SBA Agency Financial Report FY 2009 — Supplementary Information: Strategic Plan FY 2008-2013
Summary
This supplement to the SBA's Agency Financial Report FY 2009 reproduces the U.S. Small Business Administration Strategic Plan for Fiscal Years 2008 - 2013, with a Message from the Administrator dated September 28, 2007 and signed Steven C. Preston, Administrator. The plan states four strategic goals: expand America's ownership society, particularly in underserved markets; provide timely financial assistance to disaster-affected homeowners, renters, nonprofit organizations and businesses; improve the economic environment for small business; and ensure management and organizational excellence. It lists four core values and says America's small businesses number some 25.8 million. The text describes financial, management and contracting assistance and says the SBA does not make direct loans to businesses except for the disaster loan program.
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“SBA Agency Financial Report FY 2009 — Supplementary Information: Strategic Plan FY 2008-2013.”
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Attached CD – Supplementary Information
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
U.S. Small Business Administration
Strategic Plan
Fiscal Years 2008 - 2013
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
For more information on SBA programs visit: http://www.sba.gov/ (En Espańol:
http://www.sba.gov/espanol/) or contact the SBA Answer Desk (Centro de
Información de la Agencia Federal para el Desarrollo de Los Pequeños Negocios):
1-800-U-ASK-SBA (1-800-827-5722)
Send e-mails to: answerdesk@sba.gov
Answer Desk TTY: (704) 344-6640
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
U.S. Small Business Administration
2008 – 2013 Strategic Plan
Table of Contents
Message from the Administrator ....................................................... 1
Overview ........................................................................................... 3
Mission ............................................................................................3
Vision ..............................................................................................3
Core Values......................................................................................3
SBA Background ................................................................................ 4
Strategic Goals and Objectives .......................................................... 6
Strategic Goal 1 – Expand America’s ownership society, particularly in
underserved markets. ........................................................................7
1.1. Improve access to SBA programs and services by small businesses
to drive business formation, job growth, and economic activity .............8
1.2. Support entrepreneurship in markets with higher poverty and
unemployment, and in our military community ................................. 11
1.3. Ensure stewardship and accountability over taxpayer dollars
through prudent financial portfolio management and oversight. .......... 14
Strategic Goal 2 - Provide timely financial assistance to homeowners,
renters, nonprofit organizations and businesses affected by disaster....... 17
2.1. Respond quickly, efficiently, and effectively to disaster applicants 18
Strategic Goal 3 – Improve the economic environment for small business.
....................................................................................................20
3.1. Protect, strengthen and effectively represent the Nation's small
businesses to minimize the regulatory burden. ................................. 21
3.2. Foster a more small-business-friendly environment ................... 23
Strategic Goal 4 – Ensure management and organizational excellence to
increase responsiveness to customers, streamline processes, and improve
compliance and controls ................................................................... 25
4.1. Deploy a skilled workforce capable of executing high quality
programs. ................................................................................... 26
4.2. Provide a safe and secure information system environment to
support business decisions and Agency operations ............................ 28
4.3. Provide financial and performance management services to support
efficient and effective program delivery. .......................................... 29
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Appendices ...................................................................................... 30
Performance Planning ...................................................................... 30
Communication and Accountability.....................................................30
Evaluations .................................................................................... 30
External Factors .............................................................................. 32
Organization Chart .......................................................................... 35
Organization Map ............................................................................ 36
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Message from the Administrator
September 28, 2007
I am pleased to present the U.S. Small Business Administration’s (SBA)
FY 2008 – 2013 Strategic Plan. This plan describes the direction that the
Agency will take as it moves ahead to expand opportunities for our nation’s
small businesses and to assist victims of Federally-declared disasters.
The SBA’s recent history reflects challenge and opportunity. The 2005 Gulf
hurricanes challenged the agency’s disaster lending operation like never
before, but they provided the impetus for the implementation of major
program improvements that will benefit all future disaster victims seeking
SBA assistance. The SBA’s outstanding loan portfolio has grown more than
fifty percent over the past five years. That program growth represents
expanded opportunities for small business entrepreneurs but also reflects a
challenge for the SBA to maintain its operations and oversight responsibilities
during such a dynamic time. The SBA’s workforce has also undergone a
major transformation in recent years as many functions have been
centralized and many roles and responsibilities have been realigned. This too
has been both a challenge for the agency, but also an opportunity to
modernize processes and ensure our workforce is well equipped for the job.
This strategic plan reflects the agency’s efforts to meet these fundamental
challenges head on and to capitalize on the opportunities they represent.
The SBA, and the goals, objectives and strategies outlined in this plan are
guided by four core values. We are:
1. Outcomes Driven. We will clearly define the outcomes we are targeting
and ensure that our programs, processes and policies are aligned in
achieving them.
2. Customer Focused. We serve people and will be responsive to their
needs, both in the services we provide and in how we deliver them.
3. Employee Enabled. Our people extend the hand of service to
Americans every day, and we must ensure they have the tools, the
training, and the support to be effective.
4. Accountable, Efficient and Transparent. We have a bedrock obligation
to the taxpayer to manage efficiently, invest capital prudently, and be
open and honest about our results.
The four strategic goals outlined for this FY 2008 – 2013 period are not
significantly different from those of recent SBA planning cycles. The SBA’s
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SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
core objectives of effectively supporting the Nation’s entrepreneurs and
providing assistance to victims of disaster remain unchanged. However, the
means for achieving our goals reflect the lessons learned through
experiences in serving our customers across the nation and from listening to,
and working with, our employees at all organizational levels. During the
period covered by this plan, the SBA’s four strategic goals are to:
1. Expand America’s ownership society, particularly in underserved
markets.
2. Provide timely financial assistance to homeowners, renters, nonprofit
organizations and businesses affected by disaster.
3. Improve the economic environment for small business.
4. Ensure management and organizational excellence to increase
responsiveness to customers, streamline processes, and improve
compliance and controls.
As this plan reflects, we continue to focus on the impact of our programs and
our effectiveness in managing our operations. Across the SBA, we are
driving improvements in customer service and simplifying our programs to
make them more accessible to small businesses and our many resource
partners. Our focus on underserved markets will ensure that entrepreneurs
in distressed areas have access to SBA services. We will also continue our
work to reduce the regulatory burden experienced by those who seek to
create and grow small businesses in the U.S. We will serve disaster victims
with an improved reserve of trained and prepared staff and resources, and a
set of new procedures described in our recently completed Disaster Recovery
Plan. The availability of that plan, and the execution of the processes
described in it, ensure that we are better prepared than ever before for
disasters even larger than the 2005 Gulf Coast hurricanes.
The challenges before us are significant. But I have great confidence in our
people and their commitment and service. In the year that has passed since
I was appointed SBA Administrator, I have spoken with hundreds of our
employees, small business owners and counselors, trade associations, and
lenders and investors. These discussions, our plans and our results to date
tell me that we are on the right track. Through our employees and the
improvements we are making within the agency, I have confidence that our
plans are achievable, and that the small businesses, disaster victims, and
people of our nation are well served by the SBA.
Sincerely,
Steven C. Preston
Administrator
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Overview
Mission
Mission The mission of the Small Business Administration (SBA) is to
maintain and strengthen the Nation’s economy by enabling
the establishment and vitality of small businesses and by
assisting in the economic recovery of communities after
disasters.
________________________________________________
Vision
Vision The U.S. Small Business Administration supports and
enables an environment of opportunity for entrepreneurs
and their small businesses.
Core Values
Core Values Outcomes Driven. We will clearly define the outcomes we
are targeting and ensure that our programs, processes and
policies are aligned in achieving them.
Customer Focused. We serve people and will be
responsive to their needs, both in the services we provide
and in how we deliver them.
Employee Enabled. Our people extend the hand of service
to Americans every day, and we must ensure they have the
tools, the training, and the support to be effective.
Accountable, Efficient and Transparent. We have a
bedrock obligation to the taxpayer to manage efficiently,
invest capital prudently, and be open and honest about our
results.
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SBA Background
America’s small businesses play a vital role in creating opportunities for
individuals, employees, and economic growth. Research completed
comparing firm size data from the U.S. Census Bureau also has indicated
that in times of economic downturns, small businesses play a leading role in
economic recovery. America’s small businesses — some 25.8 million strong
— are a major sector of the Nation’s economy. They account for half of the
country’s gross domestic product, create 60 to 80 percent of the net new
jobs, and produce 13 to 14 times more patents per employee than do large
firms. It is the role of the SBA to help foster an environment where
entrepreneurship can flourish.
In the Small Business Act of July 30, 1953 (the Act), Congress created the
SBA, whose function is to “aid, counsel, assist and protect, insofar as is
possible, the interests of small business concerns.” The Act also stipulates
that the SBA will ensure small businesses a “fair proportion” of government
contracts and sales of surplus property.
The SBA is continuing its longstanding efforts to bridge the competitive
opportunity gaps that small entrepreneurs face. The SBA is especially
focused on serving the many areas of the country that have significantly
higher unemployment and lower income levels than the Nation’s averages.
The SBA also provides assistance in market areas that are traditionally
underserved.
The SBA plays a vital role in helping businesses and families recover from
disasters. Through its disaster assistance program, the SBA provides
affordable, timely and accessible financial assistance to homeowners,
renters, large and small businesses, and non-profit organizations. The SBA
seeks to maximize the timely restoration of property to these individuals
while continuing to improve its service delivery.
Those wishing to go into business, small businesses and disaster victims are
the customers of the SBA.
The Agency works with its lenders, SCORE, Small Business Development
Centers (SBDCs), Women’s Business Centers (WBCs), and partner networks
in service to its customers. Distribution of SBA products and services to
customers is primarily accomplished through resource partners.
The SBA tracks its progress in achieving strategic and production goals and
holds leaders of all program and support offices accountable for delivering
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the desired results by integrating program performance with resource
allocation.
The goals and objectives on which this Strategic Plan is based are derived
directly from specific statutory mandates and from elements of the
President’s Small Business Agenda. SBA operations are guided by the
principles and criteria contained in the President’s Management Agenda to
promote more efficient and effective government programs.
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Strategic Goals and Objectives
The SBA’s four strategic goals will be achieved through an assertive agenda
to expand opportunities and improve the environment for small business. By
working to reduce the costs of regulation, serving disaster victims, spending
tax dollars wisely and expanding business opportunities at home and abroad,
small businesses, and the employees that depend on them, will flourish.
Strategic Goal Objectives
1 Expand America’s ownership 1. Improve access to SBA programs
society, particularly in and services by small businesses
underserved markets. to drive business formation, job
growth, and economic activity.
2. Support entrepreneurship in
markets with higher poverty and
unemployment, and in our
military community.
3. Ensure stewardship and
accountability over taxpayer
dollars through prudent financial
portfolio management and
oversight.
2 Provide timely financial 1. Respond quickly, efficiently and
assistance to homeowners, effectively to disaster applicants.
renters, nonprofit organizations
and businesses affected by
disaster.
3 Improve the economic 1. Protect, strengthen and
environment for small business. effectively represent the Nation's
small businesses to minimize the
regulatory burden.
