SBA's Oversight of the Grant Recipient's Implementation of the CARES Act Resource Partners Training Portal
- Document type
- Report
- Date
- 2022-01-18
Summary
An evaluation report, Report 22-07, issued January 18, 2022 by the Office of Inspector General of the U.S. Small Business Administration on SBA's oversight of the $18.6 million grant for the CARES Act Resource Partners Training Portal. The report states the hub launched on schedule and met federal website requirements, but finds less than 1 percent of 30 million small businesses used it and only 62 counselors and mentors completed any training module. It also finds the grant recipient awarded contracts without assessing cost reasonableness, and questions $14.8 million in costs. The OIG makes five recommendations; management agreed or partially agreed with three and disagreed with recommendations 4 and 5, including recovery of $100,000 in pre-award project management expenses. The report closes with management's comments.
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Full text
SBA INSPECTOR GENERAL EVALUATION REPORT
SBA’S OVERSIGHT OF THE GRANT RECIPIENT’S
IMPLEMENTATION OF THE CARES ACT
RESOURCE PARTNERS TRAINING PORTAL
REPORT NUMBER 22-07 | JANUARY 18, 2022
EXECUTIVE SUMMARY Report 22-07
January 18,
SBA’S OVERSIGHT OF THE GRANT RECIPIENT’S IMPLEMENTATION 2022
OF THE CARES ACT RESOURCE PARTNERS TRAINING PORTAL
What OIG Reviewed
COVID-19 related resources for small businesses
We evaluated the Small Business Administration’s and a training portal for the resource partners
(SBA) handling of the grant to train, counsel, and counselors and mentors.
educate small businesses on federal resources
available in the wake of the Coronavirus Disease SBA awarded $18.6 million for the informational
2019 (COVID-19) pandemic. and training hub. In the critical first year of the
disaster response and launching the hub less than
The Coronavirus Aid Relief and Economic Security 1 percent of the 30 million small businesses it was
(CARES) Act authorized funds up to $25 million for intended to help used it and only 62 of
SBA to administer a grant to an association or approximately 14,000 resource partner counselors
associations representing resource partner centers and mentors completed any of the training
to establish a single centralized hub for COVID-19 modules.
information.
We also found the grant recipient awarded
The hub was to include two centrally controlled but contracts without assessing the reasonableness of
independent functions. One, it was to serve as an contract costs in accordance with federal
online portal that consolidated resources and procurement requirements.
information available from SBA and multiple
federal agencies for small business concerns. Two, In addition, the grant recipient authorized work
it was to service as a training program to educate that was prohibited for this grant award and did
resource partner counselors and mentors on the not assess whether a vendor was free from
resources available on the hub. conflicts of interest. Also, SBA reimbursed the grant
recipient for pre-award management expenses
Our objective was to determine whether SBA even though the invoice for the expenses showed
provided effective oversight to ensure the portal they were unallowable, unreasonable, and
was implemented in accordance with CARES Act unsupported.
and grant requirements.
We questioned $14.8 million in costs that either did
To meet our objective, we reviewed applicable not adhere to procurement requirements or were
legislation and federal regulations, as well as SBA’s not properly supported.
grant management policies and oversight
procedures. We also reviewed the funding OIG Recommendations
opportunity announcement, notice of award, and We made five recommendations to improve the
the grant recipient’s technical proposal. Finally, we SBA’s oversight of the grant recipient’s
interviewed program officials and the grant implementation of the informational and training
recipient. hub and compliance with procurement
What OIG Found requirements.
We found SBA ensured the grant recipient Agency Response
developed and launched the hub on schedule, the SBA agreed or partially agreed with three of the
hub functioned properly and met the technical five recommendations. The agency plans to
requirements for federal websites. However, SBA implement corrective actions that will align
did not ensure the grant recipient developed and performance goals with agency goals. It will also
implemented an effective marketing and outreach enhance oversight of the grant recipient’s
strategy to ensure the hub successfully achieved compliance with award terms and federal
the legislative purpose of the CARES Act. In requirements.
addition, neither SBA nor the grant recipient set
targets for any of the performance goals. Management disagreed with recommendations 4
and 5. OIG will seek resolution of those
Without performance targets, program officials recommendations in accordance with our audit
could not hold the grant recipient accountable for resolution policies and procedures.
