Small Business Administration:
Opportunities Exist to Build on Leadership's Efforts to Improve Agency Performance and Employee Morale
GAO-08-995: Published: Sep 24, 2008. Publicly Released: Oct 21, 2008.
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Over the past 6 years, the Small Business Administration (SBA) has sought to transform the agency and improve its operations. A major focus of transformation was to centralize the remaining loan functions performed by 68 district offices. SBA's implementation of early transformation efforts did not reflect key practices GAO recommended in a 2003 report as important for successful transformations. Consequently, its centralization of the guaranty purchase process for one of its loan programs resulted in backlogs and other problems reported by SBA's Inspector General. Some of SBA's actions also led to a reduction in staff at district offices and a decline in employee morale. GAO was asked to assess how SBA has (1) responded to GAO's 2003 recommendations, (2) addressed the impacts of transformation on employees, (3) defined the roles and responsibilities of district offices, and (4) assessed the centralization of loan functions. GAO reviewed documents related to SBA's transformation and reform efforts, interviewed SBA officials, and analyzed SBA employee survey data. GAO also visited 10 district offices and two centers and interviewed groups of employees.
In the past 2 years, SBA has applied key practices that support successful transformations to improve agency operations and, thereby, has taken actions to address recommendations GAO made in its 2003 report, including improving communication, performance management, and employee involvement. The Administrator appointed in 2006 emphasized the importance of transparency in his reform agenda and took actions to improve communications across the agency. The development of a performance management framework was a key step in linking the agency's reforms with strategic goals and employee roles. The Administrator also made a concerted effort to engage SBA's employees in improving the agency, and meetings with employees affirmed that these efforts had a positive effect. Some employees continued to feel that management does not consider their ideas and concerns. SBA recently conducted focus groups to understand these concerns and plans to implement initiatives to address them. SBA senior officials also said that they are taking steps to institutionalize these improvements. SBA leadership's commitment will be important to ensure that the agency's transformation and reforms are successful. SBA took some actions to address its low employee morale, which had declined significantly following the centralization efforts, as shown in the 2004 and 2006 Federal Human Capital Surveys. SBA's 2007 survey results suggest that these recent actions, such as improving communication and training, have had a positive impact on employees. The creation of SBA University in 2007 was an important action since it provided training and also showed that the agency was willing to invest resources in the development of employees. SBA officials said they are developing a core training program. However, SBA has not developed a training plan that lays out goals, strategies, and milestones. Such a plan would help to establish priorities and could assure employees that SBA remains committed to developing its employees. SBA continues to define the roles and responsibilities of the district offices, as evidenced by its recent determination that district offices should retain a role in loan processes that have been centralized. District directors and employees made positive comments about the flexibility they had in using resources to meet office goals. But they also said that they still were adjusting to new responsibilities and the reduction of staff in their offices. SBA recently re-engineered its guaranty purchase process. Its measures to track progress have emphasized the timeliness of the process, completeness of packages lenders submit, and customer service. SBA reviews each purchase decision and is developing a new quality assurance review process, but has not yet developed performance measures to track the quality of its purchase reviews. SBA Inspector General audits have noted concerns about the quality of purchase reviews and found that the center's purchase reviews do not adequately prevent improper payments. Performance measures could provide more attention to the quality of reviews.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: The U.S. Small Business Administration (SBA) developed a five-year strategic plan for training and development that outlines a long-term approach to continuous learning at SBA, thereby addressing our recommendation. We recommended that the Administrator of SBA develop a strategic training plan with specific goals, strategies, and milestones to support SBA's development of a core curriculum for SBA University and to communicate the agency's training development efforts to its employees. According to SBA, the strategy goes beyond SBA University by developing a long-term approach for continuous learning. In February 2009, SBA finalized a five-year strategic plan for training and development--covering the period from 2009 to 2013?that outlines a long-term approach to continuous learning at SBA. The plan focuses on six strategic elements: 1) essential competencies for training; 2) career development; 3) training and development opportunities; 4) partnerships with other organizations to share training resources; 5) monitoring and evaluation; and 6) funding for training and development. Each of these areas has goals and measures of effectiveness. Progress on some goals is measured by whether or not an action has been completed, while progress for others are based on quantifiable measures, such as the number of training courses employees complete. The plan also contains milestones for the percentage of training completed by employees in mission-critical occupations for each fiscal year based on the amount of funding available. The strategic plan for training and development is supported by a separate strategic plan, annual training plan, and a training curriculum. The fiscal year 2009 annual training plan, for example, outlines training opportunities for each of SBA's mission critical occupations based on the Office of Human Capital Management's assessment of training needs and communicates to each employee organizational and individual training responsibilities. SBA said that its training plan was approved in February 2009, but noted that it was not fully funded.
Recommendation: To support SBA's development of a core curriculum for SBA University and communicate SBA's training development efforts to employees, the Administrator of SBA should develop a strategic training plan with specific goals, strategies, and milestones.
Agency Affected: Small Business Administration
Status: Closed - Implemented
Comments: In response to our recommendation, SBA developed a database to track several quality control metrics and issues in October 2010. The metrics to measure the quality of its guaranty purchase process include measuring compliance with SBA policy and procedures for decisions on purchases including decisions on (1)guaranty repairs, (2) offers in compromise,(3) care of preservation of collateral payments, and (4) charge-offs. SBA will also randomly sample ten percent of the previous day's guaranty purchase approvals and if issues are identified, the purchases can be suspended until issues are resolved to avoid an improper payment. A metrics report is provided to the management of the National Guarantee Purchase Center on a biweekly basis.
Recommendation: To ensure that its streamlined purchase guaranty process also provides an incentive to focus on quality and thereby results in good purchase decisions, the Administrator of SBA should develop performance measures that will provide information on the quality of its guaranty purchase reviews.
Agency Affected: Small Business Administration