State’s jobless rate may not be as bad as it looks

The July jobless numbers, released Friday, weren’t as bad as they may have looked, say economists with Beacon Economics of San Francisco.

California lost a total of 9,400 jobs between June and July -- but essentially all of those losses were associated with the ending of the 2010 Census, their report notes. Thousands of temporary Census workers have been hired and had their jobs end in the past 4 to 5 months -- sometimes masking the real direction of the state's labor markets.

Fundamentally, all of the state's month-over job losses occurred in government employment, which fell by 23,100 jobs and of those, 20,100 were federal government jobs and directly related to the end of the Census, says Beacon. Private employment gained 13,700 jobs, offsetting most of the government job losses.

State’s jobless rate is just as bad as it looks

California's unemployment rate remained unchanged at 12.3 percent in July, making it one of 18 states that experienced no change in their unemployment rate. Another 18 states saw decreases in unemployment, while 14 saw increases.

The problem -- and solution -- are clear, says the president of the American Small Business League of Petaluma.

"Small businesses are the backbone of California’s economy and an engine for job creation in the state. If we are going to bolster California’s economy, as well as our nation’s economy, we must stop the diversion of billions of dollars a year in federal small business contracts to corporate giants,” says ASBL President Lloyd Chapman.

Every year California’s small businesses lose out on billions of dollars in federal contracts, he says.

The solution, he says, is kicking around in Congress: H.R. 2568, the “Fairness and Transparency in Contracting Act.”

Mr. Chapman says if it were passed, it would redirect nearly $1 billion a month in addition federal spending to California’s small businesses and create more jobs in the state than any legislation or policy to date.

“It is time for Governor Schwarzenegger and California’s congressional delegation to support H.R. 2568 as a means of saving California’s small businesses and its jobs," Mr. Chapman says.

Bullet train’s Bay-to Central Valley EIR ready

The California High-Speed Rail Authority has made available a “Revised Final Program Environmental Impact Report” (EIR) for the Bay Area to Central Valley portion of the state’s proposed high-speed train system.

In March, the Authority circulated a draft of it to comply with a court judgment in litigation challenging the its final program EIR for compliance with the California Environmental Quality Act. The Authority held two public hearings in April and got more than 3,700 comments, it says.

The Revised Final Program Environmental Impact Report includes revised text, copies of public comments, responses to comments and the full text of the Authority’s 2008 Bay Area to Central Valley High-Speed Train Final Program EIR.

See link at bottom of the Briefs to get to the posted EIR

The Revised Final Program EIR will be considered by the Authority’s Board of Directors at its meeting Sept. 1-2.

Then, on Sept. 2, the board will consider certifying the EIR and make a new decision on a preferred network alternative for the high-speed train system to connect the Bay Area to the Central Valley.

Franchise Tax Board looking for unpaid business taxes

The state is contacting more than 40,000 California businesses that have not filed their 2008 state income tax returns with the Franchise Tax Board (FTB).

The notices inform the businesses that they have 30 days to file a return or show why there is no tax filing requirement. Businesses that disregard the notices could face tax assessments that may include penalties, interest, and fees, the FTB warns.

FTB annually reviews more than 5 million income records received from the Internal Revenue Service, the state Employment Development Department, the state Board of Equalization, financial institutions, and other business entities, then compares that data to tax returns already filed to identify noncompliance. Last year, FTB collected approximately $38 million from non-filing businesses the agency notified.

California faces an annual “tax gap” of $6.5 billion per year. The tax gap is the difference between taxes owed and taxes paid.

Small business, job seekers get help in Fresno

Thousands of additional job seekers in Fresno are now covered by through the expansion of a program providing tax incentives to businesses that hire them.

Expansion of “Targeted Employment Areas” by the city of Fresno and Fresno County means inclusion of previously ineligible homes and apartments. The change improves the job prospects for unemployed or underemployed residents locally and increases the number of eligible workers for businesses located in city and county enterprise zones, the city says.

Due to a technicality, residence addresses in TEA census tracts falling partially within the jurisdiction of another municipality were excluded from eligibility. This meant that a significant number of households, which otherwise would have qualified, were left without TEA designation. As a result, Enterprise Zone businesses had no financial incentive to hire individuals residing in these areas.

But the city and county were successful in getting the state to allow the inclusion of previously ineligible census tract addresses into the County of Fresno TEA.

“This successful partnership is another significant step in the effort to bringing unemployment numbers down in Fresno,” says Craig Scharton, city of Fresno downtown and community revitalization director. “It helps qualified applicants market themselves better in this highly competitive environment while encouraging businesses to reinvest in themselves and the community. It’s definitely a win-win for all involved.”

