[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
SBA MANAGEMENT REVIEW: SBA IG REPORT ON THE MOST SERIOUS MANAGEMENT AND
PERFORMANCE CHALLENGES FACING THE SBA
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
OCTOBER 16, 2019
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-050
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
37-988 WASHINGTON : 2020
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
DAN BISHOP, North Carolina
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
Adam Minehardt, Majority Staff Director
Melissa Jung, Majority Deputy Staff Director and Chief Counsel
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nydia Velazquez............................................. 1
Hon. Steve Chabot................................................ 2
WITNESS
Mr. Hannibal ``Mike'' Ware, Inspector General, United States
Small Business Administration, Washington, DC.................. 4
APPENDIX
Prepared Statements:
Mr. Hannibal ``Mike'' Ware, Inspector General, United States
Small Business Administration, Washington, DC.............. 22
Questions and Answers for the Record:
Questions from Hon. Velazquez, Hon. Crow, and Hon. Schneider
to Mr. Hannibal ``Mike'' Ware and Answers from Mr. Hannibal
``Mike'' Ware.............................................. 27
Additional Material for the Record:
Letter to Robert Wong........................................ 43
Report on the Most Serious Management and Performance
Challenges Facing the Small Business Administration in
Fiscal Year 2020........................................... 46
SBIA - Small Business Investor Alliance...................... 73
SBA MANAGEMENT REVIEW: SBA IG REPORT ON THE MOST SERIOUS MANAGEMENT AND
PERFORMANCE CHALLENGES FACING THE SBA
----------
WEDNESDAY, OCTOBER 16, 2019
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to call, at 11:31 a.m., in Room
2360, Rayburn House Office Building. Hon. Nydia Velazquez
[chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Finkenauer, Golden,
Kim, Crow, Davids, Chu, Evans, Schneider, Delgado, Chabot,
Balderson, Hern, and Stauber.
Chairwoman VELAZQUEZ. Good morning. The committee will come
to order.
I would like to welcome back before the committee the
Inspector General of the Small Business Administration, the
Honorable Mike Ware. Today the committee is holding an
important oversight hearing, during which we will examine the
most serious management and performance challenges facing the
SBA. We will also discuss the Office of Inspector General's
recommendations for addressing these challenges, as we seek to
better understand their underlying causes.
The IG is a nonpartisan, independent watchdog tasked with
auditing, investigating, and promoting efficiency at SBA.
Simply put, the IG plays a critical role in protecting
taxpayers dollars and making sure the agency is fulfilling its
mission.
In fiscal year 2019 alone, the IG achieved more than $110
million in recoveries and savings, a fivefold return on
investment to the taxpayers. Every year, the IG is charged with
reporting to this committee on SBA's top management and
performance challenges. This report not only helps with our
oversight responsibilities, but also provides SBA with specific
recommendations to address these challenges. Unfortunately,
many of these issues are longstanding challenges.
One area of persistent concern is the SBA's small business
contracting programs. The IG continues to identify critical
weaknesses in SBA's oversight of its contracting programs,
which exposes them to fraud and abuse. In fact, the IG found
that ineligible 8(a) firms continue to compete with and receive
federal awards intended to assist disadvantaged small
businesses under the 8(a) program. Whether this is due to the
streamline application process meant to reduce burdens on
applicants or poor management of continued eligibility reviews,
it is imperative for SBA to take corrective actions.
Another area of the report that troubles me is that SBA has
not implemented a certification process for its women's
procurement program given that Congress passed a law in 2015
requiring it to do so. This delay is entirely unacceptable.
I look forward to hearing the ways in which SBA can improve
its contracting programs and accelerate the implementation of
the women small business certification process.
I am also concerned about SBA's rollout of its
``certify.sba.gov'' online platform. As of August 2019, SBA has
spent approximately $27 million on this system which was
supposed to modernize the certification experience for 8(a) and
other SBA contracting program participants and offer
comprehensive service delivery.
