Small Business Administration Needs to Improve Collaboration to Implement Its Expanded Role
GAO-13-217: Published: Jan 30, 2013. Publicly Released: Mar 1, 2013.
What GAO Found
The Small Business Administration (SBA) and five other key agencies provide a variety of export promotion services to small businesses. In addition to outreach, which all six agencies conduct, SBA's primary activities include counseling and training, provided mainly through nonfederal partner entities called Small Business Development Centers, and export financing, provided through SBA's Office of International Trade (OIT).
While SBA collaborates to some extent with other key agencies on its export promotion activities, additional collaboration could enhance agency efforts and reduce overlap. SBA, Department of Commerce (Commerce), and the U.S. Export-Import Bank (Ex-Im) coordinate some export promotion activities at headquarters and at field locations, but some services overlap. For example, Small Business Development Centers and Commerce both assist companies new to exporting as well as more experienced exporters, despite intentions to divide responsibilities for those types of firms. Additionally, OIT and Ex-Im offer similar financial products for small businesses, such as export working capital loan guarantees. Overlapping services may cause confusion for small businesses and result in inefficient use of government resources. SBA and other agencies developed a joint strategy to increase small business exports and, to varying degrees, the agencies have included collaborative efforts in the performance evaluations of staff with export promotion responsibilities. However, SBA and other agencies have not clearly defined roles and responsibilities, and efforts to leverage resources have not included regularly sharing client information where possible. Such sharing could help agencies improve client services and clarify each agency's impact in promoting U.S. exports. Enhancing collaboration could help agencies ensure they are working toward the goal of increasing exports by small businesses in a way that maximizes limited resources and mitigates overlap.
SBA has made some progress in increasing export training of Small Business Development Center counselors but has experienced challenges in meeting increased OIT staffing requirements under the Small Business Jobs Act of 2010. The law required a certain number or percentage of staff working for the 63 Small Business Development Center networks to obtain export counseling certification. As of the end of September 2012, 73 percent of the networks had met this requirement, for which SBA set a 2013 deadline. To meet another requirement under the law, SBA needed to increase its OIT field staff, who primarily provide export financing assistance, from 18 to 30 staff, by the end of September 2012. However, SBA has only advertised for four temporary positions and filled two of them. SBA officials noted challenges in finding qualified candidates and lack of continued funding for additional OIT field positions. In a recent report to Congress, SBA stated its plans to hire the additional OIT staff but did not include funding plans or updated time frames to fill the positions. Furthermore, the plan did not discuss how SBA would overcome the hiring challenges or discuss the potential to leverage resources of other export promotion entities that also provide export assistance.
Why GAO Did This Study
In January 2010, the President announced the goal of doubling U.S. exports over 5 years. The President's plan in the National Export Initiative included prioritizing exports by small businesses and called for improved coordination among agencies involved in federal export promotion activities. Recently, Congress has also directed SBA to expand its export counseling and financing activities. This report (1) describes SBA's role within federal export promotion efforts, (2) assesses the extent to which SBA collaborates with other agencies in its export promotion activities, and (3) assesses the extent to which SBA is meeting requirements under the Small Business Jobs Act of 2010 to expand export promotion training and staffing. GAO analyzed agencies' documents and interviewed agency officials, including those in six selected field office locations serving areas with high export potential and where staff from at least two agencies were colocated.
What GAO Recommends
GAO recommends that SBA (1) consult with Commerce and Ex-Im and clearly define export entities' roles and responsibilities; (2) consult with Commerce and Ex-Im and identify ways to increase, where possible, sharing of client information; and (3) update its plan for meeting mandated staffing requirements to include funding sources and time frames, as well as possible efficiencies from improved collaboration. SBA agreed with our recommendations and noted it is taking steps to address them. We also received technical comments from other key export promotion agencies, which we incorporated, as appropriate.
Recommendations for Executive Action
Comments: SBA has consulted with Commerce, the Export-Import Bank, and other agencies to define roles and responsibilities of export promotion entities' export counseling and financing staff, as GAO recommended in January 2013; however, this effort has not been fully implemented at the local level. In December 2012, SBA collaborated with other agencies to issue an Inter-Agency Communique to its nationwide network of over 900 Small Business Development Centers, which are partially funded by SBA. The Communique directed SBA and Commerce field staff to establish local Export Outreach Teams (EOT) that incorporate multiple federal and local resources to develop referral protocols among entities providing business and export expertise at the local level. In November 2014, SBA noted that it has continued to work with trade-related federal agencies to outline the roles and responsibilities of export promotion entities' export counseling and financing staff. SBA added that through the formation and ongoing meetings of EOT, U.S. small businesses can now access export assistance services via a "No Wrong Door" policy that requires all Trade Promotion Coordinating Committee domestic offices to direct U.S. small businesses to the correct federal export assistance services. In addition, SBA informed GAO that SBA and the Export-Import Bank have developed the U.S. Global Business Solutions initiative, which combines marketing of government programs in a suite of export services and trade financing products, and SBA noted the agencies' attempt to provide products and services in a complementary, non-duplicative manner. In March 2015, SBA further noted that the EOT model had been valuable in beginning the conversation between the trade service providers and business counseling organizations, where there might have been a gap, and enhancing existing communication where structures already existed. SBA explained that SBA and Commerce can continue to use the EOT model going forward, but it is not a rigid, one-size-fits-all requirement since wide differences exist among business communities across the nation. Despite these collaborative efforts, SBA has yet to demonstrate how export promotion entities' roles and responsibilities have been more clearly defined. In September 2016, SBA officials informed GAO that they had drafted an SBA Information Notice to all SBA employees outlining SBA's roles and responsibilities in providing export promotion programs and services to small businesses in cooperation with other federal agencies and resource partners. GAO will review the notice once it is issued. Without clear definition of each entity's roles and responsibilities, the overlapping labor-intensive export counseling sessions provided by Small Business Development Centers and Commerce, as well as the similar export financing products offered by SBA and the Export-Import Bank, may cause confusion for small businesses and could result in duplication of efforts and inefficient use of government resources. This recommendation is also included in GAO's Action Tracker, an online tool for monitoring the progress executive branch agencies and Congress have made in addressing the actions identified in GAO's annual reports on duplication, overlap, and fragmentation in the federal government.