ensuring the hub served as a major source of
Office of Inspector General
U.S. Small Business Administration
DATE: January 18, 2022
TO: Isabella Casillas Guzman
Administrator
FROM: Hannibal “Mike” Ware
Inspector General
SUBJECT: SBA’s Oversight of the Grant Recipient’s Implementation of the CARES Act Resource
Partners Training Portal (Report 22-07)
This report presents the results of our evaluation of SBA’s Oversight of the Grant Recipient’s
Implementation of the CARES Act Resource Partners Training Portal. We considered
management’s comments on the draft of this report when preparing the final report. We
edited recommendation 3 to provide management flexibility when taking corrective
actions. Management agreed or partially agreed with three of the five recommendations in
the report. Two recommendations are pending resolution.
We appreciate the courtesies and cooperation provided by your staff. If you have any
questions, please contact me or Andrea Deadwyler, Assistant Inspector General for Audits,
at (202) 205-6586.
cc: Antwaun Griffin, Chief of Staff, Office of the Administrator
Arthur Plews, Deputy Chief of Staff, Office of the Administrator
Peggy D. Hamilton, General Counsel
Mark Madrid, Associate Administrator, Office of Entrepreneurial Development
Yvette Collazo Reyes, Deputy Associate Administrator, Office of Entrepreneurial
Development
Kate Aaby, Associate Administrator, Office of Performance Planning, and the Chief Financial
Officer
Michael Simmons, Attorney Advisor, Office of General Counsel
Joshua Barnes, Acting Director, Office of Continuing Operations and Risk Management
Tonia Butler, Director, Office of Internal Controls
Table of Contents
Introduction ............................................................................................................................................................ 1
Resource Partner Training Portal Administration ........................................................................... 1
Objective ............................................................................................................................................................ 1
Finding 1: Portal Launched but Not Achieving Intended Purpose .................................................... 2
Grant Recipient’s Digital Marketing Campaign Did Not Reach Majority of Small
Businesses and Resource Partner Counselors and Mentors .................................................... 2
Targeted Performance Goals Needed to Set Performance Expectations and Hold Grant
Recipient Accountable ............................................................................................................................. 3
Recommendations ......................................................................................................................................... 4
Finding 2: Better Oversight of Grant Recipient Needed to Ensure Compliance with Federal
Procurement Requirements ............................................................................................................................. 5
Grant Recipient Did Not Follow Procurement Procedures to Ensure Reasonable Contract
Costs................................................................................................................................................................ 5
Grant Recipient Awarded Prohibited Project Management Services Contract ..................... 6
Recommendations ......................................................................................................................................... 7
Analysis of Agency Response ........................................................................................................................... 8
Summary of Actions Necessary to Close the Report ........................................................................ 8
Recommendation 1 ................................................................................................................................ 8
Recommendation 2 ................................................................................................................................ 8
Recommendation 3 ................................................................................................................................ 9
Recommendation 4 ................................................................................................................................ 9
Recommendation 5 ................................................................................................................................ 9
Appendix I: Objective, Scope, and Methodology .................................................................................... 11
Use of Computer-Processed Data ......................................................................................................... 12
Prior Audit Coverage ................................................................................................................................. 12
Appendix II: Questioned Costs ...................................................................................................................... 13
Appendix III: Management Comments ...................................................................................................... 14
Introduction
The Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted March 27, 2020,
authorized up to $25 million for SBA to establish a single centralized online hub for
Coronavirus Disease 2019 (COVID-19) information.
The hub was to include an online portal to consolidate resources and information available
from SBA and multiple federal agencies about available federal resources related to COVID-19.
The hub’s other intended function was a training program to educate SBA’s resource-partner
counselors and mentors about the available resources.
Resource Partner Training Portal Administration
SBA’s Office of Entrepreneurial Development helps small businesses start, grow, and compete
in global markets through a network of resource partner programs between SBA and nonprofit
entrepreneurial development organizations across the country. The nationwide network of
approximately 13,000 counselors and mentors provide training, counseling, and technical
assistance to small businesses and aspiring entrepreneurs on topics such as how to access
capital or federal contracts, complying with federal and state regulations, business planning,
marketing, and business training.
SBA awarded, and the Office of Entrepreneurial Development administered, the grant for $18.6
million to America’s Small Business Development Centers, which teamed with the Association
for Women’s Business Centers, to develop what was eventually known as the Resource Partner
Training Portal program. The office was also responsible for overseeing the grant recipient’s
plans and activities for developing and launching the portal and ensuring that intended results
were achieved.
