Work Plan: Second Quarter - Department of Small Business and Supplier Diversity (July 31, 2020)
Summary
A memo dated July 31, 2020 from Tracey G. Wiley, Director of the Virginia Department of Small Business and Supplier Diversity (SBSD), to R. Brian Ball, Secretary of Commerce and Trade, with the subject Work Plan: Second Quarter. The memo says the agency secured $70 million of CARES Act funding to deploy relief and recovery grants to Virginia's small businesses through a program labeled Rebuild Virginia. It says the Virginia Small Business Financing Authority is designing an automated portal for applications, and that SBSD is coordinating with the Joint Legislative Audit & Review Commission (JLARC) on an Operations and Performance Review to be complete in the Fall of 2020.
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“Work Plan: Second Quarter - Department of Small Business and Supplier Diversity (July 31, 2020).”
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Ralph S. Northam
Governor COMMONWEALTH of VIRGINIA
R. Brian Ball Department of Small Business and Supplier Diversity Tracey G. W iley
Secretary of Commerce & Trade Director
To: The Honorable R. Brian Ball
Secretary of Commerce and Trade
House of Appropriations & Senate Finance Committees
From: Tracey G . Wiley, D i r e c ~
Virginia Department of Small Business and Supplier Diversity
Date: July 31, 2020
CC: Arigela Navarro, Deputy Secretary of Commerce and Trade
Laura L. Wilborn, Division of Legislative Automated Systems
Subject: Department of Small Business and Supplier Diversity Work Plan: Second Quarter
We appreciate the opportunity to share with you the work that has been accomplished in the second
quarter of the year in relation to our 2020 Agency Work Plan. We are on track with the majority of
our goals and are meeting with our staff monthly to review performance. Many of the goals are
cumulative and we expect to reach our targets as the year progresses.
During this quarter, the agency has continued to play an integral role in providing support and
information to small businesses impacted by COVID-19. Through support from the Governor's
Office and the Secretary of Commerce and Trade's Office, the agency was successful in securing
$70 million of CARES Act funding for the purpose of deploying relief and recovery grants to
Virginia's small businesses. This grant will help support small businesses impacted by Executive
order 53 and 55. The program labeled, Rebuild Virginia, has been designed with equity, diversity,
and inclusion in mind to ensure the most vulnerable businesses in Virginia have access to relief.
The Virginia Small Business Financing Authority, a division of SBSD, has taken the lead in
designing and developing an automated portal for businesses to apply. The portal will automate
aspects of the screening process to determine eligibly and support faster more efficient processing of
funds to grantees. Marketing and grant deployment will occur during the next reporting period. The
agency is excited to be a part of this statewide initiative to rebuild devastated Virginia businesses.
The agency has been coordinating since February with the Joint Legislative Audit & Review
Commission (JLARC) on the SBSD Operations and Performance Review, which will be complete
in the Fall of 2020. Staff have spent a great deal of time gathering data and sharing information on
agency programs and how they support the mission of growing and developing Virginia' s small
businesses. SBSD has also shared information related to potential policy options for consideration
with specific focus on the current Commonwealth small business definition and goal setting for
agencies in support of the SWaM initiative in subsequent years. During this quarter, the agency has
been included in an Information Sensitive System Security Audit by the Auditor of Public Accounts.
LOl N. 14d' Street, 11th Floor• Richmond, Virginia 23219 • (804) 786-6585 • Fax(804) 786-9736
We expect that review to be complete during the next reporting period. The agency was notified by
the Department of Accounts that it would be included in a Quality Assurance Review of the Agency
Risk Management and Internal Control Standards this Fall, exact date to be determined. Lastly, the
agency is pleased to share that the Auditor of Public Accounts issued in April of 2020 a report of
their findings and recommendations in relation to internal controls for calendar year 2019 and SBSD
was the only agency out of fourteen that had no findings or recommendations.
We look forward to updating you at the end of October on our progress and performance in the third
quarter of the year. We plan to focus on different divisions within the agency each reporting period
to give you a holistic perspective on the work we are doing.
Thank you and please let us know if you have any questions on items not addressed in this report.
Department of Small Business and Supplier Diversity
Agency Work Plan
January 1-December 31, 2020
Overview
Mission: Economic Growth and Development of Virginia’s Small Businesses
The mission of the Virginia Department of Small Business and Supplier Diversity (SBSD) is to
serve Virginia’s small businesses, by enhancing growth opportunities through increased
revenue and job creation that raises the standard of living of all Virginians.
