Reducing Mismanagement: GAO Recommendations For Improving The SBA
Summary
The printed record of a March 6, 2024 hearing of the House Committee on Small Business on GAO recommendations for improving the SBA, published as Small Business Committee Document Number 118-043. Chairman Roger Williams presided and questioned whether SBA should again be charged with delivering pandemic-scale aid. Ranking Member Nydia Velazquez cited reports putting potential fraud at $36 billion to $200 billion and asked about SBA's 36 open recommendations, including 10 priority recommendations. GAO Acting Director Courtney LaFountain testified that SBA made or guaranteed more than $1 trillion in pandemic loans and grants and that controls it adopted saved at least $12 billion as of fiscal year 2023. She also addressed the disaster loan program and SBA's late or incomplete reports to Congress.
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Full text
[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
REDUCING MISMANAGEMENT: GAO
RECOMMENDATIONS FOR IMPROVING THE SBA
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
MARCH 6, 2024
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 118-043
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
54-983 WASHINGTON : 2024
-----------------------------------------------------------------------------------
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JAKE ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
CELESTE MALOY, Utah
NYDIA VELAZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MARIE GLUESENKAMP PEREZ, Washington
SHRI THANEDAR, Michigan
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire
Ben Johnson, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Roger Williams.............................................. 1
Hon. Nydia Velazquez............................................. 2
WITNESSES
Ms. Courtney LaFountain, Acting Director, Financial Markets and
Community Investments, U.S. Government Accountability Office,
Washington, DC, accompanied by Ms. Johana Ayers, Managing
Director, Forensic Audits, and Investigative Services, U.S.
Government Accountability Office, Washington, DC............... 4
APPENDIX
Prepared Statement:
Ms. Courtney LaFountain, Acting Director, Financial Markets
and Community Investments, U.S. Government Accountability
Office, Washington, DC..................................... 21
Questions and Answers for the Record:
Questions from Hon. LaLota to GAO and Responses from GAO..... 42
Additional Material for the Record:
None.
REDUCING MISMANAGEMENT: GAO RECOMMENDATIONS FOR IMPROVING THE SBA
----------
WEDNESDAY, MARCH 6, 2024
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:02 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams
[chairman of the Committee] presiding.
Present: Williams, Meuser, Alford, Crane, Maloy, Velazquez,
McGarvey, Scholten, Thanedar, and Davids.
Chairman WILLIAMS. Before we get started I would like to
recognize Congressman Mr. McGarvey from the great state of
Kentucky to lead us in the prayer and the pledge. Stand please.
Mr. MCGARVEY. Our Father we thank you for allowing us to
gather here today. And ask that you be with us as we seek to
serve the people in the way that you see fit with mercy,
justice, with compassion for all. Amen.
Chairman WILLIAMS. Amen.
Mr. MCGARVEY. I pledge allegiance to the Flag of the United
States of America, and to the Republic for which it stands, one
nation, under God, indivisible, with liberty and justice for
all.
Chairman WILLIAMS. Good morning, everyone. I now call the
Committee on Small Business to order. Without objection, the
Chair is authorized to declare the recess of the Committee at
any time. I now recognize myself for an opening statement.
Welcome to today's hearing, which will focus on examining
the Government Accountability Office's recommendations for
reducing mismanagement at the SBA. I would like to start off by
thanking our witnesses for joining us today, thank you very
much, and your attendance is greatly appreciated and we value
your input we will receive.
The SBA was thrust in the national spotlight during the
COVID-19 pandemic. They took an oversized role in the delivery
of pandemic assistance when American entrepreneurs were in
great need. Now that that pandemic is over we have been seeing
all the after action reports on how the agency did during those
stressful days. Unfortunately, the inspector general and other
government watchdogs discovered there were hundreds of billions
of taxpayer dollars stolen by fraudsters. It became abundantly
clear to this Committee, that the COVID-19 pandemic broke the
SBA, and it is time to open the hood and fix what has failed
American taxpayers.
At the start of each Congress, the GAO releases a high-risk
list of programs with significant problems that have high
vulnerability to waste, fraud, abuse, and mismanagement,
unfortunately the SBA still has many outstanding
recommendations on this list that we are going it to hear about
in more detail this morning.
It is imperative that this Committee evaluates not just how
the SBA handled the previous pandemic, but also, what role they
should play in the future. So given their poor track record
with detecting fraud on the front end, I am very skeptical that
this agency should ever be charged with delivering such
quantities of taxpayer dollars ever again. Additionally, since
we were so much fraud that we saw that took place, I would hope
that more of the GAO's recommendations would have been
completed by now, since many of them discuss the integrity and
the fraud controls within the programs. The SBA's inability to
address the open GAO recommendations is a concern over its
ability to aid our nation's job creators. When businesses have
operational issue changes are quickly made to ensure it does
not happen again.
This same entrepreneur spirit does not seem to exist at
this agency which seems to be weighed down by slow-moving
bureaucracy. So look no further than the agency's work from
home policy. Even though the Biden administration's been
pushing hard to get employees back in the offices, the SBA is
still only utilizing around 10 percent of their office space.
This is not only a slap in the face to small business owners
that get dressed and go to work every day, but also undoubtedly
reducing the quality of work from people who might be able to
focus on walking their dog or doing laundry than helping an
entrepreneur in need.
It is my hope that today's conversation can point us in the
right direction regarding what needs to change at the SBA. Our
Committee's job is to be main street's voice at the table and
we will continue to do our best on their behalf.
I now would like to recognize--once again, thank our
witnesses for being here with us and I am very much looking
forward to our conversation.
And with that, I yield to our distinguished Ranking Member
from New York, Ms. Velazquez.
Ms. VELAZQUEZ. Thank you, Chairman Williams, and thanks to
our witnesses for your willingness to testify before our
Committee today. I always look forward to hearing testimony
from GAO, because the information provided is fact-based,
nonpartisan, and focused on improving government services.
Today, I hope we can set aside partisanship, learn more
about your findings and discuss ways to improve the delivery of
services to small businesses. Beginning with the pandemic
relief programs, SBA executed 14 years of lending in 14 days,
to help keep small businesses afloat during the pandemic. These
programs helped millions of businesses across the country.
Unsurprisingly, there were bumps in the road with the
implementation of these new programs. We have learned through
reports that the potential fraud ranges from $36 billion to
$200 billion.
