Graves Examines SBA’s Outdated Loan Management Systems

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Washington, Feb 8, 2012 | DJ Jordan, Wendy Knox (202.225.5821) | comments

“The fact that the SBA began the modernization process almost seven years ago and has received millions in funding, but continues to mismanage the updating process is completely unacceptable.”

WASHINGTON, DC— House Small Business Committee Chairman Sam Graves (R-MO) today held a full committee hearing to examine the Small Business Administration’s (SBA) outdated computer systems used to manage its lending programs. Given the ongoing problems plaguing the systems, Chairman Graves requested in October 2010 that the Government Accountability Office (GAO) review the modernization efforts. This hearing was a follow-up to that request.

GAO confirmed today that since 2005, when the modernization project began, the SBA has completed only one project.

“With a lending program portfolio that exceeds $80 billion, the SBA should be able to manage its information technology in a way that does not waste or risk taxpayer dollars and ensure that it can obtain accurate information on its loans. The fact that they began the modernization process almost seven years ago and have received millions in funding, but continue to mismanage the updating process is completely unacceptable.

“Outside consultants, the Inspector General and the GAO all agree that the SBA’s financial systems remain a major concern, and it will remain under scrutiny of this Committee. It’s time their feet are held to the fire to get this project done thoroughly, but quickly. Small businesses need capital, but taxpayers should not be left on the hook due to the SBA’s failure to properly manage their accounting systems.”

For related hearing documents,
click here.

Notable Witness Quotes:

David Powner, Director of Information Technology Management Issues at the GAO in Washington, D.C., said, “Our report also raises concerns about SBA’s inconsistent implementation of key management practices... [C]ost increases and schedule slippage raise concerns about SBA’s ability to complete the modernization as planned. More consistent application of basic information management techniques and stronger executive oversight could help SBA arrest or reverse these conditions.”

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Tags: Oversight