This report presents the results of our audit of SBA 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 our review was to assess whether the SBA was following established procedures for soliciting, accepting, holding, and utilizing cash gifts in fiscal year 2011. Our review covered two cash gifts reported for this period totaling $10,000 that were recorded in the Business Assistance Trust Fund (BAT Fund) during April 2011.
We determined that the SBA obtained proper approvals to solicit and accept gifts to use for the payment of travel and per diem costs for the SBA’s Start-up America events in 2011. The donor was properly vetted through the SBA program offices to ensure no business relationships existed that would cause a conflict of interest. We also determined the SBA fully complied with the Act regarding the holding and utilization of cash gifts. The SBA recorded the cash donations in the BAT Fund and timely made the funds available to the OA for expenditure. In addition, the Massachusetts District Office used its prior year BAT Funds to pay for a Jobs Act “Listening Tour” event.
We concluded that the SBA did not fully comply with the solicitation and acceptance provisions of its cash gifts authority under the Act because staff in the OA recorded the wrong accounting code in the SBA’s Administrative and Accounting System. Consequently, guest speakers’ and participants’ travel and per diem expenses for the Start-Up America events, totaling $5,680.51, were reimbursed out of the SBA’s salaries and expenses appropriation instead of the BAT Fund. While $5,680.81 of the original $10,000 gift should have been used to pay these travel expenses, we also noted that the OA did not follow-up with Business Forward regarding the disposition of the unused $4,319.49.