Agency Vision:
The Virginia Department of Small Business and Supplier Diversity (SBSD), formerly the
Department of Business Assistance, was formed to meet the needs of existing and new small
businesses. Over the life of the agency, the mission has expanded so that small, woman, and
minority-owned businesses are included in this vision. Then and now, the department
separates these important functions from the political process and ensure that all Virginia small
businesses receive assistance to grow and prosper in the Commonwealth through education,
counseling, certification, and access to financing.
Agency Goals:
Statewide Goals Advanced by SBSD’s Strategic Goals, Objectives and Strategies
Be a national leader in the preservation and enhancement of our economy.
Engage and inform citizens to ensure we serve their interests.
Be recognized as the best-managed state in the nation.
Ensure that Virginia has a transportation system that is safe, enables easy movement of
people and goods, enhances the economy and improves our quality of life.
The goals listed above are statewide goals with many contributors in which SBSD plays a role.
The agency is committed to customer service, advocacy for small businesses, and support of
other Virginia state agencies. SBSD specific goals do not stand alone, but support the broader
goals of the entire Commonwealth.
Agency Goal I: Spur economic vitality through strategic investment of resources.
For the Department this means implementing strategies that assist small businesses to be more
competitive in a rapidly changing global economy.
Agency Goal II: Enhance the positive business climate in Virginia for small businesses as
they move through the business life cycle: formation, stabilization, and
growth.
For the Department this means providing services designed to assist with the development and
growth of small businesses, as they are the economic engine of the Commonwealth.
1
Agency’s Objectives and Strategies for 2020
Agency Goal #1:
Spur economic vitality through strategic investment of resources.
Objective
Utilize agency resources to maximize the creation and retention of jobs within the
Commonwealth as well as growth for wealth maximization of our current small business
population.
Overall success toward meeting this objective will be assessed through the following
measures:
Number of jobs created and retained by businesses receiving loans from the VSBFA
(Work Plan Measure)
Number of presentations to financial institutions and economic development partners
(Strategic Plan Measure)
Total number of jobs created and retained by small business borrowers as a result of
VSBFA programs (Work Plan Measure)
Total numbers of jobs created and retained in rural areas for all borrowers (Work Plan
Measure)
Total private investment enabled for borrowers under all VSBFA programs (Work Plan
Measure)
Make available a pool of Small, Women, and Minority (SWaM) and Disadvantaged
Business Enterprise (DBE) certified vendors for local, state, and corporate/private
entities (Strategic Plan Measure)
Average number of days to process a Small, Women, and Minority (SWaM)
certification application (Strategic Plan Measure)
Support of service disabled veteran businesses through certification (Strategic Plan
Measure)
Virginia Small Business Financing Authority (VSBFA)
Number of jobs created and retained by all businesses receiving loans from the VSBFA
Staff will provide data quarterly on the amount of jobs created from loans made across all
programs of the VSBFA. (Baseline 400; Goal 400)
Q1. 13,658
Q2. 5,055 (YTD 18,713)
Q3.
Q4.
Number of presentations to financial institutions and economic development partners
Staff will provide data quarterly on the amount of marketing presentations and the economic
development and banking partners associated. (Baseline 150; Goal 300)
Q1. 80
Q2. 86 (YTD 166)
Q3.
2
Q4.
Total number of jobs created and retained by small business borrowers as a result of VSBFA
programs
Staff will provide data quarterly on the number of jobs created and retained by small
businesses as a result of VSBFA programs (Baseline 200; Goal 300)
Q1. 174
Q2. 61 (YTD 235)
Q3.
Q4.
Total numbers of jobs created and retained in rural areas for all borrowers
Staff will provide data on the numbers of jobs created and retained in rural areas for all
borrowers. See appendix. (Baseline 150; Goal 150)
Q1. 168
Q2. 54 (YTD 222)
Q3.
Q4.
Total private investment enabled for borrowers under all VSBFA programs
Staff will provide data on the total private investment (non-VSBFA) enabled for borrowers
under all VSBFA programs. (Baseline $5,250,000; Goal $7,500,000)
Q1. $126,981,514
Q2. $178,443,000 (YTD $350,424,514)
Q3.
Q4.
SWaM Certification Division (SWaM)
Make available a pool of Small, Women, and Minority (SWaM) and Disadvantaged Business
Enterprise (DBE) certified vendors for local, state, and corporate/private entities
Staff will provide data quarterly on the number of currently certified SWaM and DBE
businesses. (Baseline 14,000; Goal 15,000)
Q1. SWaM = 12,272 DBE = 2,799 Total = 15,071
Q2. SWaM = 12,254 DBE = 2,824 Total = 15,078
Q3.
