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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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.

Recommendations 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

  2. Status: Closed - Implemented

    Comments: The MBDA restructured program now requires that grants be awarded competitively. In addition, MBDA will fund grants based on the strongest responsive proposal to the request for applications (RFA) or request for proposals (RFP).

    Recommendation: The Secretary of Commerce should pay particular attention to MBDA efforts at restructuring its special projects program to ensure competition in the grant process so that the best possible projects are funded.

    Agency Affected: Department of Commerce

  3. Status: Closed - Implemented

    Comments: Grants will be formally advertised in the Commerce Business Daily and Federal Register.

    Recommendation: The Secretary of Commerce should pay particular attention to MBDA efforts at restructuring its special projects program to provide for formal advertisement using multiple sources to increase the potential for MBDA to receive the strongest proposals responsive to project objectives.

    Agency Affected: Department of Commerce

  4. Status: Closed - Implemented

    Comments: Commerce RFP and RFA now routinely convey the specific performance measurements that will be used to evaluate achievements of the grant's goals and objectives.

    Recommendation: The Secretary of Commerce should pay particular attention to MBDA efforts at restructuring its special projects program to develop meaningful performance standards that allow MBDA to determine whether projects achieve planned goals.

    Agency Affected: Department of Commerce

  5. Status: Closed - Implemented

    Comments: MBDA Order 717, issued September 8, 1992, formally established national program initiatives to replace the special projects program. Initiatives must complement MBDA program priorities and be awarded via competitive or advertised negotiated contracts or cooperative/interagency agreements. The awards are subject to established requirements for monitoring to ensure compliance.

    Recommendation: The Secretary of Commerce should pay particular attention to MBDA efforts at restructuring its special projects program to develop monitoring guidelines specific to special projects to ensure compliance with grant terms and conditions.

    Agency Affected: Department of Commerce

  6. Status: Closed - Implemented

    Comments: MBDA Order 717, issued September 8, 1992, formally established national program initiatives to replace the special projects program. Initiatives must complement MBDA program priorities and be awarded via competitive or advertised negotiated contract or cooperative/interagency agreement. Awards are subject to established procedures for extending project time periods.

    Recommendation: The Secretary of Commerce should pay particular attention to MBDA efforts at restructuring its special projects program to develop appropriate criteria and guidance for evaluating renewal requests.

    Agency Affected: Department of Commerce

  7. Status: Closed - Implemented

    Comments: MBDA has established a policy that it will make funds available to perform financial and compliance audits of any projects that are awarded grants.

    Recommendation: The Secretary of Commerce should pay particular attention to MBDA efforts at restructuring its special projects program to ensure that MBDA implements its proposed policy of requiring and funding independent audits of special project grants.

    Agency Affected: Department of Commerce

  8. Status: Closed - Implemented

    Comments: The Deputy Secretary is monitoring, through the department's Management by Objective System, MBDA actions to correct problems associated with the management of its business development centers.

    Recommendation: In light of the long history of management problems and the potential vulnerability to fraud, waste, and abuse that can result from such continued uncorrected problems, the Secretary of Commerce should closely monitor MBDA implementation of actions to correct weaknesses that Commerce's Office of the Inspector General and GAO have identified in the management of the Center program.

    Agency Affected: Department of Commerce

 

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