America’s Small Business Development Centers and the Association of Women’s Business
Centers represent a nationwide network of SBA’s resource partners that support small
business development and women-owned businesses.
Phase one of portal development included determining which federal agencies to include on the
portal and what information to provide, as well as meeting all the federal technical
requirements for websites. Phase two consisted of developing the curriculum for counselors
and mentors, including the format of the training program and its content.
Objective
The objective of our evaluation was to determine whether SBA provided effective oversight to
ensure the resource partner training portal was implemented in accordance with the CARES
Act and grant requirements.
1
Finding 1: Portal Launched but Not Achieving Intended
Purpose
SBA ensured the grant recipient developed and launched the portal on schedule, the portal
functioned properly and met federal website technical requirements. However, SBA did not
ensure the grant recipient implemented an effective marketing and outreach strategy to
maximize the number of small businesses and resource partner counselors and mentors
obtaining information on federal resources available in the wake of the COVID-19 pandemic.
SBA and the grant recipient also did not set targets for performance goals to assess whether the
portal met the intended purpose.
The portal did not serve as a major source for COVID-19 information and SBA’s resource
partner counselors and mentors generally did not use the training portal. SBA awarded the
grant recipient $18.6 million and less than 1 percent of 30 million eligible small business
concerns used the portal. In addition, a total of only 62 of approximately 13,000 resource
partner counselors and mentors completed any of the training modules.
Grant Recipient’s Digital Marketing Campaign Did Not Reach
Majority of Small Businesses and Resource Partner Counselors
and Mentors
SBA’s grant funding opportunity announcement included a requirement for the portal to serve
as a major source of COVID-19 information for small businesses looking for information on the
internet. SBA also required that the portal provide training to SBA’s resource partner’s
counselors and mentors on the resources available so they could better assist small business
clients.
However, SBA did not ensure the grant recipient effectively planned its marketing and outreach
strategy to ensure the portal served as major source of COVID-19 information for small
businesses. The marketing and outreach strategy did not ensure small businesses were aware
the portal existed or that counselors and mentors completed the training modules.
Although the grant recipient proposed a digital marketing campaign, it did not include search
engine optimization to ensure the portal could be easily found through internet searches. The
grant award terms and conditions required the grant recipient use search engine optimization
to continuously improve the information on the platform to increase its ranking in search
engine results.
SBA approved the grant recipient’s budget, which included $1 million for a digital media
specialist contract to market the portal but without a detailed plan on how funds would be
spent.
The grant recipient used social media posts on Facebook, Twitter, Instagram, and LinkedIn to
promote the information portal and reach resource-partner counselors and mentors. However,
the grant recipient’s approach focused primarily on reaching the 1.1 million small businesses
already within the resource partners’ network and not the other 28.9 million small business
concerns.
Within the first year of the pandemic and implementation of an average of only about 13,000
(less than 1 percent) of the approximate 30 million eligible small business concerns used the
2
information portal at COVID.SB.org to find information on resources available. During that
same period, a total of 62 of 14,000 counselors and mentors completed any of the training
modules.
In February 2021, the grant recipient requested an additional $1.5 million to increase its
marketing and outreach efforts to focus on the 28.5 million small businesses, which the grant
recipient acknowledged had been left out of the original digital marketing and outreach plan.
As of September 2021, SBA had not approved the request.
Targeted Performance Goals Needed to Set Performance
Expectations and Hold Grant Recipient Accountable
The CARES Act required program officials to negotiate the performance goals for the
information and training portal with the grant recipient. 1 In addition, federal goal-setting
standards recommend that performance goals include a performance indicator, target, and a
time period to measure achievement.
Clear performance goals with targets are essential for program officials to accurately assess
and interpret grant recipient’s performance results. However, as we reported earlier in 2021
(Report 21-11), 2 program officials negotiated with the grant recipient to establish performance
goals and indicators for the information portal, but the performance goals were broad, and the
grant recipient did not set targets (See Table 1).
For example, one of the performance goals was “number of counselors and mentors trained”
and the performance indicator for that goal was “number of learning modules started, in
progress, and completed.” Neither SBA program officials nor the grant recipient set a target for
a realistic number of counselors to be trained so progress could be measured.