Q4.
Average number of days to process a Small, Women, and Minority (SWaM) certification
application
Staff will provide data quarterly on the average number of business days to process a
certification application. (Baseline 86; Goal 60)
Q1. 56
Q2. 54
Q3.
Q4.
3
Support of service disabled veteran businesses through certification
Staff will provide data quarterly on the number of service disabled veteran small businesses
certified. (Baseline 250; Goal 500)
Q1. 431
Q2. 456
Q3.
Q4.
Agency Goal #2:
Enhance the positive business climate in Virginia for small businesses as they move through the
business life cycle: formation, stabilization and growth.
Objective
To provide services designed to assist with the development and growth of small
businesses in the Commonwealth.
Overall success toward meeting this objective will be assessed through the following
measures:
Number of education and outreach activities conducted to assist Virginia small
businesses with strategic growth and development (Strategic Plan Measure)
Percentage of businesses that maintained or experienced growth in revenue as a
result of participating in the New Virginia Scaling 4 Growth Development Program
(Work Plan Measure)
Number of businesses served through Business One Stop (Work Plan Measure)
Number of partners worked with annually to support Virginia small businesses
(Strategic Plan Measure)
Number of VDOT projects supported through vendor development and technical
assistance (Work Plan Measure)
Business Development and Outreach Services (BDOS)
Number of education and outreach activities conducted to assist Virginia small businesses with
strategic growth and development
Staff will provide data quarterly on the number of outreach events and/or activities held or
participated in annually. (Baseline 1,000; Goal 1,700)
Q1. 503
Q2. 597 (YTD 1,100)
Q3.
Q4.
Percentage of businesses that maintained or experienced growth in revenue as a result of
participating in the New Virginia Scaling 4 Growth Development Program
This data will be provided by Interise on an annual basis. (Baseline 30%; Goal 30%)
Q1. N/A annual metric
Q2. N/A annual metric
Q3.
Q4.
4
Number of businesses served through Business One Stop
Staff will provide data quarterly on the number of small businesses served through Business
One Stop. (Baseline 2,300; Goal 2,600)
Q1. 599
Q2. 714 (YTD 1,313)
Q3.
Q4.
Number of partners worked with annually to support Virginia small businesses
Staff will provide data quarterly on the number of partner organizations worked with to
support Virginia Small Businesses. (Baseline 100; Goal 160)
Q1. 160
Q2. 119 (YTD 279)
Q3.
Q4.
DBE Technical Assistance and Outreach (DBE Outreach)
Development of ready, willing, and able businesses prepared to support VDOT projects.
Staff will provide data quarterly on the number of VDOT projects supported through vendor
development and technical assistance. (Baseline 10; Goal 10)
Q1. 3
Q2. 3 (YTD 6)
Q3.
Q4.
5
Audit Compliance and Corrective Action:
The Department of Small Business and Supplier Diversity has had eleven audits and
performance reviews and VSBFA has had five since FY15. The agency is currently undergoing
a performance and operations review by the Joint Legislative Audit and Review Commission
(JLARC). Their review commenced January of 2020 and is anticipated to last until September
of 2020. SBSD was notified by the Auditor of Public Accounts (APA) that the agency would be
audited as part of the APA Information Systems Security audit which would last from April 2020
to June 2020.