While we may never know the full extent of that fraud, we
do know for certain that the majority of that fraud took place
in the first 9 months of the pandemic. We took that seriously
then, which is why this Committee held a number of oversight
hearings. Due to the work of GAO and the IG we were able to put
internal controls in place to prevent fraud in the PPP and EIDL
programs. And let me tell you, it wasn't easy.
Congress and our nonpartisan agencies like GAO and the IG
had an incredibly difficult time getting basic information from
the Trump administration and the agency was less than
forthcoming with documentation and access to data.
When Administrator Guzman was confirmed, that all changed.
In testimony before the Committee on April 20, 2021, GAO
testified that the new administration was more forthcoming with
information. GAO's May 15, 2023, letter to SBA which delineates
priority open recommendations validates Administrator Guzman's
commitment to implementing GAO's recommendations. In fact,
their 4-year implementation rate was 100 percent for the past 3
years, well above the 77 percent rate government wide. I hope
to learn more about the agency's progress in implementing the
remaining 36 open recommendations, which include 10 priority
recommendations.
In 2021, and at the beginning of the 117th Congress, SBA
was added to GAO's high-risk list due to its mishandling of the
pandemic relief program. Hearing more about SBA's progress in
addressing the areas that left the agency susceptible to fraud
will be useful. Looking to the future, I hope to hear GAO's
perspective on SBA efforts to stand up the Fraud Risk
Management Board to prevent fraud and other challenges facing
the agency.
GAO's priority recommendations can offer a blueprint for
the Committee's oversight work. Through hard work and a true
commitment to bipartisanship, we can confront these challenges
together and improve the effectiveness of the SBA.
Thank you, Mr. Chairman. I yield back.
Chairman WILLIAMS. Yields back.
I will now introduce our witnesses. Our first witness here
with us today is Dr. Courtney LaFountain. Dr. LaFountain is the
acting director of financial markets in community investments
at the U.S. Government Accountability Office right here in
Washington, D.C. At the GAO she has launched the emerging risk
task force to support the agency's ability to provide Congress
with reliable, high-quality information and emerging risks.
She also had led teams that examine the effects of the U.S.
Government's pandemic response, and has been instrumental in
the GAO's work on financial market resilience and stability,
social safety net program design and public finance.
Prior to working at the GAO Dr. LaFountain was an assistant
professor at the University of Texas in Arlington. That is in
my district. Home of the Mavericks.
Ms. LAFOUNTAIN. That is right.
Chairman WILLIAMS. And Dr. LaFountain earned a bachelor of
arts degree in mathematics from Washington University in St.
Louis, and went on to earn her Ph.D. in economics also from
Washington University. She is recipient of the 2022 Arthur S.
Flemming award recognizing outstanding federal employees. I
thank you for joining us today and we look forward to our
conversation.
Our next witness here with us today is Johana Ayers. Ms.
Ayers is the managing director of the forensic audits and
investigative service team at the U.S. Government
Accountability Office here in Washington, D.C. At the GAO, Ms.
Ayers leads and oversees efforts to provide Congress with high
quality forensic audits and investigation fraud, waste, and
abuse, other special investigations and security vulnerability
assessments. Prior to being named managing director, Ms. Ayers
served as director in GAO's defense capabilities and management
team. Ms. Ayers earned her bachelor of arts degree in
international relations and affairs from the American
University and went on to earn her master of arts in
international relations and affairs from George Washington
University. Thank you for joining us today and we look forward
to the conversation we are going to have.
And before we recognize the witnesses, I would like to
remind them that their whole testimony is restricted to 5
minutes in length. If you see the light turn red in front of
you it means your 5 minutes have concluded and you should wrap
up your testimony. And periodically you may, if you go over you
will hear this, and that is to remind you to wind it up, okay?
I now recognize Dr. LaFountain for her 5-minute opening
remarks.
STATEMENT OF DR. COURTNEY LAFOUNTAIN, ACTING DIRECTOR, U.S.
GOVERNMENT ACCOUNTABILITY OFFICE, FINANCIAL MARKETS AND
COMMUNITY INVESTMENTS, ACCOMPANIED BY JOHANA AYERS, MANAGING
DIRECTOR, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, FORENSIC
AUDITS, AND INVESTIGATIVE SERVICES
STATEMENT OF DR. COURTNEY LAFOUNTAIN
Ms. LAFOUNTAIN. Thank you, Chairman Williams, Ranking
Member Velazquez, and Members of the Committee. Thank you for
the opportunity to discuss GAO's work on Small Business
Administration programs.
SBA's mission is to help Americans start, build, and grow
businesses and help communities recover from disasters. Based
on our work, I would like to highlight three areas where SBA
can improve program management and more effectively meet that
mission in the future.
The first area, as you have alluded to, is SBA's pandemic
relief programs. SBA quickly set up programs to respond to the
unprecedented economic shock of the pandemic, and altogether,
it made or guaranteed more than $1 trillion in loans and grants
and assisted more than 10 million small businesses.
However, quick loan approvals came at the expense of
oversight and Fraud Risk Management, especially early in the
pandemic. Our work uncovered a number of weaknesses, such as
reliance on inefficient pay and chase approaches instead of up-
front prevention of fraud and other improper payments. These
early decisions also affected the reliability of SBA's
financial reporting, and its independent financial auditor has
repeatedly identified weaknesses and its ability to support the
numbers on its balance sheet.
Where SBA has addressed our recommendations, it has
significantly strengthened oversight and management of fraud
risks. For example, it put controls in place to prevent funding
for potentially fraudulent or ineligible applications, and
monitor forgiveness of certain loans. As a of fiscal year 2023,
we estimated that taking these steps saved the government at
least $12 billion.
So, we think SBA should keep going. It should continue to
build out data analytics for preventing and detecting fraud and
fully addresses the weaknesses in its financial statements.
With a robust system of internal controls and Fraud Risk
Management, SBA will be better placed to support small
businesses in future emergencies, and in normal operations
while also ensuring that taxpayer dollars are going where they
should.
The second area I will highlight is SBA's disaster loan
program, which offers low-interest loans to small businesses
and households after disaster. For example, SBA made over $7
billion in loans to those affected by hurricanes Harvey, Irma,
and Maria in 2017.
