U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
1
TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................1
ORGANIZATION CHART...........................................................................................................3
OUR MISSION ..............................................................................................................................4
BUDGET HIGHLIGHTS.............................................................................................................13
RESOURCES SUMMARIES......................................................................................................27
BUDGET CROSSWALK.............................................................................................................39
GOALS AND RESOURCES .......................................................................................................45
GOAL 1: HELP SMALL BUSINESSES SUCCEED...................................................................46
Objective 1: Act as a Voice for America’s Small Businesses..........................................................47
Objective 2: Improve Access to Capital and Credit .......................................................................48
Objective 3: Improve Access to Procurement Opportunities ..........................................................56
Objective 4: Provide and Improve Access to Entrepreneurial Development Assistance...................65
GOAL 2: HELP FAMILIES AND BUSINESSES RECOVER FROM DISASTERS ..................71
GOAL 3: IMPROVE SBA MANAGEMENT..............................................................................74
Objective 1: Manage for Results....................................................................................................74
Objective 2: Transform the Workforce..........................................................................................76
Objective 3: Modernize Information Systems.................................................................................78
Objective 4: Improve Financial Management .................................................................................82
Objective 5: Improve Credit Program Management .......................................................................82
Objective 6: Create Electronic Government ...................................................................................85
APPROPRIATIONS LANGUAGE AND DESCRIPTION .......................................................86
Salaries and Expenses Appropriation.............................................................................................87
Business Loans Appropriation.......................................................................................................92
Surety Bond Guaranty Revolving Fund Appropriation..................................................................104
Disaster Loans Appropriation......................................................................................................107
DATA VALIDATION AND VERIFICATION.........................................................................113
CHARTS OF HISTORICAL DATA .........................................................................................123
OFFICE OF THE INSPECTOR GENERAL............................................................................124
FY 2002 Budget Request And Justification..................................................................................124
Annual Performance Plan............................................................................................................128
11 April, 2001
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
2
FY 2002 CB Narrative Revised Apr 10.doc
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
3
ORGANIZATION CHART
4
OUR MISSION
HOW SBA MAKES A DIFFERENCE
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
5
OUR MISSION
SBA’s Mission
Maintain and strengthen the nation’s economy by aiding, counseling, assisting, and protecting
the interests of small businesses and by helping families and businesses recover from natural
disasters.
The Small Business Act defines SBA’s mission as follows:
“It is the declared policy of the Congress that the Government should aid, counsel,
assist, and protect, insofar as is possible, the interests of small business concerns in
order to preserve free competitive enterprise, to ensure that a fair proportion of the
total purchases and contracts or subcontracts for property and services for the
Government...be placed with small business enterprises, to ensure that a fair
proportion of the total sales of Government property be made to such enterprises,
and to maintain and strengthen the overall economy of the Nation.”
SBA’s success contributes to economic growth. Small business is a key component of America’s
productive capacity and play a critical role in creating America’s innovations and jobs. Small business is
responsible for 51 percent of private sector output, and has created 75 percent of the new jobs
between 1990 – 1997. SBA promotes a vibrant small business sector with advocacy, capital access,
procurement opportunity, technical assistance and disaster relief. These services provide small business
customers with the crucial assistance they need to be successful, resulting in greater growth for existing
businesses and expanded opportunities for start-ups. Ultimately, SBA programs create new jobs, and
provide greater opportunities for all Americans.
Goals and Objectives
SBA, as part of the Bush Administration, will carry out its mission by focusing on the following goals
and objectives:
1. Help Small Businesses Succeed
Objective 1: Act as a Voice for America’s Small Businesses
Objective 2: Improve Access to Capital and Credit
Objective 3: Improve Access to Procurement Opportunities
Objective 4: Provide and Improve Access to Entrepreneurial Development Assistance
2. Help Families and Businesses Recover from Disasters
3. Improve SBA Management
Objective 1: Manage for Results
Objective 2: Transform the Workforce
Objective 3: Modernize Information Systems
Objective 4: Improve Financial Management
Objective 5: Improve Credit Program Management
Objective 6: Create Electronic Government
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
6
OUR MISSION
SBA Results
SBA contributes to the success of small business in two ways. First, it provides direct assistance to
companies in the form of access to capital, procurement opportunities, and technical assistance.
Second, SBA contributes to an improved small business climate by serving as a voice for small business
in the regulatory and legislative process. The diagram below illustrates the logic flow between our
resources and our customers, and their related impact on the small business sector and the economy as
a whole.
HOW SBA PRODUCES RESULTS
OUR OUTPUTS PRODUCE THESE OUTCOMES
BUSINESS
Voice for Small Businesses
Impact Analysis SBA Customer Outcomes
Research Number of start-ups
Hearings Firm growth in jobs and sales
Advocacy Firm survival rate
Firm growth in export sales
Access to Capital and Credit Customer satisfaction
Business loans
Equity financings Small Business Sector Outcomes
Surety bond guarantees Regulatory savings
Increase in number of small businesses
Access to Procurement Opportunities Increase in small business jobs
Certification of SDB and 8(a) Increase in small business ownership diversity
8(a) firms success rate Small business growth in HUBZones, LMI,
SBIR grants rural, and tribal areas
Increase in small business export sales
Entrepreneurial Development Assistance Increase in share of Federal procurement
Clients assisted to different small business groups
Clients counseled
Clients trained
DISASTER
Disaster Loans to Families and Outcomes in Areas Stricken by
Businesses Disaster
Loans to families Restored housing
Loans to businesses Jobs retained
Increased survival of businesses
Stabilized local economy and community
Customer satisfaction
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
7
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
8
OUR MISSION
The FY 2002 Budget Request and Performance Plan enhances accountability by describing goals and
requested resources in a single, integrated document. The Performance Scorecard shown below
summarizes our progress and reported success for each goal.
PERFORMANCE INDICATORS
FY 2000 FY 2001 FY 2002
Description Actual Estimate Planned
Goal 1: Help Small Businesses Succeed
1. Regulatory cost savings to small businesses $3.6B TBD TBD
2. Jobs created by SBA borrowers 541,539 542,000 542,000
3. Improved access to capital and credit: 7(a), 504,
Microloan and SBIC programs $13.1B $17.6 B $17.6 B
4. Increase diversity:
Number of loans to Women-owned firms
Number of loans to Minority-owned firms
Number of loans to Veteran-owned firms
9,921
12,120
5,215
10,000
12,300
5,300
10,500
12,500
5,300
5. Number of Start-up firms financed by 7(a), 504 and
SBIC program 16,600 16,700 17,000
6. Export Sales assisted by SBA $675M $537 M $537 M
7. Mandated Fair Share of Federal prime contract
dollars:
§ To small businesses N/A 23% 23%
§ To SDBs (including 8(a)) N/A 5% 5%
§ To Women-owned firms N/A 5% 5%
§ To service disabled Veteran-owned firms N/A 2.9% 3%
§ To small businesses in HUBZones 1.5% 2% 2.5%
8. 8(a) client success rate 3 yrs after graduation N/A 68% 70%
9. Customer satisfaction rate with ED programs as
determined through surveys N/A 80% 80%
10. Number of clients trained and counseled 1.3M 1.3M 1.4M
Goal 2: Help Families and Businesses Recover from Disasters
11. Field presence within 3 days of a disaster 100% 98% 98%
12. Customer satisfaction rate 81% 80% 80%
13. Applications processed within 21 days 91% 80% 85%
Goal 3: Improve SBA Management
14. Manage for Results
15. Transform the Workforce
16. Modernize Our Information Systems
17. Improve Financial Management
18. Improve Credit Program Management
19. Create Electronic Government
These initiatives will be
published after a review by
the incoming
Administrator.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
9
OUR MISSION
SBA and America’s Small Businesses
SBA will focus on the small business owner and continue to help small businesses succeed. Through
access to capital, procurement opportunity, management and technical assistance, and regulatory
advocacy, over a million small businesses benefit annually from SBA and its resource partner programs.
Developing precise estimates of our contribution to the overall small business sector of the economy is a
challenge. It is difficult to quantify the causal relationship between our outputs and measurable changes
in the growth of the small business sector. However, general analysis of small business provides
important contextual information for evaluating SBA’s contribution to the American people.
We measure the growth of the small business sector in a number of ways. One measure is the aggregate
number of small businesses, which can be defined as: (1) the number of small businesses with
employees, using statistics from the U.S. Bureau of Labor Statistics; and (2) small businesses filing tax
returns, using data from the Internal Revenue Service (IRS). Other measures of small business sector
growth include the number of jobs, sales revenues, and business assets in small firms. These measures
have varied substantially during the last decade, demonstrating how sensitive the small business sector is
to external factors such as the overall state of the economy.
Number of Small Businesses With Employees
In 1998, 24.8 million small businesses filed tax returns
with the IRS1. SBA projects that 25.2 million small
businesses will file tax returns in FY 2000 and 26.2
million2 in FY 2001. The graph shows a steady growth
since 1988, with a slight downturn during the 1990-
1991 downturn. Firms with employees represent about
half the growth rate of all firms that file tax returns.
Source: US Dept of Treasury, IRS, Statistics of Income
Bulletin (Fall 1998) Table 21
Growth of the Number of Small Businesses
0
5
10
15
20
25
30
1982 1984 1986 1988 1990 1992 1994 1996 1998
(millions)
All firms filing
tax returns
Firms with
Employees
1 This number includes all firms with and without employees, and firms where the owner is working part-time. Since only
15,000 firms of the 24.8 million firms have more than 500 employees, the IRS data is a very close approximation to the actual
number of small firms (24,800,000-15,000/ 24 .8 million = 99.9%).
2 Projection based on a linear regression of values from 1988 through 1999.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
10
OUR MISSION
Small Business Jobs
The number of jobs in small businesses has varied
significantly since 1988. In FY 1997, small businesses
provided 55.0 million jobs. SBA estimates that small
businesses will provide 56.3 and 57.0 million jobs in FY
2000 and FY 2001, respectively. A SBA/Census Bureau
database indicates that between 1990 and 1995, 76.5
percent of all new jobs came from small firms with less
than 500 employees, and about 49 percent came from
firms with less than 20 employees. Start-up firms
provided about a third of the total new jobs.
Source: SBA, Office of Advocacy, From data provided by Census
Bureau, Department of Commerce
.
Number of Jobs in Small Businesses
47
48
49
50
51
52
53
54
55
56
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
(millions)
In keeping with President Bush’s policy of inclusion, SBA will focus on diversity of small business
ownership. We create opportunities for all entrepreneurs, regardless of race or gender, to become
successful business owners. SBA levels the playing field for all entrepreneurs to ensure equity and
fairness for all small businesses in dealing with the Federal government.
Diversity Of Small Business Ownership
Over the last decade, business ownership has grown rapidly
for Hispanics, African-Americans, Asians, and for women.
The number of companies owned by women has almost
doubled to an estimated 9.1 million in the last 10 years.
Women entrepreneurs now own about 40 percent of all firms
and employ 27.5 million people.
Between 1987 and 1997, businesses owned by Hispanics
have increased 232 percent, businesses owned by African-
Americans by 108 percent, and businesses owned by Asian
American and Pacific Islanders by 180 percent.
Source: SBA, Office of Advocacy, SBA. From data provided by
Census Bureau, Department of Commerce
.
Women and Minority Owned Businesses
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1982 1984 1986 1988 1990 1992 1994 1996 1998
(m
illi
on
s)
Women
Owned
Businesses
Minority Owned
Businesses
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
11
OUR MISSION
How We Work – Our Core Values
Successful businesses must put their customers first, achieve results through partnerships and strategic
alliances, invest in their people, and use technology more effectively. SBA exercises an active, but
limited role – one that empowers citizens and states to make decisions, ensures results though
accountability, and promotes innovation through competition.
SBA is committed to the following principles in dealing with a more diverse, global, and technologically
advanced world.
· Citizen Centered – SBA is driven by customer demands and needs. We offer tailored assistance
including access to capital and credit, contracting help, regulatory help, counseling and training, and
access to procurement markets.
· Results Oriented. We are performance-based, and measure success through results that small
businesses seek, expect, and care about most. We hold ourselves accountable to the Congress and
to the public.
· Market Based – SBA promotes innovation and competition. We depend on partnerships for our
success. We deliver products and services by using an extensive grassroots network of business
resource partners positioned to provide small businesses with the help they need. The more we can
leverage these partnerships, along with interagency working relationships, and technology tools, the
more successful we will be in achieving our mission. SBA’s outreach and support network consists
of:
· Approximately 5,000 lenders
· 300 Certified Development Companies
· 185 Microloan Program intermediaries
· Nearly 1,000 Small Business Development Centers
· 70 Business Information Centers
· 22 One Stop Capital Shops
· 17 Tribal Business Information Centers
· 19 United States Export Assistance Centers
· 4 Veterans Business Outreach Centers
· 70 Women’s Business Centers
· 389 SCORE chapters
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
12
OUR MISSION
· Invest in our employees. Our workforce is our most important asset. Our employees must
adapt to the challenges of the new economy and provide guidance to the small business community.
We will streamline operations and ensure that our staff is well trained, motivated, and positioned to
help small businesses.
· Move aggressively to embrace the Digital Age. We are committed to offering all of our
products and services via the Internet and creating an “electronic SBA” as part of the
Administration’s vision to use the Internet to create a citizen-centered government. We will continue
to assist the entrepreneur in taking advantage of the Internet to compete locally, nationally, and
worldwide.
13
BUDGET HIGHLIGHTS
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
14
BUDGET HIGHLIGHTS
The FY 2002 Budget request for the Small Business Administration (SBA) meets the President’s goal
of encouraging entrepreneurial activity and growth while providing more efficient services and savings to
the taxpayer. With a budget of $539 million and an additional carryover balance of $37.9 million in the
Disaster Loan Programs account, SBA will be able to offer record levels of capital and credit assistance
in excess of $17.6 billion to America’s 25 million small businesses. In addition, the budget provides
adequate funds to provide the same level of managerial and technical assistance as was provided in FY
2001.
SBA’s budget is complimented by the President’s overall budget agenda which includes tax relief for
small businesses. At least 17.4 million small business owners and entrepreneurs stand to benefit from
President Bush’s tax relief plan. Small businesses will grow as a result of lower marginal tax rates, which
will give them more resources to expand.
The SBA’s budget request supports President Bush’s key budget goals: broad tax relief, the greatest
debt reduction in history, protecting Social Security, and bolstering long term economic growth. SBA’s
budget also reflects key management challenges which will also be addressed by each agency in FY
2002, including: streamlining programs to better serve small business, moving the agency toward
performance-based contracting, making full use of the Federal Activities Inventory Reform Act,
identifying and correcting erroneous payments, and modernizing government.
The Administration’s economic plan will benefit America’s small businesses and compliment recent
monetary action. President Bush’s tax relief program, including an across the board reduction in the
marginal rates, will serve as a long-term catalyst of economic growth. Since most small businesses do
not pay corporate taxes, as sole proprietors or Subchapter S’s, they are subject to personal income tax
rates. Within SBA’s account, savings from the elimination of redundant federal subsidies will make it
possible to increase funding to some key programs as reflected in our overall increased levels of
assistance to small business. Additional savings will be passed on to the taxpayer.
Presidential Initiatives:
SBA’s FY 2002 Budget Request contains two specific program initiatives that are part of the
President’s agenda for America. First, under the “New Freedom Initiative,” SBA requests $5 million to
provide technical assistance to help small businesses comply with the Americans with Disabilities Act
(ADA), and hire more people with disabilities. This funding will also help SBA increase awareness and
promote use of the Disabled Access Credit, which provides a 50 percent tax credit on up to $5,000 of
eligible expenses annually to help small businesses make their facilities ADA compliant. Secondly, to
meet the Bush Administration’s goal of a drug free workplace, SBA requests $5 million to assist small
businesses in developing policies and programs to address drug use in the workplace. Both of these
initiatives would be funded at the level of $5 million per year over 5 years.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
15
BUDGET HIGHLIGHTS
FY 2002 Policy Proposals:
The following key policy proposals are included in this Budget Request. Our legislative package will
include the changes required by the Small Business Act and the Small Business Investment Act.
· Save taxpayers $114.5 million by increasing the tax deductible user fee paid by businesses on
Section 7(a) loans over $150,000. Loans smaller than this amount account for almost 60% of all
7(a) loans and will have no increase. This will support a record $10.7 billion loan program with a
zero subsidy rate.
· Save taxpayers $26 million in the SBIC program through a nominal increase of 37.6 basis
points on the fee for investors. This reform will support a record $3.1 billion investment program
with a zero subsidy rate.
· Save $123 million from the SBA budget by restructuring disaster relief funding to draw on a
government-wide emergency account if funds are needed, and raising the loan rate to businesses
with “no-credit elsewhere” to a modest 5.4 percent. SBA’s budget includes funding for a $300 million
loan program level, including the use of a $37.9 million carryover from 2001. The balance of
funds to support the Disaster program if the need arises would be drawn from the $5.6 billion reserve
account requested in the President’s budget. SBA will continue to meet the needs of small
businesses and homeowners when disaster strikes, and will do so with a more efficient loan program.
· Streamline our programs and provide more effective services by moving away from
redundant and duplicative programs. By removing the Program for Investment in Microenterprise
(PRIME) and Business Learning-Innovation-Networking and Collaboration (BusinessLINC)
programs and reviewing other SBA program areas, SBA can focus on providing a greater level of
service through our proven core programs. Existing SBA services will be improved through the
elimination of programs that duplicate other federal, state, local or private-sector services to small
business. Also, current and proposed tax incentives will provide additional economic stimulus.
Areas where duplication is likely to hamper SBA’s services include: PRIME, BusinessLINC, New
Markets Venture Capital program and technical assistance (NMVC), as well as “earmarked”
Congressional initiatives which are not included in an agency’s budget request. These reforms will
result in a higher level of service and savings of $116 million that can be passed on to the taxpayer.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
16
BUDGET HIGHLIGHTS
· Save taxpayers $12 million in spending on Small Business Development Centers (SBDC),
while providing free and low cost counseling to small business clients. The small business clients
served by SBDC’s will receive one hour of free counseling. If additional counseling time is desired
by the client, the SBDC’s may charge approximately $10.75 per hour, which is well below private
sector counseling rates. Most SBDC clients are generally in a more mature stage of development
and are therefore able to easily pay the small fee for counseling services.
Management Reform:
In addition to the small business programs and services to be provided in FY 2002, SBA will improve
and streamline the management of all operations and activities. Specific management initiatives include:
· Continue to develop and implement new program and financial management systems under the
Systems Modernization Initiative (SMI). These new systems will greatly improve SBA’s
oversight of its $50 billion loan portfolio by assisting with our risk management measures,
integrating our financial management processes to improve financial reporting and accountability,
providing for increased client tracking to measure performance, and using information
technology to improve services to SBA’s customers and resource partners.
SBA is moving ahead with a five year plan to implement SMI. Phase I is focused on developing
a new Loan Monitoring System. Loan system prototypes are being tested in Spring 2001.
Phase II includes implementation of a new financial management system. From FY 1998 to FY
2000, SBA spent approximately $18 million on SMI projects. Approximately $12 million of
these costs were for planning, personnel, and infrastructure, while the balance of $6 million has
been for systems acquisition and integration. SBA is currently reviewing the status of the
project and is evaluating the most effective and cost efficient way to proceed.
For FY 2002, SBA’s budget requests $8 million in new budget authority for project
implementation. In addition, SBA projects that there will be approximately $8 million from prior
appropriations that have been obligated in the FEDSIM account (will be held until the projects
are ready for acquisition). SBA will prioritize its resources in FY 2002 to support the most
critical LMS and SMI activities. SBA will need to review its plans and report a revised
schedule to the Congress.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
17
BUDGET HIGHLIGHTS
· Continue to transform our organization and streamline operations to match our changing
workloads. SBA’s need for internal transformation is based on several external factors
including an increased level of privatization that has emerged, the changing demographics and
geographic locale of our customers, and expanded use of technology.
Internally, we are experiencing shrinking employment levels, and will strive to efficiently use
available human capital. A 150 employee-reduction is planned in this budget request through
normal attrition, resulting in an overall employment reduction from FY 1990 of more than 32
percent. This was done while the loan portfolio was increasing to its current level of more than
$50 billion. SBA will continue to use its best efforts to serve America’s record 25 million small
businesses.
· Continue to increase efficiency and effectiveness of operations to manage programs and
activities with a reallocation of resources. This includes conducting studies to evaluate further
streamlining of operations, especially in the area of loan servicing that has been impacted by loan
asset sales, and to reduce or eliminate duplicative operations.
· Continue to sell loan assets to private investors, thereby reducing the direct loan portfolio that
will be serviced by SBA employees. Sales will continue to occur at regular intervals as long as
the value to the government from these sales is greater than the cost to SBA of retaining loan
servicing.
· Continue to enhance internal control efforts through the full implementation of the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) internal control framework.
· Continue to produce unqualified audited financial statements that are free of material
weaknesses and compliant with the Federal Financial Management Improvement Act (FFMIA).
In summary, our request of $539 million represents a responsible and responsive funding level to
appropriately serve the needs of America’s small businesses in FY 2002. Our budget provides
sufficient funding to administer record levels of capital, credit, and entrepreneurial development
assistance to small businesses at an overall lower cost to the taxpayer than in FY 2001. Our budget
builds on the President’s tax proposal and other policies to revitalize the economy, invest in human
capital, increase customer satisfaction, and increase government accountability.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
18
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Non-Credit Programs/Special Initiatives
FY 2001
Estimate
FY 2002
Request Change
New Freedom Initiative:
SBA will use intermediaries to provide technical
assistance to help small businesses comply with the
Americans with Disabilities Act (ADA), serve
customers with disabilities, and hire more people with
disabilities. Funding will be used to increase small
business awareness and promote use of the Disabled
Access Credit, which provides an annual 50 percent
tax credit up to $5,000 of eligible expenses annually
to help small businesses make their facilities ADA
compliant. This level of funding represents the first
year of a 5-year $25 million initiative.
$ 0 $5,000 +$5,000
Paul D. Coverdell Drug-Free Workplace
Program:
SBA will use intermediaries to provide technical
assistance to help small businesses develop policies
and programs to address drugs in the workplace.
This is already an authorized program at SBA.
3,500 5,000 +1,500
Procurement Assistance Programs:
P.L. 106-554 requires SBA to implement a number
of additional procurement initiatives, including
contract bundling and a women’s procurement
certification and goaling program. These statutory
requirements include conducting research, developing
a database, and monitoring these efforts.
0 500 +500
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
19
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Non-Credit Programs/Special Initiatives
FY 2001
Estimate
FY 2002
Request Change
Veteran’s Business Development Corporation:
The Corporation was established by P.L. 106-50,
the Veteran’s Entrepreneurship and Small Business
Development Act of 1999. Funding for this
government-chartered corporation is not included in
SBA’s budget request for FY 2002, but under
separate authority in the Commerce, Justice, State,
and Related Agencies Bill.
$ 3,992 $ 0 $ (3,992)
Veteran’s Business Development Assistance:
In order to implement the provisions of P.L. 106-50
relating to SBA’s direct role in supporting veteranowned
small businesses, and implement the
provisions of P.L. 105-135, the SBA Reauthorization
Act of 1997, we will continue to administer our
previously-funded outreach and assistance program
to support the creation, growth, and viability of small
businesses owned by eligible veterans.
0 750 +750
Service Corps of Retired Executives (SCORE):
Over 11,400 business men and women volunteer
their time and talents to provide assistance in the form
of training and counseling to prospective and current
small business owners. The Federal funding covers
the cost of the SCORE national office,
reimbursement for local travel expenses, and some
minimal operational expenses. This increase covers
more of the operational costs of SCORE program
volunteers, including postage, paper, and other
incidental supplies.
3,750 4,000 +250
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
20
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Non-Credit Programs/Special Initiatives
FY 2001
Estimate
FY 2002
Request Change
30,000 0 (30,000) New Markets Venture Capital Technical
Assistance:
P.L. 106-554 authorized a number of Federal
programs and initiatives to spur economic
development in areas of high unemployment or low
income, called “new markets.” SBA’s program
included in this law was a venture capital loan
program, modeled after our existing Small Business
Investment Company program (SBIC), but with
specific targets for investments in these areas. This
program included a grant component to provide
technical assistance to firms that received investments
from the New Markets Venture Capital firms. In FY
2001, the program received a lump sum funding
which will span 5 years. The Act also included a
substantial tax incentive for investments in these New
Markets areas, which makes SBA’s technical
assistance program unnecessary. The 30 percent tax
credit will provide over $15 billion in investment in
these areas. SBA’s existing SBIC program will
continue to provide small businesses with equity
capital, including those located in low and moderate
income areas.
Program for Investment in Microenterprises
(PRIME):
PRIME was authorized in 1999 to provide technical
assistance to small businesses and to the
organizations that support them. Funding was not
provided until FY 2001. Similar assistance is already
provided through existing Federal, State, local, and
private-sector programs, including SBA’s Microloan
program, Small Business Development Centers, and
One-Stop Capital Shops. PRIME duplicates existing
programs and is not funded in FY 2002.
$ 15,000 $ 0 $ (15,000)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
21
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Non-Credit Programs/Special Initiatives
FY 2001
Estimate
FY 2002
Request Change
Business, Learning - Investment - Networking and
Collaboration (BusinesLINC):
Also included in P.L. 106-554 was the establishment
of the BusinessLINC program, which would facilitate
the establishment of mentor-protégé relationships
between large and small businesses. These
relationships are already facilitated through existing
Federal and private-sector programs, such as the
Department of Defense mentoring program, National
Aeronautics & Space Administration’s mentoring
program, the Women’s Network, and the 8(a)
program. The 7(j) management and technical
assistance programs also provide similar services as
the BusinessLINC program. BusinessLINC
duplicates existing programs and is not funded in FY
2002.
7,000 0 (7,000)
Small Business Development Centers (SBDCs):
SBDCs provide training and counseling to small
businesses. Counseling is currently provided free-ofcharge;
however, the SBDC can charge a fee for
training. Statutory language prohibits the charging of
a fee for counseling. We propose to remove this
prohibition and encourage the SBDCs to charge a
nominal fee for counseling to those who benefit from
the program and reduce taxpayer burden. SBA’s
proposed funding option will allow for an initial 1
hour of counseling to remain free-of-charge.