The agency audits/review recommendations are listed below:
DSBSD
Fiscal Year Agency Description Findings/Recommendations
FY20 APA Information Systems Security Audit Notification received 4.23.20
FY20 JLARC Performance and Operations Review Currently Underway
FY19 APA Internal Controls Review and Audit No findings
FY18 APA Procurement Review and Audit No findings
FY18 JLARC Incentive Review of SBJGF No findings for the agency, recommendation to the GA to look at wage rate
FY18 JLARC Fiscal Impact Statement Review for SB318 No findings, impact statement for DSBSD was deemed accurate
FY18 VITA Sensitive Systems Audit Provide role based security training to appropriate personnel
Develop a continuous monitoring program for vulnerabilities
Develop IT Security Plans for each application
Have users acknowledge policy adherence
FY17 Third Party Vendor ARMICS review to evaluate agency-wide and transactional internal controls Update and develop additional agency policies and procedures
Address need for additional staff
Establish budget tracking for the agency
FY17 OSIG SWaM Certification Performance Audit (Review Period FY16) Enhance Reporting of SWaM Compliance
Establish the population of agencies required to submit SWaM plan
Maintain historical SWaM Vendor Data
Perform a certification division compensation study
Research the feasibility in instituting a fee structure for certification
Update the certification officer training manual
FY17 APA Payroll Audit (Review Period FY16) Transmission of data between agency and PSB
Improve controls over terminated employees
Update and develop additional agency policies and procedures
Perform post certification activities
FY17 APA Internal Controls Audit (Review Period FY16) Update and develop additional agency policies and procedures
ARMICS not in compliance for FY16
Monitor IT contractor performance using VITA form
Review user access for internal applications
Commonwealth IT Security Audit
FY17 Third Party Vendor Independent Assessment of VSBFA Audits and Transfers as well as SBIG and SBJGF Agency should evaluate the capital requirement for SBJGF
Agency should market the SBJGF to differentiate from VJIP
FY16 JLARC Development and Management of State Contracts in Virginia Recommendation #3 - Assist with determining price reasonableness
Thirty recommendations provided only 4 pertained to DSBSD Recommendation #4 - Assist with determining if weighted criterion for SWaM needed adjustment
Recommendation #7 - Prioritize small business certification over W/M
Recommendation #8 - Send notifications to businesses ahead of expiration
VSBFA
Fiscal Year Agency Description Findings/Recommendations
FY18 JLARC Incentive Review of SBIG Recommendation #7 - Obtain metrics from grant recipients and collect industry codes
Recommendation #9 - VSBFA to review credit conditions, adjust programs as needed
Recommendation #10 - VSBFA to establish a minimum job requirement for LGP, CC, and SWaM Microloan
Recommendation #11 - VSBFA to monitor employment outcomes for LGP, CC, and SWaM Microloan
FY18 APA VSBFA Federal Grants Audit Increase policy and procedure creation for Economic Development Federal Loan programs
FY17 APA Annual Financial Review (Review Period FY16) No Findings
FY16 APA Annual Financial Review (Review Period FY15) No Findings
FY15 APA Annual Financial Review (Review Period FY14) Improve controls over financial reporting process
Strengthen controls over off-CARS disbursements
6
Agency Corrective Action Plan and Timeline listed below:
DSBSD
Fiscal Year Agency Description Corrective Action
FY20 APA Information Systems Security Audit
FY20 JLARC Performance and Operations Review
FY19 APA Internal Controls Review and Audit None
FY18 APA Procurement Review and Audit None
FY18 JLARC Incentive Review of SBJGF None
FY18 JLARC Fiscal Impact Statement Review for SB318 None
FY18 VITA Sensitive Systems Audit Complete
Complete
Complete
Complete
FY17 Third Party Vendor ARMICS review to evaluate agency-wide and transactional internal controls Complete
Budget Requests Submitted/No funding
Complete
FY17 OSIG SWaM Certification Performance Audit (Review Period FY16) Complete
Complete
Complete
Complete
Complete
Complete
FY17 APA Payroll Audit (Review Period FY16) Complete
Complete
Complete
Complete
FY17 APA Internal Controls Audit (Review Period FY16) Complete
Complete
Complete
Complete
Complete
FY17 Third Party Vendor Independent Assessment of VSBFA Audits and Transfers as well as SBIG and SBJGF Complete/Legislation was introduced
Complete
FY16 JLARC Development and Management of State Contracts in Virginia Complete
Thirty recommendations provided only 4 pertained to DSBSD Complete
Complete
Complete
VSBFA
Fiscal Year Agency Description Corrective Action
FY18 JLARC Incentive Review of SBIG Complete
Underway
Unable to implement/communication sent to JLARC
Complete
FY18 APA VSBFA Federal Grants Audit Complete
FY17 APA Annual Financial Review (Review Period FY16) None
FY16 APA Annual Financial Review (Review Period FY15) None
FY15 APA Annual Financial Review (Review Period FY14) Complete
Complete
7
Discussion Points:
The agency is committed to supporting small businesses by providing access to capital,
opportunity through state and federal certification, and growth through comprehensive
development programs. Since the merger of the Department of Business Assistance (DBA) and
the Department of Minority Business Enterprise (DMBE) to create the Department of Small
Business and Supplier Diversity (DSBSD) in FY15 the agency has flourished. Under the
direction of new leadership, the two agencies became one and shared goals and vision were
established.