Our reviews of this program uncovered obstacles to those
providing and obtaining disaster recovery assistance. We found
that SBA struggled to operate effectively after the 2017
hurricanes where the power was out, or the phone lines were
down, and especially in rural areas. We also found issues with
clear communication and an uneven playing field for accessing
federal disaster assistance in general.
So, SBA has made a start here. It has improved disaster-
specific action planning and started looking at its operating
risks. But we would urge SBA to take further action. We
recommended that SBA review its lending standards and see if it
can reduce barriers while still managing its credit risk.
We also think SBA should continue working with other
federal agencies to level the playing field for access to
disaster assistance. These steps can improve how communities
recover in the future.
The last area I will highlight cuts across multiple SBA
activities. Our reviews of SBA's 8(a) program, its oversight of
small business research programs, and its efforts to support
veteran-owned small businesses all revealed that SBA wasn't
providing required reports to Congress in a timely or complete
manner. These reports contain key data elements describing
program participation and funding amounts and various outcomes,
and fully addressing our recommendations in this area would
improve SBA's capacity to deliver reports on time, completely,
and provide information needed for effective oversight for
small business programs.
So, this concludes my opening remarks. Thank you again for
the opportunity to speak here today. And my colleague and I
would be glad to take your questions.
Chairman WILLIAMS. Thank you. And we will now move to the
Member questions under the 5-minute rule we talked about. I
recognize myself now for 5 minutes.
The COVID-19 pandemic showed some serious weaknesses within
the SBA which we have already heard. The agency's inspector
general estimates there was over $200 billion in fraudulent
pandemic dollars stolen by criminals. This is unacceptable and
it is a high number, and I am proud of the creative solutions
coming out of this Committee to get some of these funds
returned to the taxpayers. However, I don't want everything we
do to be backwards looking. If there is ever another time where
the SBA needs to deliver funds quickly, I am extremely
concerned that they have yet to institute the proper guardrails
to prevent and detect fraud within these programs.
So, the GAO has also highlighted some outstanding concerns
on this issue. So, I am going to open the floor to either one
of you, both of you: What is the single most important fraud
control measure that the SBA could implement to fix the
remaining vulnerabilities. Johana?
Ms. AYERS. So thank you for that question. I think the key
control that SBA does need to put in place is what you alluded
to, and that is, focusing on prevention. So if I could ask for
one thing for SBA to do, it is to end the reliance on self-
certification. And I will take a second to make a pitch for
data analytics so that SBA can appropriately screen
applications as they come in, flag those that look suspicious,
and quickly take actions to resolve them. And if the fraudster
does happen to receive money, have those analytics in place so
that SBA can readily detect when fraud has occurred. But the
number one thing would be to end self-certification.
Chairman WILLIAMS. You want to add to that?
Ms. LAFOUNTAIN. No, nothing to add, sir.
Chairman WILLIAMS. Okay. All right.
Ms. LAFOUNTAIN. Thank you.
Chairman WILLIAMS. So, one of the high-risk recommendations
has been identified as a major issue for the agency is their
weakness in the audited financial statements. For any small
business owner, complete and accurate financial statements are
necessary to stay in business. They have to be able to track
all the money coming in and out of their businesses. So can,
again, either of you discuss in greater detail some of why this
recommendation remains on the SBA's priority list and what the
agency has yet to do to it.
Ms. LAFOUNTAIN. So, this is a really important issue that
you are raising. As you mentioned, to operate effectively and
efficiently as possible, we need to understand the, you know,
status of the balance sheet, what is happening in SBA. So, what
SBA's financial auditors found were a number of material
weaknesses related to the pandemic relief programs, that
basically boiled down to a lack of documentation and being able
to just support where the numbers on its balance sheet came
from. There are a lot of details to dig into there but that is
the main issue.
Some driving factors that led to this situation were the,
you know, the speed and the size and the newness of the
programs, but what we see here is a real opportunity for SBA to
address the weaknesses in its internal controls around these
programs so that, you know, going forward, they will have a
stronger financial management system.
Chairman WILLIAMS. Just do what they are told, that always
works.
I have a little time left here, can either of you summarize
a recent GAO report on the SBIR programs so this Committee can
ensure it is receiving all the pertinent information on the
program before it expires in a few years.
Ms. LAFOUNTAIN. So, this is another important issue, the
small business research programs. So, SBA's role in the Small
Business Innovation Research is an oversight role, and kind of
a central body for communicating and policymaking, and then
also producing a report to Congress on various outcomes related
to the Small Business Research Programs. Some of the challenges
we have highlighted with those programs are staffing at SBA,
and resource constraints, but also, there's a lot of variety in
the federal agencies from whom SBA is trying to collect
information. But we think there is some opportunities here for
SBA to improve that process, to fully document, you know, a
plan and some policies and procedures to improving the
timeliness with which it can produce that information.
Chairman WILLIAMS. Well, they require so much from the
borrower. They probably need to do the same thing they require
the borrower to do; fill the right paperwork out and fill all
the blanks in and do what they are asked to do.
I now recognize the Ranking Member for 5 minutes of
questions.
Ms. VELAZQUEZ. Thank you, Mr. Chairman. Administrator
Guzman has said that she takes GAO's recommendations seriously.
In your view, is SBA cooperating with ongoing audits and
working to implement the open recommendations in a timely
manner?
Ms. LAFOUNTAIN. So, there is a couple of indicators we can
look at to shed some light on SBA's responsiveness and get a
sense of how seriously they are taking GAO's recommendations.
One is their 4-year implementation rate. In the past few years
that has been high at 100 percent, I think for the past 3
years. And then for a handful of years prior to that, it was
mostly at or higher than the government average of about 77
percent. So, they are on the high end of the distribution
there.
Ms. VELAZQUEZ. Thank you.
Ms. Ayers, could you share your experience with the current
administration, and then discuss the difficulties you face in
obtaining PPP and EIDL data from the previous administration?
Ms. AYERS. Yes, thank you for that question. I think I will
answer it in a little bit reverse order. So throughout 2020, as
SBA was designing and implementing the pandemic relief
programs, we did, as you alluded to in your statement,
encounter significant challenges and delays in receiving the
data and documentation that we needed to help support
congressional oversight of these programs. And those delays and
challenges certainly hindered accountability and transparency
in those programs.
In 2021, we did start to receive large volumes of the data
and documentation that we needed for oversight of those
particular programs. And I think on the whole, we have
continued to see cooperation and responsiveness from SBA
officials at all levels in response to our request, not only on
the pandemic relief programs, but across the range of programs
that SBA is responsible for.
