Key Issues > Economic Development and Small Business
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Economic Development and Small Business

Small business programs, if effective, can assist small businesses and contribute to the nation’s economic growth. However, the Small Business Administration’s ability to provide effective services is unclear.

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The Small Business Administration (SBA) faces long-term management challenges:

Small business contracting programs may be vulnerable to eligibility fraud:

  • Some federal programs intend to increase contracting opportunities for disadvantaged business owners by providing preference or set-asides for businesses owned by, for example, service-disabled veterans or women. Some of these programs lack the internal controls required to provide reasonable assurance that only eligible small businesses participate.
  • In addition, small businesses in economically distressed areas known as Historically Underutilized Business Zones can apply for certification to participate in the program. However, firms seeking recertification were not required to submit any information to verify their continued eligibility. SBA also lacked guidance on when staff should request or verify documentation for recertification.

Federal programs, including those at SBA, that support entrepreneurs are fragmented:

  • Navigating overlapping and fragmented programs is an ongoing challenge for some entrepreneurs. This fragmentation may prevent agencies from making efficient use of limited federal resources for the entrepreneurs they are trying to help.
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  • portrait of William B. Shear
    • William B. Shear
    • Director, Financial Markets and Community Investment
    • shearw@gao.gov
    • (202) 512-8678