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
Status: Closed - Implemented
Comments: In January 2013 GAO issued GAO-13-217 and recommended that 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 agency wide and at the local levels." SBA agreed with our recommendation and stated that an Inter-Agency Communique issued in December 2012, which spelled out a framework for clarifying roles and responsibilities in export promotion and trade financing and also enhanced and formalized role of SBA-led Export Outreach Teams (EOT), would address the issues GAO identified. The Communique, which was issued to SBA's nationwide network of over 900 Small Business Development Centers, envisioned that EOTs would play a key role in defining roles and responsibilities at the local level. However, the framework laid out in the Communique was never fully implemented. Instead, in September 2016, SBA issued an Information Notice to all its employees, including staff in Small Business Development Centers and Agency field offices that outlined agency roles and responsibilities for providing export promotion programs and services to small businesses in cooperation with other Federal agencies and resource partners. According to SBA officials, they consulted with the Export-Import Bank (Ex-Im Bank) and the Department of Commerce (Commerce) prior to finalizing this Notice in order to better coordinate the delivery of the agencies' trade promotion and financing programs and services. The Notice's guidelines are intended to assist SBA employees with the delivery of these programs and services and align SBA with inter-agency partners around the "No Wrong Door" policy, which was established by the Trade Promotion Coordinating Committee and implemented through the December 2012 Communique.
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 agreed with our January 2013 recommendation. 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. 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 was developing guidance on how, if at all, SBA is able to share customer data with other agencies while complying with the Privacy Act. As of March 2017, SBA officials had no further developments to report and continued to discuss the steps necessary to procure client information software programs used by other federal export promotion agencies, which would facilitate information sharing on a nationwide level. SBA needs to demonstrate that it has identified what information can be shared with Commerce and the Export-Import Bank within its legal constraints, as well as ways SBA will regularly share specific client information, such as by adopting Commerce's new client management system. 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.
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. OIT noted that filling the remaining nine positions would depend on their receiving additional agency funding. SBA needs to provide documentation of its plan for complying with staffing requirements in the Small Business Jobs Act, or provide evidence that they have reallocated resources to actually do so. As of March 2017, SBA's new leadership was reviewing agency budget and staffing needs and had not provided us with a proposal for filling the remaining 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