2. Foster a more small-business-
friendly environment.
4 Ensure management and 1. Deploy a skilled workforce
organizational excellence to capable of executing high-quality
increase responsiveness to programs.
customers, streamline 2. Provide a safe and secure
processes, and improve information system environment
compliance and controls. to support business decisions and
Agency operations.
3. Provide financial and
performance management
services to support efficient and
effective program delivery.
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Strategic Goal 1 Strategic Objectives
Expand America’s 1. Improve access to SBA
ownership society, programs and services by
particularly in small businesses to drive
underserved markets. business formation, job
growth, and economic
activity.
Stra
tegic Goal 1 – Expand America’s ownership society, 2. Support entrepreneurship in
particularly in underserved markets. markets with higher poverty
and unemployment, and in
our military community.
3. Ensure stewardship and
accountability over taxpayer
dollars through prudent
financial portfolio
management and oversight.
Small businesses represent an essential mechanism by which individuals
enter the economic and social mainstream of American society. The needs of
a small business change as the entity goes through the various stages of its
lifecycle, from a possibility to a vibrant, successful business. The SBA
supports these needs through financial, management, and Federal
contracting assistance 1 .
Financial Assistance Having access to capital resources is vital to the success
of small businesses. The SBA offers financial assistance through loan
guaranty and investment programs. Except for the disaster loan program,
the SBA does not make direct loans to businesses but guarantees loans made
by its partners (lenders, certified development companies, and micro lending
institutions). The guaranty allows business owners to obtain funds that they
would not otherwise be able to obtain. The SBA also provides financial
assistance by providing surety guarantees for construction bonds.
Management Assistance The SBA provides business management assistance
across the full range of the small business life cycle including developing a
business plan essential to starting a small business; advice and counsel on
managing and growing a business; assistance in identifying appropriate
1
Additional information on these programs is available at http://www.sba.gov/index.html or by
calling 1-800-U-ASK-SBA (1-800-827-5722).
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sources of capital; and finally, on continuity of operations and exit strategies
when transferring, selling or liquidating a business.
Contracting Assistance The SBA creates the size standards to define small
businesses and creates regulations to promote Federal procurement practices
for small businesses. The Agency assists small businesses in obtaining
Federal contracts by explaining the government procurement process and
helping small businesses identify subcontracting and procurement
opportunities. The SBA also assists other Federal agencies in achieving their
small business contracting goals.
The means and strategies used to achieve the ownership society goal and its
associated objectives are described below.
1.1. Increase access to SBA programs and services by all small businesses to drive business formation,
job growth, and economic activity
1.1. Improve Means & Strategies
access to SBA The SBA offers a variety of loan guaranty products for
programs and various uses, maximums, and maturities including:
services by small
• The 7(a) loan program, the Agency’s most flexible
businesses to drive
program, which finances a variety of general
business
business purposes.
formation, job
growth, and • The 504 loan program which provides long-term,
economic activity. fixed-rate financing to small businesses to acquire
real estate, machinery or equipment for expansion
or modernization.
• The Microloan program which provides short-term
loans of up to $35,000.
In addition, the SBA assists small businesses in acquiring
venture capital, and surety bonds. The latter allow small
business contractors to compete for and win project
contracts. The SBA uses a variety of delivery methods and
lending partners, including Certified Development
Companies, Small Business Investment Companies, and
the Surety industry to make these products available for
small businesses.
As important as the acquisition of capital, many small
businesses need business management assistance to guide
them in strengthening their business performance and
sustainability. For this reason, the SBA operates the Small
Business Training Network (SBTN), a virtual campus
providing quality, targeted online training and self-
assessment tools to meet the information needs of
prospective and existing small business owners.
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Additionally, assistance is provided in one-on-one
confidential settings, classrooms or in 24/7 online venues
throughout the SBA’s nation-wide system of:
• Full service SBA district offices in every state.
• U.S. Export Assistance Centers located in major
metropolitan areas throughout the United States.
• SCORE chapters in over 800 locations.
• SBDCs in all 50 states and U.S. territories, with more
than 950 locations across the country.
• A national network of community-based Women's
Business Centers to primarily assist socially and
economically disadvantaged women start and run
successful businesses.
The SBA assists small businesses in obtaining Federal
contracts by creating the regulations on small business
procurement, explaining the government procurement
process and helping small businesses identify subcontracting
and procurement opportunities. The SBA also assists other
Federal agencies in achieving their small business
contracting compliance mandates.
In the area of financial assistance, the Agency will aid small
businesses needing capital to start, sustain, or expand their
business by offering products not often available in the
market as well as making it easier to do business with the
SBA through operational excellence and enhanced customer
service.
To support this objective, the Agency requires products
needed by small businesses that can be delivered by the
SBA’s partners efficiently and effectively. The Agency is
concentrating on product evaluation and development,
improved product delivery through strategic marketing of
SBA products and enhancements to the delegated lender
programs.
The SBA will evaluate the Agency’s delegated lender
programs to determine what changes should be made to
maximize these relationships, and ensure clarity and
accountability to meet SBA expectations for lender
performance. For example, SBA plans to better link a
lender’s performance on its SBA loan portfolio, the quality of
its guaranty purchase packages, and a lender’s usage of
SBA loan programs particularly as it relates to lending in
underserved areas.
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The Agency is also improving lender communications
through establishing a lender roundtable to obtain feedback
from lenders on products, services and other activities,
issuing updated, simplified Standard Operating Procedures
that reflect current operations and requirements in a format
focused on lender delivery of SBA products, and developing
a communications vehicle directed specifically to lenders
and finance partners.
In the area of operations, the SBA has embarked upon a
comprehensive business process re-engineering effort for all
operating centers that utilizes Six Sigma/Lean principles.
(Six Sigma is a set of practices intended to systematically
improve processes by eliminating defects. A defect is
defined as nonconformity of a product or service to its
specifications. Lean, or lean manufacturing, is a process
management philosophy known for its focus on reduction of
process wastes in order to improve overall customer value.)
The focus of the re-engineering is on streamlining operating
procedures by concentrating on value-added activities that
improve productivity including faster response times, quality
and customer service.
The Agency offers specialized programs for women,
minorities, Native Americans, veterans, international trade
and rural development. The SBA’s Center for Faith-Based
and Community Initiatives seeks to give faith-based and
other community organizations the knowledge base they
need to help people in their communities start or expand
their own small businesses. It also supplies information on
grants and access to training, but does not make the actual
funding decisions.
The SBA is expanding its online presence to meet the
evolving demands of its customer base by improving and
broadening its Web-based delivery capabilities and by
investing in and supporting the expansion of the Web-based
delivery capabilities of its resource partners. Most SBA
counseling and training activities are now available online.
The SBA will continue to utilize new technologies to provide
the best possible knowledge solutions to its small business
customers.
The Agency continues to address the issue, raised by the
SBA Inspector General, of miscoding large businesses as
small businesses in the Federal contracting process.
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Addressing this remains a top priority along with other
initiatives to improve the ability of small businesses to
obtain government contracts.
Linkage to Annual Performance Plans – Success will be
measured by using the following indicators:
• Loans Funded
• Number of businesses assisted
• Number of businesses created
• Efficiency measures including improved processing in
operating centers
• Jobs created/retained
• Annual value of federal contracts awarded to small
businesses
• Amount of capital infusion
• Graduation rates from SBA finance programs
• SBIC Licenses issued
• Surety bond volume
• Export sales supported by loans.
________________________________________________
1.2. Support entrepreneurship in markets with higher poverty and unemployment,
and in our military community
1.2. Support Means & Strategies – The SBA seeks to significantly
entrepreneurship increase successful small business ownership and growth in
in markets with underserved markets and in the military community. The
higher poverty and SBA will do this by focusing its efforts to increase the
unemployment, number of small businesses in underserved markets and the
and in our military military community that receive SBA assistance. The SBA
community defines “underserved markets” as communities with high
unemployment and high levels of poverty.
The SBA will include underserved market targets in our
programs wherever appropriate:
• The Agency will focus on goal achievement where
shortfalls have existed in the past, particularly in
Federal contracting by improving our contracting
support services to small businesses and Federal
agencies.
• The SBA will better integrate our resource partners
(SBDCs, SCORE and WBCs) and establish customer-
focused strategic alliances with special emphasis on
Web-based delivery of technical assistance.
• We will increase loan volume through a deeper
penetration of America’s underserved markets,
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developing targeted delivery vehicles and focused
outreach efforts.
In addition, the SBA administers programs specifically
designed to assist small disadvantaged businesses (SDBs)
and businesses located in underserved markets:
• The 8(a) Business Development program prepares
eligible small disadvantaged firms to compete for, and
win, federal contracting set-asides and to receive
sole-source contracts.
• The Small Disadvantaged Business Certification
Program lists small businesses that meet eligibility
criteria on an on-line registry of certified firms that
contracting officers and large business prime
contractors use for identification of potential
suppliers.
• The HUBZone Program stimulates economic
development and creates jobs in underserved urban
and rural communities by providing Federal
contracting preferences to eligible small businesses.
The SBA also targets underserved markets and the military
community in its financial assistance programs. While all
SBA loan and finance programs are available to all eligible
small businesses, the SBA is developing incentives for SBA’s
lending and finance partners to meet the needs of
underserved areas. The following initiatives are underway
to better reach underserved markets and the military
community:
• Patriot Express – This loan program is targeted at our
military community, including veterans, reserve
components, active duty military that are in the
Transition Assistance Program, and the current
spouses of these individuals. The program provides
the SBA’s highest allowable guarantees and lower
interest rates while allowing for streamlined
processing. If the program proves to be successful it
will be made permanent.
• Community Express – This program is a pilot loan
program focused on better serving underserved
communities. It also provides SBA’s highest
allowable guarantees while allowing for streamlined
processing. The program encourages lenders to
make credit available in those markets with limited
access to financing. As a result, the program
supports small businesses in these areas, economic
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revitalization of urban and rural areas, and creation of
employment opportunities.
In addition to these loan programs, the SBA has a multi-
faceted approach to meet the needs of underserved markets
that includes enhanced/focused marketing and new delivery
vehicles.
• Rural Markets – The SBA is focusing loan products
and programs to meet the needs of rural markets.
An enhanced approach to marketing and other efforts
will be undertaken.
• Inner City/Urban Markets – Like the rural market,
inner city/urban markets have unique needs. The
SBA is focusing loan products and programs to meet
the needs of this market.
• Community Banks – Community banks are major
providers of credit to rural and inner city markets.
Within existing loan products and programs, a
community bank portal will be established to provide
these banks with the support and service needed to
allow these banks to better lend to underserved
markets.
• Certified Development Companies (CDCs) - CDCs are
nonprofit corporations set up to contribute to the
economic development of its community by working
with the SBA and private-sector lenders to provide
504 financing to small businesses. The SBA will
continue to streamline and automate the 504 loan
process.
In addition to the lending programs, the Agency is also
focusing on increasing the reach of Small Business
Investment Companies into underserved areas and markets.
