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Government Accountability Report Criticizes SBA Mismanagement

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Washington, January 6, 2016 | comments

Agency Only Implemented 7 out of 69 GAO Recommendations

Administrator Contreras-Sweet to Testify TOMORROW

You can view video of the full hearing here

Today an official from the Government Accountability Office (GAO) told the House Committee on Small Business that widespread mismanagement at the Small Business Administration (SBA) is affecting the agency’s ability to provide key services to America’s entrepreneurs.  You can read the GAO’s full report here.

Key quotes from today’s hearing below:

“The SBA plays a significant role in providing assistance to America’s entrepreneurs.  The problems that have festered far too long must end so that small businesses and taxpayers can rely on an effective and efficient SBA,” said Small Business Committee Chairman Steve Chabot (R-OH).

“It is very disturbing to us that these challenges still remain and they go down to some very basic functions,” GAO Director Financial Markets and Community Investment William Shear told lawmakers. “We saw that certain recurring themes happen over and over again all across the agency that affect all aspects of its operations and its programs and we’re looking for some commitment to deal with these issues.”

“In your review of the SBA, you’ve listed a whole range of deficiencies where the SBA has fallen short and is just not cutting it. The one that worries me the most is in the area of IT security,” Committee Chairman Chabot noted. “The information that they keep on individuals and on small businesses can be pretty sensitive – information that you might not want a rival business or your neighbors or the Chinese government to have access to…. Despite the logical concerns that individuals or small businesses who deal with the SBA might have, the SBA has failed to implement more than 30 of the Office of Inspector General’s recommendations related to IT security.”

“Your report is quite damning and quite concerning from the standpoint that it looks like we have an agency that is mismanaged from top to bottom,” said Committee Vice Chairman Blaine Luetkemeyer (R-MO) pointing to the SBA’s mismanagement of disaster relief programs. “This is an example of government run amok. We’ve got one agency that can’t do the job so we can create a second agency that can’t do the job and now we’ve got a third agency that can’t do the job.”

Noting that SBA had only implemented 7 of the GAO’s  69 recommendations to address mismanagement, Chairman Chabot observed:

“If you had a teenager and told them to clean up their room and they had 69 things sitting around the room and they cleaned up 7 of them, that might be a positive direction but I don’t think most parents would be satisfied with that and I certainly wouldn’t be inclined to give them an increase in their allowance.”

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Tags: Oversight