1 Public Law 116-136, CARES Act, Sec. 1103 (c)(2).
2 Report 21-11: Evaluation of SBA’s Award Procedures for the Coronavirus Aid, Relief, and Economic Security Act Entrepreneurial
Development Cooperative Agreements.
3
Table 1. Portal Performance Goals and Indicators
Programs Performance Goals Performance Indicators
Information Portal Develop and Evolve Online Number of visitors
Platform for Covered Unique Visitors
Businesses Concerns
Page Views
Average Time on Site; Average Time on Individual pages
Bounce Rate
New Page Sessions
Source
Entrance and Exit Locations
Digital Marketing Ad Campaign Performance (return on
investment such as Cost per click, cost per campaign,
conversion rate, etc.)
Training Portal for Develop and Evolve Training Number of Individual Registrations, Active and Inactive
Resource Partner Program for Program Users
Counselors and Counselors Number of Learning Modules Started, In Progress and
Mentors Number of Counselors Trained Completed
Time Spent on Learning Course
Learner Preferences
Learning Satisfaction Ratings
Learning Proficiency
Source: Notice of Awards’ Terms and Conditions, Workplans, and CARES Act, Section 1108
Program officials told us they did not negotiate targets for the performance goals because they
had been focused on awarding the grant quickly to ensure the information resources were
available.
Federal regulations allow program officials to withhold funds when grant recipients are not
meeting the requirements of award. 3 However, because program officials did not establish
performance targets, program officials were unable to effectively monitor the grant recipients’
performance or hold them accountable for low performance results.
Recommendations
We recommend the Administrator require the Associate Administrator for the Office of
Entrepreneurial Development to:
1. Require the grant recipient to enhance its marketing and outreach strategy to include
plans to reach a greater number of small businesses and resource-partner counselors
and mentors. The grant recipient should also set clear performance goals with realistic
targets before SBA awards any additional funds for the COVID-19 resource and training
portal, as required by CARES Act Section 1103(c)(2).
3 2 CFR § 200.338(a).
4
Finding 2: Better Oversight of Grant Recipient Needed to
Ensure Compliance with Federal Procurement
Requirements
SBA did not ensure the grant recipient adhered to applicable federal procurement
requirements when contracting for services to implement the information and training portal.
SBA did not ensure the grant recipient:
• established a basis for whether the costs were reasonable before soliciting and
awarding contracts,
• adhered to award terms and conditions, which prohibited outsourcing regular project
management duties, or
• appropriately vetted the vendor.
In addition, SBA reimbursed the grant recipient $100,000 for pre-award project management
expenses although under the terms of the grant, the expenses were not allowable.
Program officials could have detected the unauthorized project management services and cost
concerns if they had adequately reviewed the grant recipient’s justifications for selecting
contractors. Officials also should have followed SBA standard procedures for reviewing
reimbursement requests. Officials also should have verified that costs were reasonable and
allowable, as well as supported, before reimbursing the grant recipient.
Grant Recipient Did Not Follow Procurement Procedures to
Ensure Reasonable Contract Costs
SBA authorized the grant recipient to use noncompetitive award procedures to purchase goods
and services to develop the portal. Federal procurement standards allow agencies to award
noncompetitive contracts in certain circumstances, such as when requirements are of such
urgency that the need will not permit the time needed to advertise a competitive solicitation. 4
In accordance with those standards, SBA authorized the grant recipient to use noncompetitive
award procedures to purchase goods and services to develop the portal.
Federal procurement standards, however, also require cost or price analysis if the proposed
cost exceeds the simplified acquisition threshold, which was $750,000 at the time of the
awards. The method and degree of analysis depends on the details of the purchase, but as a
starting point, grant recipients are required to develop independent estimates before receiving
bids or proposals. 5 Grant recipients are also required to negotiate profit as a separate element
in the price for each contract 6.
The grant recipient solicited and awarded noncompetitive contracts, one for web development
services for $13, 264,374 and another for media services for nearly $998,400, both of which
exceeded the simplified acquisition threshold. In the grant recipient’s justification sent to SBA
for selecting the contractors, the grant recipient stated the costs for the services were
42 CFR § 200.320(f).
5 2 CFR § 200.323(a).
6 2 CFR § 200.323(b).
5
reasonable based on historical and current cost data for similar services performed under
other federal contracts.