To date, SBA has implemented only limited functionalities
and it failed to make any progress in enhancing these
functionalities during the last year. There are complaints of
unreasonably long help desk delays and significant latent
defects in this system. Now we are learning that SBA plans to
develop an entirely separate system to monitor 8(a)
participants' business development.
SBA has invested a substantial amount of taxpayers dollars
in this platform, and I would expect by now to see results from
this investment. Unfortunately, it appears that SBA has failed
to implement this platform effectively.
It is my goal for today's hearing to shed light on what
specific steps SBA is taking to address this serious finding
and how SBA intends to deliver a more effective system.
Another issue that requires this committee's close
attention is SBA's oversight of its grant programs. Last year,
OIG identified ``significant systemic deficiencies'' in SBA's
grant management, including issues regarding the accuracy of
grant data, ineffective oversight, and inadequate standard
operating procedures. While progress has been made in this
area, SBA's oversight of its grant programs remains a
significant concern.
Finally, I was pleased to see that SBA has made progress in
developing methods to disclose and track loan agent activities
on 7(a) program loans. IG investigations have revealed an
alarming pattern of fraud by loan agents in the 7(a) program
involving millions of dollars.
While I am encouraged by SBA's efforts to implement
enhanced loan agent disclosure forms and controls over lender
submissions, it is vital that the IG continue to monitor this
area closely and identify areas where SBA can continue to
improve.
Without a confirmed administrator and even a deputy
administrator in place to take the reins of the agency, it is
now more critical than ever to ensure the SBA is operating
effectively and performing its core goal of reaching and
assisting entrepreneurs across this country. I am hopeful we
can work together using the IG's expertise and unique insight
into the agency to improve the SBA.
I now would like to yield to the Ranking Member, Mr.
Chabot, for his opening statement.
Mr. CHABOT. Thank you, Madam Chair.
The Small Business Administration's Office of Inspector
General, or SBA OIG, is required to deter, identify, and
investigate instances of fraud, waste, and abuse, and
inefficiencies in the SBA programs and operations. With an
almost $20 million budget for fiscal year 2018, its audits and
investigations achieved more than $224 million in monetary
recoveries and savings. Contracting and loan fraud
investigations not only recouped federal funds, but also
resulted in 62 indictments and 43 convictions. We thank you,
Mr. Ware, for your efforts to protect American taxpayer dollars
and the integrity of SBA programs.
In the first half of fiscal year 2019, OIG issued eight
reports with 30 recommendations to improve the agency's
programs and operations. Congressional-requested and SBA-
initiated reports produce recommendations that often kick off
statutory and regulatory relief efforts and reform.
For example, the audit of the SBA's oversight of the SCORE
Association issued in April prompted immediate changes within
the SCORE organization and SBA's Office of Entrepreneurial
Development. It also informed significant reforms outlined in
H.R. 4407, the SCORE for Small Business Act of 2019. The SCORE
Audit and subsequent reform efforts demonstrate the power and
necessity of unbiased oversight conducted by OIG. We thank you
for your work to identify and resolve issues in this flagship
program.
Since 2001, the OIG has provided a yearly report to
Congress which outlines the SBA's management challenges and
recommendations to resolve each challenge. Each challenge
represents an area in which the agency is vulnerable to waste,
fraud, and abuse. When compared with the previous years'
reports, it appears that the SBA has not made sufficient
progress implementing OIG's recommendations to statutorily
mandated programs and functions. The SBA's 8(a) business
development program, lender oversight, IT and human capital
management have for nearly 2 decades been the SBA's most
serious management and performance challenges.
How can we, the Congress, help you to motivate agency
reform efforts? That is one of the things that we certainly
want to look into, and we thank you again, Mr. Ware, for your
leadership at the OIG and commitment to reforming the SBA, and
I yield back.
Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman
yields back.
If committee members have an opening statement prepared, we
ask that they be submitted for the record.