However, if additional counseling is needed, the client
will be charged $10.75 per hour. The average cost
per client is estimated at approximately $50, for an
estimated 262,000 clients annually. This fee would
reduce Federal funding for SBDCs by $12 million
per year.
87,806 75,806 (12,000)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
22
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Non-Credit Programs/Special Initiatives
FY 2001
Estimate
FY 2002
Request Change
Congressional Initiatives:
Each year as part of the congressional budget
process, there are a number of program initiatives
that are included in SBA’s final appropriation. These
initiatives are not authorized in the Small Business
Act, and therefore, are not requested as part of the
President’s annual budget.
$ 41,291 $ 0 $ (41,291)
Other Non-Credit Programs and Initiatives:
The remaining programs and initiatives for small
business assistance are proposed to be funded at the
same level as FY 2001.
62,844 62,844 0
Total Non-Credit Programs/Initiatives $255,183 $153,900 $ (101,283)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
23
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Operating Budget
FY 2001
Estimate
FY 2002
Request Change
Direct Appropriation to Salaries & Expenses $154,549 $167,319 $ 12,770
Transfer from Business Loans1 128,716 129,000 284
Transfer from Disaster Loans2 9,854 9,854 0
Fee Income (Not Appropriation Item) 3,000 3,000 0
Total Operating Budget $296,119 $309,173 $ 13,054
SBA’s operating budget includes funds directly
appropriated to its Salaries and Expenses account,
plus transfers from the Business and Disaster Loans
Program accounts for administrative expenses. This
budget covers the cost of compensation and benefits
of our employees, excluding direct Disaster and
Inspector General staff. Costs of fixed items such as
rents, telephones, computers, postage, unemployment
compensation, and financial systems such as payroll
and accounting are included. Costs of normal
operations to support and deliver services to small
business, such as travel, supplies, and General
Services Administration (GSA) rental cars are
included.
The President requested a 3.6 percent general pay
raise in January 2002, which would increase our
compensation and benefits expense by about $8
million in FY 2002. SBA expects to end FY 2001
with 2,860 full time employees (FTE). The estimate
for the end of FY 2002 is 2,710 FTE, as SBA plans
a staffing reduction of 150 through normal attrition.
We are also experiencing increases in other operating
costs, especially in the area of rents. The small
increase in the operating budget is needed to cover
these expected increased costs.
Total Salaries And Expenses $ 409,732 $ 321,219 $ (88,513)
1 Included in Business Loans Total
2 Included in Disaster Loans Total
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
24
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Business Loans Program
FY 2001
Estimate
FY 2002
Request Change
Section 7(a) General Business Loans:
SBA’s largest lending program provides government
guaranties for loans made by participating lenders.
For FY 2002, we request a program level of $10.7
billion and propose that the fees on larger loans be
increased to result in a zero subsidy rate for these
loans, requiring no new appropriations. This will shift
the cost from the general taxpayer to those who
benefit directly from the program, and decrease
SBA’s dependence on Congressional funding. Fee
changes for FY 2002 would be as follows: For loans
with a term of more than 1 year in an amount less
than or equal to $150,000, there is no change in the
current fee schedule (except for loans that mature
within one year); for loans greater than $150,000 and
less than or equal to $700,000, the upfront fee
increases from 3 percent to 3.5 percent and the
ongoing fee increases from .50 percent to no more
than 1 percent (SBA estimates .8875 percent); for
loans greater than $700,000, the upfront fee
increases from 3.5 percent to 4.0 percent and the
ongoing fee increases from .50 percent to no more
than 1 percent (SBA estimates .8875 percent); for
loans with a maturity of less than 1 year, the upfront
fee increases from .25 percent to 1.0 percent.
$ 114,707 $ 0 $ (114,707)
Small Business Investment Company (SBIC)
Participating Securities:
The SBIC program meets small business needs for
equity capital through partnerships with licensed
investment companies. For FY 2002, we request a
program level of $2.5 billion and propose that the
pass-through fees from SBIC’s be increased from 1.0
percent to no more than 1.5% percent, to result in a
zero subsidy rate for these loans (SBA estimates
1.376 percent for FY 2002), requiring no new
appropriations.
26,142 0 (26,142)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
25
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Business Loans Program
FY 2001
Estimate
FY 2002
Request Change
Microloans:
The Microloan program provides access to very small
loans (up to $35,000) to help meet the needs of small
businesses through partnerships with microloan
intermediaries. For FY 2002, we request a direct
program level of $20.6 million, with a reduced subsidy
rate from 8.95 percent to 6.78 percent, resulting in a
decreased need for new appropriations.
$ 2,245 $ 1,500 $ (745)
New Markets Venture Capital Debentures:
As indicated above, P.L. 106-554 authorized a
number of Federal programs and initiatives to spur
economic development in areas of low income or
employment - “new markets.” In FY 2001, the
Program received lump sum funding for debentures,
which will span over 10 years. The tax incentives
provided in this law make the New Market Venture
Capital Debentures unnecessary. Therefore, no
funding is requested for FY 2002.
21,952 0 (21,952)
Administrative Expenses 128,716 129,000 +284
Total Business Loans Program $293,762 $130,500 ($163,262)
Disaster Loans Program
SBA’s Disaster Loan Program provides long-term
loans at subsidized interest rates to victims of natural
disasters to enable them to recover or prevent
disaster conditions. SBA’s loans cover the uninsured
losses from the disaster damage. SBA’s loans are
available to homeowners, renters and businesses
affected by natural disaster.
$ 75,972 $ 0 $ (75,972)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
26
SUMMARY OF CHANGES FROM FY 2001 TO FY 2002
(Dollars in Thousands)
Business Loans Program
FY 2001
Estimate
FY 2002
Request Change
Disaster Loans Program (Cont’d)
For FY 2002, the Administration proposes to
establish a government-wide emergency reserve of
$5.6 billion to cover the cost of Federal disaster
assistance. SBA would utilize this reserve fund to
cover the cost of its disaster loan program and
related administrative costs to the extent they exceed
the amount of direct appropriations to SBA. SBA
proposes a $300 million loan program that is funded
from anticipated carryover balances from FY 2001 in
this program, and requests related administrative
costs as a direct appropriation.
In addition, we propose to increase the interest rate
for business loans to borrowers who do not have
credit available elsewhere. Presently, these loans are
capped at a 4 percent interest rate. SBA’s proposal
would increase this rate to the Treasury cost of funds,
which is projected at 5.4 percent next year. A
maximum of 8 percent is also proposed to parallel the
rate of disaster business loans with credit elsewhere.
This proposal has the effect of reducing the subsidy
rate on the disaster loan program from 14.67 percent
to 10.95 percent.
Disaster Administrative Expenses: 108,116 75,354 (32,762)
Total Disaster Loan Program 184,088 75,354 (108,734)
11,927 11,927 0 Office of the Inspector General
Total SBA Request $899,5091 $539,000 ($360,509)
1 Amounts in this column are “net” of the rescission.
27
RESOURCES SUMMARIES
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
28
SUMMARY OF BUDGET AUTHORITY
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Salaries and Expenses
Administrative Operating Expenses $ 133,695 $ 154,541 $ 167,319 $ 12,778
Non-Credit Programs and Special Initiatives 189,105 256,094 153,900 (102,194)
Subtotal 322,800 410,635 321,219 (89,416)
Business Loans Program Account
Direct Loans New Budget Authority 0 2,250 1,500 (750)
Guaranteed Loans Budget Authority 137,800 163,160 0 (163,160)
Administrative Expense 129,000 129,000 129,000 0
Subtotal 266,800 294,410 130,500 (163,910)
Disaster Loans Program Account
Direct Loans
New Budget Authority 140,400 76,140 0 (76,140)
Supplementals, Contingencies 15,500 0 0 0
Administrative Expense
New Budget Authority 136,000 108,354 75,354 (33,000)
Supplemental Appropriation 25,400 0 0 0
Subtotal 317,300 184,494 75,354 (109,140)
Surety Bond Guarantee Fund 0 0 0 0
Office of the Inspector General 11,000 11,953 11,927 (26)
Appropriated Funds Rescinded (3,280) (1,983) 0 1,983
Total Budget Authority $ 914,620 $ 899,509 $ 539,000 $ (360,509)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
29
SUMMARY OF FINANCING
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Salaries and Expenses:
New Budget Authority $ 322,800 $ 410,635 $ 321,219 $ (89,416)
Transfer from Business Loans Program 129,000 129,374 129,105 (269)
Transfer from Disaster Loans Program 20,000 9,854 9,854 0
Transfers from Other Agencies 11,654 5,000 1,800 (3,200)
Offsetting Collections - Fees 3,331 3,000 3,000 0
Estimated Gainsharing 0 3,000 3,000 0
Carryover from Prior Fiscal Year 4,089 2,791 0 (2,791)
Recoveries 10 0 0 0
Returned to Treasury (10,500) 0 0 0
Transfer to Other Accounts (4,248) (1,898) 0 1,898
Carryover into Next Fiscal Year (2,791) 0 0 0
Rescinded Funds Appropriated (3,185) (903) 0 903
Balance Expired (674) 0 0 0
Total Salaries and Expenses 469,486 560,853 467,978 (92,875)
Business Loans Program
New Budget Authority - Administration 129,000 129,000 129,000 0
New Budget Authority - Loan Programs 137,800 165,410 1,500 (163,910)
Transfer from Other Accounts 9,500 500 0 (500)
Carryover from Prior Fiscal Year 30,100 24,719 9,114 (15,605)
Recoveries 4,211 1,169 0 (1,169)
Transfer to Other Accounts (135,000) (129,874) (129,105) 769
Carryover into Next Fiscal Year (24,719) (9,114) (8,798) 316
Rescinded Funds Appropriated 0 (648) 0 648
Balance Expired (13,100) 0 0 0
Total Business Loans 137,792 181,162 1,711 (179,451)
Disaster Loans Program
New Budget Authority 140,400 76,140 0 (76,140)
Supplemental, Contingencies 15,500 0 0 0
Carryover from Prior Fiscal Year 81,004 96,231 37,850 (58,381)
Recoveries 33,235 10,000 0 (10,000)
Carryover into Next Fiscal Year (96,231) (37,850) 0 37,850
Transfer to Administrative Expense 0 0 (5,000) (5,000)
Rescinded Funds Appropriated 0 (168) 0 168
Subtotal - Disaster Loans Program 173,908 144,353 32,850 (111,503)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
30
SUMMARY OF FINANCING
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Disaster Loans Program - Administration
New Budget Authority $ 136,000 $ 108,354 $ 75,354 $ (33,000)
Supplemental, Contingencies 25,400 0 0 0
Carryover from Prior Fiscal Year 779 27,307 0 (27,307)
Transfer from Loan Subsidy 0 0 5,000 5,000
Recoveries 1,128 0 0 0
Carryover into Next Fiscal Year (27,307) 0 0 0
Transfer to Salaries and Expenses (20,000) (9,854) (9,854) 0
Transfer to Inspector General (500) (500) (500) 0
Rescinded Funds Appropriated (2,048) (238) 0 238
Subtotal - Disaster Administration 113,452 125,069 70,000 (55,069)
Total - Disaster Assistance Program 287,360 269,422 102,850 (166,572)
Surety Bond Guarantee Fund 0 0 0 0
Office of the Inspector General
New Budget Authority 11,000 11,953 11,927 (26)
Carryover from Prior Fiscal Year 482 515 0 (515)
Transfer from Disaster 500 500 500 0
Recoveries 96 0 0 0
Balance Expired (130) 0 0 0
Carryover into Next Fiscal Year (515) 0 0 0
Rescinded Funds Appropriated (95) (26) 0 26
Total Inspector General 11,338 12,942 12,427 (515)
Total Financing $ 905,976 $ 1,024,379 $ 584,966 $ (439,413)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
31
SUMMARY OF POSTIONS AND FULL TIME EQUIVALENTS
(Dollars in Thousands)
ON BOARD POSITIONS
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Salaries and Expenses - Regular Funds 2,807 2,760 2,610 (150)
Non Credit Programs and Initiatives 134 100 100 0
Subtotal 2,941 2,860 2,710 (150)
Disaster 1,168 1,164 9321 (232)
Inspector General 112 125 125 0
Total 4,221 4,149 3,767 (382)
FULL TIME EQUIVALENTS (FTE)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Salaries and Expenses - Regular Funds 2,869 2,788 2,688 (100)
Non Credit Programs and Initiatives 141 94 100 6
Subtotal 3,010 2,882 2,788 (94)
Disaster 1,137 1,137 1,0481 (89)
Inspector General 115 119 119 0
Total 4,262 4,138 3,955 (183)
1 For FY 2002, this assumes additional funding from the government-wide Disaster Reserve to maintain approximately the same level
of staffing throughout the year.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
32
SUMMARY OF NON CREDIT PROGRAMS & SPECIAL INITIATIVES1
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Executive Direction
Advocacy Database and Analysis $ 1,140 $ 1,300 $ 1,100 $ (200)
National Ombudsman 514 500 500 0
New Freedom Initiative 0 0 5,000 5,000
Veteran’s Business Development Assistance 615 0 750 750
Veteran’s Business Development 0 3,992 0 (3,992)
National Women's Business Council 600 750 750 0
Management & Administration
Systems Modernization 10,067 8,000 8,000 0
Workforce Transformation 0 2,000 2,000 0
Government Contracting/Business Development
7(j) Technical Assistance 3,950 3,600 3,600 0
BusinessLINC 0 7,000 0 (7,000)
PRO-Net 454 500 500 0
Small Disadvantaged Businesses 8,643 1,800 1,800 0
SBIR Technical Assistance 496 1,500 1,500 0
SBIR – FAST 0 3,500 3,500 0
HUBZones Program 1,978 2,000 2,000 0
Procurement Assistance Programs 0 0 500 500
Entrepreneurial Development
Small Business Development Centers (SBDC) 84,074 88,013 75,806 (12,207)
Drug-Free Workplace 3,469 3,500 5,000 1,500
Service Corps of Retires Executives (SCORE) 3,471 3,750 4,000 250
Business Information Centers 495 500 500 0
Women's Business Centers 8,926 12,000 12,000 0
Survey of Women-Owned Businesses 783 694 694 0
One Stop Capital Shops 3,206 3,100 3,100 0
Capital Access
US Export Assistance Centers 3,065 3,100 3,100 0
Microloan Technical Assistance 19,243 20,260 20,000 (260)
PRIME Technical Assistance 0 15,000 0 (15,000)
New Market Venture Capital Tech Assistance 0 30,000 0 (30,000)
Gainsharing Improvements 0 3,000 3,000 0
Reimbursable Programs 2,722 3,668 105 (3,563)
Congressional Initiatives 27,749 41,291 0 (41,291)
Total $ 185,660 $ 264,318 $ 158,805 $ (105,513)
1 Includes amounts carried forward from the prior fiscal year.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
33
SUMMARY OF CONGRESSIONAL INITIATIVES
(Dollars in Thousands)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Congressional Initiatives:
NTTC @ Wheeling Jesuit University $ 2,312 $ 2,458 $ 0 $ (2,458)
Western Carolina University 1,850 590 0 (590)
State University of NY-Inst of Entrep 925 1,475 0 (1,475)
New York-Bronx Museum 2,775 2,458 0 (2,458)
Long Island Bay Shore Aquarium 185 983 0 (983)
Promesa Enterprises-Bronx, NY 0 1,966 0 (1,966)
NY City Parks & Rec.-Bronx, NY 0 492 0 (492)
NY Public Library-Bronx, NY 0 492 0 (492)
Hazard, KY-Center for Rural Law Enf 2,312 0 0 0
Pike Cty, KY Interpretive Dev, Init 0 492 0 (492)
Somerset, KY-Center for Rural Dev 0 4,915 0 (4,915)
Paintsville, KY-Regional Arts & Tourism 0 1,966 0 (1,966)
Prestonburg, KY-Regional Arts and Tourism 1,758 0 0 0
South KY-Economic Development Corp. 925 4,915 0 (4,915)
Pikeville College, KY-Telemed Lrn & Res 925 0 0 0
Union College, KY-Tech. & Media Center 0 1,473 0 (1,473)
Pulaski Cty, KY-Emergency Training Center 0 1,278 0 (1,278)
Nicholas Cty, KY-Industrial. Authority 0 344 0 (344)
Mont. Cty, KY-Ed & Train Facility 0 344 0 (344)
Oakridge, TN-Tech & Econ Dev 0 983 0 (983)
Safer Foundation 0 983 0 (983)
Somerset Community College 7,909 0 0 0
Vandalia Heritage Foundation 185 197 0 (197)
Museum of Science & Industry 0 786 0 (786)
Moundsville, WV-Economic Dev Council 462 492 0 (492)
Johnstown, PA-Regional Industries Ctr. 0 246 0 (246)
Johnstown, PA-Regional Industries Ctr. 231 246 0 (246)
Buckhorn Childrens' Foundation 0 590 0 (590)
Miami-Dade Community College 139 0 0 0
Soundview Comm Action-Bronx, NY 694 983 0 (983)
East LA Community Union 0 983 0 (983)
Maywood, CA-Operation Hope 925 0 0 0
Illinois Coalition 1,850 0 0 0
Illinois Dept. of Commerce 462 0 0 0
Durant, OK.-Rural Enterprises 185 197 0 (197)
OK-Dept. of Career & Technical Education 0 492 0 (492)
City of Chicago-Tech Based Bus Growth 462 0 0 0
Greenpoint Mfg & Design Center 0 983 0 (983)
Old Sturbridge Village-Arts & Tourism 0 197 0 (197)
N.VA-Business Asst. Dev. Group 0 246 0 (246)
Brotherhood Bus. Dev. & Cap. Fund 0 983 0 (983)
AZ-Dept. of Public Safety 0 885 0 (885)
Gadsden State College-Ctr for Econ Dev 0 246 0 (246)
Morehead State U Science Res. & Tech Ctr. 0 1,966 0 (1,966)
Electronic Commerce Center, Scranton, PA 0 983 0 (983)
National Museum of Jazz, New York, NY 0 983 0 (983)
Western, MA.-Enterprsie Fund 278 0 0 0
Total Congressional Initiatives $ 27,749 $ 41,291 $ 0 $ (41,291)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
34
SUMMARY OF CREDIT PROGRAMS
(Dollars in Thousands)
Program Level Budget Authority1 Subsidy Rate
Inc/(Dec) Inc/(Dec) Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001 FY 2000 FY 2001 FY 2002 vs FY 2001 FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate Actual Estimate Request Estimate Actual Estimate Request Estimate
Microloan Direct $ 27,204 $ 25,531 $ 20,575 $
(4,956)
$ 2,323 $ 2,285 $ 1,395 $ (890) 8.54% 8.95% 6.78% (2.17)%
Total Direct 27,204 25,531 20,575 (4,956) 2,323 2,285 1,395 (890) 8.54% 8.95% 6.78% (2.17)%
Guaranty
Section 7(a) Guaranty $ 9,679,569 $11,008,547 $10,700,000 $
(308,547)
$112,283 $128,800 $ 0
$(128,800)
1.16% 1.17%2 0.00% (1.17)%
Section 7(a) Guaranty - DELTA 15,552 20,000 20,000 0 285 374 132 (242) 1.83% 1.87% 0.66% (1.21)%
Section 7(a) Y2K Loans 2,704 0 0 0 110 0 0 0 4.07% N/A N/A 0.00%
Section 504 CDC Guaranty 1,808,649 3,750,000 3,750,000 0 0 0 0 0 0.00% 0.00% 0.00% 0.00%
Section 504 CDC Guaranty -
DELTA
257 2,472 2,500 28 3 22 21 (1) 1.13% 0.89% 0.84% (0.05)%
Microloan - Guaranty 1,150 2,000 2,000 0 96 159 163 4 8.32% 7.95% 8.17% 0.22%
New Market Venture Capital 0 152,022 0 (152,022) 0 21,952 0 (21,952) 15.00% 14.44% 14.47% 0.03%
SBIC – Participating Securities 1,260,630 2,104,580 2,500,000 395,420 22,692 27,570 0 (27,570) 1.80% 1.31% 0.00% (1.31)%
SBIC - Debentures 384,955 500,000 600,000 100,000 0 0 0 0 0.00% 0.00% 0.00% 0.00%
Total - Guaranty $13,153,466 $17,539,621 $17,574,500 $
34,879
$ 135,469 $ 178,877 $ 316
$(178,561)
Total Business $13,180,670 $17,565,152 $17,595,075 $ 29,923 $ 137,792 $ 181,162 $ 1,711
$(179,451)
Disaster $ 783,369 $ 826,764 $ 300,000 $
(526,764)
$ 173,908 $ 144,353 $ 32,850
$(111,503)
22.20% 17.46% 10.95% (6.51)%
Surety Bond Guarantee $ 1,672,000 $ 1,672,000 $
1,672,000
$
0
$ 0 $
0
$ 0 $ 0 N/A N/A N/A N/A
1 Includes effects of carryover balances, transfers, recoveries, and rescissions.
2 Reflects a blended rate; 1.24% from 10/1-12/21, 1.16 from 12/21 to 9/30.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
35
JUSTIFICATION OF CHANGES FROM FY 2001 TO FY 2002 BY OBJECT CLASS
(Excluding Disaster Assistance and Office of Inspector General)
(Dollars in Thousands)
Increase/(Decrease)
FY 2000 Actual FY 2001 Estimate FY 2002 Request vs FY 2001 Estimate
Positions Amount Positions Amount Positions Amount Positions Amount
Salaries and Expenses1
Compensation & Benefits 2,807 $ 217,423 2,760 $ 226,633 2,610 $ 234,452 (150) $ 7,819
Travel 0 5,964 0 6,960 0 6,960 0 0
Rents & Communication 0 31,869 0 31,660 0 33,911 0 2,251
Postage and Printing 0 1,519 0 3,125 0 3,125 0 0
Other Services 0 27,050 0 28,157 0 30,725 0 2,568
Subtotal 2,807 283,826 2,760 296,535 2,610 309,173 (150) 12,638
Non-Credit Programs & Special Initiatives 134 185,660 100 264,318 100 158,805 0 (105,513)
Total 2,941 $ 469,486 2,860 $ 560,853 2,710 $ 467,978 (150) $ (92,875)
FY 2002 Increase/(Decrease) vs FY 2001 Estimate
Compensation & Benefits: Includes a 3.6 percent general pay increase in January 2002 and annualization impact of the FY 2001 general pay increase, and
the pay increases from within grades and promotions, offset by decreasing on board positions by 150 personnel throughout
the year.
Rents and Communication Includes a General Services Administration estimated rent increase - $2.251 million.
Other Services Reflects a minimal increase to cover anticipated inflationary increases in all areas of operations not specifically defined at this
time, such as travel, printing, transit benefits, etc. Also includes $1.5 million for the Asset Sales Program Financial Advisor.
1 Includes the effects of carryover balances, transfers, and rescissions.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
36
SUMMARY BY PROGRAM OFFICE
(Dollars in thousands)
Increase (Decrease)
FY 2000 Actual1 FY 2001 Estimate2 FY 2002 Request vs. FY 2001 Estimate
Positions Amount Positions Amount Positions Amount Positions Amount
Operating Budget (excluding
Executive Direction
Administrator 28 $ 3,003 18 $ 3,462 18 $ 3,573 0 $ 111
Disability Initiative 0 0 2 425 2 431 0 6
General Counsel 71 6,632 74 7,958 74 8,238 0 280
Congressional and Legislative 11 963 9 1,042 9 1,081 0 39
Hearings and Appeals 11 1,058 11 1,078 11 1,117 0 39
Communications and Public 21 2,650 22 2,382 22 2,447 0 65
Field Operations 10 2,262 6 1,265 6 1,292 0 27
EEO and Civil Rights Compliance 19 1,941 19 1,682 19 1,739 0 57
Advocacy 43 4,480 41 4,393 41 4,547 0 154
Veterans Business Development 5 513 5 793 5 562 0 (231)
Chief Financial Officer 82 8,733 82 8,864 82 9,113 0 249
Subtotal 301 $ 32,235 289 $ 33,344 289 $ 34,140 0 $ 796
Management and Administration
Immediate Office 4 587 9 399 9 413 0 14
Human Resources 55 4,491 58 4,678 58 4,829 0 151
Administration 48 7,389 49 6,877 49 7,000 0 123
Chief Information Officer 54 17,149 56 17,224 56 17,411 0 187
Subtotal 161 $ 29,616 172 $ 29,178 172 $ 29,653 0 $ 475
Government Contracting/Business Development3
Immediate Office 4 389 5 390 5 401 0 11
Operations & Program Support 0 0 12 955 12 991 0 36
Planning & Policy Liaison 12 1,633 15 1,704 15 1,766 0 62
Business Development 28 3,260 57 3,396 57 3,522 0 126
1 FY 2000 represents actual obligations and on-board staff as of 9/30/00.
2 FY 2001 and FY 2002 represent estimated obligations. Staffing for FY 2001 and FY 2002 represent on-board count as of 1/31/01.
