Minority Business:

Minority Business Development Agency Needs to Address Program Weaknesses

RCED-91-114: Published: Apr 16, 1991. Publicly Released: Apr 16, 1991.

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Judy A. England Joseph
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Pursuant to a congressional request, GAO reviewed the Minority Business Development Agency's (MBDA) grant program management, focusing on: (1) procedures and practices for attracting, selecting, and managing special projects; and (2) MBDA response to previously identified management deficiencies in its Business Development Center and special projects programs.

GAO found that MBDA: (1) lacked adequate procedures for attracting, selecting, and managing special projects; (2) did not publicize special project grant fund availability or ensure that the projects complied with grant selection criteria; (3) did not require grantees to clearly define project goals; (4) lacked routine and effective project monitoring; (5) based renewal decisions on insufficient information; (6) did not ensure that grants were audited regularly; (7) did not award any special projects in 1990 and was working on restructuring the program; (8) has been unresponsive to recommendations for correcting management deficiencies in its Center and special projects programs; and (9) grant funds and programs would remain vulnerable to fraud, waste, and abuse until MBDA effectively implemented actions to correct identified weaknesses.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: MBDA no longer accepts unsolicited proposals for special projects.

    Recommendation: Given the weaknesses in MBDA management of special projects, the Secretary of Commerce should cancel MBDA authority to recommend special projects for funding until he is assured that MBDA has developed a specific and detailed plan for awarding grants that corrects the management weaknesses identified in this report.

    Agency Affected: Department of Commerce


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