Normally, I go over the timing lights but Mr. Ware, you
have been here so many times I do not think I need to explain.
You are going to be the only witness here.
Today, we welcome the Honorable Hannibal ``Mike'' Ware, the
Inspector General of the SBA. Mr. Ware was sworn in as the
Inspector General in May 2018 and has been an effective leader
in his role of rooting out waste, fraud, and abuse in federal
programs and promoting more efficient operations at SBA which
encompass more than $100 billion in guaranteed loans and nearly
$100 billion in federal contracting dollars. He has 28 years of
experience within the IG community and has received numerous
awards throughout his career, including several awards from the
Council of the Inspectors General on Integrity and Efficiency
as recognition for his significant work in the Inspector
General community.
We welcome Mr. Ware, and you are now recognized for 5
minutes.
STATEMENT OF HANNIBAL ``MIKE'' WARE, INSPECTOR GENERAL, UNITED
STATES SMALL BUSINESS ADMINISTRATION
Mr. WARE. Chairwoman Velazquez, Ranking Member Chabot, and
distinguished members of the Committee, thank you for inviting
me to testify before you today and for your continued support
of the Office of the Inspector General (OIG). I am always proud
to represent the dedicated men and women of OIG and to speak to
you about their important work.
Last week, my office released its report on the most
serious management and performance challenges facing the Small
Business Administration in fiscal year 2020. The report
identifies eight challenges that span SBA's core programs,
otherwise known as the three Cs: capital, contracting, and
counseling. The report also identified a challenge in the area
of agency management principally related to information
technology controls.
I look forward to answering questions and discussing these
challenge areas with you this morning, but first, I believe it
is important to provide you with context of how the challenges
are identified and their importance in the framework of
providing oversight to SBA.
Given the identification of Top Management Challenges spans
nearly 20 years, there is a robust dialogue surrounding the
challenges and a record of corrective actions taken and the
persistence of certain challenges.
Since arriving at OIG and taking the helm, I have committed
to a collaborative approach for identifying these challenges. I
had my first meeting with then Administrator McMahon. I shared
my vision of the challenges being identified in a manner that
represents a shared perspective. Rest assured, at the end of
this process, OIG independently prepares our report and calls
the balls and strikes. Consensus is not required to include an
issue on our list. That said, collaboration allows OIG to round
out its view and possibly learn what we do not know from SBA's
leadership perspective of concerns within the programs.
As I sit here today, I can say confidently that SBA program
officials do not agree with every assessment of their progress
in addressing certain challenges. For us, it is a matter of
factual accuracy and building a common understanding of what we
are seeing, which is why I value the opportunity to speak with
you today.
To operationalize the challenges report, I believe we have
an obligation to focus on work in these challenges areas to
provide recommendations for corrective action to resolve the
root causes. For some areas, challenges will always persist.
For example, it is undeniable that responding to disasters will
always be a challenge simply because not every variable of a
specific disaster can be known or planned for in advance.
However, SBA can learn from our oversight work in this area and
be better positioned for the next disaster, ensuring assistance
is provided timely and efficiently and ensuring controls exist
to provide assurance that assistance is going to eligible
disaster victims.
I am pleased to share with you that SBA leadership also
operationalizes the Management Challenges Report.
Implementation of corrective actions is included in executive
performance agreements meaning senior leaders within SBA are
held accountable for taking concrete steps to address the
recommendations within the respective challenges. To this end,
OIG's progress assessments which are included within the report
are vital benchmarks intended to achieve results. The scoring
system is readily discernable by prescribed colors and
directional arrow representing the progress trends.
Within each management challenge is a series of recommended
actions to enhance the effectiveness of agency programs and
operations. Each recommended action is assigned a color score
to indicate its status. The scores are as follows: green for
``implemented,'' yellow for ``substantial progress,'' orange
for ``limited progress,'' and red for ``no progress.''