Research and analysis are underway to identify the best way
to achieve this objective by leveraging the existing
debenture program as well as identifying other alternatives.
SBA held a symposium in FY2007 focusing on how to include
more underserved areas and markets in the SBIC program.
Some suggestions received included supporting scholar and
fellow programs and additional research to better
understand the financing needs for investments in
underserved areas.
The SBA will encourage collaboration and establish
partnerships between the Agency’s resource partners and
grassroots faith-based and secular community organizations
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(FBCOs). This collaborative approach includes engaging
FBCOs at the local level to:
• Promote and raise awareness about SBA services and
programs;
• Recruit and refer clients to SBA programs; and
• Reach-out to entrepreneurs and small business
owners in underserved markets.
Linkage to Annual Performance Plans – Success will be
measured by using the following indicators:
• Jobs created/retained
• Annual value of Federal contracts
• Efficiency measures for processing, servicing and
purchase centers
• Number of businesses created
• Increase in 8(a) graduate companies
• Amount of capital infusion
• Loan Approvals in identified underserved areas.
________________________________________________
1.3. Ensure stewardship and accountability over taxpayer dollars through
prudent financial portfolio management and prudent oversight.
1.3. Means & Strategies – As the largest gap lender for small
1.3. Ensure
Ensure
stewardship businesses, the SBA necessarily accepts more risk than a
stewardship andand
accountability conventional lender. While the Agency must determine the
accountability over
over
taxpayer level of risk it will tolerate, it must do so within the context
taxpayer dollars
dollars
through of its mission and its programs’ structures. To do so
through prudent
prudent
financial requires an effective lender and portfolio oversight program
financial portfolio
portfolio
management to mitigate the increased risk of financial loss to the SBA
management and and
oversight. and the taxpayer.
prudent oversight.
The SBA’s approach to portfolio monitoring and lender
oversight is typical of “best practices” among major lenders
as attested to in Government Accountability Office reports.
Likewise, the SBA’s exercise of “due diligence” in monitoring
grant recipient programs and financial compliance with
Federal regulations, and OMB circulars, has proven highly
effective as represented by high scores on OMB’s Program
Assessment Rating Tool (PART).
The SBA’s loan portfolio totaling $83 billion as of May, 2007
represents a major stewardship responsibility. To ensure
the SBA manages this responsibility, the Agency utilizes the
Loan and Lender Monitoring System (L/LMS), a state-of-the-
art portfolio monitoring system that incorporates credit
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scoring metrics for portfolio management purposes. This
system is recognized as a promising practice in federal
credit management.
Additionally, the SBA uses risk ratings as a major evaluation
factor in assessing SBA lenders. Risk ratings are the
primary basis by which less active lenders are evaluated,
while at the same time providing a supplementary
assessment and a monitoring tool for the most active SBA
lenders. Lenders have access to their risk ratings and
performance metrics through the Lender Portal, allowing
them to take the initiative to address data quality and
performance issues in order to improve their risk ratings.
The SBA will continue to enhance its oversight processes for
portfolio and lender management. As part of this effort,
guidance on lender oversight, supervision and enforcement
will be issued by the Agency. Such guidance will include
regulations as well as internal procedural documents. The
objective is to implement a transparent and consistent
approach to oversight, supervision and enforcement that is
clearly understood by lenders.
As L/LMS continues to be leveraged for oversight and
portfolio management purposes, more involved data
analysis for performance trends will be conducted. The
results of these analyses will be used for more effective
management of the SBA‘s loan portfolios as well as to assist
in identifying irregularities that may be an indication of
inappropriate or fraudulent lending activities.
The SBA’s Office of Government Contracting and Business
Development will continue to play an important oversight
role in helping to ensure small businesses receive their fair
share of government contracts.
The SBA will support and publicly encourage other Federal
agencies to improve the quality of data and other
information concerning their small business set-aside
contract awards. The accuracy of that data will remain an
essential component of SBA’s Small Business Procurement
Scorecard. Helping to achieve the accurate and transparent
accounting of such contracts is essential to maintaining the
integrity of the Federal Government’s efforts to provide a
fair share of contracts to America’s small businesses.
In addition, the SBA manages technical assistance grant
programs in excess of $100 million dollars. The SBA will
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work to continuously improve and streamline the financial
oversight and outcome measurements of its grant programs
(SBDC, SCORE and WBC) to reach a level of due diligence
that does not excessively burden grant recipients, yet
generates statistics and best practices that add value to the
grant recipient’s operation. Re-engineering of these
processes will continue as the SBA identifies both new and
efficient mechanisms for risk management.
Linkage to Annual Performance Plans – Success will be
measured by using the following indicators:
• Guaranteed loan portfolio performance
• Disaster loan portfolio performance
• Lender risk rating improvements
• Percentage of guaranty packages submitted that
meet initial review requirements for completeness
and quality
• SBIC liquidation recoveries
• Erroneous payment rates
• Debt Collection Improvement Act compliance.
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Strategic Goal 2 Strategic Objectives
Provide timely financial 1. Respond quickly, efficiently
assistance to homeowners, and effectively to disaster
renters, nonprofit applicants.
organizations and
businesses affected by
disaster.
Strategic Goal 2 - Provide timely financial assistance to homeowners, renters, nonprofit organizations and
businesses affected by disaster.
To assist victims of physical disasters, the SBA operates a direct loan
program and services these loans after they have been made. A low-interest
disaster loan from the SBA is the primary source of Federal funding for the
long-term recovery of homeowners, renters, nonprofit organizations and
businesses.
SBA disaster loans have low interest rates and longer terms than
conventional lending offers. SBA disaster loans are a critical source of
economic stimulation in disaster-ravaged communities and they help
generate employment and stabilize tax bases by protecting jobs.
The SBA offers two types of disaster loans in response to disaster victims:
1) Physical disaster loans, which provide funds to repair or replace
uninsured or underinsured real and personal property belonging to
homeowners, renters, businesses of all sizes, and nonprofit
organizations; and
2) Economic Injury Disaster Loans (EIDL), which provide necessary
working capital to small businesses adversely affected by the declared
disaster until normal operations can be resumed.
The means and strategies used to achieve the financial assistance goal and
its associated objectives are described below.
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2.1. Respond quickly, efficiently, and effectively to disaster applicants
2.1. Respond Means & Strategies - The magnitude of the 2005 Gulf
quickly, Coast hurricanes highlighted the need for the SBA to ensure
efficiently and a quick and efficient response to any category of disaster.
effectively to The Agency has a disaster recovery plan that details the
disaster operational steps the SBA will take to ensure that internal
applicants. goals and external expectations will be achieved when the
Agency is called to provide disaster assistance.
As described in the plan, the SBA approaches disasters with
a strong sense of commitment and is prepared to coordinate
internally, as well as with the Federal Emergency
Management Agency (FEMA), other government entities,
and the private sector to leverage SBA’s resources and
respond accordingly.
The SBA stands ready with the following capabilities:
• Sufficient System Capacity The SBA’s Disaster Credit
Management System (DCMS) supports 8,000
concurrent users – four times its capacity during peak
usage during the 2005 Gulf Coast hurricanes.
Beginning in summer 2008 applicants will also able to
apply for an SBA disaster loan online, allowing more
rapid processing of loan applications.
• Expedited Referrals to Grant Providers Focusing on
the need to render more decisions in a timely and
efficient manner, the SBA is using tools to enable it to
refer applicants to grant providers much more
quickly, with less work for the applicant and a
significantly reduced processing burden for the SBA.
• Business Intelligence and Management Tools The
SBA’s use of performance metrics gives Agency
management the ability to establish clear timelines
for initiatives, clarify performance goals, recognize
individual accountability, and provide greater insight
into any operational challenges that the SBA must
address.
• Bolstered Modeling Ability The Agency has enhanced
its capability to project application volumes when
disasters strike. These new models provide a more
robust methodology for predicting application volume
based on assets at risk in the disaster-impacted areas
and disaster characteristics.
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• Leveraged SBA’s Nationwide Infrastructure The
Agency has expanded the role of its District offices
through a plan to utilize District employees in future
disasters in such activities as processing support,
media outreach and coordinating local resources
through SBDCs, Chambers of Commerce, and other
local professional, charitable, and other nonprofit
community organizations.
Linkages to Annual Performance Plans – Success will be
measured by using the following indicators:
• Percentage of businesses sustaining economic injury
that are operational six months after final
disbursement
• Percentage of businesses sustaining physical damage
restored within six months after final disbursement
• Percentage of homeowners restoring their homes
within six months of final disbursement
• Percentage of renters that have been able to repair or
replace their property within six months after final
disbursement
• Customer satisfaction rate.
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Strategic Goal 3 Strategic Objectives
Improve the economic 1. Protect, strengthen and
environment for small effectively represent the
business. Nation's small businesses to
minimize the regulatory
burden.
2. Foster a more small-
Strategic Goal 3 – Improve the economic environment for business-friendly
small business.
environment.
Small businesses represent an essential mechanism by which millions of
people enter the economic and social mainstream of American society. Small
businesses tend to be dynamic in their processes and in their response to
opportunities in the marketplace, and they arrive faster at management
decisions. They create new opportunities for employment, and play a crucial
role in experimentation and innovation, which leads to technological change
and productivity growth.
Despite their importance to the economy, small businesses are heavily
burdened by the costs of government regulation and excessive paperwork.
SBA’s Office of Advocacy research shows that firms with fewer than 20
employees annually spend 45 percent more per employee than larger firms
do to comply with federal regulations. The SBA works to reduce the
regulatory burdens that Federal policies impose on small firms. These
savings allow many small businesses to remain open, and allow others to
invest in new jobs, equipment or other resources.
This strategic goal is intended to ensure that all enterprising Americans have
the maximum opportunity to succeed. The SBA helps to improve the
economic environment for small businesses by:
• Reducing excessive Federal regulatory burdens.
• Protecting small business from excessive Federal regulatory
enforcement.
• Providing automated tools and information on how to comply with laws
and regulations.
• Promoting the interests of small business in the international
marketplace.
• Playing a key role in ensuring full and open competition for
government contracts.
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The SBA fulfills these functions through the offices of Advocacy, the National
Ombudsman, Government Contracting and Business Development, the Office
of International Trade within Capital Access, and the Business Gateway E-
Government initiative.
The means and strategies used to achieve the improved economic
environment goal and its associated objectives are described below.
3.1. Protect, strengthen and effectively represent the Nation's small businesses to minimize the
regulatory burden.
Means & Strategies –
3.1. Protect,
Advocacy The Office of Advocacy, while part of the SBA, is
strengthen and
an independent voice for small business within the Federal
effectively
Government. It represents the interests of all small
represent the
entities including small businesses, small organizations
Nation's small
and small governmental jurisdictions. The Office advances
businesses to
the views, concerns, and interests of small business before
minimize the
regulatory burden. Congress, the White House, Federal agencies, Federal
courts, and state policy makers. Economic research,
policy analyses, and small business outreach help identify
issues of concern. Annually, the Office of Advocacy helps
small businesses save billions in regulatory costs.
