Efforts To Improve Management of the Small Business Administration Have Been Unsatisfactory--More Aggressive Action Needed

CED-79-103: Published: Aug 21, 1979. Publicly Released: Aug 21, 1979.

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The Small Business Administration (SBA) has been unsuccessful in carrying out many GAO recommendations to correct problems in its programs and activities. Key programs and activities dealing with personnel, financial, and management control functions of the agency continue to need improvement.

SBA continues to produce unsound loans under the business loan program because its approval and servicing procedures are not followed. The agency's monitoring of the local development companies' activities continues to be insufficient. Investment policies of small business investment companies have not appreciably changed since prior review by GAO. Some employees making or influencing decisions on assistance do not file statements of employment and financial interests, even though the agency issued rules and regulations on the matter. Although the agency has issued new procedures in some cases and reminded employees to follow existing procedures in others, most of the problems previously reported to Congress still exist.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: In future oversight hearings on the local development company program, the Senate Select Committee on Small Business and the House Committee on Small Business should review the SBA March 1977 policy change which eliminated the requirement that owners of small businesses who have sufficient personal resources fund at least part of the loan. With this change, the agency is not a lender of last resort, as is the case in other small business loan programs. In addition, these committees should closely monitor the agency's progress in correcting problems.


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