As you can tell, the top Management Challenges Report is an
important component of our oversight framework. The report and
the associated processes have led to serious management and
performance challenges being addressed by the agency leading to
their removal from the list.
Most importantly, the effort places a continued emphasis on
delivering services to small businesses and disaster victims
effectively and efficiently, a goal for which there is
universal agreement.
Thank you again for the opportunity to speak to you today,
and I look forward to your questions.
Chairwoman VELAZQUEZ. Thank you, Mr. Ware.
I am very pleased that you did not use the 5 minutes. Now
we will have an opportunity to expand on your presentation.
Your office has repeatedly recommended that the SBA
implement a Women Owned Small Business Certification program as
required under the 2015 NDAA. However, it has been almost 4
years since that law was enacted and SBA has not implemented a
certification program. I am also really concerned that a June
2018 OIG audit found that sole source contracts totaling $52
million were awarded to potentially ineligible firms that self-
certify as women-owned businesses.
Can you please explain to us, what is the main cause for
SBA not having implemented the certification as required by the
2015 NDAA?
Mr. WARE. Thank you. Thank you for the question.
And that question, I am actually glad I received it because
it gives me an opportunity to talk about the folks in our
office that just yesterday received a CIGIE award for
excellence for that very same audit that you just referenced.
I will just tell you where they are currently so you know.
At least they have a proposed rule. They did that in May of
2019 to amend the WOSB regulations, rules and regulations. So,
I mean, they are way behind the curve but they are making
movement in this area. And some of the reasons that we have
gotten is that, well, you remember, like you mentioned in your
opening, certify.sba.gov was supposed to be the end all, answer
all, everything all, and it just has not been. So they were
under the impression that this would solve many of their issues
and it has failed to do so. Right now it is just serving as a
repository.
Chairwoman VELAZQUEZ. Are you confident that SBA will be on
track to implement the final rule by 2020?
Mr. WARE. They have assured us that they will but, I mean,
it has been quite a long time. At this point I am past
assurances. I would just like to see it done.
Chairwoman VELAZQUEZ. Let's go to certify.sba.gov. SBA is
supposed to allow users to manage their 8(a) program
certification. They have spent $27 million on this system, but
according to your report, SBA has implemented only limited
functionalities, and it looks like for the last year they have
not made any progress. Why is it taking this long? My other
question is, in your opinion, do you think after spending $27
million, SBA might be abandoning this platform?
Mr. WARE. SBA has basically notified that they are indeed
looking to abandon the platform. It has not been able to
deliver in a way that it thought it would.
Chairwoman VELAZQUEZ. What is the main reason for that?
Mr. WARE. That is the million dollar question. There is no
real evidence that they have put forth other than at every turn
it has not worked. Right now it is just functioning as a
repository. When they talk about the functions, limited
functions, meaning that you can upload the documents, that is
the limited functions for $27 million.
Chairwoman VELAZQUEZ. After spending $27 million of
taxpayers' money this will be the answer to all of the delays
that they were facing? My question is, is the fact that we do
not have an administrator in place, or a deputy administrator
in place playing a role in their delays?
Mr. WARE. Well, I could say this. It is clear that proper
leadership is essential for implementing a program of this
kind. I would say that Maria Roat and the OC, Office of OCIO,
has done a significantly good job in terms of moving on many of
the recommendations. They have received awards and they are
looking into it, but clearly, the proper level of leadership
needs to be in place, even to make a determination as to
whether it is time to actually walk away from this or continue
to throw good money after bad.
Chairwoman VELAZQUEZ. In the Caribbean, people are still
afraid that another storm, or hurricane, could come their way.
The season will be over by the end of November. Based on your
audit and your analysis, can you tell us that you feel
confident that SBA's, Disaster Relief Program is ready to act?
Do they have all of the controls and preparedness in place?
