Review of Women’s Business Center, Inc., Compliance with Cooperative Agreement Requirements

This memorandum presents the results of our review of the Women’s Business Center, Inc., in Mobile, Alabama, (Recipient) as part of our audit to determine whether the Small Business Administration (SBA) has effective oversight to ensure Women’s Business Centers (WBCs) complied with cooperative agreement financial requirements. The purpose of the WBC program is to provide long-term training and counseling to women business owners, including those who are socially and economically disadvantaged, and to assist women in starting and growing small businesses.

We found that the Recipient violated specific terms and conditions of the cooperative agreements by not having available client service facilities and service hours or staffing the WBCs with full-time program directors. Specifically, because the WBCs did not have full-time staff or open and accessible locations, they were not fulfilling their cooperative agreements performance requirements. Further, the Recipient’s refusal to allow SBA Office of Inspector General (OIG) auditors access to its office location, personnel, and records during an unannounced site visit occurred even after having been instructed to do so by SBA’s Office of Women’s Business Ownership.

After the Recipient denied OIG auditors access during the site visit, OIG exercised their statutory authority by issuing an administrative subpoena to the Recipient. Through analysis of the resulting information, we found that the Recipient violated federal regulation financial requirements and additional terms and conditions of the cooperative agreements. Additionally, we found that the two WBC facilities, the South WBC and the Rural WBC, were not in operation, and we witnessed a potential client trying to obtain services from a closed location. Through interviews with the building tenants and landlord, we learned that the Recipient has not been at the location for approximately 6 months and is behind by 6 months in its rent payments. Also, the documentation provided by the Recipient was insufficient and incomplete. In addition, the Recipient failed to maintain an adequate financial management system and requisite supporting documents, records, or policies and procedures as required by federal regulations.

We made two recommendations to SBA to pursue actions including, but not limited to, suspension, termination, and nonrenewal of the Recipient’s cooperative agreements, as well as suspension and debarment of the Recipient and its personnel. These findings impel SBA to take prompt corrective action to protect taxpayers’ dollars and help to ensure the integrity of the WBC program.