At the Federal level, Advocacy attorneys work within the
government, educating regulators about their obligation to
consider how small entities will be affected by Federal
regulatory proposals. The Regulatory Flexibility Act (RFA)
and Executive Order 13272 require Federal agencies to
determine the impact of their rules on small entities,
consider alternatives that minimize small entity impacts,
and make their analyses available for public comment.
The Office of Advocacy gives small business owners and
their representatives opportunities to make their voices
heard about rules that affect their interests. Highlights of
proposed rules that may affect small entities are posted at
http://www.sba.gov/advo/laws/law_regalerts.html.
Recognizing that state and local governments can be a
source of burdensome regulations, the Office of Advocacy
works with policymakers to bring regulatory flexibility to
the states. Many states have enacted legislation or taken
other steps to strengthen regulatory flexibility for small
businesses. Giving small employers a voice early in the
process is key to reducing the small business impact of
state regulations while increasing regulatory compliance
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and passing on cost savings. Regional Advocates in the 10
SBA regions hear about small business concerns and to help
level the playing field for small businesses across the nation.
National Ombudsman The Office of the National
Ombudsman (ONO) was created pursuant to the Small
Business Regulatory Enforcement Fairness Act of 1996
(SBREFA). In summary, SBREFA directs the Ombudsman
to:
• Work with each Federal agency to ensure that small
businesses are provided with a means to comment on
the unfair or excessive enforcement and compliance
activities of the Federal agency.
• Establish a means to receive comments from small
business concerns regarding actions by Federal
agencies or agency employees conducting compliance
or enforcement activities with respect to the small
business concern.
• Establish and maintain 10 Regional Regulatory
Fairness Boards and coordinate activities and meet at
least once annually.
• Produce an annual report to Congress rating each
Federal agency’s responsiveness to small businesses
and provide affected agencies an opportunity to
comment on draft reports.
The SBA’s ONO deems it a priority to inform the Nation’s 25
million small businesses of their right to comment on
Federal regulatory enforcement and compliance activities.
The Regulatory Fairness Program is meeting this outreach
challenge through speeches, presentations, and media
interviews throughout the country; through partnerships
with major trade associations, members of Congress and
others in the small business community; and through a
number of outreach avenues, such as Regulatory Fairness
Hearings and Roundtables.
Business Gateway Initiative The Business Gateway
Initiative involves several activities aimed at improving the
delivery of information and services to citizens and reducing
regulatory paperwork burden on business. The initiative
provides the Nation’s businesses with a single Internet-
based portal - Business.gov - to access government services
and business compliance information, forms, and
government contacts.
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Complying with laws and regulations costs American
businesses billions of dollars each year. The SBA responded
to this economic impact on businesses by managing the
creation of Business.gov. The one-stop Web site reduces
the burden on the business community by eliminating the
need to search through multiple Web sites to locate and
access government information, services, and
legal/regulatory requirements and forms. Additionally, the
SBA is meeting the requirements of the Small Business
Paperwork Relief Act by publishing a consolidated list of
contacts on Business.gov from all Federal agencies as a
reference for small businesses when questions arise.
The Business Gateway Initiative will continue to enhance
Business.gov and pursue other burden reduction activities to
help businesses find, understand, and comply with laws and
regulations. By helping businesses find information faster
and easier, the SBA is protecting and strengthening the
foundation upon which small businesses operate.
Linkage to Annual Performance Plans – Success will be
measured by using the following indicators 2 :
• Regulatory cost savings to small businesses
• The amount of regulatory comments addressed in 90
business days
• The number of hours businesses save finding
business compliance information.
_______________________________________________
3.2. Foster a more small-business-friendly environment
3.2. Foster a more Means & Strategies –
small-business- Address Macro Issues The SBA will strengthen its ability to
friendly achieve outcomes by improving its direct policies and
environment. procedures. In coordination with its partner Agencies and
Departments, the SBA will enact policies and procedures
that support and advocate on behalf of America’s small
business community.
The Agency can achieve the best results by concentrating its
efforts on the issues that lie specifically before it as directed
by the Small Business Act.
2
The Office of Advocacy reports annually on performance measures.
Because of the Office's statutory independence, its performance is not
tracked through SBA systems. Copies of the Office of Advocacy
performance reports may be viewed at http://www.sba.gov/advo/laws/flex/.
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SBA policies and rulemakings fall in five broad areas:
• Improving access to capital for small business;
• Helping small businesses receive their fair share of
government contracts and furthering their business
development;
• Ensuring that businesses and homeowners can
recover from disasters that befall their community;
• Assisting with entrepreneurial training and technical
assistance with special emphasis on underserved
markets; and
• Working with other Federal agencies to better serve
small businesses.
Affect Public Policy The SBA Administrator combines two
roles, that of a senior Administration official as well as the
head of the Agency. As a senior Presidential appointee, the
Administrator has the ability to affect the national dialogue
and debate over issues that affect small business yet are
outside the SBA’s direct responsibility or authority. The SBA
will help explain Administration priorities on issues such as
increasing access to affordable private health insurance,
strengthening the Nation’s commitment to free trade,
fueling economic growth through lowering taxes and
working to resolve issues concerning illegal immigration.
Through a leadership strategy consisting of communications
(including opinion editorials and other written products),
holding public events and speeches and testimony before
Congress, the Agency will help drive public policy on issues
important to the small business community.
Influence U.S. Foreign Commercial Policy The SBA, through
active participation on the Interagency Trade Promotion
Coordinating Committee (TPCC), the President's Export Council
(PEC), Summit of the Americas Interagency Follow-up, Asia
Pacific Economic Cooperation (APEC), and other interagency
working groups, works to impact the Federal government’s
international commercial policy as it relates to small business.
In this capacity the SBA supports and contributes to
Administration policy priorities and Presidential initiatives which
include a small business component. Close working
relationships with the Commerce and State Departments, and
the U.S. Trade Representative help to ensure that small
business concerns are considered in bilateral and multilateral
trade negotiations and commercial dialog.
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Strategic Goal 4 Strategic Objectives
Ensure management and 1. Deploy a skilled workforce
organizational excellence to capable of executing high
increase responsiveness to quality programs.
customers, streamline 2. Provide a safe and secure
processes, and improve information system
compliance and controls. environment to support
business decisions and
Agency operations.
3. Provide financial and
Strategic Goal 4 – Ensure management and organizational performance management
excellence to increase customer responsiveness, streamline
processes, and improve compliance and controls services to support efficient
and effective program
delivery.
The SBA has made substantial progress in becoming more efficient. By
restructuring key Agency operations and reengineering its largest loan
programs, SBA has increased the number of 7(a) and 504 loans funded by
over 100 percent since FY 2001 while reducing its total budget by 31
percent since 2001 (excluding the disaster program and Congressional
initiatives). It is a success story of improving stewardship of taxpayer
dollars while continuing to expand critical services. The SBA ensures the
continuous improvement of its internal processes through the monitoring of
key effectiveness and efficiency measures. One measure of the Agency’s
commitment to continuous improvement is its achievement of green
progress ratings in seven of its eight President’s Management Agenda (PMA)
initiatives 3 . However, much work remains to be completed.
The SBA Office of Inspector General (OIG), and in some instances, the
Government Accountability Office (GAO), identifies through audits, reviews,
and investigations major management challenges that impede the
successful implementation and efficiency of SBA’s operations, stewardship
and/or program delivery. While the SBA continues to make progress in
eliminating these challenges, many of the actions require investments
3
The President’s Management Agenda (PMA) contains five government-wide goals to improve
federal management and deliver results – Human Capital; Competitive Sourcing; Financial
Performance; E-Government; and Improving Performance. In addition, to these, SBA has three
agency-specific goals – Faith-based and Community Initiatives; Eliminating Improper Payments;
and Improved Credit Management. OMB evaluates the status and progress on each initiative
quarterly and applies a three-tier rating – green, yellow, red. In addition to the progress ratings
cited above, the SBA has two green, four yellow, and two red status ratings. All ratings are as of
June 30, 2007.
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and/or substantial changes in operations and/or regulations that span more
than a single fiscal year.
The Agency will continue to improve the support provided to SBA program
offices by key support organizations including human resources, information
technology, and finance. In keeping with the broader Agency focus on
customer service, the SBA support offices have developed measures of
service and effectiveness associated with provision of services to internal
SBA customers.
The specific means and strategies used to achieve the excellence goal and
its associated objectives are described below.
4.1. Deploy a skilled workforce capable of executing high quality programs.
4.1. Deploy a Means & Strategies – Employees are essential to the
skilled success of any service organization and SBA’s people are its
workforce most critical resource. Employee surveys in FY 2004 and FY
capable of 2006 indicated low morale at the SBA. Furthermore, 34
executing high- percent of the SBA’s workforce will be eligible to retire by
quality 2009. The SBA is addressing these critical issues through
programs. improved communication, training opportunities and
recruiting.
The SBA’s continued implementation of its Human Capital
plan will raise employee morale and enable the Agency to
recruit, sustain and effectively deploy a skilled workforce.
Our goal is to recruit, train and retain employees that will
provide executive leadership and support functions to help
accomplish the programmatic goals.
The Human Capital Assessment and Accountability Framework
(HCAAF) System will ensure SBA’s human capital initiatives
support the Agency’s mission, goals and objectives. The
Framework incorporates elements of Strategic Alignment;
Leadership and Knowledge Management; Results-Oriented
Performance; Talent Management, along with Accountability.
This will help ensure that the Agency is capable of executing
high quality programs and activities that meet the current and
emerging needs of its customers.
The Agency will develop and implement a leadership
succession planning strategy to ensure that the right people
are hired into the right positions at the right time. The main
components of this strategy are:
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• Recruiting, retention and development of talented and
skilled employees for mission critical positions
• Implementation of the leadership competency
assessment for all managers and supervisors
• Implementation of the Leadership Effectiveness
through Active Development (LEAD) management and
supervisory training program
• Roll-out of the District Director's training program and
the orientation program for newly-hired District
Directors
• Development and implementation of a recruitment and
orientation video.
The SBA will identify leadership competency gaps and develop
a comprehensive curriculum map based on the skill gaps
identified. The SBA will continue progress in aligning
management and staff's Personal Business Commitment Plans
with the SBA's strategic goals by:
• Implementing an on-line performance appraisal
management system
• Revising a second Performance Appraisal Assessment
Tool (PAAT)
• Further implementing improvement activities for
mission critical occupations
• Continued accountability procedures, including audits,
to ensure effective implementation of Agency merit-
based strategic Human Capital Management practices.
The Agency will implement non-leadership succession
planning by hiring at lower grades and implementing new
recruitment strategies such as category ratings; better
utilization of hiring flexibilities; and targeting recruiting for
mission critical occupations.
The SBA is taking steps to expand internal communication
processes to ensure employee awareness about such issues
as:
• The operational changes as described in this plan.
• The environmental factors affecting the Agency.
• Agency leadership’s ongoing efforts to guide the
Agency in a manner consistent with
o The President’s Management Agenda,
o Sound public policy, and
o Effective organizational leadership.