Mr. WARE. I can say this, definitely, as you know, I
definitely sympathize coming from St. Thomas with my mother
still living there, and my mother is still basically not being
able to get over the trauma that the last ones caused. But I
can say this, that the Office of Disaster Assistance has made
significant strides in terms of their readiness. They are more
ready now than they have ever been. It is just that the
uncertainty of what will be faced with a storm always gives me
some hesitance in talking about this, but I do know that in
implementing our recommendations and in working with our
office, they have a more trained work force than they have ever
had before. They were able to ramp up on a level that they
never had before with the last three major storms, and because
of that I would say that they have never been in a better
position.
Chairwoman VELAZQUEZ. Does that preparedness correspond to
taking into account a Category 1 or a Category 5?
Mr. WARE. Well, you know that we put out these reports that
dealt with Harvey, Irma, and Maria, and they were Cat 5s, and
bigger then. It is just that we do not have something bigger.
Chairwoman VELAZQUEZ. Thank you. Thank you.
The Ranking Member is recognized for 5 minutes.
Mr. CHABOT. Thank you, Madam Chair.
Again, thank you for being here, Mr. Ware.
As you know, a number of your recommendations stem from
longstanding challenges at the SBA. In some cases, those
challenges were identified more than a decade ago. Why has it
take so long for the SBA to address these challenges? It is
pretty frustrating. I know the Chair is frustrated. I am
frustrated. You know, what is taking them so long?
Mr. WARE. So let me explain.
You know I have been in the IG community, February will
make 30 years. And so I have been from the first time that the
IGs had to put forward this report, I have been working on
them. Some of these challenges will never go away because it is
the nature of the complexity of the programs that are run
across the Federal Government. For example, when I was at
Interior, if you look at Interior's report, you would see that,
well, insular areas is always going to be a challenge. And then
affairs would be a challenge. Energy will be a challenge.
Climate will be a challenge. These are the things that they are
faced with. It is the same with SBA. So anything that falls
within those three Cs. So you are going to have challenges in
the credit programs because you are talking $120 billion in
guaranteed loans in their portfolio to oversee. So it will
always be a challenge. Disaster will always be a challenge.
Their contracting programs will always be a challenge.
What we offer in this document is that our work is
informing how to challenge shifts and moves to ensure that they
are most efficient in our moving of these areas. As a matter of
fact, it is those challenges that inform our work, and vice
versa, the work informs the challenge.
Mr. CHABOT. Okay. Thank you.
Are there areas where the SBA has taken concrete steps to
improve past performance? And if so, are there lessons that we,
or more importantly that they should learn from those steps,
where they improved things in the past to address some of these
current challenges?
Mr. WARE. Right. To be fair, SBA has made significant
strides over the past, at least the past 3 years that I have
been at SBA. They have made significant strides in just about
every area. We have been able to remove one relative to human
capital. And again, human capital this year, they have made
significant strides. Also, in their IT challenge they have made
significant strides. And we argue with them back and forth,
well, why can we not be green? And you cannot be green because
we found this, we found that. We recognize that you have made
significant progress but works till remains to be done in these
areas.
Mr. CHABOT. Okay. Could you briefly maybe expand a little
bit upon the capital improvement or what was the term you used?
Mr. WARE. Human capital.
Mr. CHABOT. Yeah, human capital improvements that they
actually made?
Mr. WARE. So they were lacking standard operating
procedures across the board. They just did not have them. And
human capital has been identified by GAO, for example,
government-wide as one of the major challenges for probably the
past, I do not know, 20 years. And they have produced or
refreshed 11 different SOPs to address their challenges, which
is pretty significant.
In addition, we are not the only ones that oversee their
human capital, of course. The Office of Personnel Management
does so as well. And they received a pretty positive for the
most part report that also had here are some areas for
improvement. But one of those is how we replace the over, I
think they have 60 percent can retire by 2020. How are you
going to fill that skill gap? How are you going to do that? And
it is even a higher percentage if you move to 15 and higher. So
these are the challenges that they still have to work on.
Mr. CHABOT. Yeah, we certainly need to keep an eye on that.