However, the grant recipient did not analyze each cost element included in the contracts,
including the profit margin, to determine whether costs were reasonable, as required. Program
officials told us they did not enforce the requirement because they did not think that the grant
recipient was required to analyze costs under noncompetitive award procedures. As a result,
the grant recipient awarded $14.3 million for the services without any assurances that the costs
were fair, reasonable, or in the best interest of the government (see Appendix II for questioned
costs).
Grant Recipient Awarded Prohibited Project Management Services
Contract
The grant recipient awarded a contract for project management services although the grant
award terms and conditions specifically prohibited a contract award for project management
services. The grant recipient budgeted $500,000 for including acting as the daily project
manager for administrative matters, which was expressly prohibited in the terms and
conditions of the grant.
Initially, the grant recipient authorized the project management work to a vendor with whom
there was an appearance of a conflict of interest because the firm also lobbied for the CARES
Act on behalf of the Association for Women’s Business Centers, who teamed with the grant
recipient for the award. SBA did not ensure the grant recipient evaluated their relationships for
possible conflicts of interest before authorizing work.
Of concern was whether the vendor could give impartial, and objective assistance and advice
when carrying out the project management services.
Program officials had immediately raised concerns about the appearance and potential for a
conflict of interest once they were made aware that the vendor was working on the project.
They requested the grant recipient provide evidence that procedures for identifying and
avoiding conflict of interest had been followed and the factors considered. Program officials
told us they did not know earlier of the potentially compromised vendor because SBA’s
approval before the grant recipient awarding contracts was not required.
The grant recipient eventually stopped working with the vendor and selected another vendor
to provide project management services. But SBA reimbursed the grant recipient $100,000 for
pre-award project management work the vendor claimed to have performed before the grant
was awarded.
According to federal regulations, pre-award costs are incurred before the effective date of the
federal award if the costs are necessary for efficient and timely performance of the scope of
work. Such costs are allowable only to the extent that they would have been allowable if
incurred after the date of the federal award and only with the written approval. 7
7 2 CFR § 200.458.
6
SBA’s standard procedure required program officials to certify that costs incurred were
described in detail and supported. The procedure also required program officials to follow up
on any vague or unclear responses from the grant recipient. 8
SBA reimbursed the grant recipient even though the grant terms and conditions prohibited
contracting for project management services and the vendor’s invoice did not specify actual
work performed. In addition, the grant recipient did not perform an adequate cost analysis to
justify that the vendor’s hourly rates were reasonable. Because the $100,000 pre-award cost
did not meet any of the pre-award requirements, SBA should not have incurred the cost and
should seek reimbursement from the grant recipient.
Recommendations
We recommend that the Administrator require the Associate Administrator for the Office of
Entrepreneurial Development to:
2. Implement procedures for enhanced financial oversight of the CARES Act Resource
Partner Training Portal program to ensure the program office enforces the grant
requirements and follows federal procurement standards when using noncompetitive
contracting options. The requirements include a price or cost analysis for awards that
exceed the simplified acquisition threshold and ensuring the grant recipient adheres to
the terms in the Notice of Award.
3. Evaluate whether the contract costs for web development services and media services
are reasonable and remedy any violations.
4. Assess and recover the amount spent on the unallowable contracted project
management services expenses incurred during the performance of the grant.
5. Recover the $100,000 paid for unallowable pre-award project management expenses.
8 SOP 00 18 01.
7
Analysis of Agency Response
SBA management provided formal comments that are included in their entirety in Appendix III.
After receiving management’s written comments, we followed up with program officials to
clarify their proposed corrective actions and implementation timelines. SBA managers agreed
or partially agreed with three of the five recommendations and their proposed actions resolved
those recommendations.
We did not reach a resolution on recommendations 4 and 5. Management disagreed with the
recommendations and did not provide a detailed explanation to support their disagreement. In
accordance with our audit follow-up policy, we will attempt to reach agreement with SBA
management on the unresolved recommendations within 60 days after the date of this final
report. If we do not reach agreement, OIG will notify the audit follow-up official of the disputed
issues.
Summary of Actions Necessary to Close the Report
The following sections detail the status of the recommendation and actions necessary to close
them.
Recommendation 1
Require the grant recipient to enhance its marketing and outreach strategy to include plans to
reach a greater number of small businesses and resource-partner counselors and mentors. The
grant recipient should also set clear performance goals with realistic targets before SBA awards
any additional funds for the COVID-19 resource and training portal, as required by CARES Act
Section 1103(c)(2).