3 This office was re-organized effective October 1, 2000, which impacted the alignment of staffing and distorts a comparison between FY 2000 and FY 2001. In FY 2001, the 57 positions
shown for the Office of Business Development includes 14 Small Disadvantaged Businesses (SDB) positions which are funded under the Economy Act.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
37
Government Contracting 154 13,294 152 13,481 152 13,978 0 497
Subtotal 198 $ 18,576 241 $ 19,926 241 $ 20,658 0 $ 732
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
38
SUMMARY BY PROGRAM OFFICE
(Dollars in thousands)
Increase (Decrease)
FY 2000 Actual1 FY 2001 Estimate2 FY 2002 Request vs. FY 2001 Estimate
Positions Amount Positions Amount Positions Amount Positions Amount
Capital Access
Immediate Office 7 $ 821 5 $ 843 5 $ 870 0 $ 27
Lender Oversight 0 554 3 1,004 3 1,015 0 11
Financial Assistance 153 11,527 157 11,199 157 11,578 0 379
Asset Sales (Program Financial Advisor) 0 0 0 0 0 1,500 0 1,500
Investment Division 89 7,714 90 8,611 90 8,909 0 298
Surety Guarantees 14 1,177 13 1,221 13 1,261 0 40
International Trade 12 2,598 10 921 10 949 0 28
275 $ 24,391 278 $ 23,799 278 $ 26,082 0 $ 2,283
Entrepreneurial Development
Immediate Office 9 $ 1,478 6 $ 1,056 6 $ 1,087 0 $ 31
Small Business Development Centers 16 1,743 16 1,578 16 1,631 0 53
Business Initiatives 11 2,158 13 1,082 13 1,121 0 39
Native American Affairs 2 381 1 662 1 129 0 (533)
Women's Business Ownership 11 940 9 1,025 9 1,059 0 34
49 $ 6,700 45 $ 5,403 45 $ 5,027 0 $ (376)
Regional and District Offices 1,823 136,099 1,787 141,289 1,787 147,383 0 6,094
Agency-wide (not distributed)3 0 36,209 (47) 43,596 (197) 46,230 (150) 2,634
Subtotal - Operating Budget 2,807 $ 283,826 2,760 $ 296,535 2,610 $ 309,173 (150) $ 12,638
Non-Credit Programs & Special Initiatives 134 185,660 100 264,318 100 158,805 0 (105,513)
Total Salaries and Expenses 2,941 $ 469,486 2,860 $ 560,853 2,710 $ 467,978 (150) $ (92,875)
Disaster Direct Program
Loan Making 916 $ 83,929 927 $ 91,013 695 $ 40,000 (232) $ (51,013)
Loan Servicing 252 29,523 237 34,056 237 30,000 0 (4,056)
Total Disaster Direct Program 1,168 $ 1,164 $ 932 $ (232) $
Inspector General 112 $ 125 $ 125 $ 0 $ (515)
Grand Total 4,221 $ 4,149 $ 3,767 $ (382) $
1 FY 2000 represents actual obligations and on-board staff as of 9/30/00.
2 FY 2001 and FY 2002 represent estimated obligations. Staffing for FY 2001 and FY 2002 represent on-board count as of 1/31/01.
3 Agency-wide costs include staffing adjustments that have not yet been determined.
39
BUDGET CROSSWALK
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
40
BUDGET CROSSWALK
The budget crosswalk table on Page 39 illustrates the estimated resources that would be devoted to
achieving each of SBA’s goals in FY 2002. The table shows the relationship between an organizationbased
budget and cross-cutting goals. A budget structured around organizational units ensures financial
and performance accountability which reflects the way we manage ourselves. However, the activities
performed by an office often support the achievement of more than one goal. This is particularly true for
support organizations such as executive direction and administrative offices. To present the full cost of
achieving a particular goal, the costs of support offices must be allocated to each goal.
For example, the cost of providing access to capital includes the funding for the Office of Capital
Access and a portion of all the support offices, such as Regional and District Offices and General
Counsel. The crosswalk presented on Page 39 uses the results of an activity-based costing model as
the basis for these cost allocations.
Explanation of Budget Crosswalk
The first column of the crosswalk details SBA’s offices and programs categorized by the goal that best
relates to that office’s or program’s mission. The offices and programs listed in this column devote the
vast majority of their effort toward the goal under which they are listed. The estimated resources that
will be consumed by these offices and programs are in the next three columns. The loan subsidy column
shows the amount of budget authority used to subsidize loans.
The next four columns detail an estimate of the allocation of costs for support offices. The column
entitled “Field” allocates the cost of SBA’s Regional and District Offices. The Executive Direction1
column includes the cost of offices such as the Administrator’s office, the Office of General Counsel, the
EEO Office, the Office of Hearings and Appeals, and the Office of the Chief Financial Officer. The
Management and Administration column includes the Office of Administration, the Office of Human
Resources, and the Office of the Chief Information Officer. The Agency-wide column includes rent,
telecommunications, relocation expenses, centralized training, credit reports, and centralized printing.
Cost Allocation Methodology
The estimated allocation of FY 2002 resources presented in the crosswalk is based on the results of the
SBA’s FY 2000 cost allocation study. The SBA’s cost allocation model provides an estimate of the
resources required to produce key outputs. The first step in developing a cost allocation model is to
identify the Agency’s key activities. Through the budget formulation process, each office identifies the
key activities that they perform to produce outputs.
1 Executive Direction does not include offices that report directly to the Administrator but provide direct services such as the Disability
Related Business Initiatives and the Office of Veterans Business Development. These offices are listed under the appropriate goal
in the first column.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
41
BUDGET CROSSWALK
An activity is a process that converts resources (materials, labor, and technology) into outputs. For FY
2000 the SBA identified over 520 key activities performed by program and support offices. Agencywide
costs such as rent and telecommunications expenses are allocated to activities based upon
formulas such as the cost of space occupied by program offices.
Personnel costs are assigned to specific activities through the use of a survey. SBA employees are
asked in an online survey to estimate the amount of time that they spend on over 520 key activities,
including those outside of their particular organization. This data is used to compute an estimate of the
personnel costs for each activity. The FY 2000 survey was completed in October 2000. To improve
the accuracy of the estimate, the SBA will conduct two surveys in FY 2001.
The FY 2002 estimate assumes that the relative level of effort devoted to each goal by supporting
offices in FY 2002 will be the same as that provided in FY 2000. For example, if the Office of the
Chief Financial Officer (OCFO) devoted 1.45 percent of its effort toward the microlender program in
FY 2000, it is assumed the OCFO will continue to devote 1.45 percent of its effort toward that output
in FY 2002. For many offices the nature of the work performed dictates that this assumption will hold
true over the years. However, we recognize that this assumption may require adjustments as SBA’s
priorities are redefined with the new Administration. Even taking into consideration this assumption, the
crosswalk provides a useful benchmark for analysis of how the SBA allocates its resources at the
present time.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
42
BUDGET CROSSWALK
(Dollars in Thousands)
Operating Special Loan Exec Agency
Program Initiative Grants Subsidy M&A Field Dir Wide Total
1. Help Small Businesses Succeed
Obj 1 Act as a Voice for America’s Small Businesses
Advocacy $ 4,547 $ 303 $ 1 $ 258 $ 442 $ 5,551
Advocacy Database 1,100 179 1 120 256 1,656
Ombudsman 500 234 63 430 255 1,482
Subtotal 4,547 1,600 0 0 716 65 808 953 8,689
Obj 2. Improve Access to Capital and Credit
Office of Capital Access
Loan Making: 7(a) and 504 2,131 211 4,669 48,986 3,806 10,703 70,506
Loan Servicing: 7(a) and 504 8,498 7,274 22,838 3,368 5,692 47,670
Lender Oversight 1,189 512 4,050 444 1,027 7,222
Asset Sales 601 606 2,629 722 679 5,237
Microloans: Direct and Guaranty 522 1,500 768 678 589 365 4,422
Microloan Technical Assistance 20,000 20,000
SBIC Participating and Debentures 9,083 1,403 36 1,866 1,354 13,742
Surety Bond Guarantees 1,435 861 1,326 392 719 4,733
US Export Assistance Centers 3,100 3,100
International Trade 1,123 387 1 316 219 2,046
Subtotal 24,582 3,100 20,000 1,711 16,480 80,544 11,503 20,758 178,678
Obj 3. Improve Access to Procurement Opportunities
Government Contracting/Business Development
Government Contracting 14,326 1,073 1,266 1,509 1,338 19,512
Women's Procurement Program 500 61 232 130 117 1,040
Procurement Policy 1,388 355 75 683 296 2,797
SBIR Technical Assistance 1,074 1,500 218 324 300 190 3,606
SBIR FAST 3,500 3,500
Pro-Net 500 239 1,654 318 439 3,150
8(a) Business Development Program 3,870 1,738 20,170 1,004 3,897 30,679
7(j) Technical Assistance 3,600 304 468 502 282 5,156
Small Disadvantaged Business 1,800 1,800
HUBZones Program 2,000 434 1,961 524 667 5,586
Subtotal 20,658 4,800 8,600 0 4,422 26,150 4,970 7,226 76,826
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
43
BUDGET CROSSWALK
(Dollars in Thousands)
Operating Special Loan Exec Agency
Program Initiative Grants Subsidy M&A Field Dir Wide Total
Obj 4. Provide and Improve Access to Entrepreneurial Development. Assistance
Entrepreneurial Development
Small Business Development Centers 1,993 75,806 498 6,018 436 1,312 86,063
Drug Free Workplace 371 5,000 5,371
SCORE Programs 371 4,000 428 6,000 368 3,175 14,342
One Stop Capital Shops 371 3,100 365 5,159 346 1,038 10,379
Business Information Centers 371 500 479 7,706 419 2,089 11,564
Women's Business Centers 1,421 12,000 441 2,987 388 743 17,980
Native American Affairs 129 235 414 306 227 1,311
Small Business Classroom/Other 789 1,144 1,050 586 3,569
Commerce Reimbursement 694 694
National Women's Business Council 750 7 0 12 40 809
Office of Veteran's Business Development 562 750 193 1,072 310 303 3,190
Disability Initiative 431 87 0 114 56 688
New Freedom Initiative 5,000 5,000
Subtotal 6,020 10,044 97,556 0 3,522 30,500 3,749 9,569 160,960
2. Help Families and Businesses Recover From Disasters
Disaster Assistance Programs 70,000 32,850 0 10,094 5,419 5,294 123,657
Subtotal 70,000 0 0 32,850 0 10,094 5,419 5,294 123,657
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
44
BUDGET CROSSWALK
(Dollars in Thousands)
Operating Special Loan Exec Agency
Program Initiative Grants Subsidy M&A Field Dir Wide Total
3. Improve SBA Management
Obj 1. Manage For Results
Obj 2. Transform the Workforce
Workforce Transformation 2,000 2,000
Obj 3. Modernize Information Systems
Systems Modernization 8,000 3,862 28 1,804 688 14,382
Obj 4. Improve Financial Management
Obj 5. Improve Credit Program Management
Gainsharing Improvements 3,000 3,000
Financial Advisor Asset Sales 1,500 0 1,500
Obj 6. Create Electronic Government 0
Subtotal 1,500 13,000 0 0 3,862 28 1,804 688 20,882
Reimbursable Programs 105 105
Inspector General 12,427 651 2 347 1,742 15,169
Total $ 139,734 $ 32,649 $ 126,156 $ 34,561 $ 29,653 $ 147,383 $ 28,600 $ 46,230 $ 584,966
45
GOALS AND RESOURCES
SBA is committed to performance management. SBA will conduct a major review of the current
performance plan to ensure that it will promote President Bush’s agenda. After the SBA Administrator
is confirmed and has approved a new performance plan, SBA will submit it to the Congress. The
revised performance plan will meet all requirements of the Government Performance and Results Act.
The data presented in the following section should be viewed as the baseline from which the new
Administrator will start the review of the performance plan.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
46
GOAL 1: HELP SMALL BUSINESSES SUCCEED
SBA helps small businesses overcome critical challenges that lie in their path to success. Small
businesses need technical assistance to develop business plans and manage finances, access to capital to
finance their plans, fair opportunities for procurement in the Federal marketplace, and a voice within the
Government to ensure that regulations do not overwhelm them. SBA assistance is focused around four
primary objectives.
Objective 1: Act as a Voice for America’s small businesses. We achieve this objective primarily
through the work of the Office of Advocacy and the National Ombudsman. The
objective is also supported through Agency efforts to represent small businesses at the
National Policy level and through cross agency Internet tools.
Objective 2: Improve access to capital and credit. We achieve this objective through the
coordinated efforts of field offices, Office of Capital Access, and SBA’s lending
partners.
Objective 3: Increase access to procurement opportunities. We achieve this objective by
working with Federal agencies to create innovative strategies and programs that reach
the small business community, identify procurement opportunities, and provide technical
assistance and training.
Objective 4: Provide access to entrepreneurial development assistance. We achieve this
objective by managing a large network of business resource partners and electronic
access points. Through our resource partners, we annually provide substantial
assistance to more than 1 million small businesses.
Regional and District Offices play a key role in achieving SBA business assistance objectives. These
offices coordinate the delivery of SBA’s programs to the customer and ensure that every customer has
access to the full range of SBA services. Aggressive marketing efforts ensure that customers are aware
of the services offered. An estimate of the cost of Regional and District office support for each
objective is listed in each objective’s resource table.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
47
Objective 1: Act as a Voice for America’s Small Businesses
As a voice for small business, we function as a two-way information conduit. We reach out to small
businesses to gauge their needs. We raise small business concerns to the highest levels of this
Government, and act as an advocate in legislative and regulatory areas to break down barriers to
success.
Congress established the Office of Advocacy to be an independent voice for small business in the
formulation of public policy across the entire Federal Government. The Office of Advocacy focuses on
research on small business trends, characteristics, and contributions to the economy and monitors
compliance with the Regulatory Flexibility Act. The Office of the National Ombudsman addresses
specific regulatory enforcement and compliance concerns identified by small businesses in their
interactions with Federal agencies, with the goal of ensuring equity and fairness. The National
Ombudsman and the 50 Regulatory Fairness Board Members reach out to small businesses and listen
to and address their concerns in cooperation with more than 38 Federal agencies.
Through its nationwide advisory committees, SBA has created a systematic process for eliciting citizens’
advice, ideas, and opinions on small business issues and SBA programs. Additionally, the committees
serve as links to local business and can measure the effectiveness and need for current and proposed
SBA programs. SBA recognizes that advisory committees represent a valuable resource that improves
the Agency’s decision-making process by broadening its base of knowledge on small business issues.
PERFORMANCE INDICATORS AND RESOURCES REQUESTED
(Dollars in Thousands)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
Actual Actual Actual Estimate Projected
Performance Indicators
Regulatory cost savings to small
businesses
$ 1.5B $ 4.3B $ 3.6B TBD TBD
Resources ($000)
Office of Advocacy $ 4,079 $ 4,334 $ 4,480 $ 4,393 $ 4,547
Advocacy Database & Research 790 800 1,140 1,300 1,100
National Ombudsman 351 524 514 500 500
Subtotal 5,220 5,658 6,134 6,193 6,147
Agency Support Cost Estimates:
Regional & District Offices (Field N/A N/A 60 62 65
Executive Direction N/A N/A 769 783 808
Management & Admin Support N/A N/A 714 704 716
Agencywide Costs (Rent, Telecom, etc.) N/A N/A 746 899 953
Subtotal 2,289 2,448 2,542
Total $ 8,423 $ 8,641 $ 8,689
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
48
Cross-Cutting Issues
Serving as a voice for small business, reviewing agency regulatory proposals for small business impact,
and serving as the guardian for regulatory fairness requires close collaboration with major Federal
regulatory agencies. In all, the Office of Advocacy monitors the regulatory proposals of approximately
20 regulatory agencies, as well as Administration and Congressional initiatives.
The Office of Advocacy is unique within the Federal Government, in its mandate is to speak up for small
business, conduct research and reduce the costs of regulation to small business. Advocacy completed
work on five panels, three at the Environmental Protection Agency and Occupational Safety and Health
Administration.
External Factors
A critical success factor for the Office of Advocacy is continued Congressional and stakeholder support
and sufficient resources to carry out an appropriate research agenda. A critical success factor for the
Office of the National Ombudsman is the continued support of small business by participating in
hearings and providing documentation of Government enforcement practices. Other critical success
factors include:
· Using technology to elicit and receive input from small businesses
· Establishing working relationships with Federal agencies to assist small businesses
· Maintaining independence to ensure the ability to speak out
Objective 2: Improve Access to Capital and Credit
Small businesses cite inadequate access to capital and credit on reasonable terms as a serious
impediment to start-up and growth. SBA improves access to capital for entrepreneurs who cannot
obtain it from conventional lenders and in this sense is a gap lender. Our job then is to facilitate - not to
compete with - conventional lenders and traditional providers of equity capital to help meet the needs of
entrepreneurs. As the nation’s preeminent gap lender for small business, SBA identifies and helps to fill
the credit gap in the commercial marketplace.
SBA measures its performance by the amount of credit and capital provided by the loan and equity
programs and by the diversity of the clients served. Success in meeting the measures identified below
helps to ensure that credit and capital are available to all small businesses.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
49
PERFORMANCE INDICATORS AND RESOURCES REQUESTED
(Dollars in Thousands)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
Actual Actual Actual Estimated Projected
Performance Indicators
Jobs created by SBA borrowers 422,997 494,822 541,539 542,000 542,000
7(a), 504, Microloans and SBIC programs $14.0B $16.4B $18.0B $19.7B $20.4B
Number of 7(a) and 504 loans
To Women-owned firms
To Minority-owned firms
To Veteran-owned firms
11,084
10,897
5,915
10,244
12,127
5,477
9,921
12,120
5,215
10,000
12,300
5,300
10,500
12,000
5,300
Number of Start-up firms financed by 7(a), 17,344 16,600 16,600 16,700 17,000
Export Sales assisted by SBA $413M $349M $675M $537 M $537 M
Resources ($000)
Capital Access Operating Expenses $ 19,002 $ 20,943 $ 24,391 $ 23,799 $ 26,082
Special Initiatives
USEAC 2,831 3,100 3,065 3,100 3,100
Microloan Technical Assistance 14,094 19,148 19,243 20,260 20,000
PRIME Technical Assistance 0 0 0 15,000 0
New Market Venture Capital 0 0 0 30,000 0
Loan Subsidies
7(a) General Business 182,435 131,648 112,283 128,800 0
New Market Venture Capital 0 0 0 21,952 0
SBIC Participating Securities 15,471 22,232 22,692 28,070 0
SBIC Debentures 8,955 4,858 0 0 0
Microloan Guaranty 298 92 96 159 163
Microloan Direct 1,111 1,369 2,323 2,285 1,395
Subtotal 244,197 203,390 184,093 273,425 50,740
Agency Support Cost Estimates
Regional & District Offices (Field Support) N/A N/A 74,378 77,214 80,544
Executive Direction Support N/A N/A 10,956 11,155 11,503
Management & Admin Support N/A N/A 16,460 16,218 16,480
Agencywide Costs (Rent, Telecom, etc.) N/A N/A 16,262 19,576 20,758
Subtotal 118,056 124,163 129,285
Total $ 302,149 $ 397,588 $ 180,025
Programs
SBA offers general business loan guaranties, equity financing, and surety bond guarantees through five
umbrella programs.
· General Business Guaranty Loan Program 7(a), including export loans and trade finance
· Certified Development Company (CDC) or 504 Program
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
50
· Microloan Program
· Small Business Investment Company (SBIC) Program
· Surety Bond Guarantee Program
SBA delivers financial assistance programs through a network of field offices and lending partners.
These partners provide direct service and work with small businesses on a one-to-one basis. SBA
also processes many of its loans through centralized processing centers located in Sacramento,
California and Hazard, Kentucky. The Office of Financial Assistance, located in Washington, DC, is
responsible for providing overall direction for the administration of these programs.
The 7(a) Loan Guaranty Program is SBA’s primary business loan program. SBA guarantees up to $1
million of a $2 million maximum private-sector loan to small businesses for virtually every business
purpose. The guaranty can be for as much as 85 percent on loans of $150,000 or less and 75 percent
on loans of more than $150,000. Borrowers may have more than one SBA loan at a time, as long as
the total amount guaranteed does not exceed the guaranty cap of $1 million. The only exceptions to
these limits are for loans approved under the Export Working Capital Program loans (which receive a
guaranty of up to 90 percent), and the Defense Loan and Technical Assistance (DELTA) Loan
program. SBA has a number of options under the 7(a) Program to help fill the special needs of small
businesses. Some of these specialized 7(a) loans include: LowDoc, SBA Express, CAPLines,
Community Express, the Prequalification Loan Program, Community Adjustment and Investment
Program (CAIP), and the International Trade Loan Program. These specialized programs provide
streamlined processes and special products tailored to fit the specific needs of a diverse array of small
businesses and lenders.
The 504 Certified Development Company (CDC) Program provides small businesses with long-term,
fixed-rate financing for the purchase of land, buildings and long-life capital equipment. The program is
designed to enable small businesses to create and retain jobs in their areas and to meet other legislatively
mandated public policy purposes.
A CDC is generally a nonprofit corporation that is set up to contribute to the economic development of
its community or region. SBA fully guarantees (100 percent) debentures issued by the CDC for up to
40 percent of the project cost up to $1.0 million or $1.3 million for projects that meet specific public
policy purposes.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
51
The Office of Lender Oversight (OLO) was created within the Office of Capital Access in FY 2000 to
ensure consistent and appropriate supervision of SBA’s lending partners. The responsibilities of the
OLO includes evaluating existing oversight regulations, policies and procedures, monitoring changes in
accounting, banking and financial industries, and recommending appropriate modification of SBA
oversight policy. The OLO is also responsible for coordinating all Headquarters and Field office
activities with respect to lender reviews; evaluating new programs, and recommending changes to
existing programs to assess risk potential.
The Microloan program provides capital to very small businesses that traditional lenders are often
unable to serve. SBA makes loans up to $750,000 to intermediaries who in turn make very small loans
($35,000 and under) available to entrepreneurs traditionally considered unbankable largely due to
inexperience with credit, lack of assets, or the need for technical assistance. A key component of the
Microloan program is the intermediary’s ability to provide technical assistance to the micro business to
enhance their chances for success.
The United States Export Assistance Centers (USEAC) program promotes small businesses’ ability to
succeed in the global economy. The USEAC program promotes globalization and increased export
sales through funding of SBA personnel at 19 USEAC centers nationwide. At the USEAC sites, SBA
personnel work with the Department of Commerce and the Export-Import Bank to deliver technical
assistance and finance programs that help U.S. businesses finance and export their products or services.
SBA personnel at the USEACs work closely with appropriate Small Business Development Centers
(SBDCs) and members of the Service Corps of Retired Executives (SCORE).
The Small Business Investment Company Program (SBIC) helps qualified small enterprises secure the
equity to start, maintain or grow a business. The SBIC program facilitates the formation of privatelyowned
and operated investment companies to serve as a source of equity capital and long-term loans to
new or expanding small businesses; and supplementing investment companies’ private capital with funds
made available through SBA guarantees. SBICs are licensed and regulated by SBA. SBICs use their
own funds, plus funds from borrowing with an SBA guaranty--referred to as “leverage,” to make
venture capital investments in small business. The entire private capital of an SBIC is always at risk
ahead of the funding guaranteed by the SBA.
The Surety Bond Guarantee Program issues bid, payment and performance bond guarantees to surety
companies for construction, service and supply contracts that do not exceed $2 million. SBA’s
guarantees provide the incentive necessary for sureties to issue bonds to small contractors who could
not otherwise compete in the contracting industry.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
52
As a gap lender, SBA expands the parameters within which a conventional lender can make a small
business loan. SBA’s guaranties allow funding for longer terms, for new start-up businesses in emerging
industries, for businesses with lower levels of collateral and for businesses with limited track records.
Human Resources
Small business practices, products, and needs have transformed over the past several years. The
greatest change in job tasks that SBA employees have experienced and will continue to experience is
from transaction processing to analysis. Automation and asset sales will allow staff to shift their attention
from the processing of transactions to using information to analyze programs, activities, and performance
of SBA’s partners.
This transformation requires proper training of employees to provide them with the skills needed to
operate in the new business environment, to provide small business customers with first-class service,
and to ensure that the SBA’s portfolio is managed to limit risk to the taxpayer.
The Office of Capital Access will continue to work with SBA’s Office of Human Resources to develop
and deliver SBA sponsored training for its employees in marketing and outreach, commercial credit
analysis, lender oversight, lender relations, and basic and advanced liquidation. We will encourage
training in leadership and management courses for our middle management employees and will also
promote technology and computer skill enhancement as we continue our systems modernization efforts.
Evaluations, Analyses and Surveys
We are investigating the feasibility of developing an econometric demand model for the 7(a) loan
program. In FY 2000, a contract was awarded to: 1) carry out a literature survey of existing models
and experience in estimating demand for loans; 2) suggest an approach to estimate demand; and 3)
determine data availability for the suggested demand model.
The contractor completed the final report in March 2001 and it is being evaluated to determine how a
phase II should be carried out.
Additionally, a study of job creation in the 7(a) and 504 programs was initiated. This study planned to
use the Census Office of Advocacy BITS file containing longitudinal data on small businesses for the
years 1989 through 1996. A research design was approved by the Census Bureau in FY 2000.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
53
Before the data collection could commence, the Internal Revenue Service (IRS) decided that it had to
review all research proposals using the BITS data base. A decision is still pending. To move forward,
SBA has asked the Bureau of Labor Statistics if it would give SBA access to job data for small
businesses that have received 7(a), 504 or SBIC financing, with strict procedures to ensure privacy.
Discussions are still ongoing as of March 2001.
Office of the Inspector General (OIG) Management Challenges
The management challenges that apply to this functional area were identified by the OIG for the
Congress in December 2000. The current status of the specific action steps and milestones agreed upon
by the OIG and each program office’s response to the OIG’s specific recommendations are discussed
below.
The December 2000 management challenges for the Capital Access programs differ from those of
December 1999. The OIG no longer considers the oversight of the Small Business Lending Companies
(SBLC) to be a major challenge on its own, as SBA has complied with nearly all the recommendations
made in the Farm Credit Administration examination reports. Because the Agency has not yet
implemented the recommended actions, the OIG has included SBLCs in the challenge on improving
lender oversight.
OIG’s two December 2000 challenges on guaranty purchases and lender oversight are essentially the
same as those from the previous year. OIG feels that the SBA is making progress on both challenges,
but much of the implementation is still pending.
Challenge: Field offices do not consistently apply guaranty purchase requirements.
Summary: OIG audits have shown that SBA field offices do not consistently follow Agency
requirements when purchasing guarantees from lenders after loan defaults, resulting in
purchases that may not be justified and unnecessary expenditures for the Agency. In response to
this concern, SBA reports that it has taken steps to establish a purchase review and follow-up
process mechanism, a guaranty repair tracking system, an early warning system, and improved
procedures and training.