The first order of business, once the mission of the agency was solidified, was to develop the
infrastructure necessary to allow the agency to be successful. This required the build out of
office space so both agencies could work together as one cohesive unit. Next staffing needed
to be addressed; attracting new talent, addressing performance issues, and developing high
potential employees was a priority. Once infrastructure was in place then current programing
and performance of that programing could be evaluated. Strategic planning and SWOT
analysis was completed and new performance metrics were established. Through this planning
effort new programing opportunities were identified and the agency added the Virginia Scaling 4
Growth program and the Virginia Contractor’s Course to our business development offerings.
By the end of FY20, we expect to have graduated ninety-five SWaM businesses from the
Virginia Scaling 4 Growth program. Virginia is the first State to offer this nationally renowned
program. The program is a six-month MBA style program designed to take businesses through
leadership, finance, and business management modules with their final capstone project being
the completion of a growth program that they can put into action upon graduation. Based on
economic impact data we have captured from our graduates, 80 percent retained or created
new jobs. The average revenue growth was 44 percent after completion of the program.
Virginia’s program results have been so impressive that Interise, the national licensing
organization, has used Virginia’s results as a model of success for other participants.
The agency has also made tremendous strides as it relates to streamlining the SWaM
Certification process and in reducing time to process applications. In FY16, the agency was
faced with a backlog of over 2,000 applications and the average processing time for SWaM
certification was approximately 120 business days. The agency identified strategies to manage
the application volume and instituted new technology to automate the process. As of FY18, the
agency was able to clear the backlog and reduce processing times to less than 60 business
days. The average number of days to process a certification application in the private sector is
90 business days; we are committed to providing a faster service to our small businesses and at
no cost.
In FY20, the agency finalized streamlining efforts to reduce the burden of certification to the
business owner. The agency finalized regulatory changes that reduced the amount of time a
business must wait to reapply after being denied certification from 12 months to six months.
The agency implemented changes that allowed more time for reapplication increasing the
reapplication period from 90 days to 120 days. The agency implemented a streamlined
recertification process that allows for an attestation of no change allowing the business to
submit less documentation when reapplying. We have held webinars and certification labs
statewide to assist applicants with the process. We have conducted outreach and increased the
number of certified service disabled veteran owned businesses by 121 percent since FY18.
8
Average Days to Process SWaM Certification Applications
140
120
100
80
60
40
20
0
2016 2017 2018 2019 2020
The agency has also been successful in updating its technology to meet the needs and
expectations of the citizens of the Commonwealth. In 2017, the agency launched a new
website as well as a new certification application portal. The agency created an enhanced
SWaM and DBE directory to assist Commonwealth procurement officials with identification and
location of certified vendors. DSBSD, in 2018, worked with nineteen state agencies to provide
them with real time data feeds on SWaM certification information. These feeds populate SWaM
certification data into DGS’s eVA system, DOA’s Cardinal system, VITA’s subcontractor portal
and various institutions of higher education’s ERP systems. The agency launched a new
Expenditure Dashboard application in FY20, which contained enhanced reporting, adjustment
submission, and subcontractor submission capabilities. The agency has begun work to
enhance the Business One Stop application.
The agency has accomplished a great deal and appreciates the opportunity to highlight the work
that has been done and the work that will be accomplished in this upcoming reporting period.
We stand ready to continue our support of the small businesses of the Commonwealth. There
are currently 745,886 businesses in Virginia, of which 99.5 percent are small businesses.
Virginia small businesses employed 1.5 million people or 47.2 percent of the private workforce
in 2013. Our small businesses are the backbone of Virginia’s economy.
Appendix:
The agency will use the USDA definition of rural, which includes the following localities:
Accomack, Alleghany, Bath, Bland, Brunswick, Buchanan, Buena Vista City, Carroll, Charlotte,
Covington City, Cumberland, Danville City, Dickenson, Emporia City, Essex, Franklin City,
Galax City, Grayson, Greensville, Halifax, Henry, Highland, King and Queen, King George,
Lancaster, Lee, Lexington City, Louisa, Lunenburg, Madison, Martinsville City, Mecklenburg,
9
Middlesex, Northampton, Northumberland, Norton City, Nottoway, Orange, Page, Patrick,
Pittsylvania, Prince, Edward, Richmond, Rockbridge, Russell, Shenandoah, Smyth,
Southampton, Surry, Tazewell, Westmoreland, Wise, and Wythe.
The following localities have geographic areas within them that have been designated rural as
well:
Amherst, Bedford, Campbell, Culpeper, Dinwiddie, Floyd, Franklin, Goochland, Nelson, Pulaski,
Rappahannock, Sussex, and Warren.
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