Personalized license plate program turns 40 today

Forty years ago, then-Gov. Ronald Reagan signed legislation authorizing California to issue “environmental license plates” – special interest plates -- on Aug. 21, 1970.

“Since 1970 when California issued the first personalized plate with the word “AMIGO,” these plates have become part of the rich California history,” says DMV Director George Valverde.

Based on the success of the program, the state expanded on the concept of using license plates to fund special programs, such as the California Arts Council, the Coastal Commission, and various organizations that comprise California’s 11 special interest license plates.

California charges $38 annually to renew the personalized plates ($49 the first year). Californians have expressed themselves on 1,030,000 registered motor vehicles.

California’s specialty plate program has generated approximately $630 million for a wide range of causes. Special Interest License Plates, such as the Arts, Kids, Coastal, Lake Tahoe, and those supporting Veterans’ Organizations, can also be personalized.

Fresno State wins third consecutive ‘Tree Campus USA’ recognition

For the third year in a row, California State University, Fresno has been designated a Tree Campus USA by the Arbor Day Foundation – one of just 74 colleges and universities across the United States to win the recognition in 2010.

The designation recognizes the university’s urban forest that helps cleanse the air for the general community, provides shady refuge from summer heat and is one reason the 388-acre campus is a state-designated arboretum.

Together with the 1,011-acre campus farm, a substantial portion of which is planted to a broad variety of fruit and nut trees, Fresno State forms the biggest green belt within the urbanized Fresno-Clovis metro region.

Tree Campus USA is supported by a grant from Toyota.

Milton's Baking recalls some bread in Central Valley

Milton's Baking Company of Calsbad is voluntarily recalling “Milton's Multi-Grain Bread” which was distributed to locations in Northern and Central California, Arizona and Nevada. The company says it’s taking the “precautionary” step because the loaves contain milk, an undeclared allergen, which may pose a potential serious and life-threatening health risk to milk-allergic individuals.

The company advises that anyone who has eaten the bread and has had an allergic reaction should seek the advice of a health-care professional.

This recall affects only Milton's Multi-Grain Bread, 24oz, UPC 06541-92038 with the Plant Code 250 sold only in Northern and Central California, Arizona and Nevada. "All Best if Purchased By" dates through Aug 26 are included in the recall.

The product is sold in both single loaf 24 oz packages and in overwrapped double loaf packages. The plant code is printed on the front of the package under "Best if Purchased By" on the second line immediately after the date.

No other Milton's products are included in this voluntary recall.

Source: http://www.centralvalleybusinesstimes.com/stories/001/?ID=16070

The Small Business Administration (SBA) has instituted several new programs to address instances of ineligible companies being granted government contracts through its HUBZone program.

The new efforts to more effectively manage HUBZone, under which government contracts are awarded to historically underutilized business zones in economically distressed communities, are a result of a Government Accountability Office (GAO) report last month in which the SBA was found to have allowed ineligible firms to participate in the HUBZone program. It was the most recent of several reports by the GAO issued during an ongoing investigation of the SBA’s HUBZone certification process.

“The SBA continues to struggle with reducing fraud risks in its HUBZone certification process, although SBA has taken steps to bolster SBA’s controls,” Gregory Kutz, Managing Director Forensic Audits and Special Investigations for the Government Accountability Office said in his statement to the House of Representatives’ Committee on Small Business on July 28.

The SBA said $12.4 billion in federal contracts were granted through HUBZone in fiscal year 2009.

“In our previous investigations, we found that many of the firms in the 29 cases fraudulently used ‘virtual offices’ and fake business locations as their principal offices to qualify for HUBZone status,” Kutz said. “Our testing revealed that the SBA still does not adequately authenticate self-reported information — especially principal office locations — to ensure program eligibility.”

SBA Administrator Karen Mills also gave testimony at the hearing, saying the SBA had reviewed the eligibility of the 29 firms previously identified by the GAO as ineligible to participate in HUBZone.

“After reviewing the facts, 16 were decertified, eight voluntarily decertified, and five, in fact, remained eligible for HUBZone,” Mills told the committee.

“We’re also pursuing HUBZone fraud cases with the Department of Justice and the Inspector General, and we continue to suspend and debar firms suspected of fraud,” Mills told the committee in her July 28 testimony. “In fact, just yesterday we suspended four more firms and two individuals.”
Specifically, the SBA has increased its monitoring of HUBZone certified firms, increasing site visits from 100 in 2008 to more than 800 in 2009. It expects to conduct more than 1,000 site visits in 2010, Mills told the committee.

Site visits are also now more in-depth, according to Jonathan Swain, Assistant Administrator for Communications at the SBA.