Goals:
· Ensure that the Agency denies liability or reduces its payment on the guaranty when a lender has
failed to comply with SBA requirements.
· Implement an automated system for tracking circumstances where the field office records of
guarantees have been repaired and lenders have released SBA from guaranty liability on
questionable lender practices.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
54
Action Taken: SBA has implemented procedures to improve the guaranty purchase process for the
Section 7(a) program and has taken the following actions:
1. Implemented procedures to review, on a sample basis, 10 percent of all guaranty loan
purchases.
2. Established a tracking system to follow up on purchase reviews.
3. Initiated development of a Guaranty Repair Tracking System.
4. Initiated revision of its Standard Operating Procedures and the development of a training
course.
5. Modified the Delinquent Loan Collection System to identify loans where an audit or other
review has shown that a lender has an origination or servicing deficiency significant enough to
affect the guaranty purchase.
Challenge: Preventing loan fraud requires additional measures, including the necessary
legislative authority and funding.
Summary: Fraud in the business loan program can be reduced by obtaining criminal background
information on prospective borrowers and on loan packagers and other for-fee agents.
SBA submitted a proposal for the legislation necessary to conduct the background checks, but it
was not included in the reauthorization bill by the Congressional Conference Committee. The
Agency needs to resubmit the legislative proposal, establish a loan agent registration process,
and track loan agent association with individual loans.
Goals:
· Submit a legislative proposal that: (1) requires all loan agents to provide SBA with the information
necessary to conduct criminal background checks, including social security numbers; and (2)
authorizes SBA to conduct criminal background checks on loan agents.
· Identify all loan agents through a registration process and track their association with individual
loans. Registration includes maintaining identifying data and background information on loan agents.
However, registration does not imply Agency endorsement.
· Submit legislation authorizing SBA to conduct criminal background checks on all business loan
applicants.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
55
· Ensure sufficient funding to permit OIG to perform background checks on all business loan
applicants in a timely manner.
Action Taken:
· SBA submitted a legislative proposal which the Senate Small Business Committee voted to include
in the SBA reauthorization bill for FY 2001. The Conference Committee, however, voted out the
House version that did not contain the proposal. The proposal is being resubmitted for the FY 2002
legislative cycle.
· The establishment of a loan agent tracking system is tied to the development of a Partner
Information Management System (PIMS). PIMS is to be incorporated into the loan monitoring
system. The first phase of PIMS was completed on June 30, 2000. SBA Form 159, which contains
information on loan agents, is being revised to clarify the requirements for agents to notify SBA of
their loan participation. If the necessary legislation is enacted, the form will be further revised to
include additional loan agent identification data.
· SBA expects the loan agent criminal background check system to be operational 6 months after the
passage of the proposed legislation, assuming adequate staff resources are available.
Cross-Cutting Issues
Key to SBA’s success in providing access to capital and credit is a cooperative working relationship
with the various stakeholders, most notably the National Association of Government Guaranteed
Lenders (NAGGL), the National Association of Development Companies (NADCO), and the National
Association of Small Business Investment Companies (NASBIC).
SBA has executed agreements with both NADCO and NAGGL to support the Agency’s initiatives.
With the Community Development Financial Institutions Fund (CDFI), Department of Treasury, SBA
has co-chaired the Interagency Work Group on Microenterprise Development.
SBA is expanding formal relationships with a number of entities including agencies such as the United
States Department of Agriculture, the National Federation of Community Development Credit Unions,
and the Association for Enterprise Opportunity and state and local development agencies. Also
important is the partnership with the Small Business Development Centers that assist a large number of
small companies in obtaining loans.
In the international marketplace, 19 agencies, under the direction of the Commerce-directed Trade
Promotion Coordinating Committee (TPCC), offer both financial and business development assistance
to small exporters. SBA meets regularly with these groups to discuss challenges, propose program
initiatives, work on developing new products, and avoid duplication of effort.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
56
External Factors
Although the demographics, terms and conditions, and purpose of the 7(a), 504, Microloan, and SBIC
programs vary significantly, economic conditions strongly affect the demand for these products. If
interest rates rise, a credit crunch often occurs. Supply of resources for technical assistance and the
aggressiveness of the intermediaries will determine whether we reach our Microloan targets. We will
work closely with our intermediaries to ensure a successful expansion of the program.
If the economy remains strong, surety bond guarantees will remain constant or decrease, but if the
economy deteriorates, demand will increase. Congressional support of the programs, particularly those
elements that require legislative changes, is a critical success factor. Finally, the continuing uncertainty in
overseas markets, the overall strength of our own domestic economy, lack of finance, and lack of
export promotion information are four impediments to small companies entering the export market. Our
success in stimulating more small exporters is dependent on our ability to develop and make available
the appropriate export finance and information tools to overcome these impediments to export growth.
Objective 3: Improve Access to Procurement Opportunities
SBA is responsible for promoting the use of small businesses in the nearly $190 billion Federal
procurement market. Our efforts help to ensure that Federal agencies comply with statutory
requirements to buy a portion of their goods and services from small businesses. SBA helps small
businesses participate in the Federal marketplace by working with departments and agencies to
establish procurement goals, monitor performance, advocating the use of small business sources, and
providing procurement training and technical assistance to small firms. Through these activities, agencies
procured $43 billion from small businesses in FY 1999 or 23.1 percent of Federal prime contract
dollars.
SBA works with Federal agencies to identify suitable procurement opportunities for small businesses,
and plan innovative procurement strategies and outreach programs to reach the small business
community. We provide hands-on technical assistance and training to small firms so that they can fill
Federal requirements efficiently and cost-effectively, serve as a source of innovation, and contribute to
our Nation’s economic health and vitality. In a dynamic procurement environment, we are educating
small businesses on how to transition from paper-based business transactions into the expanding
electronic commerce marketplace. We are also educating Federal agencies on how to use our small
business programs to their best advantage.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
57
PERFORMANCE INDICATORS AND RESOURCES REQUESTED
(Dollars in Thousands)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
Actual Actual Actual Estimate Projected
Performance Indicators
Achieve mandated shares of Federal Prime contract dollars:
· to small businesses 23.4% 23.1% N/A 23% 23%
· to women-owned businesses 2.2% 2.5% N/A 5% 5%
· to small and disadvantaged businesses (incl
8(a))
6.5% 6.6% N/A 5% 5%
· to service disabled veteran-owned businesses N/A N/A N/A 2.9% 3%
· to small businesses in HUBZones N/A N/A N/A 2.0% 2.5%
8(a) program client success rate 3 yrs after
graduation
N/A N/A 65% 68% 70%
Resources ($000):
Gov Contracting /Business Development Operating
Expenses
$16,601 $18,300 $18,576 $19,926 $20,658
Non-Credit Initiatives
7(j) Technical Assistance 2,850 2,600 3,950 3,600 3,600
BusinessLINC 0 0 0 7,000 0
Pro-Net 232 363 454 500 500
Small Disadvantaged Business 10,409 9,750 8,643 1,800 1,800
SBIR Technical Assistance 0 0 496 1,500 1,500
SBIR FAST 0 0 0 3,500 3,500
HUBZones Program 2,000 2,000 1,978 2,000 2,000
Procurement Programs 0 0 0 0 500
Subtotal 32,092 33,013 34,097 39,826 34,058
Agency Support Cost Estimates
Regional & District Offices (Field Support) N/A N/A 24,148 25,070 26,150
Executive Direction Support N/A N/A 4.734 4,820 4,970
Management & Admin Support N/A N/A 4,416 4,348 4,422
Agency-wide (Rent, Telecom, etc.) N/A N/A 5,659 6,813 7,226
Subtotal 34,228 41,051 42,768
Total $68,325 $80,877 $76,826
Programs
Our Procurement Access Strategy to improve access to procurement opportunities has four key
elements:
1. Increase the number of opportunities for small businesses to perform Federal contracts at the
prime and subcontract levels.
2. Increase the economic viability of small and small disadvantaged businesses by providing
contract opportunities and other business development assistance to those firms who qualify.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
58
3. Increase the economic viability of small disadvantaged and small businesses in Historically
Underutilized Business Zones (HUBZones) by providing contract opportunities and other
business development assistance to those firms who qualify.
4. Facilitate the commercialization of Federal research by providing access to capital.
SBA’s primary objective is to increase Federal prime contract and subcontract dollars to small
businesses. As agencies use larger consolidated contracts that are often not suitable for small
businesses to perform as prime contractors, we must ensure that efforts are made to increase
subcontracting opportunities for these companies. SBA negotiates with each Federal department and
agency to establish annual prime contracting goals and subcontracting goals for their large prime
contractors. Based on FY 1999 data, agencies are awarding about 38 percent of Federal procurement
prime and subcontract dollars to small businesses. We believe our goals should remain constant through
FY 2002. However, SBA will continue to work with the agencies to ensure that small businesses
participate in Federal contracting to the maximum extent possible.
Through the Prime Contracting Program, SBA works with Federal agencies to increase small business
opportunities in the Federal acquisition process by reviewing their acquisition plans and making
appropriate recommendations to set-aside opportunities for small businesses. SBA provides small
business sources to acquisition officials and counsels small businesses on how to sell to the Federal
Government.
Under the Subcontracting Program, SBA works with the Federal Government's large prime contractors
to ensure that small businesses receive a fair share of subcontracting opportunities. The SBA
accomplishes this by reviewing the subcontracting plans of large prime contractors and by bringing
together large and small businesses to facilitate the formation of mutually beneficial private sector
relationships.
For example, the Federal Contract Assistance for Women's Business Program encourages Federal
agencies to develop long-term comprehensive strategies that expand opportunities for women-owned
small businesses in order to meet the 5 percent women-owned small business goal. The Office is also
developing regulations to implement the women-owned small business set-aside program authorized by
the SBA reauthorization bill of FY 2000. This program authorizes set-asides in industries determined
by SBA, whose women-owned businesses are under-represented.
Through the Natural Resources Sales Program, SBA ensures that small businesses obtain a fair share of
Federal real and personal property authorized for sale or other competitive disposition.
Through the Certificate of Competency Program, SBA helps small businesses that are apparent
successful low-bidders on government requirements, but whose ability to perform is questioned by
contracting officers.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
59
The Procurement Marketing and Access Network, PRO-Net, is one of SBA's key tools in ensuring
that small businesses participate fully in the Federal market for goods and services. PRO-Net is the
Federal Government's officially established and recognized database of small businesses seeking to do
business with the Government. It holds records of more than 200,000 small businesses, including small
disadvantaged businesses, veteran-owned, Native American-owned, and women-owned small
businesses. Per statutory/regulatory requirements, PRO-Net is the authoritative database of firms
certified under the 8(a) Business Development and HUBZone Empowerment Contracting Programs,
and as certified small disadvantaged businesses. The Federal acquisition community, state and local
governments, and prime contractors use PRO-Net in identifying small business vendors.
The HUBZone Empowerment Contracting Program helps small businesses that are located in, and
employ residents of, "historically underutilized business zones." The program provides for Federal
Contract set-asides, sole source awards, and price evaluation preferences for HUBZone small
businesses. The government-wide statutory goal for this program is to award of 2.5 percent of the total
Federal procurements to such firms in FY 2002. Through this program, SBA seeks to increase
employment, promote capital investment, and encourage economic development in these communities.
To accomplish this, SBA certifies eligible firms, maintains a database of certified firms, and conducts
random and targeted compliance reviews. SBA also utilizes its procurement assistance professionals to
assist these firms in marketing Federal contract opportunities.
The 8(a) Business Development Program assists firms owned and controlled by economically and
socially disadvantaged individuals to enter and succeed in the economic mainstream. SBA helps eligible
small businesses in a structured developmental process over a 9-year program participation term.
SBA provides access to business development opportunities authorized under section 8(a) of the Small
Business Act. Assistance includes access to sole source and limited competition Federal contract
opportunities. We work with Federal acquisition agencies to develop contract opportunities for program
participants, and assist firms with partnering, teaming, and joint venture arrangements in support of their
business development plans.
Under the 7(j) Program, SBA awards grants, contracts, and cooperative agreements for the
development of training and technical assistance to companies owned and controlled by socially and
economically disadvantaged individuals, or companies located in areas of high unemployment, and firms
located in areas of low income.
SBA certifies qualifying companies as Small Disadvantaged Businesses (SDBs). Certification enables
eligible companies to obtain certain procurement preferences. This activity has been funded under
Economy Act Agreements with the top 20 Federal procuring agencies.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
60
SBA encourages small business innovation by establishing government-wide policy for the Small
Business Innovation and Research (SBIR) and Small Business Technology Transfer (STTR) Programs.
Through award of research and development assistance grants, these programs promote the flow of
innovative products and services from small businesses to Federal and commercial markets.
Through the Federal and State Technology Partnership (FAST) Program, SBA will make matching fund
grants to state organizations to strengthen the technological competitiveness of small businesses. The
Rural Outreach Program provides grants to approximately 25 states to increase participation in the
Small Business Innovation Research Program.
SBA develops small business size standards for Federal programs so that small business assistance is
provided to its intended beneficiaries.
Human Resources
We will provide training for our procurement specialists mandated by the Defense Acquisition
Workforce Improvement Act (DAWIA) of 1991 and subsequent legislation applicable to the civilian
workforce. This training is especially important as the pace of efforts to reform the acquisition process is
challenging SBA’s acquisition and contracts specialists as never before. To meet these challenges,
acquisition personnel must perform at higher standards, be flexible, and keep pace with professional
development trends, especially contracting certification in accordance with DAWIA.
We also plan to provide professional development training to Business Opportunity Specialists in our
district offices that service portfolios of 8(a) Business Development program participants. This training
will address changes taking place in the Federal marketplace, streamlining of 8(a) Program operations,
improved business counseling techniques, and leveraging resources to provide enhanced management
and technical assistance. As part of this training, we will provide guidance to staff in the determination of
initial and continuing eligibility, especially that of economic disadvantage.
We plan to hold the second annual district office liaison training conference for the HUBZone
Empowerment Contracting Program. All district office liaisons and Government Contracting Area
Directors will attend. Training will cover the use of geocoding software, newly deployed electronic
applications, database reporting systems, and statutory and regulatory updates.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
61
Evaluations, Analyses, and Surveys
SBA began a HUBZone benchmarking study to help assess changes in employment opportunity and
investment in distressed urban and rural communities as a result of the HUBZone program. A report is
due in late FY 2001. This information will be used to develop our report to Congress on the program in
FY 2002.
Office of the Inspector General
OIG Management Issues
The management challenges were identified by the OIG for the Congress in December 2000. The
current status of the specific action steps and milestones agreed upon by the OIG and each program
office in response to the OIG’s specific recommendations are discussed below.
Challenge: More participating companies need access to business development and contracts
in the 8(a) Business Development program.
Summary: The bulk of the dollar value of 8(a) Business Development (BD) contracts go to a
relatively small number of companies in the program. SBA is participating in a recently formed
interagency task force designed to, among other things, improve business development
initiatives, including access to contracts. The Agency needs to give greater emphasis to business
development assistance and encourage a more equitable distribution of contracting opportunities
to program participants.
Goals:
· Refocus the 8(a) BD program to emphasize business development, develop criteria defining
“business success,” and graduate participants once they reach those levels.
· Develop a mechanism that ensures contracting opportunities are more equitably distributed to 8(a)
BD program participants.
Actions Taken or Planned:
· SBA plans to refocus the role of the District Office staff where their highest priority will be helping
inform small businesses about the Federal procurement process, Federal and non-Federal
contracting opportunities, and best practices in procurement opportunities. SBA is planning to send
out a new 8(a) BD Standard Operating Procedure to the field during calendar year 2001.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
62
· To address needed reform and achieve major improvement in the results of the 8(a) BD program,
the Department of Defense Change Management Center, SBA, and the Office of Management and
Budget, jointly sponsored the formation of a Rapid Improvement Team (RIT). The RIT, comprised
of key stakeholders and interested staff from SBA, was asked to identify breakthrough
opportunities and recommend actions for Federal government-wide 8(a) BD program
improvements. The process began November 1, 2000.
· SBA plans to propose several significant changes that it believes will make the 8(a) BD program
more acceptable to procuring agencies and less cumbersome to administer, including:
· Reduce cumbersome regulations and administration and streamline 8(a) processes.
· Reduce or eliminate some unrealistic expectations held by participants, and focus on facilitating
business development initiatives, including access to Federal agency contracts.
· Reduce or eliminate SBA’s role of having sole responsibility for developing firms, and create a
Federal government-wide program coordinated by SBA that leverages all agencies’ resources
to promote growth of Section 8(a) firms.
Challenge: SBA needs clearer standards to determine economic disadvantage
Summary: New standards for determining economic disadvantage should be established to
effectively measure diminished capital and credit opportunities - the definition included in the
law. SBA anticipates issuing procedural guidance on the definition of “economic disadvantage”
based on revisions to be made by a new interagency task force. The Agency should: (1) redefine
“economic disadvantage” using objective, quantitative, qualitative, and other criteria that
effectively measure capital and credit opportunities; and (2) provide sufficient training to SBA
staff responsible for evaluating companies.
Goals:
· Redefine “economic disadvantage” using objective quantitative and qualitative criteria that
effectively measure capital and credit opportunities.
· Provide sufficient financial and analytical training to Business Opportunity Specialists to enable them
to more accurately evaluate a company’s business profile and competitive potential.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
63
Action Taken or Planned:
· SBA added provisions to the regulations to prevent 8(a) BD applicants and participants from
transferring assets to family members.
· Annual review procedures, designed to access continuing program eligibility, were modified and
training was provided to SBA field staff.
· SBA will work with RIT team to develop recommendations to define “economic disadvantage.”
Based on the results from the RIT, SBA officials plan to issue draft procedural guidance by
September 30, 2001, to ensure an objective and comprehensive review of Section 8(a) applicant
and/or participant’s economic status.
Challenge: SBA needs to clarify its rules intended to deter 8(a) Business Development
participants from passing through procurement activity to non-8(a) Business Development
firms.
Summary: SBA’s rules, while restricting the amount of a contract that a Section 8(a) firm may
pass through to a non-Section 8(a) firm, allow many non-participating companies to receive
substantial financial benefit. SBA intends to include value-added resellers as a legitimate industry
under the North American Industry Code. SBA needs to tighten the definition of
“manufacturing” to preclude the pass-through practice of making only minor modifications to
the products of other manufacturers.
Goals:
· Tighten the definition of “manufacturing” to preclude the pass-through practice of making only minor
modifications to the products of other manufacturers.
Action Taken or Planned:
· SBA proposes to define value-added resellers (VARs) as legitimate categories of business. SBA
has already published a notice in the Federal Register seeking comment on VARs. The 8(a) BD
program will use this information and work with the Office of Size Standards to develop an
appropriate size and category for VARs.
Cross-Cutting Issues
SBA is charged with providing business development assistance to firms owned by socially and
economically disadvantaged individuals through Federal contract program grants, and cooperative
agreements with service providers for management and technical assistance. SBA accomplishes this
through partnerships with other Federal, state and local agencies and the private sector.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
64
For example, SBA participates in monthly meetings with the agencies’ directors of the Offices of Small
and Disadvantaged Business Utilization to discuss our small business program and strategies to increase
small business participation in Federal contracts. We also plan to partner with the Department of
Defense to offer assistance to small businesses through Electronic Commerce Resource Centers and
Procurement Technical Assistance Centers. We will develop additional partnerships with other
agencies. Additionally, we plan to:
· Work with private organizations to develop special electronic malls to facilitate the participation of
small and small disadvantaged businesses in Federal purchases made electronically.
· Explore the increased use of the Internet to increase the coverage of Federal buying activities by our
Procurement Center Representatives.
· Maintain a proactive stance on combating contract bundling by aggressively identifying bundled
procurements for small business participants.
· Encourage increased partnering of small and large businesses to enhance the capacity and
competitiveness of small contractors.
· Work with the Office of Federal Procurement Policy and the Procurement Executives Council to
enhance the efficiency with which Federal buyers can utilize 8(a) and women-owned small
businesses.
· Increase efforts to secure procurement opportunities for small businesses in designated HUBZones
to build on the success of the certification effort.
External Factors
Acquisition reform has changed the way agencies buy goods and services. SBA must continue to work
with Federal agencies to develop alternative procurement strategies that will maximize small business
participation in this changing environment, while at the same time ensuring efficient and cost-effective
procurement reform. It is also critical for SBA to develop positive cooperative working relationships
with the major procurement agencies in the Federal Government, resource partners, and major prime
contractors to improve access and opportunities for small businesses in Federal procurement.
SBA published final regulations in FY 2000 to implement the contract bundling provisions set forth in
the SBA Reauthorization Act of 1997. The regulations establish guidelines to assist agencies in
determining whether planned acquisitions that consolidate requirements are necessary and justified.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
65
SBA has trained its Procurement Center Representatives (PCRs) on the new regulations, will work
aggressively to educate the Federal acquisition work force about the new procedures, and will take the
steps necessary to ensure that these procedures are enforced. These efforts will both further
procurement reform and continue to ensure our Nation’s small businesses play a significant role in
Federal acquisitions.
SBA is charged with implementing the small business procurement objective of 3 percent of prime and
subcontracts to service-disabled veteran-owned small businesses established by the Veterans
Entrepreneurship and Small Business Development Act of 1999. On October 11, 2000, the Federal
Acquisition Regulatory Council published an interim procurement regulation that requires servicedisabled
veteran-owned small businesses to represent their small business status. The agencies must also
include a provision in their contracts that requires prime contractors to use their best efforts and
establish goals for subcontracting with both veteran and service-disabled veteran-owned small
businesses.
During FY 2002, SBA will continue to educate Federal contracting officials, small business officials, and
prime contractors about this new small business objective. SBA will also work with the Office of
Federal Procurement Policy to change its policy directives to incorporate this new procurement
preference objective.
Objective 4: Provide and Improve Access to Entrepreneurial Development Assistance
Lack of management and technical assistance is an impediment to small business success. With this in
mind, providing access to entrepreneurial development assistance is one of SBA’s four principal
objectives as the Agency helps more businesses get started and stay in business.
SBA annually assists more than 1 million small businesses through a vest network of resource partners
and electronic access points. Business development information, education and training are offered at
more than 1,100 locations nationwide. These include the Online Women’s Business Center, SCORE
Online, nearly 1,000 Small Business Development Centers (SBDC), 11,400 Service Corps of Retired
Executive (SCORE) volunteers, 70 Business Information Centers (BIC), 17 Tribal Business Information
Centers (TBIC), 22 One Stop Capital Shops (OSCS), 19 US Export Assistance Centers (USEAC), 4
Veterans Business Outreach Centers, and 70 Women’s Business Centers (WBC).1 The Agency is also
continuing to create customer-centered Internet applications that empower entrepreneurs to easily
access government information.
1 There are currently 67 Women’s Business Center grantees representing 70 centers. Some of the grantees fund multiple locations.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
66
Performance Indicators and Resources Requested
(Dollars in Thousands)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
Actual Actual Actual Estimated Projected
Performance Indicators
Achieve high customer satisfaction rate:
Women’s Business Centers 76% N/A N/A 80% 80%
BICs N/A N/A 93% 93% 93%
OSCS N/A N/A 89%1 80% 80%
SBDC2 85% N/A N/A 80% 80%
Veterans Business Opportunity Centers N/A N/A N/A N/A 85%
SCORE N/A N/A N/A 80% 80%
Resources ($000)
Office of Veterans Business Development
Veterans Business Development Assistance $ 371 $ 733 $ 615 $ 0 $ 750
Veterans Business Development Corporation N/A N/A N/A 3,992 0
Disability Related Business Initiatives
New Freedom Initiative N/A N/A N/A N/A 5,000
National Women's Business Council 473 600 600 750 750
Office of Entrepreneurial Development (ED) 4,543 5,296 6,700 5,403 5,027
ED Programs & Special Initiatives
SBDC 71,561 89,817 84,074 88,013 75,806
Drug Free Workplace 0 0 3,469 3,500 5,000
SCORE 3,937 3,660 3,471 3,750 4,000
Business Information Centers 499 700 495 500 500
Women's Business Centers 4,292 8,000 8,926 12,000 12,000
Commerce Reimbursement - SWOBE 992 750 783 694 694
One Stop Capital Shops 3,100 3,100 3,206 3,100 3,100
Native American Outreach 607 0 0 0 0
Subtotal 90,375 112,656 112,339 121,702 112,627
Agency Support Cost Estimates:
Regional & District Offices (Field) N/A N/A 28,165 29,238 30,500
Executive Direction Support N/A N/A 3,571 3,635 3,749
Management & Administrative Support N/A N/A 3,517 3,463 3,522
Agencywide (Rent, Telecom, etc.) N/A N/A 7,494 9,026 9,569
Subtotal 42,747 45,362 47,340
Total $ 155,086 $ 167,064 $ 159,967
1 89% is based on a pilot of the Boston, MA One Stop Capital Shop. A full survey will be conducted in FY 2001.
2 Customer satisfaction results are based on a biannual study conducted by the Association of Small Business Development Centers.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
67
Programs & Special Initiatives
SBA provides business assistance programs through the Office of Entrepreneurial Development, the
National Women’s Business Council, the Office of Veterans Business Development, and Disability
Related Business Initiatives. The Office of Entrepreneurial Development manages programs that provide
direct service to the small business community. Entrepreneurial development programs and special
initiatives provide information, education, and training opportunities to small business owners and
individuals interested in starting a business.
The National Women’s Business Council serves as an independent advisor to the President, Congress,
and the Interagency Committee on Women’s Business Enterprise, and the SBA on issues concerning
women in business, and the effectiveness of Federal programs designed to foster women’s
entrepreneurship.
SBA supports the needs of veterans through the new Office of Veterans Business Development. This
office was officially established on January 12, 2001. It is responsible for the formulation, execution, and
promotion of policies and programs of the Administration that provide assistance to small business
concerns owned and controlled by veterans and service-disabled veterans. The office also supports
other SBA veteran-oriented objectives. It serves as a voice for veterans by acting as an ombudsman
for full consideration of veterans in all programs of the Administration. It supports ensuring veterans
access to capital through marketing and outreach efforts. It will help make Federal procurement
opportunities available to veterans by working to ensure that 3.0 percent of Federal prime and
subcontracts go to service-disabled veteran-owned small businesses.
