U.S. SMALL BUSINESS ADMINISTRATION
OFFICE OF INSPECTOR GENERAL
MANAGEMENT ADVISORY REPORT
POLICIES AND PROCEDURES FOR THE SBAEXPRESS AND
COMMUNITYEXPRESS LOAN PROGRAMS
REPORT NUMBER 6-34
SEPTEMBER 29, 2006
WASHINGTON, DC
U.S. SMALL BUSINESS ADMINISTRATION
OFFICE OF INSPECTOR GENERAL
WASHINGTON, D.C. 20416
MANAGEMENT ADVISORY REPORT
Issue Date: September 29, 2006
Report Number: 6-34
To: Michael W. Hager Associate Deputy Administrator for Capital Access
From: Glenn P. Harris Counsel to Inspector General
Subject: Policies and Procedures for the SBAExpress and Community Express Loan Programs
Attached is a copy ofthe subject management advisory report. The report contains five concerns and sixteen recommendations addressed to you. Your response has been synopsized and included in the report.
The recommendations in this report are subject to review and implementation of corrective action by your office in accordance with existing Agency procedures for Office oflnspector General report follow-up. Please provide your management decision for the recommendations to our office within 30 days of the date ofthis report using the attached SBA Fonn 1824, Recommendation Action Sheets.
Should you or your staff have any questions, please contact me, at 202-205-6862.
Attachment
MANAGEMENT ADVISORY REPORT POLICIES AND PROCEDURES FOR THE SBAEXPRESS AND COMMUNITY EXPRESS LOAN PROGRAMS
This Management Advisory Report contains concerns of the Small Business Administration (SBA) Office of Inspector General (OIG) based solely upon its review of policies and procedures for the SBAExpress Program and the Community Express Program. This is not intended as an audit and, therefore, was not conducted in accordance with Federal Government Auditing Standards.
Of the OIG concerns discussed in this report, the following are the most significant:
(1) Although the SBAExpress Program has been in existence for over 11 years and was made permanent in 2004 by Congress, SBA has not issued any regulations to govern the Program.
(2) The Agency's Guide for the Program contains credit requirements for lenders that may conflict with the Small Business Act, and contains provisions that conflict with SBA regulations.
(3) The criteria for lenders seeking admission to the Program in the Guide may not provide SBA with sufficient information to identify whether the applicant lender presents an undue risk to the Agency, and appears to impose more stringent criteria upon ]enders who have previously participated in SBA loan guarantee programs than for lenders with no SBA program experience.
(4) Certain provisions in the Agency's Guide are ambiguous, or conflict with other agency policies, and do not provide meaningful guidance to lenders or guidance that SBA could rely upon to use enforcement to correct lender noncompliance.
(5)The Agency is relying on a Guide for the CommunityExpress Program that has never officially been cleared or issued by SBA, contrary to agency procedures.
To read the entire report, please see the attached document.