Status: Resolved.
SBA managers partially agreed with this recommendation. They stated that prior to receiving
the draft report, SBA provided additional funds to the grant recipient to enhance the marketing
and outreach strategy to reach a greater number of small businesses and mentors. The
managers stated they will better define performance goals and targets that support SBA’s
mission. The managers stated they will collect performance data for the initial year to serve as
a baseline for establishing performance goals in any future awards. They plan to update
policies and collect performance data by March 31, 2022. This recommendation can be closed
when the managers provide evidence that they issued updated policies and procedures and
evidence of the performance data they collected to use as a baseline for future grant awards.
Recommendation 2
Implement procedures for enhanced financial oversight of the CARES Act Resource Partner
Training Portal program to ensure the program office enforces the grant requirements and
follows federal procurement standards when using noncompetitive contracting options. The
requirements include a price or cost analysis for awards that exceed the simplified acquisition
threshold. Another requirement ensures the grant recipient adheres to the terms in the Notice
of Award.
8
Status: Resolved.
Management agreed with the recommendation and plans to implement policies and procedures
for enhanced oversight to ensure grant recipients adhere to 2 CFR 200 Procurement Standards
and terms in the Notice of Award. Management plans to implement the policies and procedures
for the enhanced oversight by March 31, 2022. The recommendation can be closed when the
managers provide evidence that they issued policies and procedures for enhanced oversight of
the grant recipient’s compliance with federal regulations and the notice of award.
Recommendation 3
Evaluate whether the contract costs for web development services and media services are
reasonable and remedy any violations.
Status: Resolved.
Management agreed with the recommendation and plans to evaluate whether the contract
costs for web development and media services were reasonable by February 28, 2022 and
remedy any violations. This recommendation can be closed when the managers provide
evidence that they evaluated the contract costs and remedied any violations.
Recommendation 4
Assess and recover the amount spent on the unallowable contracted project management
services expenses incurred during the performance of the grant.
Status: Unresolved.
SBA managers disagreed with this recommendation, stating that their approval was for
allowable, reasonable, and allocable costs for services performed that benefitted the project in
accordance with federal regulations. However, the managers did not provide a detailed
explanation for their disagreement or evidence to support that the questioned payments were
allowable under the terms and conditions of the award. As a result, we maintain our position
that the expenses for contracted project management services were expressly prohibited in the
grant award terms and conditions. This recommendation can be closed when SBA managers
provide evidence that they have determined how much was paid for unallowable project
management services expenses and provide evidence that they have recovered any
unallowable costs.
Recommendation 5
Recover the $100,000 paid for unallowable pre-award project management expenses.
Status: Unresolved.
Management disagreed with this recommendation, stating that the payments approved for pre-
award project management expenses were allowable, reasonable, and allocable, and the
services performed benefited the project in accordance with federal regulations. However, SBA
managers did not provide a detailed explanation for their disagreement or evidence to support
that the questioned costs were allowable under the terms and conditions of the award. As a
result, we maintain our position, that the expenses for contracted project management services
were expressly prohibited in the grant terms and conditions. We also maintain our position
that program officials did not ensure they followed SBA’s policies for approving payments since
the vendor’s invoice did not specify actual work performed. This recommendation can be
9
closed when management provides evidence that the costs were allowable or that they
recovered $100,000 for the unallowable expenses.
10
Appendix I: Objective, Scope, and Methodology
Our objective was to determine whether SBA exercised effective oversight over the Resource
Partner Training Portal to ensure it was developed in accordance with the CARES Act and grant
requirements.
To meet our objective, we reviewed SBAHQ-20-C0118, a grant totaling nearly $18.6 million
awarded to America’s Small Business Development Centers on April 29. 2020, to design and
launch the Resource Partner Training Portal. The period of performance for the grant ends
April 26, 2022.
SBA approved a teaming agreement between America’s Small Business Development Centers
and the Association for Women’s Business Centers to jointly administer the award on May 21,
2020. We reviewed the grant recipient’s progress in meeting the grant requirements as of July
31, 2021 (see Table 2).