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Through organizational and employee assessments, we have
determined that there are key skill deficiencies. The Agency
has identified two primary categories for training:
• Assurance that our people have the right skills to do
their jobs
• Assurance of a customer focus in the execution of our
external programs and internal support functions
Linkage to Annual Performance Plans – Success will be
measured by using the following indicators:
• Employee satisfaction surveys
• Progress and status ratings on PMA initiatives.
_______________________________________________
4.2. Provide a safe and secure information system environment to support business
4.2. Provide a decisions and Agency operations
safe and secure Means & Strategies – The SBA envisions an environment
information where the electronic transfer of applications and documents
system with customers and partners will occur seamlessly via
environment to Agency-wide systems supporting internal operations and
support bringing the SBA closer to the small business community and
business its resource partners.
decisions and
Agency The SBA will implement this vision though efficient and secure
operations. information systems and related technology. A key focus will
be to leverage data and systems to support program
execution and promote cost efficiency. The SBA has
formalized IT capital planning and IT governance processes to
ensure that IT investments complement existing systems and
infrastructure and support the SBA’s mission.
The SBA will continue to simplify the interaction between
small businesses and the Federal government through the use
of the Internet and information technology including
Business.gov, the official business portal of the U.S.
government.
The SBA will provide clear information on customer support
services and will provide targeted training for each of the
Agency’s major information systems. Further, the SBA will
conduct regular reviews of key information systems to ensure
overall security and the protection of personally identifiable
information.
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Linkage to Annual Performance Plans – Success will be
measured by using the following indicators:
• Progress and status ratings on PMA initiatives
• Hours saved in searching for relevant government
information, such as forms
• Unscheduled IT system downtime
• IT security breaches.
_______________________________________________
4.3. Provide financial and performance management services to support efficient and effective program
delivery.
Means & Strategies – Financial management processes and
4.3. Provide
systems will support SBA strategic management and financial
financial and
accountability by providing financial information that is useful,
performance
relevant, timely, and accurate and which assists the SBA in
management
maximizing program performance and accountability.
services to
support efficient
The SBA maintains a rigorous internal control process over its
and effective
financial systems and reporting environment and is one of the
program
few Federal agencies to include an independent audit
delivery.
committee as a key element in its control environment.
The SBA applies a cost allocation methodology whereby costs
are assigned to all Agency activities that are in turn allocated
across the Agency’s programs. This process allows the SBA to
calculate and monitor efficiency measures for the products and
services it provides.
The SBA’s planning and management efforts will result in
clearly defined goals and effective strategies, and the
coordination of operational support systems. This will
maximize the Agency’s mission performance. This effort will be
facilitated by the development of a comprehensive
management system that will integrate financial, performance,
and human resource information. This will link to the Agency’s
internal management scorecard.
Linkage to Annual Performance Plans – Success will be
measured by using the following indicators:
• Independent auditor’s opinion on the SBA’s financial
statements
• Prompt implementation of Inspector General audit
recommendations
• Progress and status ratings on PMA initiatives.
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Appendices
Performance Planning
Performance Performance planning at the SBA begins with the strategic
Planning plan that states the Agency’s mission and the strategic goals
that the Agency works toward accomplishing. The plan
provides the framework around which the Agency requests
funding from the Congress. The strategic plan is
implemented via annual performance budgets submitted to
the Congress that include goals defining specific levels of
performance (targets). At the close of each fiscal year an
annual performance report is published that compares the
actual levels of performance achieved against the targets
and provides explanations and action plans for all variances.
Annual performance budgets and reports may be viewed at
http://www.sba.gov/aboutsba/budgetsplans/index.html.
Communication and Accountability
Communication The Agency’s strategic and annual performance goals are
and communicated internally and externally via the Internet,
Accountability public statements, and internal management meetings.
Personal Business Commitments hold each senior executive
accountable for achieving the results outlined in the
Agency’s plans. Progress is monitored on a regular basis
throughout the year.
Evaluations
Evaluations The SBA uses a variety of methods and tools to evaluate its
programs including independent evaluations, OMB’s
Program Assessment Rating Tool (PART), and Office of
Inspector General and General Accountability Office reports
and evaluations.
• Independent evaluations are conducted on behalf of
the SBA for the purpose of evaluating program
effectiveness.
• OMB’s PART evaluates four elements of a program:
o Program Purpose and Design
o Strategic Planning
o Program Management, and
o Program Results/Accountability.
• The SBA’s Office of Inspector General, an
independent oversight office within the SBA, conducts
audits, investigations, and reviews relating to the
Agency’s programs and support operations.
• The General Accountability Office, an independent
organization established by the Congress, conducts
program evaluations and analysis and makes
recommendations to improve practices and
operations of the programs that it reviews.
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Evaluations considered in the development of this strategic
plan include:
• The Debenture SBIC Program: A Comparative
Analysis of Investment Patterns with Private Venture
Capital Equity (Independent Evaluation)
• Public Sector Duplication of SBA Loan and Investment
Programs (Independent Evaluation)
• OED Impact Study (Independent Longitudinal
Evaluation)
• Section 504 Certified Development Company
Guaranteed Loan Program (PART)
• SCORE (PART)
• Small Business Development Centers (PART)
• Disaster Loan Program (PART)
• Section 7(a) Guaranteed Loan Program (PART)
• Women's Business Centers (PART)
• 8(a) Business Development Program (PART)
• Historically Underutilized Business Zone - HUBZone
(PART)
• Small Business Surety Bonds (PART)
• Small Business Investment Companies Debentures
(PART)
Evaluations scheduled during the period covered by this
strategic plan include:
• Analysis of Government Contracting Programs
• OMB PART – Annually (Programs to be determined
in conjunction with OMB)
• OIG and GAO Reports and Evaluations (Scope and
timing to be determined by OIG and GAO)
• OED Impact Study (Independent Longitudinal
Evaluation
External Factors
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External Factors A variety of factors beyond the SBA’s control can affect the
attainment of the objectives identified in this Strategic Plan.
The following matrix identifies those external factors.
Factor Objectives
Impacted
The flow of men and women who wish 1.1.
to start a small business
The SBA relies on other Federal 1.1., 1.2
agencies to meet targets and to
maintain appropriate data quality
standards for reporting contract
awards to small businesses.
The development of new guaranty 1.1.
products and/or delivery methods is
limited by the level of risk the SBA
can afford within its budget.
Economic factors including inflation, 1.1., 1.2., 3.2.
sector changes, growth rates,
unemployment trends, and the
availability of capital can impact
portfolio performance as well as
demand for the SBA’s programs.
Availability of local matching funds for 1.1., 1.2
resource partners (e.g., state and
local governments, colleges and
universities, private sector)
Local disasters 1.1., 1.2.
Changes resulting from Congressional 1.1., 1.2., 1.3.
mandates
Availability of lender networks in 1.2.
undeserved markets
Reaching out to underserved markets 1.2.
where access to credit is constrained
may result in the Agency increasing
its credit risk.
Legislative changes that limit the 1.3.
SBA’s ability to impose accountability
requirements on lender and finance
partners.
Since the SBA has a fixed annual 2.1.
budget, significant variances in the
number and scope of disasters can
lead to additional funding
requirements via supplemental
appropriations, which are not assured.
SBA’s annual disaster loan budget
32
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
U.S. SMALL BUSINESS ADMINISTRATION: STRATEGIC PLAN FY 2008 - 2013
Factor Objectives
Impacted
assumes an average disaster season.
There can be instances where the 2.1.
catastrophic disaster damage is so
extensive that long-term financial
recovery provided by the SBA is not
the immediate concern of the disaster
victims. The primary concern may
instead be emergency food and
shelter. The SBA may be prepared to
make and disburse loans, but the
disaster victims may not be ready to
make long-term recovery decisions.
This can also impact the SBA’s ability
to meet its goals.
The SBA relies on many partners 2.1.
across the spectrum of government to
deliver timely financial assistance to
disaster applicants. Those partners
can face many challenges, including
providing access to records and
services during disaster. This lack of
access can have a dramatic effect on
the SBA’s ability to provide timely
assistance.
Security concerns, immigration issues, 3.1.
health care mandates and many other
issues drive our regulators to
promulgate laws and regulations
which increase the cost of doing
business for the small business owner.
The cooperation received from other 3.1.
agencies to provide compliance links
for Business.gov.
There are continued attempts to push 3.2.
the SBA to address issues beyond the
authority of the Small Business Act
and applicable laws and regulations.
If enacted, some of these changes
would have the Agency essentially
duplicate the activities of other
Federal organizations.
The Agency is to be a responsible 3.2.
steward within its programs. The SBA
also has the obligation to avoid the
unnecessary duplication of programs
and responsibilities with other
33
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
U.S. SMALL BUSINESS ADMINISTRATION: STRATEGIC PLAN FY 2008 - 2013
Factor Objectives
Impacted
Agencies.
As Congress passes laws amending 3.2.
the Small Business Act or other laws
to require the Agency to undertake
broader responsibilities, the policy
focus of the SBA is diluted to
incorporate those issues.
Large-scale natural disasters can force 1.1., 3.2.
the Agency to re-focus, shifting
percentage of the SBA’s personnel to
the SBA Office of Disaster Assistance.
This will have an effect on the other
SBA programs.
No legal authority to force change. 3.2.
Many of the major public policy issues
are outside the ability of the SBA to
take direct action.
The objectives of other Federal 3.2.
entities occasionally conflict with
those of the SBA. There are
legitimate differences of opinion
among agencies over contracting
priorities, policy decisions and
research development programs.
Within the interagency review
process, all agencies are required – on
occasion - to compromise to benefit
the Nation as a whole.
34
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
U.S. SMALL BUSINESS ADMINISTRATION: STRATEGIC PLAN FY 2008 - 2013
Organization
Chart United States Small Business Administration
Office of Advocacy
Office of the
Office of Inspector General
Administrator
Associate Administrator Associate Administrator Associate Associate Administrator Associate
Office of Administrator Office of Government Administrator
Office of Capital Access Entrepreneurial Office of Disaster Contracting & Business Office of Field
Development Assistance Development Operations
Director
Office of Financial
Assistance Director Director
Office of Business & Office of Government
Regional
Community Initiatives Contracting
Administrators
Director
Office of Investment
Director District Directors
Director Office of HUBZone
Office of Small Business
Development Centers
Director
Office of Surety
Guarantees
Director
Office of Business
Development
Director Director
Office of International Office of Women’s
Trade Business Ownership
Director
Office of Policy,
Director
Planning & Liaison
Office of Credit Risk
Management
National Ombudsman
Associate Administrator and Assistant
Office of Management Associate Administrator General Counsel Administrator for
& Administration Office of Performance Office of the Assistant Regulatory
Management & Chief General Counsel Administrator Enforcement Fairness
Financial Officer Office of
Congressional &
Legislative Affairs
Assistant Administrator
Chief Human Office of Hearings &
Capital Officer Appeals
Office of Human
Chief Information Assistant
Capital
Deputy Chief Financial Officer Administrator
Management
Officer Office of
Office of the Chief Office of the Chief
Communications &
Financial Officer Information Officer Assistant Administrator
Public Liaison
Director Office of Faith Based
Office of Business Community Initiatives
Operations
Assistant
Director Administrator Assistant Administrator
Director Office of Performance Office of Policy & Office of Veterans
Office of Executive Management Strategic Planning Business Development
Secretariat
Assistant
Administrator
Office of Native Assistant
American Affairs Administrator
Office of Equal
Employment
Opportunity & Civil
Rights Compliance
June 2007
35
SI 1 – Strategic Plan FY 2008-2013, Agency Financial Report FY 2009
U.S. SMALL BUSINESS ADMINISTRATION: STRATEGIC PLAN FY 2008 - 2013
Organization Map
Organization The SBA’s headquarters building is located in Washington,
Map D.C., while its business products and services are delivered
with the help of 10 regional offices, 68 district offices, their
corresponding branch offices, and a vast network of
resource partners in all 50 states, the District of Columbia,
Puerto Rico, American Samoa, the U.S. Virgin Islands, and
Guam.