The Disability Related Business Initiatives assist small businesses in the implementation of the
American’s With Disabilities Act and foster entrepreneurship among people with disabilities.
Implementation of President Bush’s New Freedom Initiative will be a major focus in FY 2002. This
initiative will provide small businesses with training and technical assistance to help them comply with the
Americans with Disabilities Act (ADA). This training will result in increased hiring of people with
disabilities and an increase in customers who will be able to frequent small businesses. A $5 million
dollar budget is requested for this activity.
The Office of Entrepreneurial Development manages the following programs:
· Paul D. Coverdell Drug-Free Workplace Program (DFWP): Through this program, SBA funds
organizations that provide technical assistance services to small businesses to implement programs
to address the issue of drugs in the workplace. Examples of services provided by intermediaries
include drug free workplace policy development and training, drug testing, Employee Assistance
Program services and general drug-free workplace education.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
68
· Women’s Business Centers (WBC): Through the WBC program, SBA provides grants to nonprofit
organizations to train and counsel women entrepreneurs. In addition, the Online Women’s
Business Center offers a 24-hour Internet site with information aimed specifically at women
entrepreneurs.
· Service Corps of Retired Executives (SCORE): Though a network of 11,400 counselors and 389
chapter locations, SCORE provides counseling and training services to more than 350,000 clients
annually.
· E-Commerce and Distance Learning: Through this initiative, SBA is developing distance learning
and other advanced learning applications to deliver E-Commerce and other virtual business
development information to small businesses.
· Small Business Development Centers (SBDC): SBDCs provide management and technical
assistance to small businesses though a network of service centers located throughout the United
States, Puerto Rico, U.S. Virgin Islands, Guam and American Samoa.
· Business Information Centers (BIC): Through a network of 70 locations, BICs provide
entrepreneurs access to computers and other business resource materials. Pre-business and inbusiness
counseling and training are also available at BIC locations using SCORE volunteers.
· One Stop Capital Shops (OSCS): 22 OSCSs are operated in partnership with the local
communities and provide clients a one-stop location for financial and business assistance through a
full range of Federal, state and local resources.
· Tribal Business Information Centers (TBIC): In partnership with Tribal colleges, 17 TBICs
provide entrepreneurial development assistance to Native Americans interested in starting or
expanding a small business.
Evaluation, Analyses and Surveys
Customer Satisfaction Surveys. In September 2000, SBA contracted the University of Michigan to
conduct three surveys of clients from the One Stop Capital Shops, Service Corps of Retired Executives
(SCORE), and Women’s Business Centers. The contractor conducted the interviews in February and
March and will submit a final report in the spring of 2001.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
69
Review of the SBDC program. Between December 2000 and March 2001, SBA conducted a
traditional program review of the SBDC network to 1) describe SBDC inputs, outputs and outcomes;
2) identify significant management issues regarding the SBDC network, cooperation with SBA and SBA
oversight; 3) identify “best practices” in the network and suggest ways to emulate these “models”; and
4) identify ideas to make the SBDC more responsive to client and community needs, and use
technology more effectively.
Cross-Cutting Programs
SBA provides management and technical assistance through partnerships with other Federal, state and
local agencies and the private sector. For example, SBA and the Department of Commerce (DOC)
provide different programs and services to American minority businesses, and focus on different market
segments. SBA provides counseling and technical/management assistance to help small firms write
business plans, apply for loans, compete for Federal contracts, and run their businesses. SBA focuses
on long-term competency-based skills and institution building. DOC provides services to minority
businesses, regardless of size, and seeks to enhance the continued development of these firms by
increasing their access to resources and markets.
In the past, the Office of Veterans Affairs (now the Office of Veterans Business Development)
partnered with the Office of Small and Disadvantaged Business Utilization in the Department of
Veterans Affairs, to conduct business-management briefings on resources within SBA which help small
business grow and improve in doing business with the Federal Government. The SBA and the
Departments of Veterans Affairs and the Department of Labor (DOL) have entered into an MOU to
assist disabled veterans to become entrepreneurs by providing the necessary entrepreneurial
development assistance needed to start a company.
The Office of Veterans Business Development is working in conjunction with the Department of
Veterans Affairs’ Center for Veterans Enterprise, the Department of Labor Assistant Secretary for
Veterans Employment and Training, the DOL Office of Disability Policy, the Association of Small
Business Development Centers, the Service Corps of Retired Executives, the National Veterans
Business Development Corporation, and the organized veterans community to implement significant
outreach to veterans and the service-disabled veterans small business community.
We are also working with the Department of Commerce (DOC), the National Institute of Science and
Technology (NIST), the United States Department of Agriculture (USDA) and the Minority Business
Development Agency (MBDA) of the DOC on E-Commerce outreach and training.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
70
The Disability Related Business Initiative is cross-cutting in that it works with the Social Security
Administration, Department of Labor, Department of Education, and Department of Defense and
Department of Veterans Affairs, to develop interagency educational sessions on lending,
entrepreneurship, resource sharing and required training. This cooperative effort works to support the
market education for entrepreneurs with disabilities
External Factors
No other SBA program exemplifies the importance of “shared outcomes” more than the “access to
entrepreneurial development assistance” programs. With the positive and cooperative assistance from a
host of business resource partners, SBA is able to reach out to more than 1 million small firms annually.
Additionally, with new emphasis on delivery of management and technical assistance via the electronic
media, a critical success factor will be access to and training in the use of the Internet. Finally,
availability of resources and stakeholder support are essential to successful implementation of this
strategy.
The SBA, through the Office of Veterans Business Development, has established a relationship with the
National Veterans Business Development Corporation. The relationship is critical to our efforts to
reach and develop initiatives designed to meet the needs of the veteran and service-disabled veteran
small business market. Working with the Corporation (a public/private initiative) enables SBA to engage
the private business community and develop cost-effective and efficient ways of furthering our efforts.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
71
GOAL 2: HELP FAMILIES AND BUSINESSES RECOVER FROM DISASTERS
In the wake of physical disasters, SBA's disaster loans are the primary form of Federal assistance for
non-farm, private-sector disaster losses for individuals and businesses. The disaster loan program is the
only form of SBA assistance not limited to small businesses. SBA’s disaster loans help homeowners,
renters, businesses of all sizes, and nonprofit organizations fund rebuilding and recovery efforts.
SBA operates a direct loan program to assist victims of natural disasters and supports the servicing and
collection of these loans after they have been made. We make disaster loans totaling approximately $1
billion each year, and we have an active portfolio of about $8 billion in loans. In FY 2000, SBA
included a large number of disaster loans in its Assets Sale Program.
Recent legislation was passed to establish two additional categories of economic injury disaster loans.
The Pre-disaster Mitigation Pilot Loan Program is a 5-year program that provides financial assistance to
small businesses participating in the Federal Emergency Management Agency’s (FEMA) formal
mitigation program to protect property from future disaster damage. The legislation authorizes SBA to
use up to $15 million of loan authority in each fiscal year. The Military Reservist Economic Injury Loan
Program provides financial assistance to small businesses that are economically impacted because its
owner(s) or employee(s) are called up for active duty due to a military conflict.
SBA disaster assistance is a critical source of economic stimulation in disaster-ravaged communities.
Eligibility is based on financial criteria. Current interest rates charged to borrowers are determined
according to statutory formulas: i.e., a lower rate, not to exceed 4 percent, is available to applicants
without credit available elsewhere; and a higher rate, not to exceed 8 percent, for those with credit
available elsewhere. SBA offers physical disaster loans to individuals and businesses of any size, and
economic injury loans to small businesses without credit available elsewhere.
The dollar volume of approved loans varies widely from year to year, reflecting the difficulty of planning
and accurate forecasting of the next disaster. Because it is difficult to predict disasters, SBA’s primary
objective is to offer victims quality, timely, easy access, and cost-effective help to rebuild their homes
and businesses. Customer satisfaction is a key measure of success for this program.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
72
Performance Indicators and Resources Requested
(Dollars in Thousands)
FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
Actual Actual Actual Estimated Projected
Performance Indicators
Field presence within three days of a disaster 100% 100% 100% 98% 98%
Achieve high customer satisfaction rate N/A N/A 81% 80% 80%
Applications processed within 21 days 77% 60% 91%1 80% 85%
Resources ($000)
Disaster Assistance Operating Expenses
Disaster Loan Making $ 79,116 $ 85,926 $ 83,929 $ 91,013 $ 40,000
Disaster Loan Servicing 25,012 30,808 29,523 34,056 30,000
Loan Program Subsidy 149,953 170,427 173,908 144,353 32,850
Subtotal 254,081 287,161 287,360 269,422 102,850
Agency Support Cost Estimates:
Regional & District Offices (Field Support) N/A N/A 9,321 9,677 10,094
Executive Direction N/A N/A 5,162 5,252 5,419
Management & Admin Support 2 N/A N/A 0 0 0
Agencywide Costs (Rent, Telecom, etc.) N/A N/A 4,148 4,994 5,294
Subtotal 18,631 19,923 20,807
Total3 $ 305,991 $ 289,345 $ 123,657
Evaluation, Analyses and Surveys
SBA will continue to conduct quality reviews of its disaster loan underwriting and documentation
process. Customer surveys will be conducted to measure the effectiveness and delivery of disaster
assistance.
Cross-Cutting Issues
Systematic coordination among Federal, state and local agencies is necessary before and during a
disaster to ensure effective, efficient delivery of the array of recovery programs. The Federal Response
Plan (FRP) describes the initiation, coordination and implementation of the wide array of Federal
disaster programs that provide assistance directly to individuals, families and business owners attempting
to recover from the effects of a major disaster (Presidential declaration). The Stafford Act assigns
FEMA the coordination role, in which multiple Federal assistance programs are reviewed, initiated,
implemented, and delivered to address the unique needs of a particular disaster area. Interagency
coordination is critical to promote efficient, consistent Federal action.
1 In FY 2000, the bulk of the loan activity occurred during the first 3 months of the fiscal year, enabling the program to exceed the
loan processing goal due to low levels of activity in the remaining months.
2 The majority of the Management and Administrative support for Disaster is directly funded by the $70 million appropriation for
program operating expenses.
3 These numbers represent spending and were funded partially with carryover balances.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
73
It also helps avoid ad hoc decision making, funding initiatives at cross-purposes, replicating efforts (e.g.
multiple damage assessments, inspections, environmental reviews), and duplicating benefits.
Disaster assistance programs for individuals, families, and businesses often overlap in their coverage and
purpose. Section 312 of the Stafford Act requires that no person, business concern, or other entity
receive Federal disaster assistance for any part of a loss that has been covered by any other program,
insurance, or any other source. FEMA has established a policy and procedure that outlines when
duplication can occur, and describes procedures for preventing and rectifying duplication.
The following delivery sequence establishes the order in which the major forms of overlapping
assistance should be provided:
1. Voluntary organizations’ emergency assistance and insurance proceeds, including
additional living-expense benefits
2. Disaster temporary housing assistance, including rental assistance, funds for minimal
repairs, and provision for housing units
3. SBA and United States Department of Agriculture disaster loans
4. Individual and family grant awards
5. Additional assistance from voluntary organizations
External Factors
The single most important external factor is the unpredictability of disasters. Helping families and
businesses recover from disasters requires SBA to work closely with the FEMA as well as other
Federal, state and local agencies. SBA must coordinate closely with FEMA to establish disasterassistance
centers when natural disasters strike, provide expedited responses, cut paperwork, and
create ongoing partnerships with voluntary agencies, businesses, and industries in the affected area.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
74
GOAL 3: IMPROVE SBA MANAGEMENT
SBA is an Agency that is continuing to transform itself to meet the challenges and opportunities of a
global marketplace. This integrated budget and performance plan partially documents this
transformational process. We have already made changes and continue to improve how we manage
ourselves and our resources. Similar to the private sector, SBA needs to increase the pace of change
and reform itself based on a reexamination of the role of the Federal Government. Our guiding principle
is to meet the needs of today’s citizens, creating a culture that is results-oriented (not processoriented),
citizen-centered (not bureaucracy-centered), and market-based (promoting, not stifling,
innovation and competition). To achieve our overall goal of modernizing the Agency, we have identified
six critical management objectives: (1) Managing for Results (Transparency and Accountability); (2)
Transforming the Workforce (Human Capital Investment); (3) Modernizing our Information Systems
(Information Technology Investment); (4) Improving Financial Management; (5) Improving Credit
Program Management; and (6) Creating Electronic Government.
Objective 1: Manage for Results
Performance Goal: Create Culture of Results
The Results Act requires Federal agencies to institute changes to enable them to measure and declare
the value of public sector programs to improve the internal management and decision-making of related
public expenditures. The core of the Results Act is the ability of a Federal Agency to be transparent
(i.e., define our work, our success, and our costs) and to be accountable (i.e., measure and report on
our progress).
To achieve an acceptable level of transparency and accountability in the Executive Branch, Congress
requires agencies to develop goals, objectives, and strategies for success and to submit multi-year
strategic plans, annual performance plans, and annual performance reports. SBA is meeting this
Congressional requirement by integrating its annual performance plan with the budget contained in this
document as well as its annual performance report with its program and financial accountability report in
the recently released “Performance and Accountability Report.”
To manage for results, SBA must ensure that performance information is valid and verifiable, and that it
has a cost allocation system that links resources with results achieved.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
75
Office of the Inspector General (OIG) Management Challenge
The OIG has incorporated the need to improve managing for results in its December 2000 major
management challenges.
Challenge: SBA needs to improve its managing for results processes and produce reliable
performance data
Summary: SBA needs to develop effective outcome measures, ensure that its performance data
are accurate and reliable, and establish systems to manage for results. The Agency has taken
steps to identify more program outcomes, improve performance measures, and increase the
accuracy of its data. SBA still needs to develop (1) Agency-wide guidance on preparing
performance goals and indicators, (2) standards and procedures for data verification and
validation, and (3) client surveys and other methods to obtain outcome information.
Goals:
· Develop guidance involving the preparation of organizational performance goals and indicators
· Develop and promulgate standards and procedures for data verification and validation
· Issue guidance to providers on how to count clients served, client counseling and training sessions
· Develop a client survey to measure impact of counseling and training
Action Planned
· Develop guidance for preparation of organizational performance goals and indicators
· Develop and promulgate standards and procedures for data verification and validation
· Issue guidance on how to count clients served, client counseling, and business training sessions
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
76
Objective 2: Transform the Workforce
Performance Goal: Ensure a Workforce with the right skills and correct placement.
SBA has changed significantly and will continue to change in the way it operates. We are moving
toward a more technologically driven operation, focused on providing business development assistance,
oversight, and building partnerships to help serve the needs of small business. We are phasing out some
functions, reemphasizing others, and creating new ones. Some new functions include:
· Management and technical assistance tailored to small and disadvantaged, HUBZone, disabled
veterans, and other entrepreneurs with disabilities.
· Oversight of lenders and business partners
· Response to asset sales
· Marketing and outreach to small business segments and our resource partners
· Management of information technology (IT Security, IT Investment Management, Internet, Quality
Assurance, IT Acquisition, Configuration Management)
· Creating E-Government and E-Commerce
Changes in how we do business and the demands of the New Economy create situations where we lack
geographic or functional employee balance. We must keep pace with the level of skill and technology
of our lending partners, since they originate 75 percent of our loans. We are committed to a thoughtful
workforce transformation process for our affected employees. Through discussions with our union
partners, we will invest in our human capital by providing employees with transition services and training.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
77
Office of Inspector General (OIG) Management Challenges
Challenge: Maximizing program performance requires that SBA fully implement its human
capital management strategies.
Summary: The nature and scope of SBA’s work has changed significantly, requiring a different
set of skills in the Agency’s workforce to maintain productivity. SBA has prepared an analysis
that projects future workforce needs, expanded training and candidate development programs,
and contracted for a workload and staffing study. The Agency needs to continue to develop its
workforce planning, re-training, and other human capital management activities to ensure
optimal performance of its employees.
Goals:
· Identify the knowledge, skills, abilities, and other characteristics that employees will need to perform
successfully in SBA’s new business environment.
· Develop a succession plan for senior leaders and candidate development programs.
· Ensure that employees receive adequate training to improve job performance.
Action Taken
· Developed a comprehensive “Workforce Transformation Plan” that outlines the current workforce
numbers and skills, and estimates the number of employees needed categorized by types of skills
needed in the future.
· Conducted a workload and staffing analysis of SBA Headquarters.
· Provided leadership training to 134 SBA executives and senior managers and trained more than
200 supervisors in leadership competencies.
· Reinstated candidate development programs for executives and district directors for succession
planning.
· Completed competency models for Marketing and Outreach Specialist and Public Information
Officer positions, and trained more than 300 employees in the skills required.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
78
Objective 3: Modernize Information Systems
Performance Goal: Provide Effective and Efficient IT Support to Program Delivery
Our financial management and information systems were developed when SBA was primarily a direct
lender, and are currently more than 20 years old. They do not comply with many new guidelines and
standards, including enhanced systems security, integration, standard databases and reporting, and a
standard general ledger. They also do not fully support our transition to the role of overseer of resource
partners, nor do they meet SBA’s need for quicker, more comprehensive, and accurate information on
program performance (Results Act compliance).
SBA is redefining how it does business to include outreach, marketing, and program oversight. We are
using information technology, particularly the Internet, to become more widely accessible to small firms.
Through modernizing our information systems, we can ensure reasonable data accuracy, improve
decision-making, and increase productivity and cost-effective service delivery to more small business
customers. Effective systems modernization requires replacement of old and outdated legacy systems,
and installation of a new technology infrastructure. Once completed, these improvements will improve
program oversight, enhance program management, and permit more accurate and timely financial
reporting.
Our System Modernization Initiative (SMI) is divided into four phases:
1. Phase I is a Loan Monitoring System (LMS) which addresses loan and lender monitoring. The
LMS system includes loan management, lender management, and risk management. The LMS is an
automated systems solution designed to automate the business functions necessary to manage
SBA’s portfolio, principally: process applications for loans and loan guarantees, service loans and
loan guarantees, process payments and disbursements, liquidate and litigate, maintain subsidiary loan
ledgers, perform debt collection, lender oversight, risk management, subsidy rate calculations, and
portfolio management.
2. Phase II is the Joint Accounting and Administrative Management System (JA2MS) and Disaster
Credit Management Modernization (DCMM). JA2MS will provide common processing routines
and support data for critical financial management functions affecting the entire Agency. SBA will
have a fully integrated and modern financial management system that includes human resources,
procurement, travel and finance (budget, reporting, and accounting). DCMM will define the
requirements for a paperless loan application process to be used by the Office of Disaster
Assistance. This system will expedite the disaster loan approval process and result in substantial
savings in personnel and travel expenses.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
79
3. Phase III includes Government Contracting and Business Development and Entrepreneurial
Development. In order to more fully monitor the use of resource partners in these areas and
quantify the performance of these programs, SBA will develop a client tracking database and
identify counseling and training that is conducted on a consistent and reliable basis. This data will
also allow us to better identify not just outputs but also program outcomes.
4. Phase IV will upgrade SMI functions which will greatly affect our ability to achieve our goals: an upto-
date technology infrastructure that can support new work processes and systems; (2) a strong IT
security program; and (3) IT standards management and governance. We must also upgrade our
telecommunications network to support large data transfers at faster speeds and must be able to
handle the increased complexity of hardware and software interfaces that accommodate effective
data interchange with lending and resource partners. To succeed, we must ensure that our IT
infrastructure remains current.
Finally, security will become increasingly important as we become more automated. We must
assure the public, as well as our resource partners, that we have the security policies, practices, and
infrastructure to maintain the privacy, confidentiality, and integrity of the data that we collect and
exchange with them. We realize that maintaining good security requires a continuous commitment of
resources and management attention.
Office of Inspector General (OIG) Management Challenges
Challenge: SBA faces significant challenges in modernizing its major loan monitoring and
financial management systems
Summary: SBA has ambitious plans to upgrade its systems for loan monitoring and financial
management, but implementing those plans will require sustained commitment to achieve
objectives and overcome system development obstacles. The Agency has identified modernizing
these systems as a major priority and has made progress in developing information technology
procedures and controls. SBA needs to continue to formulate and implement sound procedures
for system development and acquisition to enable more effective and efficient loan monitoring
and financial management.
Goals:
· Adopt policies and procedures and define processes for investment selection, control, and
evaluation.
· Develop a systematic process for architecture development, establish policies and procedures for
architecture maintenance, and set a target date for implementation of the maintenance process.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
80
· Develop a plan to institutionalize and enforce agency-wide use of SBA’s Systems Development
Methodology (SDM).
· Establish policies, procedures, and processes for software development and software acquisition
and develop a mechanism to enforce them.
Action Taken
· SBA has taken steps to strengthen and institutionalize its “Information Technology (IT) Planning and
Investment Control Process,” to improve selection and control of IT projects in a portfolio
environment and to improve formulation of the IT budget.
· To address past criticisms and help support its strategic goals, the Office of the Chief Information
Officer developed and started implementing the SDM. SDM is a set of procedures and quality
controls intended to reduce risks in the development of new information systems and ensure that
new systems function as intended by owners and stakeholders.
· SBA has begun development and implementation of a cost accounting system. In addition, SBA has
implemented a cost allocation model to assign costs to each major program, activity and function.
· The Agency has completed an IT architecture document and established procedures for its
maintenance.
· SBA has developed configuration management and quality assurance procedures for SMI projects.
Challenge: Information systems security needs improvement
Summary: SBA operations depend heavily on the Agency’s information systems, and the security
of these systems is critical. The Agency has made a substantial commitment of resources for
enhancing computer security, providing technical staff support, and developing security training.
SBA needs to fully implement its agency-wide systems security program to include assessing
risks, establishing policies and controls, promoting awareness, and evaluating security
effectiveness.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
81
Goals:
§ SBA needs to fully implement and maintain an ongoing information security program aimed at
understanding and reducing its information security risks.
Action Taken
· Committed more than $1.2 million in personnel and contract support to enhance the Agency’s
computer security program
· Increased the number of authorized personnel for IT security from 2 to 9 and acquired additional
contractor support to conduct security reviews
· Removed computer security as one of SBA’s material weaknesses in the FY 2000 audit
· Issued an updated computer security policy document that incorporated security policies covering
the latest Agency technology including client servers, e-mail, and the Internet
· Documented the computer security program and produced guidance documents and templates for
the performance of computer security functions within the Agency
· Completed certification and accreditation reviews for eight of the most sensitive systems
· Developed a security training program
· Continued work on developing critical infrastructure protection and security plans
Action Needed
· Perform vulnerability assessments on all critical cyber-based infrastructure
· Complete remedial plans for vulnerabilities identified by the risk assessments
· Develop a multi-year funding plan
· Include infrastructure assurance functions in the strategic planning and performance measurement
framework
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
82
Objective 4: Improve Financial Management
Performance Goal: Improve Financial Management
Since the passage of the Chief Financial Officers Act of 1990 (CFO Act), SBA has become a leader in
Federal financial management. In essence, SBA is primarily a financial institution, due to the level of
credit extended annually and a loan portfolio more than $50 billion. As a financial institution, excellence
in financial management is paramount to ensuring public confidence in SBA.
Office of Inspector General (OIG) Management
The OIG has incorporated its December 1999 cost accounting challenge into its December 2000 Major
Management Challenge on modernizing Agency information systems for loan monitoring and financial
management.
Objective 5: Improve Credit Program Management
Performance Goal: Improve Loan Portfolio Performance
SBA must maintain the financial stability and soundness of our $50 billion loan portfolio. As with
financial institutions in the private sector, we have the fiduciary responsibility to make our loan guaranty
decisions wisely and guard our current investments carefully. Risk management issues have become
more critical as we have initiated a change to partnering with banks, outsourcing our core processes,
and selling our assets. In FY 2000, SBA placed greater reliance on the credit decisions of its lending
partners to originate approximately 75 percent of all business loans. Congress has required us to
outsource servicing 30 percent of our disaster home loans. In the past 2 years, we have implemented a
highly successful asset sale program and will continue to strategically sell our loan portfolio.
As more of the loan-making, servicing and liquidation processes are outsourced and centralized, SBA's
exposure on loan guaranties becomes increasingly subject to the credit policies and actions of the
participating lenders. To protect the taxpayers interests and to ensure the long-term viability of our
lending programs, we have begun to build a system to identify, understand, and respond appropriately
to the behavior of SBA’s lending partners in a timely way. As described previously, the Loan
Monitoring System (LMS) is part of SBA’s Systems Modernization Initiative and will create an
automated monitoring system for SBA’s portfolio.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
83
Federal guidelines now require Federal credit agencies to include lender oversight in their program
management. OMB Circular No. A-129, “Policies for Federal Credit Programs and Non-Tax
Receivables,” requires Federal credit agencies to track and evaluate lender performance, including
delinquency, default and claim rates. The Joint Financial Management Improvement Program (JFMIP)
guidelines on Guaranteed Loan System Requirements similarly require Federal agencies to monitor
lender and servicer performance, identify lenders or servicers for regular or special review based on
performance characteristics, and periodically review lenders and servicers on-site.
One of SBA’s major management challenges is to make sure our lenders take prudent and appropriate
risk. With this in mind, we are improving our ability to assess, forecast, and manage risk.
Key objectives include:
· Delineating the difference between conventional bank lending and SBA guaranties by industry at
different points in the economic cycle.
· Delineating an optimization of risk/benefit ratio for small business borrowers.
· Detecting excessive risk-taking by marginal lenders earlier in the loan cycle.
· Implementing a graduated system of enforcement to slow marginal lending activity.
· Forecasting portfolio performance.
The Office of Lender Oversight is developing models and processes to meet the above objectives.
Performance measures addressing delinquency and purchase and default rates among other items will be
defined and monitored for individual lenders and by loan program. Monitoring these measures will
allow the Agency to track trends by lender and within the loan portfolio. The new approach will allow
longitudinal comparisons of lender behavior both among individual lenders, and that of an individual
lender to a norm (constant) derived from the behavior of the portfolio as a whole. By analyzing both
loan portfolio performance and lender behavior, the Agency gains a broad analytical tool in which to
improve performance.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
84
Office of the Inspector General (OIG) Management Challenges
Challenge: SBA needs to continue improving lender oversight.