Ms. VELAZQUEZ. Thank you, thank you.
Ms. Ayers, in 2015 GAO developed a Fraud Risk Framework to
help agencies manage their risk both in normal operations and
in emergencies. In 2016, the Fraud Reduction and Data Analytics
Act required the Office of Management and Budget to incorporate
these leading practices into guidelines for agencies. What
steps did the Trump administration's SBA take to implement
these practices?
Ms. AYERS. So unfortunately between 2015 when we released
the Fraud Risk Framework and its leading practices, and 2020,
at the start of the pandemic, SBA had not taken action to
implement the various controls outlined in the Fraud Risk
Framework for preventing, detecting and responding to fraud in
a strategic manner. And as a result, when the pandemic began,
SBA was not well-positioned to manage the heightened fraud risk
that emerged.
Ms. VELAZQUEZ. Would you say that if these practices were
in place could some of that fraud have been prevented?
Ms. AYERS. Yes.
Ms. VELAZQUEZ. Okay. What steps has the Biden SBA under the
leadership of Administrator Guzman taken to implement this
recommendation?
Ms. AYERS. SBA has taken a number of actions that are in
alignment with the Fraud Risk Framework. For example, it has
designated an entity to lead its antifraud efforts, the Fraud
Risk Management Board. It has also begun conducting fraud risk
assessments in alignment with leading practices. And it has
also developed antifraud strategies for some of programs, and
that can serve as a blueprint for going forward.
Ms. VELAZQUEZ. Thank you. Are there areas where SBA can
improve?
Ms. AYERS. I certainly think there is always room for
improvement. I think in the fraud risk management space,
specifically what SBA has done to date does represent important
steps forward. But SBA needs to build on those in terms of
broadening across the range of programs that SBA is responsible
for administering, and then ensuring that Fraud Risk Management
culture is engrained throughout the agency. From not only the
administrator, but to the lowest-level employee and also to the
contractors and service providers that SBA works with.
Ms. VELAZQUEZ. Thank you. In the fiscal year 2024 budget,
President Biden recommended $47 million for the Office of
Inspector General. Unfortunately, we have been operating under
a continuing resolution that provides level funding. How does
underfunding the inspector general hinder their ability to
recover fraudulent money?
Ms. AYERS. So I believe IG Ware has testified before this
Committee on the importance of his office receiving full
funding so that it can carry out the necessary investigations
and audits, not only related to the pandemic relief programs
and the fraud that occurred there, but across the range of SBA
programs.
Ms. VELAZQUEZ. Thank you. I yield back.
Chairman WILLIAMS. Lady yields back.
I now recognize Representative Crane from the great State
of Arizona for 5 minutes.
Mr. CRANE. Thank you, Mr. Chairman and thank you for
holding this hearing today. So am I correct that there was
about $200 billion worth of fraud that we have--that we have
calculated with the PPP loans? Is that correct?
Ms. AYERS. So the SBA inspector general has estimated that
fraud in the PPP and COVID-19 EIDL programs was $200 billion,
yes.
Mr. CRANE. Okay. Are we going after any of that money? Is
the SBA going after any of that trying to recuperate any of it?
Ms. AYERS. So I will start off by saying the SBA OIG under
Inspector Ware's direction has an aggressive effort to conduct
investigations and refer cases for prosecution. SBA has also
taken steps to review previously approved loans under the
pandemic relief programs and to flag those that are potentially
fraudulent and refer those to the SBA OIG for further
investigation.
Mr. CRANE. Ms. Ayers, you said that one of the things you'd
recommend in a future crisis is prevention mechanisms. Is that
correct?
Ms. AYERS. Yes.
Mr. CRANE. To make sure that vetting was done on the front
end?
Ms. AYERS. Yes.
Mr. CRANE. Is that correct?
Ms. AYERS. Yes.
Mr. CRANE. Do you think that that is happening right now at
the SBA?
Ms. AYERS. So in terms of pandemic relief programs.
Obviously at this point, the funds have been distributed and we
did see numerous indicators early in the pandemic that the
proper vetting was not being done. And as a result, fraudsters
did get money that they should not have.
Mr. CRANE. That is not the question I asked, ma'am.
Ms. AYERS. In terms of the current programs----
Mr. CRANE. Yeah, has anybody been fired, ma'am, to your
knowledge?
Ms. AYERS. Not to my knowledge, no.
Mr. CRANE. So why would any of these prevention mechanisms
be put in place if nobody's been held accountable?
Ms. AYERS. We have seen, based on our discussions as well
as information that SBA has provided to us, we do see several
indications that preventative measures are being put in place
and that SBA has an understanding that these measures do need
to be in place, you know, not only looking back at the pandemic
relief programs, but also looking towards, for example, the
regular programs it has such as the 7(a) and the regular EIDL
program. So they are recognizing the importance of having
preventative controls put in place.
Mr. CRANE. Okay. So you are saying that they are putting
measures in place, but still, you acknowledge that nobody yet
has been held accountable at SBA. Is that accurate?
Ms. AYERS. I would say, again, to my knowledge, I am not
aware of anyone being fired.
Mr. CRANE. Do you think that is a problem, Ms. Ayers? I
mean, we are talking about $200 billion, right?
Ms. AYERS. Yes. I believe what was experienced at SBA was a
systemic issue. As I discussed previously, there were not,
across the agency, a range of mechanisms that had been put in
place to manage the fraud risk. So it really very much was a
systemic issue as opposed to the fault of one or two
individuals.
Mr. CRANE. Thank you. Is it true that SBA only utilizes
about 10 percent of their office space? Either one of you.
Ms. LAFOUNTAIN. I am not aware that we have looked at that.
Mr. CRANE. Okay. All right, moving on.
Can you repeat the issues you found with SBA's failure to
support our veteran business community? I think that was you,
Ms. LaFountain.
Ms. LAFOUNTAIN. Thank you. So, this recent work identified
two issues: One is that SBA is required by statute to give
special consideration in its lending programs to veteran-owned
small businesses.
Mr. CRANE. Are they doing that, ma'am?
Ms. LAFOUNTAIN. They pointed to some areas where they--
where veterans are benefiting from some of their lending
programs, but they couldn't point to how SBA is giving them
special consideration, no.