Table 2. Approved Grant Budget and Actual Costs as of July 31, 2021
Budget Actual Project Cost
Cost Category
(dollars) (dollars)
Personnel 506,824 88,120
Fringe Benefits 120,624 20,873
Travel 96,000 --
Supplies 52,628 4,041
Contractual 17,670,000 9,312,128
Other 24,872 9,428
Indirect Cost 112,608 35,506
Total 18,583,556 9,470,195
Source: Approved budget for grant award SBAHQ-20-C0118 and grant recipient’s Form A-9, Detailed Expenditure
Worksheet (April 27, 2020, to July 31, 2021)
We reviewed the Notice of Award, special terms and conditions, Work Plan Narrative, quarterly
financial and performance reports, and other applicable documentation. We also reviewed the
requirements in the CARES Act legislation, funding opportunity announcements, notice of
award, and SBA policy directives, and memorandums of the Office of Management and Budget.
In addition, we reviewed award documentation to determine whether SBA officials included all
applicable CARES Act provisions, Public Law 116-136, Sections 1103 (c), in the funding
opportunity announcements, terms and conditions, and other relevant award documentation.
To assess whether the grant recipients complied with federal requirements for procurements,
we reviewed the grant recipient’s policies and procedures for procurement, award
documentation, and reimbursement request. In addition, we interviewed SBA personnel from
the Office of Entrepreneurial Development responsible for administering the grant award and
obtained corroborating information.
We conducted this evaluation in accordance with the Council of the Inspectors General on
Integrity and Efficiency Quality Standards for Inspection and Evaluation. Those standards
require that we adequately plan and perform the evaluation to obtain sufficient and
appropriate evidence to provide a reasonable basis for our findings and conclusions based on
11
our objective. We believe that the evidence we obtained provides a reasonable basis for our
findings and conclusions based on our evaluation objective.
Use of Computer-Processed Data
We relied on computer-processed data in the program office files. We retrieved CARES Act
grant information from the program office files maintained outside of the grant management
system. We tested the reliability of the data by comparing data reported in the quarterly
reports to the source documentation.
In addition, the audit team registered on the Resource Training Portal and completed several of
the training modules to test data reliability of the performance data. We compared source
documentation, such as the number of advisors that had completed each module, against our
results. We verified that credentials of the audit team were listed as completed for each
module.
In addition, we compared the data reported in the quarterly reports to the source
documentation generated from the grant recipient’s data analytics program. We believe the
computer-processed information is reliable for the purposes of this evaluation.
Prior Audit Coverage
Report Title Objective Report Number Final Report Monetary
Date Impact
Evaluation of Determine if SBA Report 21-11 March 30, 2021 N/A
SBA’s Award awarded the CARES
Procedures for Act entrepreneurial
Coronavirus Aid, development
Relief, and cooperative
Economic agreements and grants
Security Act in accordance with
Entrepreneurial applicable federal
Development laws, regulations, and
Cooperative other guidance
Agreements
Risk Awareness Inform SBA of lessons Report 20-13 April 23, 2020 N/A
and Lessons learned and risks
Learned from identified in prior
Prior Audits of audits and reviews of
Entrepreneurial entrepreneurial
Development development
Programs programs
Consolidated Provide SBA Report 19-02 November 8, N/A
Findings of Office management with a 2018
of Inspector summary of systemic
General Reports issue areas identified
on SBA’s Grant by OIG audit and
Programs, Fiscal evaluation reports and
Years 2014–18 identify agencywide
improvements for
grants management
12
Appendix II: Questioned Costs
Questioned costs are expenditures that do not comply with legal, regulatory, or contractual
requirements; are not supported by adequate documentation at the time of the audit; or are
unnecessary or unreasonable. 9 Questioned costs may be remedied by offset, waiver, recovery of
funds, the provision of supporting documentation, or contract ratification, where appropriate.
Table 3. OIG Schedule of Questioned Costs for Resource Partner Training Portal
Description Amount (dollars) Explanation
Unallowable Expenses 14,262,774 Grant recipient’s proposed cost that the grant
recipient did not award in accordance with
federal requirements for procurement
standardsa
Unallowable Expenses 400,000 Grant recipient’s budgeted expense for project
management services is prohibited in
accordance with the notice of award’s terms
and conditions
Unsupported Costs 100,000 Reimbursed pre-award project management
expenses. Invoice indicated the expenses were
either unallowable unsupported, or
unreasonable
Total 14,762,774 --
Source: OIG analysis of grant recipient financial data
a2 CFR § 200.323(a)(b).
