Pursuant to a congressional request, GAO reviewed the Minority Business Development Agency's (MBDA) operations, focusing on: (1) MBDA review and approval of competitive grant applications; (2) MBDA staffing levels and work load; and (3) client satisfaction with management, marketing, and technical assistance MBDA provided through its network of Minority Business Development Centers.

GAO found that: (1) MBDA delayed approval of 76 of the 102 center operation grants it scheduled for award during fiscal year (FY) 1988, primarily due to its detection, during the grant application review process, of such problems as unresolved debts to the government and disallowed indirect cost rates; (2) some of those delays forced centers to suspend operations and disrupt client services until they received funding; (3) MBDA headquarters and regional staffing levels changed little between FY 1980 and FY 1989, although the program budget decreased by $19 million, and directors believed that offices were overstaffed; (4) personal differences between former headquarters directors hindered effective communications and efficient use of staff and negatively affected employee morale and productivity; and (5) MBDA management planned to focus efforts on improving the grant review process to eliminate approval delays and on reexamining agency staffing needs, roles, and responsibilities. GAO also found that, of 149 surveyed center clients: (1) 72 percent reported high or general satisfaction with center services; (2) over 83 percent reported that they would contact a center if they needed assistance in the future; (3) 53 percent believed that center services were very useful in meeting their business needs; (4) 36 percent believed that their business skills greatly increased as a result of center services; and (5) 66 percent rated center personnel as having at least above-average expertise.