performance and Risk Management plan to co-publish a report outlining several best practices in program evaluation, data sharing, and technical assistance. It will be important for SBA to follow through on the initiatives described above that are intended to improve the evaluation of programs that provide assistance to entrepreneurs.

    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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