Department of Small Business and Supplier Diversity Work Plan: Third Quarter (Virginia, October 30, 2020)
Summary
A memorandum dated October 30, 2020 from Tracey G. Wiley, Director of the Virginia Department of Small Business and Supplier Diversity, to R. Brian Ball, Secretary of Commerce and Trade, reporting on the agency's third-quarter work plan. It states that the agency worked with Virginia Community Capital to deploy $70 million of CARES Act funding and that, since the program launched in August, it processed more than 7,000 applications and awarded 1,252 grants totaling $34,238,764. It adds that an additional $30 million was allocated, and that the Virginia Small Business Financing Authority approved a $190,000 equipment loan to McAllister Mills, Inc. The memo says a final Disparity Study report from BBC Research and Consulting is expected in the next reporting cycle.
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“Department of Small Business and Supplier Diversity Work Plan: Third Quarter (Virginia, October 30, 2020).”
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Ralph S. Northam
Governor
R Brian Ball Department of Small Business and Supplier Diversity Tracey G. Wiley
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, Direct~
Virginia Department of Small Business and Supplier Diversity
Date: October 30, 2020
CC: Turner Widgen, Special Assistant to the Secretary of Commerce and Trade
Laura L. Wilborn, Division of Legislative Automated Systems
Subject: Department of Small Business and Supplier Diversity Work Plan: Third Quarter
We appreciate the opportunity to share with you the work that has been accomplished in the third
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 worked in partnership with Virginia Community Capital to
deploy the $70 million of CARES Act funding secured last quarter to struggling Virginia small
businesses. Since the program launched in August the agency has processed more than 7,000
applications and awarded 1,252 grants totaling $34,238,764. Due to the demand for the program an
additional $30 million has been allocated for deployment. The agency has worked tirelessly to
provide support to applicants and will continue to do so until all program funds are deployed. It has
been heartwarming to hear from the businesses who have been saved by receiving a grant award
through this program.
Not only has the agency been focused on supporting businesses through grant relief efforts but also
traditional lending opportunities offered by the Virginia Small Business Financing Authority
(VSBFA). This quarter the VSBFA approved an application for both Grayson County Economic
Development Authority and McAllister Mills, Inc. VSBFA approved an equipment loan in the
amount of $190,000 to finance the purchase of a new flame retardant product line for McAllister
Mills, Inc., a company that has been in operation in Grayson County since 1978. As a result of this
financing McAllister Mills injected $500,000 into Research & Development, and spent the $190,000
on equipment, for a total investment of $690,000. This product line expansion is allowing the
company to retain 49 jobs and create five new ones. The programs offered by the VSBF A are vital
to support small business financing needs that can't readily be met by the private lending market.
The agency is in the final phases of the Disparity Study process and expects the final report from
BBC Research and Consulting to be delivered in the next reporting cycle. During this reporting
101 N. H ,1, Street, 11th Floor • Richmond, Virginia 23219 • (804) 786-6585 • Fax (804) 786-9736
period the agency held several public meetings virtually to continue to inform business owners of
the study purpose and provide opportunities for participation. BBC Research and Consulting held
focus groups with minority business advocacy entities, woman business advocacy entities, small
business advocacy entities, and trade associations. BBC is in the final stages of utilization and
availability analysis and will have a draft report to the agency by the end of November.
Lastly, the agency would like to thank the Joint Legislative Audit & Review Commission (JLARC)
for their work on the SBSD Operations and Performance Review which concluded at the end of this
reporting period. The report highlighted the operational successes of a number of iniatives
undertaken by the agency and agency leadership specifically the improvements in the agency
certification processes. There were a handful of recommendations, fourteen that were actionable by
the agency, all which highlighted opportunities for continuous improvement. Several were
opportunities to provide additional information or resources on the agency website all which are
complete or in progress. Many of the VSBFA recommendations spoke to enhanced communication
opportunities with the Board and evaluation of risk tolerance that the Authority and Board is willing
to accept. These recommendations will require additional evaluation as accepting more risk will
need to be balanced with the need to preserve fund balances to ensure the VSBFA can continue to
reuse funds repaid to make new loans as they receive no infusion of funding from the General
Assembly.
We look forward to updating you at the end of January on our progress and performance in the
fourth 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. 712 (YTD 19,425)
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. 52 (YTD 218)
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. 6 (YTD 241)
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. 676 (YTD 898)
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 $305,424,514)
Q3. $ 16,600,000 (YTD $322,024,514)
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. SWaM = 12,238 DBE = 2,923 Total = 15,161
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. 53
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. 495
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. 384 (YTD 1,484)
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. N/A annual metric
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)
Q3.1,064 (YTD 2,377)
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. 96 (YTD 375)
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. 5 (YTD 8)
Q3. 5 (YTD 13)
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 just concluded a
performance and operations review by the Joint Legislative Audit and Review Commission
(JLARC). Their review commenced January of 2020 and concluded in September of 2020. The
recommendations and corrective action will be added next reporting cycle. SBSD participated
in an Auditor of Public Accounts (APA) review of its Information Systems Security program. The
APA report hasn’t been finalized.
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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