Skip to main content

Small Business Administration: Response to September 11 Victims and Performance Measures for Disaster Lending

GAO-03-385 Published: Jan 29, 2003. Publicly Released: Jan 29, 2003.
Jump To:
Skip to Highlights


The September 11 terrorist attacks and subsequent federal action had a substantial impact on businesses in both the declared disaster areas and around the nation. In the aftermath of the attacks, the Congress, among other actions, appropriated emergency supplemental funds to the Small Business Administration (SBA) to aid September 11 victims. Given the uniqueness of this disaster and changes in the program, GAO analyzed SBA's lending to September 11 victims, as well as the loan program's performance goals and measures.


Recommendations for Executive Action

Agency Affected Recommendation Status
Small Business Administration In order to better demonstrate program performance, the Administrator of SBA should direct the Office of Disaster Assistance to revise the performance measures for disaster lending to (1) include more outcome measures; (2) assess more significant outputs, such as service to applicants or loan underwriting; (3) report achievements that can be compared over several years, such as percentages; and (4) include performance targets that encourage process improvement rather than maintaining past levels of performance.
Closed – Implemented
SBA took the following actions in response to GAO's recommendation. SBA's ODA revised its strategic plan, which is incorporated into SBA's overall plan. Both strategic plans include expanded, long-term performance goals and measures, as well as outcome measures for the short and long term. According to the ODA Strategic Plan, timely response to a business's request for assistance is paramount in the recovery process. SBA developed one new tool (the Disaster Credit Management System, DCMS), and is developing another tool (Business Expedited Loan Officer Report, BELOR), that it anticipates will enable it to better measure outcome and to assess more significant outputs. DCMS has improved automation of the loan application process; loans can be processed and closed from any location in the U.S. thereby reducing travel and personnel costs. DCMS will allow ODA to meet its outcome and performance goals more quickly and with fewer resources. The BELOR will allow for an abbreviated financial analysis, resulting in quicker loan decisions.
Small Business Administration In order to better demonstrate program performance, the Administrator of SBA should revise and expand its current research to improve its measures and evaluate program impact. To improve its current measures SBA should conduct research, such as surveying Disaster Area Office staff and reviewing the disaster, lending, and performance literature, to identify and test new outcome measures. To evaluate its program impact, SBA needs to revise its survey approach to survey all disaster loan applicants and to employ other methods, such as periodic analyses of regional statistics, to assess the economic impact of the program on local communities.
Closed – Implemented
In 2003, ODA partnered with the Federal Consulting Group and the American Customer Satisfaction Index (ACSI) to measure customer satisfaction by surveying applicants who they approved or declined for disaster loans. ACSI assisted ODA in (1) the development of relevant empirical data available to establish valid baselines, (2) the development of the survey format, questions, and methodology so that the survey document could accurately measure results of the SBA's disaster program goals and outcomes, and (3) the compiling and reporting of the results of the survey. The results assessed whether or not SBA assistance is meeting the needs and expectations of disaster victims. Information from the survey will enable ODA to make improvements in its disaster loan processes. Disaster loans are instrumental in making small businesses operational after a disaster, spurring employment, and helping to stabilize the economy. In addition, among other uses, SBA intends to use the survey results to prioritize future efforts to improve the quality of customer service.
Small Business Administration In order to better demonstrate program performance, the Administrator of SBA should revise the disaster section of the performance plan to (1) establish direct linkages between each output and outcome and the associated performance measure; (2) accurately describe proxy measures as either an outcome or output measures; (3) accurately describe the validation and verification of performance measures; and (4) explain additions, deletions, or changes in the current goals or measures used from the previous year.
Closed – Implemented
SBA took the following actions in response to GAO's recommendation. The Office of Disaster Assistance (ODA) created its own strategic plan, which was incorporated in SBA's overall strategic plan. ODA's plan--section three of SBA's strategic plan--is intended to measure the effectiveness with which SBA is able to make disaster recovery loans to businesses and homeowners affected by disasters. The 2005 performance budget establishes linkages between each output and outcome, and the associated performance. In support of each outcome measure, ODA has set performance based output measures, as well as incremental goals for fiscal year (FY) 2004 and 2005, which provide interim targets for meeting the long term outcome goals. SBA's 2005 Performance Budget provides for each performance indicator, a definition, source, validity and verification statement and discussion of limitations. As ODA developed its 5-year strategic plan, ODA elected not to use "proxy measures"; instead it chose to use actual measures--both outcome and output as they would be more reflective of effectiveness and efficiency. These outcomes are measured using a survey administered by an outside third party. ODA's new GPRA goals are outcome goals for FY 2004. ODA made these goals to be outcome, results-oriented goals, not merely production or put goals. ODA's goals now reflect both outcome and output measures. All of the outcome measures are new and detailed in the strategic plan. Finally, these new measurements were made a part of the strategic plan because they are results oriented goals which illustrate the effectiveness of the disaster loan program.

Full Report

Office of Public Affairs


Disaster relief aidImpacted area programsLoansPerformance measuresProgram evaluationStrategic planningTerrorismLoan accounting systemsDisaster preparednessSmall business