Agency Management Challenges

Overview

In accordance with the Reports Consolidation Act of 2000, the OIG each year identifies the most serious management and performance challenges facing the Agency for inclusion in SBA’s Performance and Accountability Report. The Management Challenges represent areas that the OIG considers to be particularly vulnerable to fraud, waste, abuse, or mismanagement, or which otherwise pose significant risk to the Agency, its operations, or its credibility. Each Management Challenge generally has originated from one or more OIG or Government Accountability Office (GAO) report. For each Management Challenge, the OIG provides the Agency with recommended remedial actions together with an assessment of Agency progress on each recommended action during the preceding fiscal year.

FY 2009 Report on SBA’s Top Management Challenges

The Management Challenges identified in the OIG’s FY 2009 report, issued on October 20, 2008, were as follows.

• Procurement flaws allow large firms to obtain small business awards and agencies to count contracts performed by large firms towards their small business goals.
• Information systems security needs improvement.
• Effective human capital strategies are needed to enable SBA to successfully carry out its mission and become a high-performing organization.
• SBA’s National Guaranty Purchase Center needs better controls over the business loan purchase process.
• SBA needs to further strengthen its oversight of lending participants.
• The Section 8(a) Business Development (BD) program needs enhanced business development processes, objectively defined eligibility standards, upgraded training and information systems, improved graduation procedures, and better oversight of contractor compliance with program regulations.
• Insufficient and outdated SBA controls continue the excessive risk of the Small Business Investment Company (SBIC) program.
• Effective tracking and enforcement would reduce financial losses from loan agent fraud.

As in prior years, the FY 2009 report used a color-scoring scheme to show the Agency’s progress in addressing the actions needed to resolve each Management Challenge. The chart on the next page provides a summary of SBA’s progress for each of the eight Management Challenges in the FY 2009 report. While progress on a number of the challenges has been encouraging, much more remains to be done. By their nature, these challenges require continued long-term commitment and effort by the Agency.

For further information, please refer to the attached document.