Recommendation: To help small businesses understand and get the most benefit from the various export assistance products and services provided by different federal entities, and to efficiently use government resources, the Administrator of the SBA should consult with Commerce and Ex-Im and more clearly define roles and responsibilities of export promotion entities' export counseling and financing staff agencywide and at the local levels.
Agency Affected: Small Business Administration
Comments: SBA has consulted with Commerce and the Export-Import Bank and has begun to identify ways to increase sharing of client information deemed useful for SBA, Commerce, and the Export-Import Bank, as GAO recommended in January 2013; however, this effort has not been fully implemented with a functioning system for sharing client information. In field visits during August and September 2013, GAO found that agencies continue to share some client information on an ad hoc basis. However, as GAO reported in January 2013, confidentiality concerns continue to limit information sharing, and GAO found no evidence at the time that SBA had consulted with the other agencies to identify ways to increase information sharing. In June 2013, SBA and the Export-Import Bank entered into a memorandum of understanding (MOU) that implements the U.S. Global Business Solutions Initiative in 2014 to work with lenders to deliver trade and investment financing products to small businesses. In November 2014, SBA noted that since it signed the U.S. Global Business Solutions Initiative MOU in June 2013, SBA and the Export-Import Bank had continued to work in partnership on the initiative, which includes sharing information regularly on the initiative?s baseline information and current status regarding the number and type of loans to small business exporters. In addition, both the Department of Commerce?s Commercial Service and the Export-Import Bank have transitioned to the use of new client management software, which could facilitate systematic sharing of client information. SBA noted in November 2014 that its intra-agency Impact Evaluation Working Group planned to determine general constraints SBA has regarding sharing information with other federal agencies. According to SBA, this working group is developing guidance on how, if at all, SBA is able to share customer data with other agencies while complying with the Privacy Act. In September 2016, SBA officials told GAO that they continue to investigate the procurement of client information software programs used by other federal export promotion agencies in order to facilitate information sharing on a nationwide level, but that the implementation of client information software programs would depend on SBA funding. Nevertheless, SBA has yet to demonstrate that it has identified ways to share specific client information with Commerce and the Export-Import Bank. Without greater sharing of client information where possible, federal agencies will likely be hampered in their ability to collaborate and to ensure they efficiently manage export promotion services and leverage resources appropriately. This recommendation is also included in GAO's Action Tracker, an online tool for monitoring the progress executive branch agencies and Congress have made in addressing the actions identified in GAO's annual reports on duplication, overlap, and fragmentation in the federal government.
Recommendation: To improve collaboration and leverage available resources, the Administrator of the SBA should consult with Commerce and Ex-Im and identify ways to increase, where possible, sharing of client information deemed useful for SBA, Commerce, and Ex-Im.
Agency Affected: Small Business Administration
Comments: SBA concurred with our recommendations and noted that SBA would work to implement the recommendations. SBA agreed that it intends to respond to staffing requirements of the SBJA while acknowledging resource constraints in its next annual report to Congress. In November 2014, SBA officials said that SBA was in the process of evaluating the impact of Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payments (VSIP) retirements that took place at the end of September 2014 and was developing a plan for reallocating full-time employees (FTEs). They said that at the end of this process, SBA would have a better understanding of the impact on current and future USEAC staffing levels. In September 2015, SBA stated that it was still in the process of evaluating the impact of the VERA/VSIP retirements that took place at the end of September 2014, and was developing a plan for current and future FTEs. In February 2016, SBA's Office of International Trade (OIT) reported that in the first quarter of fiscal year 2016, it was able to fill the 21st of 30 USEAC-based Export Finance Specialist positions. OIT also reported that it has prepared an updated staffing proposal for the remaining nine positions called for under the Small Business Jobs Act of 2010. Finally, OIT noted that filling the remaining nine positions would depend on their receiving additional agency funding. As of June 2016, SBA had not provided us with their proposal for filling the remaining nine positions.
Recommendation: To more effectively implement SBA's expansion of OIT field staff as required by the SBJA, the Administrator of the SBA should update SBA's plan for additional OIT staff to include funding sources and time frames, as well as possible efficiencies from clearly defining roles and responsibilities and leveraging other entities' export assistance resources.
Agency Affected: Small Business Administration