“We’re doing more than driving by the building or checking that the address exists,” Swain told BusinessNewsDaily.  He said the SBA inspectors require businesses to produce documents while on site to show that the firm qualifies. Many of the visits are unannounced, Swain said.

In addition, the SBA has reengineered the HUBZone certification process to require more documentation and is now requiring HUBZone firms to verify under penalty of perjury that all of the information provided is true and verifiable, Swain said.

The SBA also has plans to debut a small business contract web site requested by President Obama in April as part of the establishment of an Interagency Task Force on Federal Contracting Opportunities for Small Businesses, which was announced by Obama in late April. The website will illustrate the participation of small businesses, including those owned by women, minorities, socially and economically disadvantaged individuals, and service-disabled veterans of our Armed Forces, in Federal contracting, according to the White House.

It is intended to foster greater accountability and transparency in, and allow oversight of, the federal government's progress, and encourage improved collection, verification, and availability of federal procurement data, plus provide accurate data on the federal government's progress in ensuring that all small businesses have a fair chance to participate in federal contracting opportunities, the White House said in a prepared statement.

Swain said the SBA plans to debut the web site in a few weeks.

The SBA’s efforts are not enough, however, to satisfy its harshest critics.

“We need an agency to help small businesses,” said Lloyd Chapman, a long-time critic of the SBA, whose American Small Business League has been critical of the SBA through both Republican and Democratic administrations. The ASBL issued a press release last week to highlight the GAO’s most recent findings.

“The SBA doesn’t need to be shut down. Instead, we need to get it back on track and do what it was supposed to do when it was founded,” Chapman said in a phone interview. “The agency needs to be overhauled.”

"The SBA was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation," according to the SBA web site.

"We recognize that small business is critical to our economic recovery and strength, to building America's future, and to helping the United States compete in today's global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same," the web site says.

Mills’ statement to the House of Representatives indicates that an overhaul, of sorts, is already underway.

“We’ll soon provide formal recommendations, including some that will help equip our agency partners with tools they need to help in the shared mission of reducing fraud, waste and abuse,” Mill said. “At the same time, we’re committed to working more closely with Congress to make sure small businesses can continue to grow and create the jobs we need now.”

Source:  http://www.businessnewsdaily.com/-sba-addresses-hubzone-fraud-allegations-0452/

•  Says there are some controls, but more are needed

•  ‘Most were obtained through fraudulent schemes’

American taxpayers have given $325 million in set-aside and sole-source contracts to firms not eligible for the Small Business Administration’s “Historically Underutilized Business Zone” (HUBZone) programs, the Government Accountability Office says.

“Most were obtained through fraudulent schemes,” the GAO says.

In the 14 cases investigated by the government’s watchdog agency, “numerous instances” were found of false statements, such as underreporting income or assets, to either qualify for the program or retain certification, the GAO says.

GAO also found cases where ineligible companies used certified firms to secure set-aside and sole-source contract work. For instance, a West Virginia company that graduated from the program in 2001 used a series of three certified companies as pass-throughs to continue obtaining the government money.

“In some cases, SBA did not detect the false statements and misrepresentations made by certified firms. In others, SBA became aware of the firms’ ineligibility but failed to take action,” the GAO says.

Not all was bad, the inspectors say.

GAO’s proactive testing found several strengths in SBA’s 8(a) application process that helped prevent three bogus applicants from being certified for the program. Examples of the strengths included validation of data with third-party credit bureaus and the Excluded Parties List System.

“These controls and effective review appropriately raised questions about income and assets of GAO’s bogus applicants that would have made them ineligible,” it says.

However, GAO says it obtained certification for one bogus firm using fabricated documentation and owner information. Certification of GAO’s bogus firm shows vulnerabilities in the process such as the lack of any face to face contact that could allow ineligible individuals or pass through companies to enter the program.

“Although we were unable to determine whether all 14 cases were ineligible at application, these cases show substantial vulnerabilities in SBA’s monitoring of eligibility for individuals and firms already in the program. The lack of a consistent enforcement strategy or any real consequences for fraud and abuse is a further weakness in SBA’s fraud prevention program,” the GAO says.

“This latest investigation stands as another example of a complete lack of oversight over small business programs by the SBA,” says the American Small Business League of Petaluma.

“Despite the fact that small businesses create nearly 100 percent of net new jobs, they have received virtually none of the stimulus money and the Obama Administration has turned a blind eye to billions of dollars in fraud in small business programs,” says ASBL President Lloyd Chapman.

Source: http://www.centralvalleybusinesstimes.com/stories/001/?ID=15951