9 Inspector General Act of 1978, as amended, section 5(f)(1).
13
Appendix III: Management Comments
SBA Response to Evaluation Report
14
DATE: December 15, 2021
TO: Hannibal “Mike” Ware
Inspector General
FROM: Mark L. Madrid
Associate Administrator, Office of Entrepreneurial Development
SUBJECT: SBA’s Implementation of the CARES Act Resource Partners Training Portal
(Project No. 20012)
Thank you for the opportunity to respond to the draft report entitled, “SBA’s Implementation
of the CARES Act Resource Partners Training Portal (Project No. 20012).” The objective of this
audit was to determine whether SBA provided effective oversight to ensure the portal was
implemented in accordance with CARES Act and grant requirements.
The Office of Entrepreneurial Development (OED) appreciates the role the Office of the
Inspector General (OIG) plays in working with the agency’s management in ensuring our
programs are effectively administered. We appreciate the courtesies and cooperation
extended to us during this audit and the collaborative manner in which our teams worked
together to complete this work.
As the Associate Administrator for OED, one of my priorities has been for our entrepreneurial
development programs to be effective, efficient, and accountable to the American taxpayers.
Prior to this OIG audit, we recognized some of the challenges facing the various programs and
had begun addressing them.
We will continue to strengthen the Agency’s oversight and implementation of OED programs.
My management team and I are committed to ensuring the Agency’s entrepreneurial
development programs serve the Nation’s small businesses to the maximum potential. We
will work expeditiously to ensure the recommendations below are resolved.
Recommendation 1: Require the grant recipient to enhance its marketing and outreach
strategy to include plans to reach a greater number of small businesses and resource-partner
counselors and mentors. The grant recipient should also set clear performance goals with
realistic targets before SBA awards any additional funds for the COVID-19 resource and
training portal, as required by CARES Act Section 1103(c)(2).
Explanation of Proposed Action: The Associate Administrator for OED partially
agrees with this recommendation. Prior to the release of the draft report, the grant
recipient requested funding to enhance its marketing and outreach strategy to
effectively reach a greater number of small businesses and mentors. As a result of the
additional funding, the website had a significant growth in traffic. OED will improve
planning that includes a more comprehensive, integrated, and strategic approach to
defining performance goals and targets that support the SBA’s mission as well as
align with the Agency’s goals and subsequently with OED’s Program goals. Data and
metrics during this initial year will serve as a baseline for establishing targets and
goals, pending the award of future grants.
Status: Target date for final action is March 31, 2022.
Recommendation 2: Implement procedures for enhanced financial oversight for the CARES
Act Resource Partner Training Portal program to ensure the program office enforces the grant
requirements and follows federal procurement standards when using noncompetitive
contracting options. The requirements include a price or cost analysis for awards that exceed
the simplified acquisition threshold and ensuring the grant recipient adheres to the terms in
the Notice of Award.
Explanation of Proposed Action: The Associate Administrator of OED agrees with
this recommendation. OED will implement procedures for enhanced oversight in
accordance with 2 CFR 200 Procurement Standards and ensuring the grant recipient
adheres to the terms in the Notice of Award.
Status: Target date for final action is March 31, 2022.
Recommendation 3: Evaluate whether the contract costs for web development services and
media services are reasonable and remedy any violations, in accordance with 2 C.F.R. §
200.305(b)(6).
Explanation of Proposed Action: The Associate Administrator of OED agrees with
this recommendation. OED will evaluate whether the contract for web development
services and media services were reasonable.
Status: Target date for final action is February 28, 2022.
Recommendation 4: Assess and recover the amount spent on the unallowable contracted
project management services expenses incurred during the performance of the grant.
Explanation of Proposed Action: The Associate Administrator of OED disagree with
this recommendation. OED’s approval was based on 2 CFR § 200.403—405 and 48 CFR
§ 52.216-7 for allowable, reasonable costs, and allocable costs for services performed
that benefited the project.
Status: Resolved.
Recommendation 5: Recover the $100,000 paid for unallowable pre-award project
management expenses.
Explanation of Proposed Action: The Associate Administrator of OED disagree with
this recommendation. OED’s approval was based on 2 CFR § 200.403—405 and 48 CFR
§ 52.216-7 for allowable, reasonable costs, and allocable costs for services performed
that benefited the project.
Status: Resolved.
Respectfully,
Mark L. Madrid, Associate Administrator
Office of Entrepreneurial Development
U.S. Small Business Administration
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