Summary: As SBA becomes increasingly dependent on private lenders to carry out business loan
functions, an effective lender oversight program is critical for ensuring that lender activities
serve Agency objectives and comply with all rules and procedures. SBA has established an Office
of Lender Oversight, completed the second round and started the third round of Preferred
Lender Program (PLP) reviews, completed the second cycle of safety and soundness
examinations of the non-depository Small Business Lending Companies (SBLC) and begun
development of a comprehensive loan monitoring system. The Agency needs to ensure that all
non-PLP lenders are reviewed periodically on a consistent basis, fully implement the loan
monitoring system, establish baseline goals and measures for lender processing errors, and
compare actual performance to goals.
Goals:
· Ensure that all non-PLP lenders are reviewed periodically and on a consistent basis. Results must
be documented, and recommendations made to correct any problems found.
· Implement a comprehensive Loan Monitoring System (LMS) that will enable SBA to better
evaluate the quality of a lender’s SBA portfolio. Factors to be considered should include loan
volume, loan origination, loan seasoning, and delinquency and default rates.
· Establish baseline goals and measures for lender processing errors and periodically compare
performance to goals.
· Implement the strategic plan for lender oversight.
Action Taken:
· SBA has established an Office of Lender Oversight.
· PLP lenders are reviewed annually by the PLP Review Branch with contractor help.
· SBA is continuing to conduct Quality Service Reviews of all district office functions.
· SBA has initiated steps to develop and implement a comprehensive Loan Monitoring System
(LMS) to evaluate lender performance.
· SBA has implemented an examination program for the Agency’s 14 Small Business Lending
Companies.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
GOALS AND RESOURCES
85
· SBA modified the PLP certification renewal process to strengthen the process for evaluating lender
performance in loan origination and processing.
Objective 6: Create Electronic Government
Performance Goal: Use the Internet to Serve Entrepreneurs and Small Businesses.
Electronic commerce (EC), loosely defined, is using computers, telecommunications and all available
electronic resources to conduct business. For SBA, the E-Government (e-gov) vision revolves around
customer service. Our objectives are to (1) educate small businesses on the importance of using
electronic commerce services in their businesses (e-commerce), and (2) deliver products and services
to small businesses anytime/anyplace through the Internet (e-gov).
At the core of our e-government and e-commerce strategy is an effort to create a horizontally integrated
suite of programs and services available to small companies anyplace, when they need it, and in a format
that is user-friendly, comprehensive and cost effective. We will use information technology and
communications to implement electronic business transactions that will replace the current paper
intensive processes as required by the Government Paperwork Elimination Act.
86
APPROPRIATIONS LANGUAGE AND
DESCRIPTION
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
87
Salaries and Expenses Appropriation
The Salaries and Expenses (S&E) appropriation provides funding for non-credit programs and
initiatives and for costs incurred by Headquarters and field staff in the administration and operation of
SBA programs. Non-credit programs and initiatives include all SBA business assistance programs not
related to loans, such as procurement assistance and business development assistance for women and
minorities. They also include management and information technology initiatives that improve SBA’s
operations. Funding for administration and operation (hereafter referred to as the operating budget)
pays for on-going personnel and support costs, including costs to support the administration and
management of the non-credit programs. As such, the S&E account is instrumental in the achievement
of SBA’s performance goals to help small businesses succeed, assist disaster victims, and improve
overall SBA management.
The FY 2002 President’s Budget requests $321.2 million in new budget authority for the S&E
appropriation, a decrease of $89.4 million from the FY 2001 appropriated level. Of this amount,
$153.9 million is for non-credit programs (a reduction of $101.2 million from the FY 2001
appropriation). For the operating budget, including fee income and transfers from the Business Loan
appropriation and the Disaster Assistance appropriation for administrative expenses pursuant to the
Federal Credit Reform Act of 1990, the request will provide $309.2 million in total resources (an
increase of $13.0 million over FY 2001). A summary of the President’s Request for Salaries and
Expenses follows:
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Salaries and Expenses:
New Budget Authority $ 322,800 $ 410,635 $ 321,219 $ (89,416)
Transfer from Business Loans Program 129,000 129,374 129,105 (269)
Transfer from Disaster Loans Program 20,000 9,854 9,854 0
Transfers from Other Agencies 11,654 5,000 1,800 (3,200)
Offsetting Collections - Fees 3,331 3,000 3,000 0
Estimated Gainsharing 0 3,000 3,000 0
Carryover from Prior Fiscal Year 4,089 2,791 0 (2,791)
Recoveries 10 0 0 0
Returned to Treasury (10,500) 0 0 0
Transfer to Other Accounts (4,248) (1,898) 0 1,898
Carryover into Next Fiscal Year (2,791) 0 0 0
Rescinded Funds Appropriated (3,185) (903) 0 903
Balance Expired (674) 0 0 0
Total Salaries and Expenses $ 469,486 $ 560,853 $ 467,978 $ (92,875)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
88
Non-Credit Programs and Initiatives ($158.8 million)
The FY 2002 request includes $158.8 million for non-credit programs and initiatives. Of this amount,
nearly $76 million is for the Small Business Development Centers to provide long-term counseling and
training to small businesses throughout the country. The remaining funds will allow SBA to provide
outreach and technical assistance to small businesses, especially women, veterans, and minorities,
through programs such as Microloan technical assistance, Women’s Business Centers, and Veteran’s
Business Assistance. Other non-credit programs such as HUBZone Empowerment Contracting and
7(j) Technical Assistance provide an advocate for small businesses in the government contracting area.
In addition to funding business assistance programs, the Non-Credit Programs and Special Initiatives
account funds management and information technology initiatives to help transform SBA’s workforce
and modernize its infrastructure. Funds are requested to upgrade systems, implement risk management
techniques, improve internal controls, transition the workforce, and update technology infrastructure to
help meet SBA’s long-term goals.
Operating Budget ($309.2 million)
The total authority requested for SBA’s operating budget is $309.2 million, an increase of $13.0 million
from the FY 2001 enacted level. The small increase (3.9 percent) is primarily for the general salary pay
raises of 3.6 percent in January 2002 and for mandatory rate increases in rent that are passed directly to
SBA by the General Services Administration. The request for SBA’s operating budget reflects the
minimum requirement needed to provide efficient customer services, ensure a motivated and trained
workforce, and maintain an effective infrastructure to support SBA programs and activities. In fact,
SBA will further reduce its workforce by 150 positions during FY 2002. The operating budget portion
of the S&E appropriation funds five major types of costs: Program Support, Field Operations,
Executive Direction, Management and Administration, and Agency-wide Costs. It does not include
funding for disaster assistance direct expenses; these are covered under the Disaster Loan
Appropriation. Descriptions of these major components of the operating budget follow.
Program Support ($51.9 million)
Funding for program support activities covers the costs of providing government contracting assistance,
business development assistance, training and outreach activities, and capital access programs. Most
administrative expenses for non-credit programs are included in this group. Funding requirements
reflect the needs of headquarters offices as well as servicing centers that process loan guarantees and
service SBA’s portfolio.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
89
Field Operations ($147.4 million)
Funding for field operations covers the cost of operating 10 regional and 70 district and branch offices
throughout the United States and Puerto Rico. The regional and district offices are the locations where
SBA personnel interact with customers and deliver SBA’s programs and activities to the Nation’s 25
million small business customers.
Executive Direction ($34.1 million)
Executive Direction offices are responsible for administratively supporting SBA’s program offices.
Requirements include policy analysis and support, financial management, legal representation, hearings
and appeals, equal employment opportunity/civil rights compliance, congressional and public interface,
marketing to SBA’s constituency, and advocating the small business community within the governmental
process. An estimate of the cost of Executive Direction is provided in the Performance Indicators and
Resources Requested section of each goal.
Management and Administration (29.6 million)
Management and Administration offices are responsible for the formulation and execution of policies
and procedures that maximize the utilization of SBA’s primary internal resources, including human
resources, information technology, and administrative services. An estimate of the cost of Management
and Administration is provided in the Performance Indicators and Resources Requested section of each
goal.
Agency-wide Costs ($46.2 million)
Agency-wide costs comprise fixed expenses that the Agency must incur to support the annual level of
program funding. These costs include telecommunications, postage, rent, worker’s compensation,
centralized training, in-house printing, transit benefits subsidy, and reasonable accommodation expenses.
Estimates for Agency-wide costs are provided in the Performance Indicators and Resources Requested
section of each goal.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
90
SALARIES AND EXPENSES
For necessary expenses, not otherwise provided for, of the Small Business Administration as
authorized by Public Law 105–135, including hire of passenger motor vehicles as authorized by
31 U.S.C. 1343 and 1344, and not to exceed $3,500 for official reception and representation
expenses, [331,635,000,000] $321,219,000: Provided, That the Administrator is authorized to
charge fees to cover the cost of publications developed by the Small Business Administration,
and certain loan servicing activities: Provided further, That, notwithstanding 31 U.S.C. 3302,
revenues received from all such activities shall be credited to this account, to be available for
carrying out these purposes without further appropriations: Provided further, That
[$88,000,000] $75,806,000 shall be available to fund grants for performance in fiscal year
[2001] 2002 or fiscal year [2002] 2003 as authorized by section 21 of the Small Business Act, as
amended. [Provided further, That, of the funds made available under this heading, $4,000,000
shall be for the National Veterans Business Development Corporation established under section
33(a) of the Small Business Act (15 U.S.C. 657c).
In addition, for the cost of programs related to the New Markets Venture Capital Program,
$37,000,000, of which $7,000,000 shall be for BusinessLINC, and of which $30,000,000 shall be
for technical assistance: Provided, That the funds appropriated under this paragraph shall not
be available for obligation until the New Markets Venture Capitol program is authorized by
subsequent legislation.]
In addition, to reimburse the Small Business Administration for qualified expenses of delinquent
non-tax debt collection, to be derived from increased agency collections of delinquent debt, 5
percent of such collections but not to exceed $3,000,000. (Departments of Commerce, Justice,
and State, the Judiciary, and Related Agencies Appropriations Act, 2001, as enacted by section
1(a)(2) of P.L. 106–553).
[For an additional amount for “Salaries and Expenses”, $1,000,000 shall be available for a
grant to the Electronic Commerce Resource Center in Scranton, Pennsylvania, to establish an
electronic commerce technology distribution center. (Division A, Miscellaneous Appropriations
Act, 2001, as enacted by section 1(a)(4) of P.L. 106-554.)]
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
91
NON-CREDIT BUSINESS ASSISTANCE PROGRAMS
[For non-credit programs authorized under the Small Business Act, as amended, $256,050,000,
of which $89,500,000 shall be for grants for performance in fiscal year 2001 or fiscal year 2002:
Provided, That (1) $85,000,000 shall be for grants for the purposes authorized by section 21 of
such Act, (2) $3,000,000 to establish a reservation-based Native American Small Business
Development Center network, including subcenters, to serve Native Americans on a national
basis subject to section 21 of such Act but without the necessity for matching funds, and (3)
$1,500,000 to support the Tribal Business Information Centers: Provided further, That any
balances of FY2000 funds appropriated for these non-credit programs under the heading,
‘‘Salaries and Expenses’’, may be transferred to this heading, to be available to carry out these
programs and to be available for the time period originally provided.]
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
92
Business Loans Appropriation
The Business Loans appropriation includes the funds to cover the taxpayer’s cost of providing direct
and guaranteed loans to new and existing small businesses throughout the United States. Financing to
small businesses is made either directly or in cooperation with banks or other financial institutions
through agreements to participate on a deferred (guaranteed) basis, or through approved Microloan
intermediaries. Through its business loan programs, SBA provides capital, credit and equity assistance
to help develop and strengthen America’s small businesses and contribute to the country’s economy.
As required by the Federal Credit Reform Act of 1990 (FCRA), the Business Loans program account
includes the subsidy costs associated with direct loans obligated and loan guaranties committed in the
fiscal year in question.
The Business Loans program account also includes administrative expenses associated with the delivery
of business loan programs. Subsidy amounts are estimated on a present value basis, and administrative
expenses are estimated on a cash basis. Funds for administrative expenses are appropriated to this
account and then transferred to the Salaries and Expenses account to be obligated and outlayed in that
account.
The FY 2002 budget requests $1.5 million for the subsidy costs associated with direct loans, $0 for the
subsidy costs associated with guaranteed loans and debentures, supporting and a total program level of
$17.6 billion in “net” loan approvals to small businesses during FY 2002. These approvals include the
effect of loan increases, decreases, and cancellations. In addition, the Budget requests $129 million for
administrative expenses to be transferred to the Salaries and Expenses account.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
93
Business Loan Programs Appropriation
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
New Budget Authority
Section 7(a) Guaranty $ 107,390 $ 114,960 $ 0 $ (114,960)
Section 7(a) Guaranty - DELTA 0 0 0 0
Y2K Loans1 110 0 0 0
Section 504 CDC Guaranty 0 0 0 0
Section 504 CDC Guaranty - DELTA 0 0 0 0
Microloan - Direct 0 2,250 1,500 (750)
Microloan - Guaranty 0 0 0 0
New Market Venture Capital 6,000 22,000 0 (22,000)
SBIC - Participating Securities 24,300 26,200 0 (26,200)
SBIC - Debentures 0 0 0 0
Rescinded Funds - Appropriation 0 (364) 0 364
Subtotal – Loan Programs 137,800 165,046 1,500 (163,546)
Administrative Expense
New Budget Authority 129,000 129,000 129,000 0
Rescinded Funds - Appropriation 0 (284) 0 284
Subtotal – Administrative Expense 129,000 128,716 129,000 284
Total New Budget Authority $ 266,800 $ 293,762 $ 130,500 $ (163,262)
Business Loans - Summary
Program Level $ 13,180,670 $ 17,565,152 $ 17,595,075 $ 29,923
New Appropriation $ 266,800 $ 294,410 $ 130,500 $ (163,910)
Carryover from Prior Fiscal Year 30,100 24,719 9,114 (15,605)
Carryover into Next Fiscal Year (24,719) (9,114) (8,798) 316
Transfer to Other Accounts (135,000) (129,974) (129,105) (231)
Recoveries 4,211 1,169 0 (1,169)
Balance Expired (13,100) 0 0 0
Transfer from Other Accounts 9,500 0 0 0
Rescinded Funds - Appropriation 0 (648) 0 648
Subsidy Budget Authority $ 137,792 $ 181,162 $ 1,711 $ (179,451)
1 Program authority expired 12/31/00.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
94
Section 7(A) Loan Guaranty Program
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Program Level $ 9,679,569 $ 11,008,547 $ 10,700,000 $ (308,547)
New Subsidy Appropriation 107,390 114,960 0 (114,960)
Carryover Balance - Beginning of Year 5,632 12,924 0 (12,924)
Recoveries 2,685 1,169 0 (1,169)
Carryover Balance - End of Year (12,924) 0 0 0
Transfer from Other Accounts 9,500 0 0 0
Rescinded Funds - Appropriation 0 (253) 0 253
Subsidy Budget Authority $ 112,283 $ 128,800 $ 0 $ (128,800)
Subsidy Rate1 1.16% 1.17% 0.00% (1.17%)
Base Program
The 7(a) Loan Guaranty Program is the SBA’s primary business loan program. The SBA guarantees
up to $1 million of a $2 million maximum loan. At present, the guaranty can be for as much as 85
percent on loans of $150,000 or less and 75 percent on loans of more than $150,000 (except Export
Working Capital loans, which receive a guaranty of up to 90 percent). A borrower may have more
than one SBA loan at a time, so long as the total amount does not exceed the SBA’s guaranty cap of $1
million. The only exceptions are the International Trade and DELTA loan programs, as noted in the
following pages.
The SBA has a number of specialized loans under the 7(a) Program that help fill the particular needs of
small businesses:
SBA LowDoc: SBA’s Low Documentation Loan Program (LowDoc) offers a one-page SBA
application form and centralized processing with a rapid turnaround on approvals for loans of $150,000
or less. SBA established a requirement to process completed applications within 3 days. Proceeds
may not be used to repay certain types of existing debt.
SBAExpress: SBAExpress provides SBA guaranties on loans $150,000 or less, allowing lenders to
use their own forms and processes. In return for this convenience, lenders receive a maximum 50
percent guaranty.
1 FY 2001: The Authorization Bill includes changes that lower the rate to 1.16% effective December 21, 2000. The rate was 1.24%
from October 1, 2000 to December 21, 2000.
FY 2002: Assumes proposed fee changes (under 1 year = 1%, <=$150,000 = 1.5%, >$150,000 and <=$700,000 = 3.5%; > $700,000
= 4%; pass-thru <= $150,000 = 0.5%, >$150,000 = 0.8875%) to lower rate from 1.07% current services rate to 0%.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
95
Section 7(A) Loan Guaranty Program
(Dollars in Thousands)
CAPLines: Under this program, SBA helps small businesses meet their short-term and cyclical
working capital needs. A CAPLines loan can be for any dollar amount and the SBA will guarantee
75 percent up to $1 million (85 percent on loans of $150,000 or less). There are five short-term
working capital loan programs for small businesses under the CAPLines umbrella: seasonal line,
contract line, builders’ line, standard asset-based line, and small asset-based line.
Prequalification Loan Program: Through the Prequalification Loan Program, intermediaries
assist women, minorities, and veterans as well as exporters, rural markets and designated
geographical areas, to develop viable loan application packages and secure loans. This program is
a pilot and combines the Women and Minority Prequalification Pilots established in 1994. It allows
SBA to prequalify guaranties of up to $250,000 before a business owner approaches a lender.
International Trade Loan Program: The International Trade Loan Program helps small
businesses that are either engaged in international trade, preparing to engage in international trade or
adversely affected by competition from imports. SBA can guarantee as much as $1.25 million in
combined working capital, facilities, and equipment loans (including any other current SBA loan
guaranties).
Community Express: Community Express is similar to SBAExpress except that it provides the
maximum guaranty available to loans up to $250,000. That is, 75 percent on loans over $150,000
and 85 percent on loans up to and including that amount. The unique feature of this program is that
it requires lenders to arrange for technical assistance to be provided to meet the needs of the
borrower. The program is targeted to businesses located in low and moderate income areas and
those owned by women, minorities, and veterans.
Community Adjustment and Investment Program (CAIP) Under a Memorandum of
Understanding (MOU) with the Department of Treasury, SBA guarantees 7(a) loans to businesses
in communities adversely affected by the North American Free Trade Agreement (NAFTA) without
guarantee fees. This fee is paid from a special fund provided by the Department of Treasury.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
96
Section 7(A) Loan Guaranty Program (DELTA)
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Program Level $ 15,552 $ 20,000 $ 20,000 $ 0
New Subsidy Appropriation 0 0 0 0
Carryover Balance - Beginning of Year 4,796 4,511 4,137 (374)
Carryover Balance - End of Year (4,511) (4,137) (4,005) 132
Transfer to Salaries and Expenses 0 0 0 0
Subsidy Budget Authority $ 285 $ 374 $ 132 $ (242)
Subsidy Rate 1.83% 1.87% 0.66% (1.21%)
Base Program
The Defense Loan and Technical Assistance Program (DELTA) is a joint effort between SBA and the
Department of Defense. It provides both financial and technical assistance to defense-dependent small
firms adversely affected by defense cuts and base closings to help them diversify into the commercial
marketplace. The maximum SBA loan guarantee under DELTA is 80 percent for all loans with a $1.25
million loan ceiling.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
97
Section 504 Development Company Loan Program
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Section 504/CDC Guarantees
Program Level $ 1,808,649 $ 3,750,000 $ 3,750,000 $ 0
New Subsidy Appropriation 0 0 0 0
Carryover Balance - Beginning of Year 0 0 0 0
Recoveries 0 0 0 0
Carryover Balance - End of Year 0 0 0 0
Transfer to Salaries and Expenses 0 0 0 0
Subsidy Budget Authority 0 0 0 0
Subsidy Rate1 0.00% 0.00% 0.00% 0.00%
Section 504/CDC Guarantees (DELTA)
Program Level $ 257 $ 2,472 $ 2,500 $ 28
New Subsidy Appropriation 0 0 0 0
Carryover Balance - Beginning of Year 1,031 1,028 1,006 (22)
Recoveries 0 0 0 0
Carryover Balance - End of Year (1,028) (1,006) (985) 21
Transfer to Salaries and Expenses 0 0 0 0
Subsidy Budget Authority $ 3 $ 22 $ 21 $ (1)
Subsidy Rate 1.13% 0.89% 0.84% (0.05%)
Base Program
The 504 Development Company Loan Program is delivered through a network of Certified
Development Companies (CDCs) that provide small businesses with long-term fixed-rate financing for
the purchase of land, buildings and long-life equipment. The program is designed to enable small
businesses to create and retain jobs in their business service areas and to meet other legislatively
mandated public policy purposes. A CDC is generally a nonprofit corporation that is set up to
contribute to the economic development of its community or region. There are about 300 CDCs
nationwide. SBA guarantees debentures issued by the CDC for up to 40 percent of the project cost,
up to $1.3 million.
1 No appropriation is required due to the annual adjustment of fees to maintain a 0% subsidy rate. For FY 2002, the fee will be lowered
from 0.472% o 0.410%.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
98
Microloan Program
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Miroloan Direct
Program Level $ 27,204 $ 25,531 $ 20,575 $ (4,956)
New Subsidy Appropriation 0 2,250 1,500 (750)
Carryover from Prior Year 2,521 198 0 (198)
Recoveries 0 0 0 0
Carryover into Next Year (198) 0 0 0
Transfer to Salaries and Expenses1 0 (158) (105) 53
Rescinded Funds - Appropriation 0 (5) 0 5
Subsidy Budget Authority 2,323 2,285 1,395 (890)
Subsidy Rate 8.54% 8.95% 6.78% (2.17%)
Microloan Guaranty Loans
Program Level $ 1,150 $ 2,000 $ 2,0002 $ 0
New Subsidy Appropriation 0 0 0 0
Carryover from Prior 2,700 2,604 2,445 (159)
Recoveries 0 0 0 0
Carryover into Next Year (2,604) (2,445) (2,282) 163
Transfer to Salaries and Expenses 0 0 0 0
Subsidy Budget Authority $ 96 $ 159 $ 163 $ 4
Subsidy Rate 8.32% 7.95% 8.17% 0.22%
Base Program
The Microloan Program makes loans up to $750,000 to intermediaries who in turn make very small
loans ($35,000 and under) to entrepreneurs traditionally considered “unbankable” largely due to
inexperience with credit, lack of assets or the need for on-going technical assistance. They may have no
prior business experience, have no credit history (or a blemished one), have been on public assistance,
live in an area of economic downturn or face other factors that would cause traditional lenders not to
consider them viable clients. Therefore, this program is accompanied by a technical assistance grant
program that provides a significant contribution to the viability of the business and supports the
repayment of the debt.
1 By SBA statute, 7% of the annual appropriation is to be transferred to Salaries and Expenses to provide training to Microloan intermediaries.
2 The amount shown consists entirely of funds carried over from FY 2001 and may be reduced if expenditures during FY 2001 are
different from projections.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
99
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
100
Each loan generates approximately 1.7 jobs, and if a borrower was a welfare recipient, it is common for
them to hire other welfare recipients. Since its inception in 1992, more than 100 intermediary lenders
have made $121 million in Microloans to more than 12,000 small businesses. This program was made
permanent with the passage of P.L. 105-135 in December 1997.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
101
Small Business Investment Company Programs
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Participating Securities
Program Level $ 1,260,630 $ 2,104,580 $ 2,500,000 $ 395,420
New Subsidy Appropriation 24,300 26,200 0 (26,200)
Carryover Balance - Beginning of Year 320 1,928 0 (1,928)
Recoveries 0 0 0 0
Carryover Balance - End of Year (1,928) 0 0 0
Transfer from Debentures 0 0 0 0
Rescinded Funds - Appropriation 0 (58) 0 58
Transfer to Salaries and Expenses 0 (500) 0 500
Subsidy Budget Authority 22,692 27,570 0 (27,570)
Subsidy Rate1 1.80% 1.31% 0.00% (1.31%)
SBIC - Debentures
Program Level $ 384,955 $ 500,000 $ 600,000 $ 100,000
New Subsidy Appropriation 0 0 0 0
Carryover Balance - Beginning of Year 13,100 1,526 0 (1,526)
Recoveries 0 0 0 0
Carryover Balance - End of Year (1,526) (1,526) 0 1,526
Balance Expiring (13,100) 0 0 0
Recoveries 1,526 0 0 0
Subsidy Budget Authority $ 0 $ 0 $ 0 $ 0
Subsidy Rate2 0.00% 0.00% 0.00% 0.00%
Base Program
The need for the Small Business Investment Company Program (SBIC) was established by a 1958
Federal Reserve Board Study, which identified a major gap in capital markets for long-term financing of
smaller growth-oriented businesses. The SBIC program was reinvented in FY 1994 with the creation
of a new participating security program and the issuance of final regulations implementing a sweeping
overhaul of the program. SBICs, licensed and regulated by SBA, are privately owned and managed
investment firms who make their own investment decisions.
1 FY 2002 assumes proposed fee change from 1.0% to 1.376% resulting in 0% subsidy rate.
2 No appropriation is required due to the annual adjustment of fees to maintain a 0% subsidy rate. For FY 2002, the fee will be lowered
from 0.88% to 0.866%.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
102
Small Business Investment Company Program
SBICs use their own funds, plus funds from borrowing with an SBA guaranty (referred to as
“leverage”), to make venture capital investments in small business. The entire private capital of an
SBIC is always at risk ahead of the funding guaranteed by the SBA. This program serves one of the
most important missions of the Agency--that of helping qualified small enterprises secure the capital to
start, maintain or grow a business.