SBA REGIONS & DISASTER ASSISTANCE OFFICES
Locations and Territorial Responsibilities
DISASTER ASSISTANCE OFFICES
Buffalo Customer Service Center (Nationwide)
Herndon, DCMS Operations Center and Personnel and Administrative Support Center
Atlanta Field Operations Center – East (Responsible for Regions I – V)
Dallas/Fort Worth Loan Processing and Disbursement Center (Nationwide)
Sacramento Field Operations Center – West (Responsible for Regions VI – X)
36
SI 2 – SBA Offices
(In alphabetical order)
Office of Administration
The Office of Administration plans, directs and executes all administrative management functions within
SBA headquarters, and monitors administrative programs in field offices. The office develops policies
and procedures for the procurement of supplies, equipment and non-personnel services. It also
implements and manages approved grants and cooperative agreements.
Office of Advocacy
The Office of Advocacy is an independent voice for small business within the federal government. It
represents the interests of all small entities including small businesses, small organizations and small
governmental jurisdictions. Appointed by the President and confirmed by the U.S. Senate, the Chief
Counsel for Advocacy directs the office. The Chief Counsel advances the views, concerns, and interests
of small business before Congress, the White House, federal agencies, federal courts, and state policy
makers. Economic research, policy analyses, and small business outreach help identify issues of
concern. Regional advocates and an office in Washington, DC, support the Chief Counsel's efforts. The
Office of Advocacy’s economic research, regulatory interventions, and model state legislation initiatives
reduce regulatory barriers that impede small business growth and development.
Office of Capital Access
The Office of Capital Access assists small businesses in obtaining the loans necessary for growth by
being a gap lender, providing assistance to small businesses that otherwise would not qualify for un-
guarantied financing, obtaining equity, or taking advantage of procurement opportunities.
The 7(a) loan program requires SBA’s lending partners to certify that the applicant was unable to
qualify for loans elsewhere on reasonable terms.
The 504 program, which has a statutorily mandated job creation component, fills another lending
gap by providing long-term, fixed rate financing for major assets such as real estate and heavy
equipment.
The Surety Bond Guarantee program serves as a gap surety bond credit provider expanding the
bond credit and capacity of small contractors that would not otherwise be able to compete for
public and private work.
Small Business Investment Center financings generally support smaller transactions that may not
otherwise receive funding from private venture firms or financial institutions.
The Office of International Trade develops, oversees, and delivers SBA’s technical assistance
and export finance programs to small business exporters.
The Office of Credit Risk Management provides risk management based on monitoring,
reviewing, and oversight of the 7(a) and 504 lenders and microloan intermediaries; and
monitoring and analysis of the 7(a), 504, microloan and disaster portfolios.
Office of the Chief Financial Officer and Performance Management
The Office the Chief Financial Officer conducts and promotes effective financial management activities for
the SBA including budget, credit subsidy, financial operations, financial systems and internal controls. It
develops and maintains integrated accounting and financial management systems; directs, manages, and
provides policy guidance and oversight of all Agency financial management personnel, activities, and
operations; approves and manages financial management systems design and enhancement projects;
develops budgets for financial management operations and improvements; implements Agency asset
management systems; and monitors the financial execution of the Agency budget in relation to actual
expenditures.
Agency Financial Report ▪ FY 2009 1
The office also provides tools and guidance to assist the Agency in expanding its capacity to conduct and
use the results of program evaluations. It helps the Agency develop better performance measures; builds
Agency capacity for results-based management through training and outreach to program offices; and
supports the Agency’s strategic planning. The office also prepares annual accountability and
performance reports, and establishes and implements Agency-wide policies for management integrity and
audit follow-up, including internal controls.
Office of the Chief Information Officer
The Office of the Chief Information Officer provides information technology leadership, products, services
and operational support for the SBA. The chief information officer is the principal advisor to the
Administrator on information technology matters and has overall responsibility for developing, managing
and monitoring SBA-wide IT systems, projects, personnel and expenditures. The office provides
information technology governance support to the Agency, ensuring that the SBA manages its current
and prospective IT investment portfolio in accordance with the laws, regulations and policies applicable
across government.
The OCIO manages the SBA’s functional IT units encompassing systems development, operations, voice
and data communications and user support. The OCIO has responsibility for over 80 current, mission
oriented IT systems that support SBA program delivery and enable the Agency to equip and outfit its
employees with current hardware, software and computing tools, such as email, wireless capabilities and
remote access for telecommuters. This office manages and maintains SBA’s web presence on
www.sba.gov and is also the federal managing partner for the Business Gateway, www.business.gov, a
single site resource connecting government to the small business community and entrepreneurs.
The OCIO is also the Agency’s lead office for information security, data privacy, electronic identity
protection and incident reporting, including information technology aspects of COOP, continuity of
operations planning.
Office of Communications and Public Liaison
The Office of Communications and Public Liaison has the principal responsibility for developing and
implementing effective communications strategies to ensure that the SBA’s mission, programs, services
and initiatives are articulated clearly and consistently to the American public in general and the small
business community in specific. It supports field and program offices with planning and implementation of
effective communications strategies. OCPL plays the chief role in articulating, explaining and promoting
Agency policy and goals to the national news media.
Through OCPL, the SBA forms alliances with for-profit corporations, small businesses, non-profit
organizations, trade and professional associations, academic institutions, and public-sector agencies.
The alliances offer opportunities to network on areas of common interest.
Office of Congressional and Legislative Affairs
The Office of Congressional and Legislative Affairs assist in the development of SBA legislative programs
and serves as the communications focal point on legislation and congressional activity. CLA monitors
legislation and policies introduced by Congress and government agencies to determine their effects on
the SBA and small business. It furthers the goals of the SBA and enables Members of Congress to best
serve their small business constituencies by promptly providing accurate, current, and continuous
information to them, to congressional committees, and to others interested in SBA programs. It also
devises and implements legislative strategy and has primary responsibility for all matters relating to
congressional and legislative functions. It provides liaison with legislative personnel at the White House,
the Office of Management and Budget, and various federal departments and agencies. It coordinates
with program offices and field offices to ensure continuity and consistency in the SBA’s communications
with Congress.
Agency Financial Report ▪ FY 2009 2
Office of Disaster Assistance
The Office of Disaster Assistance plays a vital role in the aftermath of disasters. Through ODA, the SBA
is responsible for providing affordable, timely, and accessible financial assistance to homeowners,
renters, and businesses of all sizes affected by disaster. Financial assistance is available in the form of
low-interest, long-term loans. The SBA’s disaster loans are the primary form of federal assistance for the
repair and rebuilding of non-farm, private sector disaster losses. For this reason, the disaster loan
program is the only form of SBA assistance not limited to small businesses. ODA makes two types of
disaster loans:
Physical disaster loans are for permanent rebuilding and replacement of uninsured or
underinsured disaster-damaged privately-owned real and/or personal property. The SBA’s
physical disaster loans are available to homeowners, renters, businesses of all sizes and
nonprofit organizations.
Economic injury disaster loans provide necessary working capital until normal operations resume
after a disaster. Economic injury disaster loans are restricted to small businesses and non-profit
organizations.
Executive Office of Disaster Strategic Planning and Operations
The Executive Office of Disaster Strategic Planning and Operations reports directly to the SBA
Administrator and is responsible for integrating disaster planning, preparedness activities and disaster
response programs for all SBA offices.
The office provides direction and oversight to the Agency’s Office of Disaster Assistance in coordinating
the use of SBA resources to assist citizens, communities and businesses in response to disaster
occurrences and long-term recovery needs. It also represents the SBA on various intergovernmental
bodies related to disaster response and recovery and works to ensure that the Agency and its resource
partners coordinate effectively to help serve disaster victims. The Agency’s disaster training operations,
exercises and simulation programs also fall under the purview of this office as does the responsibility for
monitoring internal and external communications in times of disaster.
Office of Entrepreneurial Development
The Office of Entrepreneurial Development serves the small business community through outreach and
public/private sector collaborative ventures and other creative mechanisms, with the purpose of providing
counseling and training to America’s small businesses. OED provides entrepreneurs with free and low-
cost education and training, topical information, and management assistance critical for sound decision-
making.
The Small Business Development Center program funds 63 lead centers and nearly 900 service
locations in every state plus the District of Columbia and U.S. territories. Through these centers,
and in partnership with the Association of Small Business Development Centers, the SBA
provides up-to-date counseling, training and management assistance in all aspects of small
business management.
The Women’s Business Centers program represents a national network of more than 110
educational resource centers designed to assist women start and grow small businesses. WBCs
operate with the mission to level the playing field for women entrepreneurs, who still face unique
obstacles in the world of business.
SCORE is a nationwide network of nearly 11,000 volunteers who provide no-cost counseling and
mentoring, online and face-to-face. The organization is a key resource partner of the SBA. Its
mission is to provide resources and expertise to maximize the success of existing and emerging
small businesses
Agency Financial Report ▪ FY 2009 3
The Office of Entrepreneurship Education manages the SCORE program, the Small Business
Training Network, the International Visitors’ Service and other specialized entrepreneurial-
focused initiatives.
Office of Equal Employment Opportunity and Civil Rights Compliance
To advance Agency-wide diversity at all levels, and equal access to programs and activities receiving
SBA financial assistance, this office works to prohibit discrimination against all SBA employees and
applicants based on: race, color, sex, age, religion, disability, national origin, and retaliation for opposition
to discriminatory practices or participation in the EEO process. The office of EEO and CRC also works to
achieve equal employment opportunity for all qualified employees consistent with the nation’s workforce
diversity. The office works to ensure that no person in the U.S. is denied the benefits of, excluded from
participation in, or subjected to discrimination under any program or activity receiving SBA financial
assistance, based on race, color, sex, age, disability, national origin, and marital status (extension of
credit). In addition, the office ensures that individuals with disabilities have equal access to SBA-
conducted or co-sponsored programs and activities.