Mr. CRANE. So by statute, they are required to do that and
they are not doing that?
Ms. LAFOUNTAIN. That's right.
Mr. CRANE. Why do you think that is, ma'am? Do you think
this current administrator doesn't care about veterans or
statute? If you had to take a guess, why aren't they, by
statute, doing what they are supposed to to help veteran small
business owners?
Ms. LAFOUNTAIN. That is an important question. When we had
talked to them, they cited a lack of awareness. And so one
thing that we would look SBA to do to remedy this situation is
put policies and procedures in place so that doesn't happen in
the future.
Mr. CRANE. A lack of awareness?
Ms. LAFOUNTAIN. Yes, sir.
Mr. CRANE. I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Representative Davids from the great State
of Kansas for 5 minutes.
Ms. DAVIDS. Thank you, Chairman Williams. And thank you to
you and the Ranking Member both for holding this hearing today.
Thank you to our witnesses from the Government Accountability
Office. I definitely appreciate the work that you all do. I
just want to touch on a couple of things here.
In August of 2022, GAO published a report on Tribal
economic development. And since coming to Congress, I have
definitely been diligently working to improve access to capital
and entrepreneurship opportunities in general for Native
communities. And I, of course, am very excited and thrilled
that we just passed out of the House my bill to improve the
Office of Native American Affairs at the Small Business
Administration. And actually, I got the chance to work with my
colleague, Mr. Crane, on that bill. So with that in mind, I am
curious if you could speak to the recommendation that you made
regarding SBA and the analysis to improve their Tribal economic
development assistance, and what progress you've seen made to
date or additional issues that I need to be aware of?
Ms. LAFOUNTAIN. I apologize, I do not know those details.
So, we would be glad to connect with our experts and follow up
with you on those topics.
Ms. DAVIDS. Okay. Thank you. We will also follow up with
probably some additional written questions to get into more
specifics. We don't get a ton of time with 5 minutes here.
So the second thing I was hoping to touch on is GAO's
review of the disaster recovery activities that happen at--at
various agencies and at SBA specifically. I know that your
office recently released a report about the SBA disaster
assistance in rural communities. And certainly in Kansas, we
are absolutely facing a number of unique challenges. On the
eastern side of the State, folks are often hit with severe
storms and flooding that can have just a devastating impact on
our entrepreneurs. And then on the western side of the State we
are dealing with drought and, you know, that is threatening
crop yields and this sort of thing, which we are seeing rising
costs at grocery stores.
So I am just curious if you have a chance to expand on your
recommendations that you made to SBA regarding the disaster
assistance outreach, and then the challenges that that program
is facing with regard to the rural communities that they are
trying to serve.
Ms. LAFOUNTAIN. So, this is a really important issue. So
one thing we observed in our work on the disaster loan program
is that SBA doesn't have--doesn't fully have a grasp on some of
its operating risks for doing business in areas after a
disaster, like, physically, in areas after a disaster,
especially in rural areas it can run into things like downed
power lines or poor cell phone service that can just inhibit
its ability to deliver the services that its providing or that
it should be providing. So, one thing we have recommended is
that they take a look at their operational risks and come up
with plans for mitigating those risks, including in rural
areas.
Ms. DAVIDS. Did you want to add anything?
All right, thank you so much. And we will follow up with a
few written questions regarding a Tribal economic development
activities. Thank you and I yield back.
Chairman WILLIAMS. Yields back.
I now recognize Representative Meuser from the great State
of Pennsylvania for 5 minutes.
Mr. MEUSER. Thank you very much, Mr. Chairman. I appreciate
being here. Thank you to or witnesses very much.
So I want to continue with the Chairman again speaking
about earlier related to fraud issues, billions and billions
from, as you well know EIDL and the PPP, and not assigning any
blame, but we certainly want to avoid this in the future. So
what is the GAO looking at? What have you determined? What have
you assessed, and have you offered any--I apologize I haven't
seen them--written ideas for solutions to keep this from
happening again in the future?
Ms. AYERS. Yes, thank you for that question. So we have a
body of work going back to, you know, the early days of the
pandemic where we made a number of recommendations to SBA to
enhance controls related to the various pandemic relief
programs. And many of those recommendations are tied to our
Fraud Risk Framework that we issued in 2015 that outlines
leading practices for managing fraud risk. And as I previously
noted, prior to the pandemic, SBA had not been acting on those
leading practices. I am very pleased that in recent years, SBA
has started taking action to implement those leading practices.
And going forward, as we think about future programs, SBA needs
to continue implementing the leading practices from the Fraud
Risk Framework so that it is better positioned to manage its
fraud risk during normal times, and certainly during
emergencies when risks are heightened.
Mr. MEUSER. So I said I am not assigning blame, you are
kind of assigning blame to the previous SBA. And if you look at
the numbers, there was just as much fraud in the PPP and the
EIDL from this administration as the previous administration.
So what has been done? Back to my question. Okay, if you write
a paper, that is wonderful. That is a wonderful bureaucratic
action to take, was that followed up, was there any
improvements actually done, such as new IT systems? New
procedures? Bringing in people from the private sector? Credit
card companies that are so much better at detecting and keeping
fraud, because it's their money that they are losing? It is
not, you know, the American taxpayer dollars which sometimes
doesn't get the respect that it deserves. Okay, does the GAO
actually do anything besides write reports?
Ms. AYERS. So we have evaluated the actions that SBA did
take to address fraud as it emerged during the pandemic, and we
did find that the controls that were added such as data
analytics, enhanced screening of applications as they came in,
and then doing post award reviews did help prevent fraud and
help more readily detect it.
I do think it is fair to say based on our work as well as
the work of the inspector general that while there was progress
made, there were, at times, plans that SBA put into place that
weren't always followed. For example, SBA, for a period of
time, had not been running applications through Treasury's Do
Not Pay system to flag people--applicants--with potential
problems. SBA then began running applications through the Do
Not Pay system. But in some cases, for reasons that are not
necessarily clear to us or the IG they made decisions not to
run all of the applications through that portal.
Mr. MEUSER. Thank you. Could we see some of the ideas and
the plan that you have to improve? Do you have that in outline
form or, in some way, an action plan for minimizing fraud?