The SBIC Program furthers this mission by: (1) facilitating the formation of privately-owned and
operated investment companies to serve as a source of equity capital and long-term loans to new or
expanding small businesses; and, (2) supplementing investment companies’ private capital with funds
made available through SBA guarantees.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
103
New Markets Venture Capital Program
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Program Level $ 0 $ 152,022 $ 0 $ (152,022)
New Subsidy Appropriation 6,000 22,000 0 (22,000)
Carryover Balance - Beginning of Year 0 0 0 0
Recoveries 0 0 0 0
Carryover Balance - End of Year 0 0 0 0
Transfer to Other Accounts (6,000) 0 0 0
Rescinded Funds – Appropriation 0 (48) 0 48
Transfer to Salaries and Expenses 0 0 0 0
Subsidy Budget Authority $ 0 $ 21,952 $ 0 $ (21,952)
Subsidy Rate 15.00% 14.44% 14.47% 0.03%
Base Program
This Program was funded in FY 2001 for debentures spanning 10 years. The consolidated
Appropriations Act of 2001 (P.L. 106-554) authorized SBA to provide loans to geographic areas with
high unemployment or low income to help spur economic development in “new markets.” This loan
program duplicates the effects of tax incentives also included in the bill. The Act included a 30 percent
tax credit for investments in these areas, which will provide $1.5 billion in investments over a 10 year
period. As a result, funding for the New Markets Venture Capital loan program in FY 2002 will not
be necessary.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
104
Surety Bond Guaranty Revolving Fund Appropriation
(Dollars in thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Surety Guarantees $ 0 $ 0 $ 0 $ 0
Total Budget Authority $ 0 $ 0 $ 0 $ 0
Total Obligation $ 3,300 $ 0 $ 0 $ 0
Adjustments to Obligations 0 0 0 0
Offsetting collections $ (3,300) 0 0 0
Appropriation $ 0 $ 0 $ 0 $ 0
Base Program
The Small Business Administration (SBA) is authorized to issue bond guarantees to surety companies
for construction, service and supply contracts that do not exceed $2 million and to reimburse these
sureties up to 90 percent of the losses sustained if the contractor defaults. SBA’s guarantees provide
the incentive necessary for sureties to issue bonds to small contractors who could not otherwise
compete in the contracting industry.
The Surety Bond Guaranty Program is delivered through the Prior Approval Program and the Preferred
Surety Bond (PSB) Program. Under the Prior Approval Program, SBA must approve each surety
bond guarantee agreement. The surety receives a 90 percent guarantee if the bonds are issued on
behalf of a socially and economically disadvantaged firm or if the total amount of the contract does not
exceed $100,000. Otherwise the SBA’s guarantee will not exceed 80 percent.
Under the Preferred Surety Bond (PSP) Program, participating sureties are authorized to issue, monitor,
and service bonds without SBA’s prior approval. Guarantees under this program are limited to 70
percent. Currently, there are 15 participating sureties in the program.
Each of these programs provides assistance to a different segment of the contracting community. There
is no subsidy loss rate for this program since it is not considered a credit program under the guidelines of
credit reform. Instead, there is a revolving fund at the Treasury in which income is deposited and from
which claims are paid.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
105
BUSINESS LOANS PROGRAM ACCOUNT
For the cost of direct loans, [$2,250,000], $1,500,000 to be available until expended; [and for
the cost of guaranteed loans, $163,160,000, as authorized by 15 U.S.C. 631 note or subsequently
authorized for the New Markets Venture Capital program, of which $45,000,000 shall remain available
until September 30, 2002: Provided, That of the total provided, $22,000,000 shall be available only for
the cost of guaranteed loans under the New Markets Venture Capitol program and shall become
available for obligation only upon authorization of such program by the enactment of subsequent
legislation in fiscal year 2001]: Provided further, That such costs, including the cost of modifying such
loans, shall be as defined in section 502 of the Congressional Budget Act of 1974, as amended:
Provided further, That during fiscal year [2001], 2002 commitments to guarantee loans under section
503 of the Small Business Investment Act of 1958, as amended, shall not exceed $3,750,000,000:
Provided further, That during fiscal year [2001] 2002, commitments for general business loans
authorized under section 7(a) of the Small Business Act, as amended, shall not exceed
[$10,000,000,000 without prior notification of the Committees on Appropriations of the House of
Representatives and Senate in accordance with section 605 of this Act] $10,700,000,000: Provided
further, That during fiscal year [2001] 2002, commitments to guarantee [loans] debentures and
participating securities under section 303(b) of the Small Business Investment Act of 1958, as
amended, shall not exceed [$500,000,000] $3,100,000,000.
In addition, for administrative expenses to carry out the direct and guaranteed loan programs,
$129,000,000, which may be transferred to and merged with the appropriations for Salaries and
Expenses. (Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies
Appropriations Act, 2001, as enacted by section 1(a)(2) of P.L. 106–553).
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
106
SURETY BOND GUARANTEES REVOLVING FUND
No appropriation language is requested for FY 2002.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
107
Disaster Loans Appropriation
Base Program
The Small Business Administration’s (SBA) Disaster loan Program is a key component of the overall
Federal recovery effort in the wake of natural disasters. SBA’s disaster loans, made pursuant to
Section 7(b) of the Small Business Act, as amended, are the primary form of Federal assistance for
non-farm, private sector uninsured losses as the result of natural disasters such as hurricanes, floods,
wildfires and tornadoes. The disaster loan program is the only form of SBA assistance that is not limited
to small businesses. Both the President and the SBA Administrator may make disaster declarations, but
the vast majority of disaster loans (in number and dollars) are made to victims of disasters declared by
the President. Disaster loans from SBA to homeowners, renters, nonprofits and businesses make a
significant contribution to the process of the rebuilding and recovery from these events.
The SBA Disaster Loan program helps control Federal disaster assistance costs, by providing loans that
are repaid to the Treasury. When disaster victims need to borrow to repair uninsured damages, the
comparably low interest rates and long period of repayment terms available from SBA make recovery
affordable. Currently interest rates fluctuate according to statutory formulas: a lower rate, not to exceed
4 percent is available to those applicants unable to obtain credit elsewhere, while a higher rate, not to
exceed 8 percent is charged when other sources of credit are available. SBA’s disaster loans are a
critical source of economic stimulation for the economies of disaster-ravaged communities, helping to
rebuild homes and businesses, spur employment and stabilize the tax base.
Appropriation
As required by the Federal Credit Reform Act of 1990, the Disaster Loans Program account includes
the subsidy costs associated with direct loans obligated committed in the fiscal year in question.
The Disaster Loan program account also includes administrative expenses associated with the delivery
of disaster loans. Subsidy amounts are estimated on a present value basis, and administrative expenses
are estimated on a cash basis. Funds for administrative expenses are appropriated to this account and
then transferred by reimbursement to the Salaries and Expenses account.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
108
Disaster Loans Appropriation
The FY 2002 budget requests no new budget authority for loan subsidies to support a $300 million loan
program. This level will be funded by unobligated balances from FY 2001. SBA‘s budget requests
$75.4 million for administrative expenses to support the direct and indirect costs associated with
administering the $300 million in loans and servicing our disaster loan portfolio. In addition to SBA’s
direct request for new budget authority in FY 2002, the President requests an appropriation of $5.6
billion for a government-wide reserve account for disaster programs. SBA’s need for additional loan
funds and related administrative support, will be drawn from this reserve account once the direct
appropriation is exhausted.
In addition, we propose to increase the interest rate for business loans to borrowers who do not have
credit available elsewhere. Presently, these loans are capped at a 4 percent interest rate. SBA’s
proposal would increase this rate to the Treasury cost of funds, which is projected at 5.4 percent next
year. A maximum of 8 percent is also proposed to parallel the rate of disaster business loans with credit
elsewhere. This proposal has the effect of reducing the subsidy rate on the disaster loan program from
14.67 percent to 10.95 percent.
Detailed information on the FY 2002 budget request is provided on the following pages.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
109
Disaster Loan Program
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Disaster Loans Program
Direct Loan Subsidy $ 140,400 $ 76,140 $ 0 $ (74,140)
Supplemental, Contingencies 15,500 0 0 0
Total Budget Authority $ 155,900 $ 76,140 $ 0 $ (76,140)
Loan Program Budget Authority
New Budget Authority $ 140,400 $ 76,140 $ 0 $ (76,140)
Supplemental, Contingencies 15,500 0 0 0
Carryover from Prior Fiscal Year 81,004 96,231 37,850 (58,381)
Recoveries 33,235 10,000 0 (10,000)
Carryover into Next Fiscal Year (96,231) (37,850) 0 37,850
Transfer to Administrative Expense 0 0 (5,000) (5,000)
Rescinded Funds Appropriated 0 (168) 0 168
Subtotal - Disaster Loans Program $ 173,908 $ 144,353 $ 32,850 $ (111,503)
Subsidy Rate 22.2% 17.46% 10.95% (6.51)%
Program Level $ 783,369 $ 826,,764 $ 300,000 $ (526,764)
Disaster Loans Program - Administration
New Budget Authority $ 136,000 $ 108,354 $ 75,354 $ (33,000)
Supplemental, Contingencies 25,400 0 0 0
Carryover from Prior Fiscal Year 779 27,307 0 (27,307)
Transfer from Loan Subsidy 0 0 5,000 5,000
Recoveries 1,128 0 0 0
Carryover into Next Fiscal Year (27,307) 0 0 0
Transfer to Salaries and Expenses (20,000) (9,854) (9,854) 0
Transfer to Inspector General (500) (500) (500) 0
Rescinded Funds Appropriated (2,048) (238) 0 238
Total - Disaster Administration $ 113,452 $ 125,069 $ 70,000 $ (55,069)
Disaster Loan Making $ 83,929 $ 91,013 $ 40,000 $ (51,013)
Disaster Loan Servicing 29,523 34,056 30,000 (4,056)
Total $ 113,452 125,069 $ 70,000 $ (55,069)
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
110
Disaster Loan Making
Summary Of Requirements By Object Class
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Personnel Compensation $ 34,848 $ 37,789 $ 8,472 $ (29,317)
Overtime and Awards 5,855 6,349 2,790 (3,559)
Civilian Personnel Benefits 9,340 10,128 2,270 (7,858)
Workers/Unempl Compensation 1,429 1,550 1,550 0
Travel 9,756 10,579 300 (10,279)
Transportation of Things 14 15 15 0
Rental Payments to GSA 3,800 4,176 4,176 0
Rental Payments to Others 0 0 0 0
Communications, Utilities 1,274 1,381 1,381 0
Postage 735 797 797 0
Printing and Reproduction 25 28 28 0
Other Services 13,623 14,718 14,718 0
Supplies and Materials 92 100 100 0
Equipment 3,138 3,403 3,403 0
Total Obligations $ 83,929 $ 91,013 $ 40,000 $ (51,013)
Total Positions1 916 927 695 (232)
1 For FY 2002, this assumes additional funding from the Government-wide Disaster Reserve to maintain approximately the same level
of staffing throughout the year.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
111
Disaster Loan Servicing
Summary Of Requirements By Object Class
(Dollars in Thousands)
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
Personnel Compensation $ 12,138 $ 14,002 $ 13,992 $ (10)
Overtime and Awards 253 292 257 (35)
Civilian Personnel Benefits 3,942 4,547 4,543 (4)
Workers/Unempl Compensation 32 37 37 0
Travel 51 59 52 (7)
Transportation of Things 10 12 12 0
Rental Payments to GSA 2,608 2,857 2,857 0
Rental Payments to Others 0 0 0 0
Communications and Utilities 409 472 472 0
Postage 1,113 1,284 1,284 0
Printing and Reproduction 3 4 4 0
Other Services 8,876 10,389 6,389 (4,000)
Supplies and Materials 61 70 70 0
Equipment 27 31 31 0
Grants and Subsidies 0 0 0 0
Total Obligations $ 29,523 $ 34,056 $ 30,000 $ (4,056)
Total Positions 252 237 237 0
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
APPROPRIATIONS LANGUAGE AND DESCRIPTION
112
DISASTER LOANS PROGRAM ACCOUNT
[For the cost of direct loans authorized by section 7(b) of the Small Business Act, as
amended, $76,140,000, to remain available until expended: Provided, That such costs, including
the cost of modifying such loans, shall be as defined in section 502 of the Congressional Budget
Act of 1974, as amended.]
[In addition, for] For administrative expenses to carry out the direct loan program,
[$103,354,000], $75,354,000 which may be transferred to and merged with appropriations for
Salaries and Expenses, of which $500,000 is for the Office of Inspector General of the Small Business
Administration for audits and reviews of disaster loans and the disaster loan program and shall be
transferred to and merged with appropriations for the Office of Inspector General; of which
[$98,000,000] $65,000,000 is for direct administrative expenses of loan making and servicing to carry
out the direct loan program; and of which $9,854,000 is for indirect administrative expenses[:
Provided, That any amount in excess of $9,854,000 to be transferred to and merged with
appropriations for Salaries and Expenses for indirect administrative expenses shall be treated as a
reprogramming of funds under section 605 of this Act and shall not be available for obligation or
expenditure except in compliance with the procedures set forth in that section]. (Departments of
Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2001, as
enacted by section 1(a)(2) P.L. 106–563).
113
DATA VALIDATION AND VERIFICATION
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
114
DATA VALIDATION AND VERIFICATION
Managing for results and producing an annual performance plan and performance report require valid,
reliable and high-quality performance measures and data. SBA faces many challenges in acquiring highquality
data, both output and outcome. In addition to using output data internally from its own systems,
SBA relies on data from resource partners (such as SBDCs, SCORE, WBCs), and other Federal and
local governments to assess its accomplishments and effectiveness. Limitations such as the lack of
relevant data for measures, the accuracy and currency of data, and the reporting capacity of quality
data, remain major issues for the Agency. Improving data quality will continue to be a high priority for
SBA.
SBA vigorously pursues the following strategies to address the shortcomings of its data quality:
§ Ensuring the validity of performance measures and data. We will assess the relevancy of
performance measures and data.
§ Fostering organizational commitment and capacity for data quality. We will achieve data
quality through different processes. As part of a formal process, our managers will attest to the
quality of the data under their management. We are training managers to make sure they
understand the need for quality data. This necessitates guidance to the field on standards for data
collection and warehousing. In managing for results, we will require development of better data
systems to provide relevant information for decision-making. We are also using performance
information to evaluate our senior managers and the effectiveness of our programs.
§ Assessing the quality of existing data. The quality of our financial data systems is ensured by
audits and reviews. However, we must assess the quality of loan and program data provided by our
resource partners. For example, an OIG report documented that SBDCs do not always use the
same definitions for clients served, making it more difficult to get a valid picture of what has been
done. We plan to include data verification in our lender and resource partner oversight.
§ Responding to data limitations. It is not enough to identify data quality problems. Where there
are data limitations, we must improve quality. Managers will be asked to document how they intend
to reduce these limitations.
· Building quality into the development of performance data. The design process for new IT
systems will include the requirements for developing and maintaining performance data. The new
systems and upgrades will ensure that only correct data is entered into the systems and that data is
stored with stringent verification and change rules.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
115
DATA VALIDATION AND VERIFICATION
In FY 1999, we tracked our performance goals monthly and verified the accuracy of the data on an ad
hoc basis. As part of this internal performance monitoring, we tested the relevance of the indicators and
identified problems of data completeness, timeliness, and accuracy.
In FY 2000, we began implementing a more formal quality process, which included program managers
self-assessing the quality of their performance indicators, training managers in data quality control and
improvement methods, developing data quality improvement plans, and feedback to program managers
about data limitations determined through using the data. We completed the program manager selfassessment
step in December 1999. Program managers were asked to:
· Identify the data source.
· Discuss the validity of the measure.
· List data limitations, particularly of resource partners, to include reporting cycles, incomplete source
of data, double-counting, erroneous data, inconsistency in standards and definition of data, data that
could not be collected (due to privacy or policy), and system capacity; and document steps being
taken to improve data collection, verification and reporting, and to reduce data limitations.
In FY 2001 we will continue to train our managers. Managers will be informed of the elements of data
quality, how to ensure data quality through internal controls and how to improve data quality. Managers
will be asked to provide data verification procedures and improvement plans, with milestones, after
completion of the training. Explicit feedback will be provided to managers regarding data limitations and
data quality as part of SBA’s use of the data in analyzing Agency activities, outputs and outcomes, and
as part of the Inspector General’s audits of data validity and verification.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
116
DATA VALIDATION AND VERIFICATION
The table below provides a definition, source, validity statement and discussion of limitations for each
performance indicator
Measure Number of Small Businesses
Definition Number of small businesses filing tax returns with the Internal
Revenue Service (IRS). This number includes all firms with
employees, without employees and where the owner is working parttime.
Source Department of Treasury, IRS, Statistics of Income Bulletin
Validation (Self-Assessment) The indicator is a valid measure for the growth of small businesses
Limitations None.
Remedies for Limitations N/A
Verification Through audits
Measure Number of Small Businesses With Employees
Definition Firms filing form 941 with IRS.
Source SBA, Office of Advocacy, from data provided by the U.S. Department
of Labor, Employment and Training Administration
Validation (Self-Assessment) The indicator is a valid measure for the growth of small businesses
Limitations None.
Remedies for Limitations N/A
Verification Through audits
Measure Number of Jobs in Small Businesses
Definition Firms with a positive payroll reporting on form 941 to IRS.
Source SBA, Office of Advocacy, from data provided by Census
Validation (Self-Assessment) The indicator is a valid measure for the growth of small businesses
Limitations None.
Remedies for Limitations N/A
Verification Through audits
Measure Number of Small Businesses Owned by Women and Minorities
Definition Small firms that are self-certified as 51 percent woman- or minorityowned.
Source SBA, Office of Advocacy, “Women in Business”, and “Minorities in
Business” based on Census of Women-Owned Business, IRS data on
sole proprietorships, Bureau of Labor Statistics data on self-employed
women.
Validation (Self-Assessment) The indicator is a valid measure for the growth of small businesses
Limitations Only the Census Bureau does a survey every 5 years and uses 50
percent as criterion of ownership.
Remedies for Limitations None
Verification Through audits
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
117
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
118
DATA VALIDATION AND VERIFICATION
Measure Regulatory Cost Savings to Small Business
Definition Cost savings to Small Businesses in implementing regulations because
of changes to proposed regulations as a consequence of Office of
Advocacy actions.
Source Office of Advocacy Report “20 Years of the Regulatory Flexibility
Act: Rulemaking in a Dynamic Economy”.
Validation (Self Assessment) The indicator is a valid measure of the impact of the Office of
Advocacy on small businesses.
Limitations The savings are an estimate provided by a model that was developed
by a contractor.
Remedies for Limitations None
Verification Through audits
Measure Jobs created by SBA borrowers
Definition Estimates of jobs created by SBA loan programs.
Source Disbursed loans for 7(a) and 504 estimate from Loan Accounting data
base.
SBIC dollar financings from program data base.
7(a): Based on a study done in 1994 of disbursed loans in 1990, with a
change in jobs between 1989 and 1994. Uses an estimated job creation
constant of one job for $27,259.
504: Based on SBA’s follow-up of jobs created from disbursed loan
funds. Job creation constant is $33,366 for loans made 1998-2000.
SBIC: Based on the Arizona Venture Capital Impact Study made by
the Zermatt Group (1999). Study estimates a job creation constant of
one job for $35,000 invested in 1999
Validation (Self Assessment) The indicator is a valid measure of the impact of SBA’s credit and
equity assistance to small businesses.
Limitations The studies used are old, based on a limited sample, and based on selfreported
data.
Remedies for Limitations Discussions are under way with Bureau of Labor statistics to obtain
current statistics on job creation by SBA loan recipients. This will be
possible for those firms that have EIN numbers.
Verification Not possible until SBA has access to data from BLS or IRS.
Measure Improved Access to Capital and Credit: 7(a), 504, Microloan
and SBIC programs
Definition Dollar amount of Gross Original Approval Loan Dollars for 7(a),
Microloans and 504. Dollar amount of actual financing by Small
Business Investment Companies to small businesses.
Source SBA internal databases.
Validation (Self-Assessment) The indicator is a valid measure of the impact of SBA’s credit and
equity assistance to small businesses.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
119
DATA VALIDATION AND VERIFICATION
Limitations OIG has recommended that SBA use disbursed loan dollars instead of
approved loan dollars.
Remedies for Limitations None
Verification The source of data is complete and accurate. There are data
verification procedures in place to ensure that the data is accurate.
Data are provided in a timely manner for budget process/external
reporting/internal tracking.
Measure Number of Loans to Women, Minorities, and Veterans
Definition Loans made to small businesses 51 percent owned by Women,
Minorities, or Veterans
Source SBA internal databases.
Validation (Self-Assessment) The indicator is a valid measure of the impact of SBA’s credit and
equity assistance to small businesses.
Limitations By default, firms 50 percent owned by women are regarded as maleowned.
A more valid approach would be to also indicate loans to firms
50 percent women-owned.
Remedies for Limitations None
Verification The source of data is complete and accurate. There are data
verification procedures in place to ensure that the data is accurate.
Data are provided in a timely manner for budget process/external
reporting/internal tracking.
Measure Number of Start-up Firms Financed by 7(a), 504, and SBIC
programs
Definition 7(a) and 504 loans made to start-up firms. Number of actual SBIC
financings to start-ups. Start-ups are defined as firms less than 2 years
old (Census definition).
Source SBA internal databases.
Validation (Self-Assessment) The indicator is a valid measure of the impact of SBA’s credit and
equity assistance to small businesses.
Limitations The measure would perhaps be improved if the number of disbursed
loans were used instead. The SBIC data shows number of start-up
financings rather than the number of start-up firms financed.
Remedies for Limitations None
Verification The source of data is complete and accurate. There are data
verification procedures in place to ensure that the data are accurate.
Data are provided in a timely manner for budget process/external
reporting/internal tracking.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
120
DATA VALIDATION AND VERIFICATION
Measure Export Sales Assisted by SBA
Definition Estimate of export sales by clients who receive SBA export loans.
Source Office of International Trade loan documentation
Validation (Self-Assessment) This indicator is a valid measure of the impact of SBA’s assistance on
small businesses, since exporting is important to firm survival and
competitiveness.
Limitations This is an estimate and a derivative statistic.
Remedies for Limitations None
Verification Through audits
Measure Share of Federal Procurement Prime Contract Dollars to Small
Firms, to SDBs (including 8(a)), to Women-owned, Minorityowned,
service disabled Veteran-owned Firms, and to Small
Businesses in HUBZones.
Definition The extent to which these different categories of small business
ownership receive Federal Prime Contract dollars.
Source The Federal Procurement Data System (FPDS).
Validation (External) This indicator is a valid measure of SBA’s assistance to small
businesses since Federal contracting provides a large source of
revenues, about $190 billion per year, into the marketplace. The Office
of Federal Procurement Policy (OFPP) in its policy letter 99-1 supports
SBA’s use of FPDS data to measure accomplishments rather then
requiring agencies to provide this information on separate reports.
Limitations Prime contracts data are reported to the FPDS on a quarterly basis.
FPDS has been determined to be the most accurate and verifiable
reporting system of contract awards under the procurement preference
goal program; however, there are some minor problems with data that
are entered incorrectly into FPDS through the SF-279 and SF-281.
The FPDS was not programmed to identify HUBZone awards during
FY 1999.
Remedies for Limitations SBA is working with agencies to ensure accuracy of the data placed
into FPDS. SBA is a member of the PEC-Social Economic Work
Group that is reviewing methods to improve the accuracy of the FPDS
data. This is an on-going effort.
The FPDS has been modified to collect HUBZone contract award data
for FY 2000. The revised system will provide consistent, valid
information relative to goal achievement.
Verification There are data verification procedures in place to ensure that the data
are accurate. The General Services Administration is responsible for
the accuracy of the FPDS database. SBA does not have access or
resources to review or evaluate this data.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
121
DATA VALIDATION AND VERIFICATION
Measure 8(a) Client Success Rate 3 Years after Graduation
Definition The percentage of firms 3 years after graduation that are successful
and competitive.
Source SACS/MEDCOR data base, surveys, and Dunn and Bradstreet
Validation (Self-Assessment) The indicator is a valid measure of SBA’s assistance to small
businesses because the intent of the program is to increase the firm’s
competitiveness and survival rate.
Limitations The success rate is an estimate.
Verification Through audits
Measure Customer Satisfaction rate with ED programs as determined by
Surveys
Definition The percentage of customers receiving assistance from SBA that were
satisfied with the assistance.
Source Surveys done by University of Michigan
Validation (Self-Assessment) This indicator is a valid measure of SBA’s assistance to small
businesses because we are customer-focused and strive to continually
improve our level of customer service and satisfaction.
Limitations An estimate.
Remedies for Limitations None
Verification Through audits
Measure Number of Clients Trained and Counseled
Definition The number of clients receiving entrepreneurial development
assistance by SBA and its resource partners.
Source Collected as part of normal reporting
Validation (Self-Assessment) This indication is a valid measure of SBA’s assistance to small
businesses because our mission is to assist in the start-up and survival
of businesses.
Limitations Consistency in reporting by different resource partners
Remedies for Limitations Consistent definitions
Verification Through audits.
GOAL 2: HELP FAMILIES AND BUSINESSES RECOVER FROM DISASTER
Measure Field Presence within 3 days of Declaration of a Disaster
Definition Percentage of Disasters where effective field presence is provided
within 3 days of a physical disaster declaration. Field presence is
defined as SBA disaster office personnel on site to coordinate the
provision of disaster assistance with appropriate federal, state and local
officials.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
122
DATA VALIDATION AND VERIFICATION
Source Closeout reports prepared by the disaster area office after each
disaster.
Validation This indicator is a valid measure of SBA’s assistance to disaster
victims because timely assistance is critical to re-establishing lives and
communities in the aftermath of a disaster.
Limitations Currently, this information is not received for approximately 6 months
after a disaster is declared and there is some inconsistency in what is
meant by “effective field presence” among the area offices.
Remedies for Limitation SBA will consider options for obtaining this information much sooner
after the disaster has been declared, including, but not limited to,
making a revision to the automated loan control system so that this
information can be inputted as soon as it is accomplished. SBA will
also provide further guidance to the area offices to define “effective
field presence” and its scope.