Office of the Executive Secretariat
The Office of the Executive Secretariat works with senior management officials to formulate the
Administrator’s and Deputy Administrator’s written correspondence. Under the leadership of the
associate deputy administrator for management and administration, ExecSec reviews, edits, and
manages correspondence, rules, and regulations. ExecSec also reports products to and from the Office
of the Administrator, Deputy Administrator and chief of staff. Together with CLA, OGC, and program
offices, ExecSec ensures that correspondence and written products are delivered in the most timely and
efficient manner, while providing useful, reliable information, and advice to Congress, other federal
agencies, and small business owners nationwide.
Office of Faith-Based and Community Initiatives
Faith-based and community initiatives can play an important role in helping the SBA identify, train and
finance the entrepreneurs whose businesses will bring jobs and hope to economically distressed
communities across the nation. This office s seeks to empower these groups to apply for federal grants.
It supplies information and training in order to create a level playing field for faith-based and other
community organizations to work with the government to meet the needs of America’s communities.
Office of Field Operations
The Office of Field Operations represents SBA field offices at headquarters. The office provides policy
guidance and oversight to regional administrators and district directors in implementing Agency goals and
objectives, and in solving problems in specific operational areas; establishes and monitors performance
goals for district offices; provides associate deputy administrators, associate administrators and the
general counsel with a vehicle for overseeing field office program and policy implementation; provides
feedback to headquarters management regarding the performance of their programs; ensures that field
offices have adequate input into all policy formation and participate in policy deliberations at
headquarters; organizes reviews of field offices; and informs the SBA Administrator of field activity.
Office of General Counsel
The Office of General Counsel provides legal advice in support of all SBA programs and initiatives. The
office helps to minimize the Agency’s legal risks and costs, reduce litigation exposure, and ensure
compliance with the applicable statutes, regulations, Executive Orders and other legal requirements.
OGC provides the legal support necessary to defend SBA’s interest in judicial and administrative actions,
and proactively represent the Agency in all legal matters that arise in the context of its financial
assistance, procurement and contracting programs, as well as labor and employment disputes.
Agency Financial Report ▪ FY 2009 4
Office of Government Contracting and Business Development
The Office of Government Contracting and Business Development promote increased small business
participation in the federal procurement market for goods and services. The office fulfills SBA’s statutory
mission to ensure that a fair share of federal procurement goes to small businesses. Several of the
government-wide goals are statutory, including those for small businesses, small disadvantaged
businesses, women-owned small businesses, HUBZone small businesses, and service disabled veteran-
owned small businesses.
Prime Contracting — The office negotiates federal agency procurement goals, monitors
performance, encourages the use of small business sources, provides procurement training and
technical assistance to small firms, and provides policy direction and guidance to federal
agencies.
Subcontracting — The program works with large prime contractors to increase substantive small
businesses; participation as subcontractors in the federal marketplace
HUBZone empowerment contracting — This program stimulates economic development and
creates jobs in urban and rural communities by providing federal contracting preferences to small
businesses in historically underutilized business zones.
8(a) Business Development — This is a business assistance and procurement program for small
disadvantaged businesses.
Office of Hearings and Appeals
The Office of Hearings and Appeals provides an independent, quasi-judicial appeal of certain SBA
program decisions. The office adjudicates disputes arising in numerous jurisdictional areas. These
include appeals from SBA formal size determinations; appeals from contracting officer designations of
NAICS codes for procurements government-wide; appeals from certain SBA determinations relating to
development companies; and appeals from agency and private certifier small disadvantaged business
determinations, all of which, by regulation, may be decided either by an administrative judge or an
administrative law judge. The office’s jurisdiction also includes 8(a) program eligibility, suspension, and
termination appeals; and salary offset appeals, all of which by statute must be decided by an
administrative law judge.
Office of Human Capital Management
The Office of Human Capital Management develops and provides innovative human capital strategies.
The OHCM advises SBA management with respect to selecting, developing and managing a high-quality,
productive workforce. This office sets SBA’s workforce development strategy; assesses current
workforce characteristics and future needs based on SBA’s strategic plan; aligns human resources
policies with organization mission, strategic goals, and performance outcomes; develops and advocates a
culture of continuous learning to attract and retain employees with superior abilities; identifies best
practices and benchmarks studies; and creates systems for measuring intellectual capital and identifying
links of that capital to organizational performance and growth. This position also implements laws, rules
and regulations governing the civil service.
Office of the Inspector General
The Office of Inspector General is an independent office created within the SBA by law to conduct and
supervise audits, inspections, and investigations relating to SBA programs and supporting operations; to
detect and prevent waste, fraud, and abuse; and to promote economy, efficiency, and effectiveness in the
administration and management of SBA programs. The inspector general keeps the SBA Administrator
and the Congress fully informed of any problems, recommends corrective actions, and monitors progress
in the implementation of such actions. The two operating components of office are the Auditing Division
and the Investigations Division. Each administers its respective activities through field offices around the
Agency Financial Report ▪ FY 2009 5
country. The Management and Policy and Counsel divisions support both the inspector general and the
operating divisions by providing policy, planning, administrative, and legal services.
Office of the National Ombudsman
The Office of the National Ombudsman fosters a more small business–friendly federal regulatory
enforcement environment by assisting small businesses when they experience excessive federal
regulatory enforcement actions, such as repetitive audits or investigations, excessive fines, penalties,
threats, retaliation, or other unfair enforcement action by a federal agency. It does this by evaluating how
federal agencies treat small businesses during enforcement or compliance actions.
Office of Native American Affairs
The Office of Native American Affairs coordinates initiatives and develops policies and procedures to
ensure that SBA assistance is made available to American Indians, Native Alaskans, and Native
Hawaiians. The initiative consists of two major components: marketing and outreach, and training to
enhance business opportunities.
Office of Policy and Strategic Planning
The Office of Policy and Strategic Planning is responsible for evaluating the existing policies and
programs of the SBA as well as translating economic, social and demographic trends that have an impact
on small business competitiveness into policy prescriptions that will allow the Agency to be more
proactive in addressing the needs of small business.
Office of Veterans Business Development
Statutes direct the Office of Veterans Business Development to conduct comprehensive outreach on
behalf of the Agency, and to be responsible for the formulation, execution, and promotion of policies and
programs of the Administration. To accomplish these tasks, the office operates its national outreach
Initiative through direct service delivery, funding agreements with resource partners, coordination of
outreach and service delivery with federal agency partners, and through development of Agency program
initiatives.
Office of the National Women’s Business Council
The Office of the National Women’s Business Council undertakes a variety of programs and initiatives in
support of women-owned businesses. The council holds two public council meetings and other public
roundtable events. It publishes research study reports, Issue in Brief reports (which synthesize and
summarize federal and other research information for women business owners and policy makers on
topics such as health care and federal procurement), and fact sheets on the numbers and growth of
categories of women-owned firms. The council manages two websites, www.nwbc.gov and
www.womenbiz.gov, plus a bimonthly e-newsletter, Engage!
Agency Financial Report ▪ FY 2009 6
SI 3 – Detail of OIG Audit Follow-up Action Activity
Disallowed / Questioned Costs
Report # 9-09, Borrower Eligibility For Gulf Coast Disaster Loans
Summary: The audit objective was to determine whether the SBA had controls in place to prevent ineligible
applicants from receiving disaster loans. The audit recommended the Agency request remittance from HUD
for a loan associated with a grant that duplicated disaster benefits awarded under an SBA loan.
Final Action: $19,145.00 collected / $0.00 written off
Report # 9-13, Application Of Insurance Offsets On Disaster Loans For The Midwest Floods Of
2008
Summary: The audit objective was to determine whether SBA properly reduced Midwest flood loan
balances to reflect insurance offsets. The audit recommended the Office of Disaster Strategic Planning and
Operations reduce four loan balances to prevent duplicate benefits.
Final Action: $22,388.00 collected / $0.00 written off
Report # 3-30, Early Defaulted Loan To 2B Systems, Inc.
Summary: The audit objective was to determine if the early loan default was caused by lender or borrower
non-compliance with SBA requirements. The audit recommended the Agency seek recovery from the bank
on the guaranty paid to it.
Final Action: $0.00 collected / $630,224.00 written off
Report # 7-08, Audit Of SBAExpress And Community Express Loan Purchase And Liquidation
Process
Summary: The audit objective was to determine if the SBA Express and Community Express Loan
Purchase process adequately identified lender deficiencies that would have affected purchase decisions.
The audit recommended the Office of Financial Assistance determine if loan proceeds were used in
accordance with the terms of the loan authorizations and to review specific loans for compliance with SBA
rules and regulations and improper payments.
Final Action: $0.00 collected / $935,258.00 written off
Report # 8-08, UPS Capital Business Credit's Compliance With Selected 7(a) Lending
Requirements
Summary: The audit objective was to determine whether UPS Capital Business Credit complied with SBA’s
requirements for documentation. The audit recommended SBA obtain the appropriate use of loan proceeds
documentation for the loans reviewed or repair the guarantees for those loans for which appropriate
documentation cannot be obtained. Also, to repair the guaranty purchase amount for one loan associated
with loan proceeds that were used to pay the lender's loan origination fee.
Final Action: $1,198,774.36 collected / $3,118,225.64 written off
Report # 8-18, Audit Of Six SBA Guaranteed Loans
Summary: The audit objective was to review six loans with egregious deficiencies that were part of a
statistical sample of charged off loans to determine if full denial is warranted. The audit recommended the
Office of Financial Assistance seek recovery plus interest from several lenders.
Final Action: $2,216,738.36 collected / $4,543,645.64 written off
Agency Financial Report ▪ FY 2009 1
Funds Put To Better Use
Report # 9-11 SBA Serviced Liquidation Of Certified Development Company Loans
Summary: The objectives of this audit were to determine whether SBA’s liquidation efforts maximized
recoveries and if centralization improved the liquidation process. The audit recommended the Office of
Financial Programs evaluate whether staffing and process improvements introduced after the audit enabled
the Centers to complete all required liquidation actions.
Final Action: $12,700,000.00 implemented / $0.00 not implemented
Table III
(Tables I and II are in the Office of Inspector General section, OIG Audit Follow-up.)
Final Action on Audit Recommendations Not Completed Within 1 Year
October 1, 2008 – September 30, 2009
Report # 0-14, 7(a) Service Fee Collections
Program: OCFO
Date Issued: 03/30/2000
Management Decision Date: 08/22/2000
Explanation: The recommendation is to establish receivable accounts for 7(a) loan service fees. This
final action cannot be completed until October 2011 when the LMAS receivable calculation function has
been implemented.
Report # 3-08, SBA's Oversight of the Fiscal Transfer Agent for the 7(a) Loan Program
Program: CA
Date Issued: 01/30/2003
Management Decision Date: 10/15/2003
Explanation: The recommendation is to develop SBA procedures and regulations governing the proper
operation of the Master Reserve Fund. This final action is expected by 03/31/2010.