Ms. AYERS. So we have outlined the steps that we think SBA
does need to take and that is outlined in the Fraud Risk
Framework. It is up to SBA to develop that action plan to see
how it will carry it out. And we have seen action plans that
SBA has developed related to Fraud Risk Management and we will
continue to follow up with them to see the status of the
implementation, to make sure that it isn't just a plan on the
shelf gathering dust, but it is resulting in real change.
Mr. MEUSER. That is great. I yield back, Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back. And we are
going to kind of go into a little mini second round here, we
haven't asked all of our questions.
This Committee has been investigating the SBA's Community
Navigator's pilot program. Now this program essentially is a
duplicative of existing SBA programs such as Small Business
Development Centers. However, it is much less effective. This
leads to a waste of taxpayers' dollars. So, can you all discuss
how the GAO is looking at this program and what you are
finding?
Ms. LAFOUNTAIN. So, these are important issues that you are
raising and we do have ongoing work looking at the Community
Navigator program. Because it is ongoing work, we don't have
any findings to share at this time, but we would be glad to
when that work is completed.
Chairman WILLIAMS. When do you think it will be completed?
Ms. LAFOUNTAIN. I think our goal is to complete it later
this fall but let me double-check that detail.
Chairman WILLIAMS. Yeah, we need to follow through so we
can see what you have found, okay?
All right. Next go back to Congressman Meuser for his
second round of questions----
Mr. MEUSER. Thank you again, Mr. Chairman. Thanks again for
being with us.
So during a GAO review, agencies seem to, don't know for
sure, appease the GAO recommendation, and turn around and
revert back to the old ways of implementing the recommendations
in an inadequate manner. It is imperative that, in this case,
the SBA, commits to addressing the GAO's concerns in a lasting
and effective way. However, audits of internal SBA controls and
processes paint a picture that the agency struggles with
developing such adequate processes that protect taxpayer
dollars. With that in mind, how does the GAO look at the long-
term effectiveness of the SBA's actions in closing out these
recommendations, and how can that improve?
Ms. LAFOUNTAIN. So, this is another important issue that
you are raising. We do have a robust recommendation follow-up
procedure. As agencies are trying to address our
recommendations, we are applying the same scrutiny and
evidentiary standards and professional skepticism that we apply
when we write the original reports. After a recommendation has
been closed, then we rely on working with our congressional
partners to see if additional follow up needs to happen, and we
need to open another audit.
Mr. MEUSER. Okay. You don't have an easy job, I can see
that, but it can also be an extremely important job that can
really make a difference.
Let me ask you if I can about the Community Navigator. Is
this a point of focus for the GAO? Are you aware of some of the
discrepancies and problems that some small businesses have
brought to our attention regarding not being part of a targeted
group, and therefore not receiving some of the benefits or
access? Is this something that your--something you are looking
at?
Ms. LAFOUNTAIN. So, we do have ongoing work looking at the
Community Navigator program. And like I said, because it is
ongoing work, we don't have findings yet to share with you, but
you are raising some important issues and we--you know, we
would be glad to work with the Committee to look into them
further.
Mr. MEUSER. Great, yeah. My understanding is it is very
important and it probably doesn't need a lot to necessarily
improve in the manner it was designed to perform.
We--I will just ask, is the SBA prepared, in your view, the
next major national disaster in dealing with the various
responsibilities they have in such a situation?
Ms. AYERS. I certainly think it is fair to say that they
are better prepared today than they were in 2020. But I do
think there is more action that they can and should take. This
includes implementing our open recommendations related to Fraud
Risk Management generally, and then also the recommendations we
have related to the disaster programs, as well as
recommendations from the inspector general. So there are
actions that they should continually be taking to improve and
be better prepared in this area.
Mr. MEUSER. Okay. Do you have a team at the GAO that
focuses on, or a couple of people anyway, that focuses on the
SBA exclusively?
Ms. LAFOUNTAIN. So, the Financial Markets and Community
Investment Team where I am currently situated, we do a lot of
reviews of various SBA programs. But other teams across the
agency have also looked at what SBA is doing, and yeah, in
various aspects of its operations.
Mr. MEUSER. Can you point to one area that you got
involved, showed them how it could be improved and it actually
did get improved?
Ms. LAFOUNTAIN. An area that springs to mind is the
oversight of the PPP and EIDL programs. We had some
recommendations for them to develop and implement an oversight
plan, and they did that.
Mr. MEUSER. Okay. Thank you. I yield back, Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Representative Scholten from the great
State of Michigan for 5 minutes.
Ms. SCHOLTEN. Thank you so much, Mr. Chair. Thank you to
our witnesses for being here today. Though our numbers might be
a little bit sparse, your testimony is critical for the work
that we do every single day.
One positive trend I observed is that the SBA's 4-year
implementation rate for GAO recommendations since 2021 is 100
percent. It is no surprise that the SBA met their goals under
the leadership of Administrator Guzman who I have had the
pleasure of hosting twice now in our district, as well as in
conjunction with a visit by Vice President Harris just a couple
weeks ago. This question is for both Dr. LaFountain and Ms.
Ayers: With Administrator Guzman coming to testify in the next
couple of weeks, what component of what we have discussed here
today would you like us to share with the Administrator?
Ms. LAFOUNTAIN. I can start. I think what is really
important is for SBA to keep going where it has made
significant progress and addressing our recommendations related
to the pandemic relief programs, so there is more work to be
done, and we would like to see them move forward there. And
also, move forward with the work they are doing on the disaster
loan program, and leveling out the playing field for disaster
recovery assistance.
Ms. AYERS. And I would simply add to that that we hope and
expect that SBA continues to broaden and deepen its Fraud Risk
Management efforts across the agency implementing the lessons
learned and the experiences that it had during the pandemic so
that it continues to be better positioned for the next disaster
as well as its everyday operations.
Ms. SCHOLTEN. So continuing to keep going on the programs
that are successful and that are delivering, but also
broadening and deepening areas of need. What elements do you
think are essential from us as Members of Congress to ensure
that those things can happen?
Ms. AYERS. Well, I think events like today's hearing and
the continued oversight. And the one aspect I would mention is
that stressing to agencies like SBA that it is not just enough
to deliver the funds quickly. I know at various times, that is
the appropriate focus, but it also needs to be stressed that
when you are delivering funds quickly, it is not an either/or.
You can manage fraud risk; you can protect taxpayer interest
while also delivering funds quickly. And that is the message
that I believe SBA is starting to understand in a way it did
not before. But I think that pressure and that message needs to
stay on SBA, as well as any number of other federal agencies.
