Report 12-12: The SBA’s Office of International Trade Inappropriately Awarded a One Million Dollar State Trade and Export Promotion (STEP) Program Grant to an Ineligible Recipient

This advisory memorandum presents an issue that we identified during our ongoing Review of the Small Business Administration’s  State Trade and Export Promotion (STEP) Grant Program.    Due to the significance and timing of our finding, we issued this advisory memorandum to enable SBA’s Office of International Trade personnel to take immediate corrective action.  The Office of the Inspector General  audit team determined that the SBA’s Office of International Trade (OIT) awarded a State Trade and Export Promotion (STEP) program grant— valued at $1,022,781— to the Commonwealth of the Northern Mariana Islands, despite being ineligible to receive the grant.  This resulted in eligible grant recipients receiving a lesser portion of the available $30 million for the FY 2011 STEP grant program.

We recommended that the Associate Administrator for the Office of International Trade immediately terminate the grant, withhold fund disbursements, and recover all previously disbursed funds related to this grant.  Further, we recommended that the OIT redistribute the funds to other qualified STEP grant recipients or return them to the US Department of the Treasury.