Report # 3-26, Microloan Program: Moving Toward Performance Management
Program: Microloan
Date Issued: 05/13/2003
Management Decision Date: 08/28/2003
Explanation: Three recommendations remain open to the Office of Financial Assistance (OFA). 1) Work
with the Office of Field Operations to establish a task force to develop a system for district office
marketing and oversight of the Microloan program. Increased marketing efforts for microloans are
currently on hold as funding levels for the program are uncertain. 2) Ensure the development of a
comprehensive Microloan program SOP. OFA had previously completed a draft SOP for the Microloan
Program. The Office of General Counsel is leading a team to revise the draft SOP. 3) Ensure program
goals are set and outcome-oriented data. Principal program goals are set forth in the SBA microloan
regulations and these can only be modified with a regulatory change. With the absence of an approved
budget, the Agency determined that it would not be appropriate to request a regulatory change. Final
actions for these recommendations are expected by 12/31/2009.
Report # 4-34, SBA's Process for Complying With the FMFIA Reporting Requirements
Program: OCFO
Date Issued: 07/29/2004
Management Decision Date: 09/09/2004
Explanation: The two recommendations remaining open are to the Office of the Chief Financial Officer
to revise, clear and issue the draft SOP 00 02 3 and clearly define material weakness as it relates to SBA
and at the different levels of management within the Agency. The new Internal Control SOP is in
clearance. These final actions are expected to be completed by 03/31/2010.
Agency Financial Report ▪ FY 2009 2
Report # 4-40, SBA Guarantied Loan To Elatec Technology Corporation And HK Equipment, Inc.
Program: OPM
Date Issued: 09/13/2004
Management Decision Date: 04/06/2007
Explanation: This recommendation is to recover from the lender the $246,460 paid to purchase the
guaranty on a loan. This recommendation had previously been elevated to the Deputy Administrator to
determine how to proceed. But, it was not resolved. It is being resubmitted to the new COO. A final
action is expected to be completed by 11/30/2009.
Report # 4-41, Selected SBA General Support Operating Systems
Program: OCIO
Date Issued: 09/10/2004
Management Decision Date: 11/09/2004
Explanation: There are two open recommendations to the Office of Chief Information Officer. These
recommendations are related to systems patches and security fixes and a monitoring strategy. The last
of the software has been procured and will be installed during October 2009. One recommendation is
believed resolved, but the OCIO is meeting with the OIG to discuss additional corrective action. Both of
these final actions are expected to be completed by 10/31/2009.
Report # 5-12, SBA's Information System Controls for FY 2004
Program: OCIO
Date Issued: 02/24/2005
Management Decision Date: 04/18/2005
Explanation: The one remaining open recommendation is to the Chief Information Officer to develop
logging procedures for all SBA internal and contractor supported general support systems and major
applications. This is believed to be resolved; the OCIO is meeting with the OIG to discuss additional
corrective action. This final action is expected by 10/31/2009.
Report # 5-23, SBA's Administration of Its Special Appropriations Grant
Program: OA
Date Issued: 09/21/2005
Management Decision Date: 05/01/2006
Explanation: There are five open recommendations to the Office of Administration to develop policies
and procedures regarding the Agency's grants portfolio, obtain documentation that shows all costs
charged to the grant are allocable and allowable, include guidelines in the grant application instructions
that clearly define key personnel, obtain all performance and financial reports as required by the terms of
the grant, and consider invoking SBA authority to suspend grantee payments until earlier audit
recommendations are addressed. The Office of Business Operations will distribute information to all
DPGM staff; a revised SOP will also cover this information. These recommendations are expected to
have final actions by 12/31/2009.
Report # 5-28, Review of SBA Procedures for Cash Gifts
Program: OA
Date Issued: 09/30/2005
Management Decision Date: 02/23/2006
Explanation: The one open recommendation is to the Office of Administration to streamline procedures
to obligate funds within five working days after a commitment document is approved. Procedures were
still in final clearance at the close of the fiscal year. This recommendation was closed on 10/01/2009.
Agency Financial Report ▪ FY 2009 3
Report # 6-04, SBA's FY 2005 Financial Statements
Program: OCFO
Date Issued: 11/15/2005
Management Decision Date: 05/10/2006
Explanation: There is one open recommendation to the Office of the Chief Financial Officer to
coordinate with the Office of Procurement and Grants Management to implement timely closeout
procedures and strengthen monitoring procedures to ensure that all grant undelivered orders are
supported by evidence as to their need and validity. A new Oracle report was developed to simplify the
reconciliation and close-out process. This report was presented to grant program offices in a training
session. The corrective actions are ongoing. This recommendation is expected to have final action by
12/31/2009.
Report # 6-10, SBA's FY 2005 Financial Statements Management Letter
Program: OCFO
Date Issued: 01/18/2006
Management Decision Date: 03/06/2006
Explanation: There is one open recommendation to the Office of the Chief Financial Officer to update
the accounting SOP to include SBA’s policies and procedures for processing detailed accounting
transactions. A draft SOP is about to go into clearance. SBA continues to update and use online tables
to document its accounting transactions’ policy and procedures. It was decided to make this a feature of
SBA’s ELIPS system. We will include this on the FY 2010 priority list for development activities and will
continue to include it as a requirement for LMAS. The recommendation is expected to have final action
by 03/31/2010.
Report # 6-25, SBA's Implementation of the Improper Payments Information Act (IPIA)
Program: OCFO
Date Issued: 06/21/2006
Management Decision Date: 07/19/2006
Explanation: The recommendation is to the Office of the Chief Financial Officer to develop Procedure
Notices or SOPs as internal guidance when changes to IPIA requirements are issued by OMB. The new
Internal Control SOP is in clearance. This final action is expected to be completed by 03/31/2010.
Report # 7-03, SBA's FY-2006 Financial Statements
Program: M&A
Date Issued: 11/15/2006
Management Decision Date: 01/04/2007
Explanation: The recommendation is to the Chief Operating Officer, in conjunction with appropriate
program officials, to ensure that policies are implemented regarding segregation of duties for FRIS,
JAAMS, DCMS and LAS. Pending system integration will establish roles and responsibilities with respect
to Oracle and the contract writing system. This final action is expected to be completed by 10/30/2009.
Report # 7-21, SBA's Use of the Loan and Lender Monitoring System
Program: OCRM
Date Issued: 05/02/2007
Management Decision Date: 09/22/2008
Explanation: The recommendation is to the Office of Credit Risk Management to develop and implement
comprehensive loan monitoring policies and procedures. Lender Oversight Regulations were published
as an Interim Final Rule in January 2009. This was a critical step toward the creation of a Lender
Enforcement SOP. This SOP was written and is currently in clearance. This final action is expected to be
completed by 12/31/2009.
Agency Financial Report ▪ FY 2009 4
Report # 7-28, SBA's Oversight of Business Loan Center, LLC
Program: Office of the Administrator
Date Issued: 07/11/2007
Management Decision Date: 09/16/2008
Explanation: The recommendation is to the Office of Capital Access to mitigate risk and promote
consistent and uniform enforcement actions by developing SOPs that provide an integrated system of
enforcement activities. An SOP governing lender oversight supervision and enforcement actions is in
clearance for internal review. The final action is expected to be completed by 12/31/2009.
Report # 7-32, Advisory Memorandum: Surety Bond
Program: OSG
Date Issued: 09/28/-2007
Management Decision Date: 11/27/2007
Explanation: The recommendation is to the Office of Surety Guarantees to require a surety to perform
specific actions before hiring a replacement contractor. A regulation addressing this situation is in
clearance. This final action is expected to be completed by 12/31/2009.
Report # 8-06, SBA's FY 2007 Financial Statements Management Letter
Program: OFA
Date Issued: 12/14/2007
Management Decision Date: 12/18/2007
Explanation: There are three open recommendations to the Office of Capital Access. 1) To mitigate
potential risks regarding the guarantied loan purchase process, issue the updated SOP 50 51, Loan
Liquidation and Acquired Property. A proposed revision to SOP 50 51 Chapter 13 will be incorporated
into the SOP. 2) Implement procedures regarding the evaluation of lenders. A policy decision will be
developed along with an update to the SOP. 3) Implement an action plan for timely updating, reviewing
and approving of SOPs. Comprehensive updates to SOP 50 10 have been issued. Teams were formed
to revise the liquidation SOP 50 51 and place the revision into the formal clearance process. These three
final actions are expected to be completed by 03/31/2010.
Report # 8-09, Loan Classifications and Overpayments on Secondary Market Loans
Program: OFA
Date Issued: 03/26/2008
Management Decision Date: 09/03/2008
Explanation: There are nine open recommendations to the Office of Financial Assistance to revise the
classification procedures to ensure loan currency is not solely based on the next installment due date,
take additional actions to ensure lenders comply with the requirements for reporting next installment due
dates on 1502 reports, develop a mechanism to identify loans with no principal reduction for 60 days or
more, ensure SBA is in compliance with the 1086 agreement, modify the 1086 agreement to require
lenders request guarantee purchase when interest is 120 days or more past due, ensure guarantees are
purchased within 30 days of the lender's demand, conduct post purchase reviews of the 15 loans with
inappropriate billings, discontinue the practice of including the amount of SBA's servicing fees in the
purchase payment to the Fiscal and Transfer Agent, and reduce the servicing fees owed the lender at the
time of purchase by the amount of fees owed SBA from the lender. Final actions for all nine
recommendations were submitted in September, these are being carefully reviewed to assure all findings
were adequately addressed.
Report # 8-12, Oversight of SBA Supervised Lenders
Program: CA
Date Issued: 05/09/2008
Management Decision Date: 06/26/2008
Explanation: The three open recommendations are to the Office of Capital Access to establish risk
mitigation goals applicable to each loan program and the entire lending portfolio, develop SOPs that
establish a hierarchy of enforcement actions, and develop guidance addressing when corrective action
plans should be required. These final actions are expected to be completed by 12/31/2009.
Agency Financial Report ▪ FY 2009 5
Report # 8-13, Planning For the Loan Management and Accounting System Modernization and
Development Effort
Program: CA
Date Issued: 05/14/2008
Management Decision Date: 08/11/2008
Explanation: There are three open recommendations. One recommendation is to the Office of Financial
Assistance to Make cost-effective remediation of mainframe vulnerabilities a priority and ensure that
migration of LAS occurs before the current mainframe contract expires in 2012 to reduce SBA’s
mainframe costs and timely mitigate associated security risks. The remaining two recommendations are
to the Office of the Chief Information Officer to ensure interim remediation and prioritization of loan
accounting system vulnerabilities and to design and implement an enterprise-wide quality assurance
function that fulfills responsibilities of the Clinger-Cohen Act. These final actions are expected to be
completed by 12/31/2009.
Report # 8-14, Non-Native Managers Secured Millions of Dollars from 8(a) Firms Owned By Alaska
Native Corporations
Program: BD
Date Issued: 08/07/2008
Management Decision Date: 09/25/2008
Explanation: The recommendation is to the Office of Field Operations to perform a workforce analysis of
staffing levels at the Alaska District Office. An additional position was allotted which resulted in two new
hires bringing staffing levels to a sufficient level to handle the additional workload. This final action is
expected to be completed by 10/31/2009.
Agency Financial Report ▪ FY 2009 6
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