Broadly speaking, is there anything that either this
Committee or Congress in general could do to help your office
to more effectively conduct investigations and/or oversight of
the SBA?
Mr. WARE. Broadly speaking, I was going to say you have no
idea, but you do have an idea how critical it is that we have
these kind of hearings where you conduct oversight with us. The
way that you have worked with our office in terms of the new
appropriation authorizations, the new authorization language,
those put a significant amount of sunlight on these programs
and lead to change. I mean, instant change. The work that we
have done together relative to the grant programs have fixed a
lot of the issues that we brought forward in an incredibly
short time.
Mr. CHABOT. That is good to hear, so I want to commend the
Chair and commend this Committee in a bipartisan way because we
really do work in a bipartisan manner on this Committee. So it
sounds like we are doing something right. So glad to hear it.
Thank you, and I yield back.
Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
Now we recognize the gentleman from Colorado, Mr. Crow,
Chairman of the Subcommittee on Innovation and Workforce
Development for 5 minutes.
Mr. CROW. Thank you, Madam Chair.
And Mr. Ware, thank you for being here today and for your
office's work to continue to improve the SBA. We appreciate
your professionalism and hard work.
As you are probably aware, Accenture recently released a
report showing that 43 percent of cyberattacks are aimed at
small businesses costing on average $200,000, with 60 percent
of these small businesses going out of business within 6 months
of a breach or attack. And in your report you mention that
during this fiscal year, the IG made 35 new recommendations in
IT security control areas and that overall there were 44
recommendations that were resolved, corrective actions. But you
also mentioned that there are other critical issue areas that
need to be addressed.
Can you mention the top one or two other areas that keep
you awake at night?
Mr. WARE. Well, for us, of course, the information that you
just said, that is on the board scrolling on every floor at SBA
relative to the number. But one of the things is how they are
dealing--how SBA, sorry, deals with their infrastructure, the
IT infrastructure. And we spoke about certify.sba.gov and the
challenges that they have had with that, and we have continued
to push them on the way that they are planning these
investments to replace these legacy systems. So that would be
one.
And of course, the security of the documents, I mean, of
everything that they receive from the public relative to small
business, it is critical that they have that well done.
We contract with KPMG to take a look at that, to make sure
that they are straight with that. They have grown in terms of
improvements in leaps and bounds in that areas but it only
takes one. They have just recently received awards. Maria Roat
was awarded for her work in FITARA. So in terms of security,
they have really come a long way.
Mr. CHABOT. Okay. Thank you.
Madam Chair, I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
The gentleman from Minnesota, Mr. Stauber, Ranking Member
of the Subcommittee on Contracting and Infrastructure is
recognized for 5 minutes.
Mr. STAUBER. Thank you, Madam Chair, and Ranking Member
Chabot for holding this important meeting. And Mr. Ware, thanks
for your professional testimony.
Mr. WARE. Thank you.
Mr. STAUBER. I just have a couple of comments here.
You know, as the ranking of the Subcommittee on Contracting
and Infrastructure, I have heard about some of the issues
highlighted in the 2020 IG reports firsthand during the
hearings that Chairman Golden and I have held. Of particular
note, we held a hearing about the Women-Owned Small Business
Contracting Program, and it seems that the SBA enacted a sole-
source authority without implementing a front-end certification
program or eradicating the self-certification option. This has
only exacerbated fraudulent behavior within the program
specifically. $52 million dollars were awarded to potentially
ineligible firms and ended up hurting our women small business
owners who truly need assistance procuring Federal contracts.
Knowing that this is not unique to the women-owned small
business programs, Mr. Ware, could you provide an estimate for
how many Federal contracts are awarded to ineligible firms?
Mr. WARE. To provide an estimate would be tough but I know
what our work has informed, and our work has informed across
these programs that is a significant amount, and that is a
significant part of our investigations portfolio in terms of
all the arrests and the convictions that we have gotten.