Ms. SCHOLTEN. Yeah. Thank you. Anything to add on that?
Ms. LAFOUNTAIN. I would just add that there are some themes
in our recommendations that we highlighted today. And so not
just focusing on addressing a single recommendation for a
single program. But if there are lessons learned that can have
positive spillovers across the agency, that seems like a great
opportunity.
Ms. SCHOLTEN. Yeah. My second question, the SBA's delivered
over $1 trillion to small businesses through economic relief
programs during the pandemic, as we have talked about. Part of
this Committee's role is to exercise oversight. You referenced
that in your response, Ms. Ayers, of the SBA and ensuring the
agency is being a good steward of those taxpayers' hard-earned
dollars. If there were to be another crisis, like the pandemic
in 2020, is the SBA better prepared to handle it today than it
was 4 years ago? And is it in any better position to combat
fraud?
Ms. AYERS. I would say yes to both questions.
Ms. SCHOLTEN. What specifically do you think puts it in
that position?
Ms. AYERS. So SBA has, in the last couple of years, taken
actions that implement controls for better managing fraud risk
to prevent, detect, and respond to fraud in a strategic way. It
had been either not paying sufficient attention to fraud or
handling it in an ad hoc manner. It is now better positioned to
do so strategically and that is, again, where I believe it does
need to broaden and deepen those efforts across the range of
programs. It may be a completely different program that is
called on next time to provide assistance and relief. And that
program needs to build on what SBA has done to date and not
start over, as we saw PPP and COVID EIDL having to do.
Ms. SCHOLTEN. Yeah, that is very helpful. Thank you very
much. I yield back.
Chairman WILLIAMS. Lady yields back.
And I now recognize Representative Maloy from the great
State of Utah for 5 minutes.
Ms. MALOY. Thank you, Mr. Chairman. Thank you both for
being here. One of the nice things about being a really new
Member of Congress is I get to go last on these things and back
clean up. So I get to ask the fun questions.
I read through the report and I read through the materials
for the hearing and some of the things that GAO's finding in
your report are very upsetting. And I know that you are part of
the executive branch and you have a responsibility for making
sure that the SBA is accountable, but we as the legislative
branch also have a responsibility to hold the executive branch
accountable and clean up waste, fraud, and abuse. And it looks
like you are working with us to do that, and I appreciate that.
But one of the things I noticed is that these SBA programs are
failing to help some of the groups they are supposed to help,
like Veterans, Women Owned Small Businesses, or WOSBs, and
rural areas in the wake of disasters.
Rep. Scholten, who just asked questions, and I have a bill
to try to address some of the loopholes in the WOSB program and
make it cleaner, more accountable and more transparent. I want
more accountability, you want more accountability. What have
you not had a chance to talk about today that this Committee,
or Congress can do, to help make SBA more accountable, more
transparent and make sure the dollars we are spending are
actually helping small businesses in America?
Ms. LAFOUNTAIN. Well, a thing that springs to mind, and
thank you for the question, is having a hearing like this where
we get to talk about how the issues that we are finding at SBA,
how they have an effect, again where they have made progress,
but where they really need to keep going.
Ms. MALOY. So we have your report, is there anything other
than your report that we can use to help make sure that
happens?
Ms. LAFOUNTAIN. It is a great question. In addition to the
report we have provided, we have--we would welcome or actually
we would welcome talking to you all about what your interests
and priorities are and seeing where we can do work on those
topics. Actually, that would probably be my answer to that
question. Thank you.
Ms. MALOY. Okay. Thank you. I am going to have my staff
reach out, because I would like to work with you on how we can
make these programs work better for veterans, women-owned small
businesses, and rural communities. Those are really important
constituencies for me. Ms. Ayers?
Ms. AYERS. So I would echo what my colleague said. And,
while the focus of my work has largely been on fraud and Fraud
Risk Management, the programs you mentioned are ones that, you
know, we can talk to you about as well through that lens. And
so, we are here to support you as a legislative body, and in
fact, I will mention that we actually are part of the
legislative branch ourselves.
Ms. MALOY. Thank you for that correction.
Ms. AYERS. And we are happy to support you and your
colleagues in your oversight role in a nonpartisan, non-
ideological, fact-based way. And so, yes, we have the reports
that we issue, but we also have a wealth of knowledge and
expertise that goes behind that. And we are always happy to
meet with you or your staff to discuss issues of interest.
Ms. MALOY. Okay, I am going to have any staff reach out to
you as well because I am also interested in reducing fraud. I
mean, that is something that is nonpartisan that we all want to
get under control so work with us on that, let's come up with
some ideas to close these loopholes and accountability.
With that, Mr. Chairman, I yield back the remainder of my
time.
Chairman WILLIAMS. Yields back.
I now recognize Representative Thanedar from Michigan, the
great State of Michigan for 5 minutes.
Mr. THANEDAR. I think I am going to pass.
Chairman WILLIAMS. Okay. I next recognize Representative
Alford from the great State of Missouri for 5 minutes.
Mr. ALFORD. Thank you, Mr. Chair, I appreciate it. Thank
you for our witnesses being here today. This is a very
important meeting. You know, one of the core duties of
Congress, I don't have to tell you, is to conduct oversight of
the executive branch. We have to make sure that the agencies
are using their budget sufficiently to complete their duties
for the American people. A key tool of Congress center
oversight of the executive branch is the Government
Accountability Office, an independent nonpartisan government
agency with the legislative branch.
Right now, the SBA has a staggering 41 open recommendations
from the GAO leading to the conclusion on the high-risk list.
One glaring recommendation the SBA has not adopted is to meet
reporting requirements in a timely manner. And right now, many
of the SBA's Veterans' business outreach centers are not
submitting their quarterly or yearly reports, and the SBA does
not even have a process to make sure it happens.
Another major problem is the SBA's minimal return-to-work
policy. When we tried to visit the Small Business
Administration just down the street here to conduct
congressional oversight, our request was repeatedly denied.
Sitting Members of Congress were not allowed in the building.
This is why we introduced the Congressional Access to
Bureaucratic Office, or the CABO Act. The CABO Act would
require any agency headquarters to allow sitting Members of
Congress and their staff in their buildings.