Verification Through audits
Measure Customer Satisfaction Rate
Definition The percentage of customers receiving assistance from SBA that were
satisfied with the assistance.
Source Surveys
Validation (Self-Assessment) This indicator is a valid measure of SBA’s assistance to disaster
victims because we are customer-focused and strive to continually
improve our level of customer service and satisfaction.
Limitations The survey measures those who received disaster loans but does not
include those who did not receive loans.
Remedies for Limitations None
Verification Through audits
Measure Percentage of Disaster Loans processed within 21 days after
receipt of a Complete Application
Definition Share of applications where the disaster office has provided applicants
with a decision within 21 days of receiving a complete disaster loan
application,.
Source Disaster automated loan control system.
Validation This indication is a valid measure of SBA’s assistance to disaster
victims because timely assistance is critical to re-establishing lives and
communities in the aftermath of a disaster.
Limitations
Verification
123
CHARTS OF HISTORICAL DATA
124
OFFICE OF THE INSPECTOR GENERAL
FY 2002 Budget Request And Justification
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
125
FY 2002 BUDGET REQUEST AND JUSTIFICATION
Inc/(Dec)
FY 2000 FY 2001 FY 2002 vs FY 2001
Actual Estimate Request Estimate
New Budget Authority $ 11,000 $ 11,953 $ 11,927 $ (26)
Carryover from Prior Fiscal Year 482 515 0 (515)
Carryover into Next Fiscal Year (515) 0 0 0
Transfer from Disaster 500 500 500 0
Recoveries 96 0 0 0
Balance Expired (130) 0 0 0
Rescinded Funds - Appropriation (95) (26) 0 26
Total Budget Authority $ 11,338 $ 12,942 $ 12,427 $ (515)
Positions 112 125 125 0
Base Program:
The Inspector General Act of 1978, Public Law 95-452 (as amended), established the Office of
Inspector General (OIG) as an independent office within the Small Business Administration (SBA) to
conduct and supervise audits and investigations of SBA programs and operations; to provide leadership
for the detection and prevention of fraud, waste, and abuse; and to promote policies for the
improvement of economy, efficiency, and effectiveness in the administration of SBA programs and
operations. The Inspector General (IG) keeps the Administrator of SBA and the Congress fully
informed of any problems and deficiencies relating to SBA programs and operations, recommends
corrective actions to SBA’s policy officials and program managers, and monitors SBA's overall
progress toward the implementation of such actions.
OIG has a mandate to audit, investigate, and review a large number of SBA programs and participants.
These oversight activities cover a universe of approximately 5,400 certified Section 8(a) firms, 330
Small Business Investment Companies, 214,000 business loans, more than 5,000 participating lenders
(of which more than 900 are certified and preferred lenders) 270,000 disaster loans, and $328 million in
SBA liability for surety bond guarantees. These and other activities comprise SBA's financial portfolio,
which has a current exposure of more than $41 billion in SBA funds (of which almost $7 billion
represent the disaster portfolio) and potentially another $22 billion in other Federal Government
agencies' funds. OIG conducts:
· Audits of financial statements and information systems to ensure accurate information.
· Audits of selected operations to assess inherent program risks and systemic problems.
· Audits of selected SBA program participants to identify money owed to SBA.
· Inspections and other reviews that identify opportunities for more effective operations.
· Investigations of suspected fraud and abuse.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
126
FY 2002 BUDGET REQUEST AND JUSTIFICATION
· Reviews of proposed legislation, regulations, and procedures.
· Reviews of complaints from the public and from SBA employees.
Major Accomplishments for FY 2000
· Overall office-wide dollar accomplishments of $39 million, including loans not approved as a result
of the Name Check Program, potential investigative recoveries and fines, disallowed costs agreed
to by management, and recommendations to put Agency funds to better use.
· Major audits and inspections of the Small Disadvantaged Business Certification and Eligibility Program,
Agency Government Performance and Results Act Performance Measures, as well as Loan
Processing Centers, Entrepreneurial Development and Section 7(a) Loan Programs that identified
opportunities for significant improvements.
· Seventy-three indictments and 38 convictions relating to fraud in SBA programs.
· Issued 31 audit reports and 2 inspection reports, and obtained management decisions on 104 audit
recommendations.
· Reviewed 304 proposed issuances, including legislation, regulations, and procedures.
· Identified major SBA management challenges.
Major Goals and Objectives for FY 2001
OIG has three goals: (1) improve the economy, efficiency, and effectiveness of SBA programs and operations;
(2) prevent and detect fraud and abuse and foster integrity in SBA programs and operations;
and (3) ensure the economical, efficient, and effective operation of OIG. Much of OIG’s work is in
response to requests, complaints, and referrals. Given the unknown nature of the work, it is difficult to
project results. OIG expects, however, that the workload will remain the same or increase and therefore
OIG results in FY 2001 should be similar to those in FY 2000.
Congress appropriated $11.9 million to OIG for FY 2001, with an additional $500,000 transfer from
the Disaster Program for disaster-related oversight. After a rescission adjustment of .22 percent, OIG’s
final budget authority is $12.427 million. OIG priority areas for review in FY 2001 are listed below:
· Continue to address Congress’ priority concerns about the Agency’s internal financial management
systems, the planned Loan Monitoring/Risk Management System, annual exams of Small Business
Lending Companies, and Agency oversight on lenders and defaulted loans.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
127
FY 2002 BUDGET REQUEST AND JUSTIFICATION
· Identify the most significant management challenges facing SBA.
· Give primary attention to fraud in the Business Loan Guarantee and Disaster Loan Programs.
· Evaluate the Agency’s implementation of the Government Performance and Results Act of 1994.
· Provide oversight to new Agency initiatives, such as the HUBZone Empowerment Contracting Program
(HUBZone), asset sales, and new information systems.
FY 2002 Justification
The $12.4 million budget request for FY 2002 will fund OIG at a “current services level” in providing
oversight of SBA’s programs and participants. OIG workload is based on identified risks for the
Agency, referrals and requests from many sources, and complaints and inquiries. Potential workload
always exceeds the OIG’s available capacity to investigate or review high-risk areas or to respond to all
inquires. OIG prioritizes its workload based on available resources, and seeks alternatives when
internal resources are not available. Our FY 2002 priorities are contained in our FY 2002 annual
performance plan.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
128
Small Business Administration
Office of Inspector General
FY 2002
Annual Performance Plan
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
129
ANNUAL PERFORMANCE PLAN
Vision
Our vision is to improve SBA’s programs by identifying key issues facing the Agency, ensuring that
corrective actions are taken, and promoting a high level of integrity. We will focus on serving the needs
of our customers and stakeholders and on safeguarding SBA resources from waste, fraud, and abuse.
We will also provide a work environment in the Office of Inspector General (OIG) that is conducive to
excellent performance by our employees.
To accomplish this vision, we will –
§ Focus on significant, systemic issues drawn from the cumulative results of our reviews and cases.
§ Enhance our expertise in SBA’s major programs to help us identify priority issues and plan our
reviews and casework.
§ Become more proficient in the use of information technology, research methods, data analysis, and
investigative techniques.
§ Encourage creative thinking within our office and the development of synergistic teams that combine
various disciplines.
§ Achieve superior results by emphasizing corrective actions that will improve SBA operations,
combat fraud, and eliminate program vulnerabilities.
Mission
Under the authority and in fulfillment of the Inspector General Act of 1978, as amended (IG Act), the
Inspector General is committed to supporting the Small Business Administration (SBA) in its statutory
mission to maintain and strengthen the Nation's economy by aiding, counseling, assisting, and protecting
the interests of small businesses and by helping families and businesses recover from disasters.
Annual Plan Alignment
With the Inspector General Act. OIG is an independent and objective oversight office created within
the SBA by the IG Act of 1978. Inspectors General (IG) are principally charged with detecting fraud,
waste, and mismanagement in agencies' programs and operations; conducting audits and investigations;
and recommending policies to promote economy, efficiency, and effectiveness. OIGs also review
existing and proposed legislation and regulations and make appropriate recommendations, and keep the
Agency head and Congress informed.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
130
ANNUAL PERFORMANCE PLAN
The goals and objectives of the Strategic and Annual Plans reflect the OIG's statutory mission. OIG
implementation of the Government Performance and Results Act (Results Act) extends our commitment
to a results-oriented Government. For many years, OIG has provided regular and
frequent updates to customers and stakeholders on the monetary and non-monetary results of OIG
reviews and investigations. OIG Annual Plans and Performance Reports will strengthen our
commitment to performance-based management.
With SBA's Program Initiatives. In 1953, the Congress created SBA to aid, counsel, assist, and
protect the interests of small business concerns. The OIG's Strategic and Annual Plans reflect the OIG
commitment to support SBA's purpose. In FY 2002, OIG will assist SBA in identifying and mitigating
emerging vulnerabilities as SBA modernizes and changes its business practices, work systems, and
procedures.
With the OIG Strategic Plan. The OIG FY 2002 Annual Performance Plan also builds on the three
strategic goals and related supporting objectives found in the OIG FY 2001-2006 Strategic Plan. The
focus of the Strategic Plan is to increasingly direct our efforts to
· Financial management systems.
· Information systems and computer security.
· Lender oversight.
· Other selected high risk issues.
· New Agency initiatives.
OIG also places a high priority on responding to requests from SBA management and congressional
committees and providing consultative assistance where appropriate.
Performance Measurement Limitations
OIG has developed a mix of output, intermediate outcome, and outcome measures to assess the
effectiveness, quality, relevance, and timeliness of our work. Nevertheless, the OIG measures are
subject to a number of external factors. Some are predictable, such as mandatory statutory
requirements. Others are unpredictable, such as the budget, or the discovery of individual cases of
fraud with a potential to yield such substantial judgments or settlements in a single year that they cannot
be easily compared to other work. Moreover, it often takes several years after the completion of work
on a given audit, inspection, or investigation for its outcome to be final and its results known.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
131
ANNUAL PERFORMANCE PLAN
In addition, the ultimate authority in implementing OIG recommendations and improvements rests with
the Agency. OIG also cannot control the results of judicial or administrative proceedings. To mitigate
these factors, OIG will expand on-going efforts with SBA's policy and program officials to underline the
importance of OIG findings and encourage the implementation of OIG recommendations. Likewise, we
will work closely with judicial and administrative officials to ensure that criminal and administrative cases
are appropriately handled. Within these parameters, OIG strives to improve the performance of SBA
programs and operations and deter fraud and other forms of misconduct.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
132
ANNUAL PERFORMANCE PLAN
Data Collection and Validation
As appropriate, quantitative data is being collected and stored in the management information system
(MIS). Much of the quantitative data proposed has been collected for several years. For some of the
measures, baselines have been established in FY 2000. Monetary results will be reported at the time of
management decision in accordance with OIG legislative requirements. SBA's Office of the Chief
Financial Officer tracks actual collections. The management of each OIG division will be responsible
for collecting, verifying, and validating all data in the Annual Performance Report. All qualitative data
will be thoroughly documented by the appropriate divisions. The data will be reviewed quarterly and
consolidated by the Management and Policy Division. OIG believes that the data is reasonably
accurate.
Goals, Objectives, Performance Goals, and Resources
Goal 1. Improve the economy, efficiency, and effectiveness of SBA programs and operations.
FY 2002: Consistent with OIG’s strategic plan, FY 2002 OIG audits and inspections will focus on
financial management, information systems and computer security, lender oversight, other selected high
risk issues, and new Agency initiatives.
To fulfill the legislatively mandated requirement, OIG will contract for an audit of SBA's financial
statements to provide an opinion on whether they are presented fairly and in accordance with Federal
accounting requirements. Financial management issues that are identified, either through financial
statement auditing efforts or otherwise, will also be scheduled for audit coverage.
A major focus of OIG efforts in FY 2002 is continued oversight of SBA’s systems modernization
efforts, which include planned major improvements to SBA’s accounting system and loan monitoring
systems. In addition, OIG will conduct computer systems security assessments to identify vulnerabilities
such as unauthorized access and information accuracy. Regarding the latter, OIG will selectively verify
the accuracy of data in support of the Government Performance and Results Act (GPRA) reporting
process.
SBA's increasing reliance on banks and other lenders to perform loan management functions previously
reserved to the Government presents inherent risks. OIG will conduct oversight reviews to identify
vulnerabilities and offsetting controls to minimize potential problems and continue its auditing of defaulted
loans to identify invalid claims and to identify lenders who do not follow SBA rules. OIG will also
assess lenders’ performance and adherence to SBA requirements.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
133
ANNUAL PERFORMANCE PLAN
OIG will provide oversight of SBA's high-risk programs and will respond to program managers’
requests for reviews of programs, projects, or entities that they consider vulnerable to loss or
mismanagement. OIG will continue to identify the major management challenges facing the operation of
its programs. OIG will institutionalize an OIG advisory function, made up of selected Agency program
managers, to identify high-risk operations.
Agency initiatives, such as Historically Underutilized Business Zones (HUBZones), asset sales,
implementation of internal controls, and human capital programs, will be selectively identified for OIG
oversight. OIG will also review proposed legislation, regulations, standard operating procedures, and
other issuances for vulnerabilities and risks.
The majority of staff and other resources used to accomplish Goal 1 will come from the Auditing and
Inspection and Evaluation Divisions, with contributions and support from the Investigations,
Management and Policy, and Counsel Divisions. Approximately 36 percent (or $4,461,293) of OIG’s
total FY 2002 resources will be dedicated to Goal 1.
Objective 1.1 Conduct reviews of major program activities, with emphasis on high
risk and high priority areas, and assess whether SBA can be reasonably assured that
its programs are meeting their goals in an economical, efficient, and effective manner.
FY 1999
Actual
FY 2000
Actual
FY 2001
Estimate
FY 2002
Estimate
Output Performance Goals
Percentage of all recommendations on major
program activities accepted by management
or otherwise resolved within 6 months of
report issuance
86% 88% 90% 90%
Narrative assessment of OIG contribution to Agency task forces
Intermediate Outcome
Percentage of recommendations from reviews
of major program activities implemented
or corrective actions taken by management
within the timeframe agreed by
OIG and management
N/A* 52% 60% 60%
Outcome
Identification and implementation of corrective actions by the Agency to address the major
management and operating problems in SBA
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
134
ANNUAL PERFORMANCE PLAN
· The chart will be updated to reflect the percentage of recommendations implemented or corrective
actions taken by management within the timeframe agreed by OIG contained in reports issued
between April 1998 through March 31, 1999.
Objective 1.2 Audit contracts, grants, surety claims, and defaulted loans to determine
whether the costs claimed are allowable.
FY 1999
Actual
FY 2000
Actual
FY 2001
Estimate
FY 2002
Estimate
Output Performance Goals
Percentage of all recommendations in audits
of contracts, grants, surety claims, and defaulted
loans accepted by management or
otherwise resolved within 6 months of report
issuance
95% 96% 95% 95%
Percentage of dollars in questioned costs,
funds to be put to better use, settlement recoveries,
and cost corrective measures in
audits of contracts, grants, surety claims, and
defaulted loans accepted by management or
otherwise resolved within 6 months of report
issuance
97% 44%* 60% 60%
Intermediate Outcome
Percentage of all recommendations in audits
of contracts, grants, surety claims, and defaulted
loans implemented by management
within the timeframe agreed by OIG and
management
N/A** 44% 60% 60%
* This reflects recommendations agreed to by management contained in reports issued between April
1, 1999 through March 31, 2000.
** This chart will be updated to reflects recommendations agreed to by management contained in
reports issued between April 1, 1998 through March 31, 1999.
Outcome/Impact for Goal 1: OIG activities improve the economy, efficiency, and effectiveness of
SBA programs.
Methodology for Measuring Outcome: Estimate the impact of implemented recommendations,
e.g., what percentage of corrective actions taken in response to the OIG recommendations resolved the
identified problems, and/or resulted in improved SBA programs or operations.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
135
ANNUAL PERFORMANCE PLAN
Limitations: Because OIG staff and resources are limited and intervening variables may also make it
difficult to draw direct causal relationships, a pilot for estimating impact will be developed in FY 2001.
The pilot will assist us in determining the level of resources needed to evaluate impact. As SBA
develops and verifies the accuracy of its performance measurement system, it may also be possible to
use some of that information to assess OIG effectiveness.
Goal 2. Prevent and detect fraud and abuse, and foster integrity in SBA programs and
operations.
FY 2002: OIG places a high priority on combating and preventing both fraud and abuse in SBA’s
programs and operations and ensuring a high level of integrity in SBA's applicants, lenders, and
employees. While the Investigations Division has the primary responsibility for OIG efforts to prevent
fraud and abuse, all OIG divisions directly contribute to fostering integrity in SBA programs and
operations. For example, audits frequently result in referrals for investigations and investigative results
are always analyzed to identify potential steps to improve controls. Much of the OIG effort in the area
of fraud and abuse is reactive.
For FY 2002, OIG will investigate those cases with the highest impact and potential for successful
prosecution. In addition, OIG will expand activities to pursue civil fraud under the False Claims Act and
the Financial Institution Reform, Recovery, and Enforcement Act of 1989.
Traditionally, the Investigations Division has relied on SBA’s personnel to refer allegations concerning
fraud, abuse, and mismanagement in SBA programs. As SBA’s employees reduce their direct
involvement in reviewing loans, however, fraud indicators will have to be identified by lenders. OIG
integrity and fraud awareness programs will be restructured to equip SBA employees to perform their
new or expanded lender oversight role. OIG will develop new programs to educate the lending
community concerning their responsibilities to report allegations of wrongdoing and heighten their
awareness of the role of OIG. Outreach will include attending and/or participating in lender-related
conferences and other activities and educating non-SBA employees of the more than 5,000
participating, certified, and preferred SBA lending partners. OIG will also continue to conduct a
comprehensive employee integrity assurance program.
In addition, as resources are available, OIG will conduct studies of the underlying conditions that foster
opportunities to commit fraud and recommend ways to detect vulnerabilities.
OIG will continue its name and fingerprint checks for SBA program participants, and assist the Agency
in its pre-employment screening program by conducting background checks of potential key employees.
OIG will explore the use of other information sources to identify persons of bad character and preclude
their participation in SBA programs.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
136
ANNUAL PERFORMANCE PLAN
The Investigations Division will provide the majority of the staff and other resources necessary to
accomplish Goal 2. In addition, goal achievement will depend on the contributions of the Auditing,
Inspection and Evaluation, Management and Policy, and Counsel Divisions. Approximately 50 percent
(or $6,201,073) of OIG FY 2002 resources will be dedicated to Goal 2.
Objective 2.1 Detect/identify waste, fraud, abuse and integrity problems in SBA programs
and operations and take appropriate action.
FY 1999
Actual
FY 2000
Actual
FY 2001
Estimate
FY 2002
Estimate
Percentage of criminal cases referred that
are accepted by U.S. Attorneys N/A* N/A* 50% 50%
Percentage of Affirmative Civil Enforcement
(ACE) cases referred that are accepted
by U.S. Attorneys
N/A* N/A* 35% 35%
Intermediate Outcomes
Percentage of potential monetary recoveries
to estimated losses
20% 17% 20% 20%
Percentage of closed cases resulting in
criminal, civil, or administrative actions 32% 23.5% 25% 25%
* The Investigation Division’s current management information system (MIS) does not record when a
referral, either criminal or ACE, is “accepted” by a Federal prosecutor. When implemented in FY
2001, our new MIS should provide that capacity.
Objective 2.2 Prevent and deter fraud and abuse, and other misconduct through studies
and education programs for employees and participants.
FY 1999
Actual
FY 2000
Actual
FY 2001
Estimate
FY 2002
Estimate
Output Performance Goals
Number of SBA employees attending integrity
briefings
499 222 300 300
Number of private sector partners attending
integrity briefings
150 96 150 150
Intermediate Outcome
Percentage of target population reached
by integrity briefings
8% 4.2% 8% 8%
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
137
ANNUAL PERFORMANCE PLAN
Objective 2.3 Preclude persons not of good character from participating in SBA
programs and employment.
Output Performance Goal
Narrative assessment of the work of the Office of Security Operations in conducting criminal
background checks of SBA program partners and participants, and administering SBA
applicant/employee/contractor background investigations
Outcome/Impact for Goal 2: SBA internal policies, procedures, and controls are
strengthened and provide a deterrence for future wrongdoing. OIG activities lead to
changes in SBA practices that effectively reduce fraud and abuse, and promote the integrity
of SBA programs and operations.
Methodology for Measuring Outcomes: OIG will assess the practicality and feasibility
of developing evaluations of major investigative cases and related audits and inspections to
estimate the impact on the prevention and deterrence of fraud and abuse. In addition, as
SBA develops and verifies the accuracy of its performance measurement system, it may be
possible to use some of the information to indicate OIG effectiveness.
Limitations: Evaluation efforts will be constrained by a lack of information on the extent
of actual fraud and other misconduct in SBA’s programs and operations.
Goal 3. Ensure the economical, efficient, and effective operation of OIG.
FY 2002: OIG recognizes that its operations are only as good as its people, communications, and planning
and control processes. Therefore, OIG will continue to emphasize these functions and strive to
improve them. OIG will continue to explore innovative ways to recruit, develop, and retain a wellqualified
work force, including regular assessments and provision of necessary training. OIG will provide
up-to-date and secure computer technology and information systems for OIG staff. Support functions,
such as legal advice, administrative services, budget development and execution, and procurement,
will be timely to aid in carrying out OIG mandated functions.
OIG will continue to strive to improve communication with Agency officials and stakeholders to improve
our planning process and information services on the results of our operations. In developing our annual
operating plans, OIG will closely cooperate with SBA management to identify areas for in-depth review.
OIG will seek to be more proactive in evaluating SBA's programs, management structure, and
administrative systems, and develop work products that provide input or feedback to SBA management
on an expedited basis.
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
138
ANNUAL PERFORMANCE PLAN
Maintaining ongoing liaison with Agency officials (both headquarters and field), key congressional committees,
the Office of Management and Budget, the President's Council on Integrity and Efficiency, and
others as appropriate is key to effectively accomplishing the OIG mission. We will continue to identify
and share the knowledge/experience of individual staff members across OIG organizations.
OIG will complete an annual plan--based on current information from strategic plans, budget, legislative
and program developments, previous reports, external sources, and in consultation and coordination
with customers and stakeholders--that identifies high-priority issues for OIG review. As with the other
two OIG goals, staff and other resources necessary to accomplish the support functions related to Goal
3 will come primarily from one division—Management and Policy—although all divisions are key to accomplishing
the objectives of this internal operating goal. Approximately 14 percent (or $1,764,634) of
OIG FY 2002 resources will be dedicated to Goal 3.
Objective 3.1 Provide the tools, services, and supportive work environment necessary
to improve employee productivity.
FY 1999
Actual
FY 2000
Actual
FY 2001
Estimate
FY 2002
Estimate
Output Performance Goals
Percentage of staff that received the training
established by OIG for their career
needs
N/A* 85% 100% 100%
Percentage of employees provided the IT
products necessary to do their jobs, as
established by the OIG
N/A* 100% 100% 100%
Intermediate Outcomes
Percentage of employees satisfied or very
satisfied in annual employee surveys N/A* 62%*** 65% 65%
No material weaknesses identified in audit
quality controls by external peer reviews N/A** N/A** None ** N/A**
*Standards for measuring this goal and the employee survey instrument were developed in FY 2000.
**Peer reviews are conducted every three years. The peer review was scheduled to be completed in FY 2000, but was actually completed
in FY 2001. The peer review found no material weaknesses in audit quality controls.
***Based on responses to an OIG Organization Assessment Survey distributed September 2000: “Considering everything, how satisfied
are you with your job?”
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
139
ANNUAL PERFORMANCE PLAN
Objective 3.2 Communicate and foster cooperation with all stakeholders, customers,
and interested parties.
Output Performance Goals/Intermediate Outcome
Narrative assessment that may include anecdotal results of ongoing contacts with customers and
stakeholders, OIG work on PCIE and interagency projects, and/or customer satisfaction surveys
Objective 3.3 Develop and maintain a planning process that will provide for effective
monitoring of operations and identify opportunities for improvement.
Output Performance Goal/ Intermediate Outcome
Narrative assessment of the results of the OIG planning process
Outcome/Impact for Goal 3: An OIG staff that is fully supported with the tools, services, and
direction necessary to be economical, efficient, and effective, and works cooperatively and in a
timely manner with customers and stakeholders.
Methodology
An analysis of the performance goal results in each Annual Performance Report (beginning with
the FY 2001 report) should indicate if OIG is operating economically, efficiently, and effectively.
Statistical Data on Selected Product Outputs
FY 1999
Actual
FY 2000
Actual
Office-Wide Dollar Accomplishments
Potential Investigative Recoveries and Fines $10,419,102 $7,555,827
Management Avoidances As a Result of Investigations and
Name Checks
$28,382,286 $28,741,121
Disallowed Costs Agreed to by Management $2,322,780 $1,153,535
Recommendations That Funds Be Put to Better Use Agreed to
by Management
$8,929,983 $9,762,700
Goal 1 Accomplishments
Reports Issued 28 33
Number of Recommendations Made 103 126
Disallowed Costs Agreed to by Management $2,322,780 $1,153,535
U.S. Small Business Administration
FY 2002 Budget Request and Performance Plan
140
ANNUAL PERFORMANCE PLAN
Recommendations That Funds Be Put to Better Use Agreed to
by Management
$8,929,983 $9,762,700
Number of Reviews of Proposed Legislation, Regulations,
Standard Operating Procedures, and Other SBA Issuances 241 323
Goal 2 Accomplishments
Cases Closed 138 132
Indictments 44 73
Convictions 53 38
Potential Investigative Recoveries and Fines $10,419,102 $7,555,827
Loans not Approved as a Result of: $28,382,286 $28,741,121
1) Investigations $0 $1,404,529
2) Name Check Program $28,382,286 $27,336,592
Number of Integrity Briefings 12 15
Goal 3 Accomplishments
Number of FOIA Responses and Other Disclosures 67 89
Number of Subpoenas Issued 86 135
Number of External Reports Issued 19 14
Number of Employees Trained 114 94