Letter to The Honorable Isabella Casillas Guzman, Administrator, U.S. Small Business Administration (March 23, 2023)

Summary

In this March 23, 2023 letter, the Committee on Small Business tells Administrator Isabella Casillas Guzman of the Small Business Administration that the Committee is investigating the Community Navigator Pilot Program. The letter states that the Committee is concerned that continued funding of the Program is an irresponsible use of taxpayer funds and that between FY21 and FY22 Navigators spent a combined $131,631,000. It says SBA's budget justification reports that the program helped to start 422 new businesses in those two years. The letter requests a staff level briefing no later than March 29, 2023, and lists document and information requests covering January 1, 2021 to the present, due no later than April 7, 2023. The signature block names Roger Williams, Chairman.

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Full text

                                         March 23, 2023


The Honorable Isabella Casillas Guzman
Administrator
U.S. Small Business Administration
409 3rd Street S.W.
Washington, D.C. 20416

Dear Administrator Guzman:

       The Committee on Small Business is investigating the Community Navigator Pilot
Program (the Program). The Committee is concerned that the continued funding of this
Program—which was created to improve access to pandemic related funding—is an
irresponsible use of taxpayer funds.1 We write today to request a staff level briefing and request
additional documents and information.

        The Program was created under the American Rescue Plan Act (ARPA) directed the
Small Business Administration (SBA) to “make grants to, or enter into contracts or cooperative
agreements with, private nonprofit organizations, resource partners, States, Tribes, and units of
local government to ensure the delivery of free community navigator services to current or
prospective owners of eligible businesses in order to improve access to assistance programs and
resources made available because of the COVID–19 pandemic.”2 Yet instead of bringing the
program to a close at the end of the pandemic, President Biden’s FY2024 allocates nearly $42
million more for the Program.3

        One of the stated goals of the Program is to service counties without access to any type of
SBA Resource Partner/service center.4 However, SBA Resource Partners/service centers are also
eligible for program funding.5 Funding centers that are already eligible for funding under other
programs does not help meet the goal of serving “those who have historically not benefitted from



1
  The American Rescue Plan Act, Pub. L. No. 117–2, title V, § 5004, 135 Stat. 90 (2021).
2
  Id.
3
  U.S. SMALL BUS. ADMIN., FY 2024 CONGRESSIONAL BUDGET JUSTIFICATION, FY 2022 ANNUAL PERFORMANCE
REPORT, 96 (Mar. 13, 2023).
4
  U.S. SMALL BUS. ADMIN, COMMUNITY NAVIGATOR PILOT PROGRAM FREQUENTLY ASKED QUESTIONS. 3 (Oct. 28,
2021).
5
  U.S. SMALL BUS. ADMIN., OFFICE OF ENTREPRENEURIAL DEVELOPMENT, CNP-2021-01, COMMUNITY NAVIGATOR
PILOT PROGRAM NOTICE OF FUNDING OPPORTUNITY, 10 (May 25, 2021).
The Honorable Isabella Casillas Guzman
March 23, 2023
Page 2 of 3

the Agency’s services.”6 In addition, it seems that the Program has failed to provide ample
assistance to small businesses at a reasonable cost to the taxpayer. Between FY21 and FY22
Navigators spent a combined $131,631,000.7 According to the SBA’s budget justification, the
program helped to start 422 new businesses in those two years, and “serviced” 16,312 “new
clients meaning the cost per new business started to the taxpayer was $311,921.80. The cost per
client serviced was $8,069.58 during this two-year period.8

        Further, the Committee seeks clarity regarding the selection process for grantees as well
as methods of oversight used to determine whether Spokes, the local organizations funded to
work in targeted communities, are properly using Program resources. Specific metrics for what
constitutes an appropriate Spoke are unclear, with vague qualifiers for Spokes such as “trusted,
culturally knowledgeable” and “credible.”9

        The American people deserve to know that their tax dollars are being properly used to
support the mission of the SBA which is to "aid, counsel, assist and protect, insofar as is
possible, the interests of small business concerns" and not for superfluous or duplicative
programs. We therefore request the following documents and information, covering the time
period January 1, 2021 to the present, as soon as possible but no later than April 7, 2023:

    1. All the score cards used by the Technical Evaluation Panels to evaluate Hub applicants,
       including those which were not selected for the Program.

    2. All documents and communications regarding the staffing process for the Technical
       Evaluation Panels.

    3. All documents detailing metrics as to what constitutes a suitable Spoke organization.

    4. List all small businesses receiving Program resources and their affiliated Spokes.

    5. All the documentation all applicants were required to submit under 4.1.2 of the Notice of
       Funding Opportunity.

    6. All SBA Form 3516 (or current equivalent) submissions.

    7. All documents and communications regarding the staffing (including selection process,
       total headcount, and territory of each) of the community impact liaisons who are tasked
       with assuring accountability and oversight measures to ensure proper distribution and use
       of Program funding.


6
  U.S. SMALL BUS. ADMIN., FY 2024 CONGRESSIONAL BUDGET JUSTIFICATION, FY 2022 ANNUAL PERFORMANCE
REPORT, 96 (Mar. 13, 2023).
7
  Id.
8
  Id.
9
  U.S. SMALL BUS. ADMIN., FY 2024 CONGRESSIONAL BUDGET JUSTIFICATION, FY 2022 ANNUAL PERFORMANCE
REPORT, 96 (Mar. 13, 2023).
The Honorable Isabella Casillas Guzman
March 23, 2023
Page 3 of 3

      8. All documents and communications related to the methodology of/criteria used by
         community impact liaisons in determining whether Program funding had been properly
         distributed and spent, as well as all resulting work product.

      9. All documents and communications related to the decision to allow SBA Resource
         Partners/service centers to be eligible for Program funding.

      10. Identify every SBA Resource Center that has received Program funding, along with the
          amount.

      11. The percent of small businesses served through the Program that are in an area without
          reasonable access to any type of SBA Resource Partner/service center.

      12. Copies of all Spoke entity Commitment Letters and Funding Distribution Agreements
          provided by Hubs to the SBA.

      13. A copy of the implicit bias training that the Awards Panel underwent before its Hub
          evaluation and selection process.

      14. A list of all any entities that were awarded funding and participated in voter registration
          activities.

        In addition to the above requests, we request you reach out to schedule a staff level
briefing as soon as possible but no later than March 29, 2023.

        To schedule the delivery of responsive documents or ask any related follow-up questions,
please contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee
on Small Business has broad authority to investigate “problems of all types of small business”
under House Rule X. Thank you in advance for your cooperation with this inquiry.

                                                Sincerely,


                                                _________________________
                                                Roger Williams
                                                Chairman
                                                Committee on Small Business

cc:      The Honorable Nydia M. Velasquez, Ranking Member
         Committee on Small Business


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