As a result of introducing the CABO Act, we were finally
allowed in, and led a delegation with Chairman Williams to the
SBA and met with the Administrator Guzman. We were later told,
however, that the administration had condensed the staff to two
floors that we were allowed on to make it appear that the
workplaces were active, and it still looked meager. Rows and
rows of empty desks. Look, we need bureaucrats to get back to
work. It is time, COVID is over. Let's get back to work for the
American people.
Dr. LaFountain, how often do you work from home or phone it
in?
Ms. LAFOUNTAIN. I make sure I am in the office----
Mr. ALFORD. Why is that?
Ms. LAFOUNTAIN.--as needed.
Mr. ALFORD. Why do you feel a need to be in the office?
Ms. LAFOUNTAIN. So, this question about telework and work
from home is actually--it is a really important issue. There is
a lot of open questions about the effect of telework.
Mr. ALFORD. Just answer the question, why do you feel a
need to be in the office?
Ms. LAFOUNTAIN. I--for some of my work tasks it is good to
be in person----
Mr. ALFORD. Why?
Ms. LAFOUNTAIN.--to interact with my colleagues in person.
Mr. ALFORD. To interact, to build camaraderie, to get
things done. Ms. Ayers, how about you?
Ms. AYERS. Yes, I similarly am in the office as needed for
in-person meetings. And with my colleagues to help build
culture and camaraderie.
Mr. ALFORD. Culture and camaraderie. You know the federal
government operates more than half a billion square feet of
offices space. It has cost taxpayers $7 billion to operate.
According to a September 2023 study, 17 of the 24 federal
agencies uses an estimated average of 25 percent or less of
their capacity. The SBA is estimated at 10 percent of their
office space. This is a waste of taxpayer money. Down at the
Department of Ag, 2 million square feet, they won't let us in
either. We are getting in there. They have about 11 percent of
the people showing up for work.
This is my schedule today. I am running ragged but I'm here
working for the American people earning my pay, 16 appointments
I have today. I can't do this from home. Why are people in the
federal government not at their desk working for the American
people? Doctor.
Ms. LAFOUNTAIN. So, we have looked at the effects of
telework and work-from-home policies in a recent report. And
its--the effects of telework are really uncertain on
productivity.
Mr. ALFORD. Well, if it is uncertain, then let's go with
what we know works, get them back to the office. Let's start
this community of workers together so we can have this
camaraderie and collective thought and practice and get
something done. Why are we waiting on studies to figure out if
this works as continued telehealth--telework?
Ms. LAFOUNTAIN. You are raising some really important and
timely issues, and we would be glad to work with you to find a
way to look into this further.
Mr. ALFORD. Well, thank you. I know that is a bit of a
rant. But I am really upset that we even had to file this act
that sitting Members of Congress cannot go down to the offices
that we have oversight. And then when we get down there, it is
staged to make it look like an act of workforce is down there.
I look forward to Administrator Guzman coming here and
answering some of these questions. Thank you for being here. I
appreciate your service to our nation. With that, I yield back,
Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back. I now
recognize Representative Thanedar from the great State of
Michigan for 5 minutes.
Mr. THANEDAR. Thank you, Chairman. I appreciate your
consideration here. I appreciate both your organization and how
bipartisan it is. And in this partisan environment, it is
refreshing to see that. You know, I am a small business owner.
I have owned small businesses for 25 years, and I have had some
really good luck with SBA, able to get things like 504 loan
programs so that can help my business succeed.
I also had some frustrations with the red tape and the
paperwork and getting things approved. What immediate steps can
SBA take, in your mind? Maybe give me two, three things that
they could do to improve its effectiveness and ability to serve
the business community?
Ms. LAFOUNTAIN. So, one perspective on this based on our
recent work is that SBA could improve its capacity to turn in
some of its required reports in a timely manner. There are some
themes there where SBA has, for a variety of reasons, faced
some obstacles providing outcome information about its
programs. And we think that if it addresses our recommendations
in this area, it would provide more information to Congress and
others who want to effectively oversee how its programs are
performing.
Mr. THANEDAR. Thank you. And, particularly, I represent
Detroit, Michigan, a 78 percent African American city, we have
some amazing entrepreneurs very, very successful. But many of
my small businesses are struggling. They are struggling. They
don't have the time to go through the paperwork and be able to
access SBA services. Often, they are unaware of what is
available. Now, SBA has indicated they want to work with your
organization. But are there any else where there is
disagreement between your organization and SBA, and if so, what
are those?
Ms. LAFOUNTAIN. So, SBA has generally agreed with the
recommendations that we have made, particularly, the ones we
have highlighted today. Yeah, there may be a detail here and
there that they push back. However, we have found that they are
willing to take steps to address our recommendations and are
doing that. Yeah.
Mr. THANEDAR. Any disagreement? Is there total agreement,
100 percent, or can you identify any areas where you are
struggling?
Ms. LAFOUNTAIN. I think what I would say here is that some
of the things we have asked SBA to do are not easy. And the
recommendations will take time to address, and may need some
sustained attention. So as an example, we have asked SBA to
work with other agencies on improving access to federal
disaster assistance. And that, you know, looking to see, is the
playing field uneven? Do you have the right data and analytics
to look into this issue? If you find a gap, do you have the
right structures in place to address it? And that is a big
thing to do. It is also an extremely important thing to do. So,
we understand that it takes time to address the issues we have
raised, but we see them--we do see them trying.
Mr. THANEDAR. All right. Thank you. And in terms of--under
the Biden administration, I see there is a lot more--Latino
ownership has increased. African American ownership of small
businesses have increased. We have seen more women-owned
businesses flourishing. But we still need to do more to help,
especially the Black and Brown community in terms of, you know,
being able to--their ability to achieve the American Dream.
What specific steps would you recommend to SBA to help improve
access for the minority businessowners?
Ms. LAFOUNTAIN. So here I will just say that you are
raising some really important questions, and we would love an
opportunity to work with you and the Committee to look into
them further.
Mr. THANEDAR. All right. Thank you, and my time is up.
Chairman WILLIAMS. The gentleman yields back. And I would
like to thank our witnesses today for your testimony and for
appearing before us.
Without objection, the Members have five legislative days
to submit additional materials and written questions for the
witnesses to the Chair, which will be forwarded to the
witnesses. I ask the witnesses to please respond promptly. And
if there is no further business, without objection, the
Committee is adjourned.
[Whereupon, at 11:14 a.m., the Committee was adjourned.]
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