Congress probes management problems at Small Business Administration


Congress probes management problems at Small Business Administration

By Sabrina Eaton
January 8, 2016

WASHINGTON - The U.S. Small Business Administration is inthe throes of its own big-time management crisis, according to the Ohio memberof Congress who oversees its operations.

House Small Business Committee Chairman Steve Chabot ofCincinnati held a series of hearings this week on reports of widespreadmanagement deficiencies at the independent agency founded in 1953 to helpAmericans start and build small businesses.

A Septemberreport from Congress' investigative arm – the U.S. General AccountingOffice (GAO) - found that high personnel turnover at SBA's top levels has keptit from resolving longstanding management challenges, including securing itsinformation technology.

GAO's Director of Financial Markets and CommunityInvestment, William B. Shear, on Wednesday told Chabot'scommittee that SBA had implemented just 7 of the 69 recommendations it made inprior reports.

"We found that senior SBA leaders have not prioritizedlong-term organizational transformation in areas such as human capital andIT," Shear told Chabot's committee. "This raises questions aboutSBA's sustained commitment to addressing management challenges that could keepit from effectively assisting small businesses."

At a hearing the following day, Chabot told SBAAdministrator MariaContaras-Sweet that the problems have produced "a failure ofconfidence in the SBA."

"From information technology and security to staffmanagement issues, from disaster response to fraud in your lending andcontracting programs, it's a safe bet that the small businesses in ourdistricts are paying the price for the agency's failures," said Chabot.

The committee's top Democrat – New York's Nydia Velazquez –agreed with Chabot that the agency faces "a wide range of frankly verytroubling management challenges, many of which have persisted for years."

"I do fully recognize that many of these problems tookroot before Administrator Contreras-Sweet's tenure – and that furthermore, shehas demonstrated a commitment to addressing them," Velazquez continued."With that said, there is still much work that needs to be accomplished interms of addressing GAO recommendations."

Contraras-Sweet, who has headed the agency for 20 months,acknowledged problems, and said she agrees with many of the GAO'srecommendations. During 2015, she said her agency resolved 14 recommendationsmade by the GAO.

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