This report presents the results of the OIG’s audit of the Small Business Administration’s Unauthorized Commitments. The audit objective was to determine the extent and reasons unauthorized commitments occurred. The OIG determined that the Small Business Administration (SBA or the Agency) received invoices associated with 417 unauthorized commitments, valuing more than $1.4 million between November 2010 and May 2012. The OIG found that the total number of unauthorized commitments at the SBA in the last two fiscal years greatly exceeded the total number of unauthorized commitments at six other federal agencies of a similar size. Further, the OIG believes that the 417 unauthorized commitments directly affected the ability of the Agency to procure goods and services for its daily operations legally and efficiently, and limited its ability to provide needed support to small businesses.
The SBA continues to improve its acquisition process and preventing unauthorized commitments, however, transformation of the culture needs to occur. In order to implement a successful culture change, the SBA needs to hold its employees accountable for their actions, have detailed policy and guidance readily accessible to all employees, and provide meaningful training to all employees. The OIG recommended seven actions to improve contract management at the SBA and significantly decrease the total number of future unauthorized commitments.