Audit Report 13-20: Evaluation of SBA’s 2012 Cash Gifts

On September 30, 2013, the OIG issued Audit Report 13-20, The Small Business Administration’s  Controls Over Cash Gifts.  The SBA has gift authority under sections 4(g), 8(b)(1)(G), 5(b)(9) and 7(k)(2) of the Small Business Act (the Act). The objective of this review was to assess whether the SBA was following established procedures for soliciting, accepting, holding, and utilizing cash gifts in fiscal year 2012.  Section 4(g)(2) of the Act provides that any gift, devise, or bequest of cash accepted by the Administrator shall be held in a separate account and shall be subject to semi-annual audits by the Inspector General who shall report his or her findings to Congress.

The objective of this review was to determine whether SBA officials followed established procedures for soliciting, accepting, holding, and utilizing cash gifts in 2012.  To achieve the objective, the OIG obtained an understanding of laws, regulations, and SBA policies and procedures regarding its gift authority. Lastly, the OIG examined documentation obtained from officials in the Offices of Strategic Alliances and the Chief Financial Officer for cash gifts posted to the Business Assistance Trust Fund (BAT Fund) between August and November 2012. 

The OIG determined the SBA adequately complied with the Act regarding the acceptance, holding, and utilization of cash gifts.  The responsible SBA officials determined the gifts were something the Agency could use and that its use would further the mission of the Agency.  The non-federal organizations that gifted cash donations were properly vetted through the SBA’s program offices to ensure no business relationships existed that would cause a conflict of interest in accordance with the Act.

During the 2011 review, the OIG noted that the SBA had not had permanent procedures on gift acceptance in place since 2007.  The OIG also noted that the procedural notice that prescribes SBA’s control over the BAT Fund expired in 2005.  The OIG previously recommended that the SBA’s Office of General Counsel collaborate with the Offices of the Chief Financial Officer and Strategic Alliances to issue SOP 90 53 to include procedures for soliciting, accepting, depositing, expending ,and tracking expenditures, as well as documentation retention requirements for cash gifts.  During the FY 2012 review, the OIG found that the SBA has not issued this SOP.