And I will tell you how troubling this is to me on a
personal level. I was recently at a volleyball game and I
overheard two people talking about how easy it is to get into
these small business programs. About how one person had said
they had started three of these businesses and might need to
get out before it is too late. They do not know who they are
sitting next to; right? So these are guys talking about it. It
is extremely troubling.
So when we write about these things and we are simply
asking for more assurances up front that we are reaching the
people who desperately need these services, it is like that. It
is significant. I could say that.
Mr. STAUBER. I can say, Mr. Ware, if you were at a hockey
game in Minnesota, you would not have heard those comments.
So Mr. Ware, what do you think is the biggest factor
contributing to fraud in the Federal procurement place?
Mr. WARE. In the Federal procurement space, the biggest
instance is the relative ease that just about anyone can get
into, and it is an awful lot of money. It is a big pool.
Mr. STAUBER. Okay. So what remedies can we put in place to
reduce the fraudulent activity?
Mr. WARE. These are the recommendations we have been trying
to get implemented for years and that they are working with us
on. We need up front, internal controls that give assurances to
SBA that the right people are getting this. So no more of that
self-certification. The proper documents must be in place
before you are able to receive assistance from SBA.
Mr. STAUBER. You know, Mr. Ware, you are exactly right.
With your experience I was expecting that answer.
I will say this, that you know, you said we have been
working on it for years. We know that small business is the
engine of our economy, and so from outside this city, when you
say we have been working on it for years, what do you think
small businesses across this Nation, I mean, they are
frustrated with this. And so I appreciate your honesty that you
have been working on it, or we have been working on it for
years. I think that we need to speed this up because it is
affecting Main Street America.
And I will say this, that you had mentioned a couple of
things and you had mentioned some big challenges. You used the
word ``challenge.'' Great word. I look at it as an opportunity
for us. An opportunity to change. And I think you are in the
right place to help us out with your experience and your
professionalism.
Mr. WARE. Thank you.
Mr. STAUBER. So I look at it as an opportunity to work with
us and actually make meaningful legislation today or as soon as
practical because when you get outside these walls of Congress,
when the statement is made we have been working on this for
years, that is extremely frustrating for American small
business owners, both men and women. So I think that we have an
opportunity I think to work on this and take your report and
start making progress, immediate progress on these concerns
that we all have.
But I really appreciate your testimony, your
professionalism, and Madam Chair. And I yield back.
Mr. WARE. Thank you.
Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
Now we recognize the gentlelady from California, Ms. Chu,
Chairwoman of the Subcommittee on Investigations, Oversight,
and Regulations, for 5 minutes.
Ms. CHU. Thank you.
Mr. Ware, first I would like to ask about disasters and
then about human capital management.
Disasters are on my mind. I represent a district in
Southern California, and for the last few days we have had a
terrible wildfire where 100,000 people had to be evacuated,
including our Congress member Bob Sherman. And this is on top
of the wildfires that we had throughout California, Northern
California and Central California.
So you outline in your report that the SBA established the
Express Bridge Loan Pilot Program in October 2017 to quickly
extend up to $25,000 to small businesses and presidentially
declared disaster areas. The pilot program launched 2 years ago
but so far has resulted in only two loans despite the fact that
there were 126 major disaster declarations and 33 emergency
declarations since October 2017.
So can you tell us how many small businesses applied for
loans under this program and why SBA has failed to effectively
administer the pilot?
Mr. WARE. Thank you.
I do not have the information relative to how many applied
for the program. I can definitely and will certainly get that
back to you.
But according to SBA, their lenders have many different
ways to get this money to disaster victims and that they are
not partnering with them at the rate that was anticipated to
get these loans out. They say they just do not have the
lenders. That is what they have said.
Ms. CHU. And what could be done to improve the situation?
Mr. WARE. I think that we really need to take a look at,
well, they need to take a look with the overseers with whether
this is the best way to achieve that outcome. Or if there are
other things already in place that are meeting the needs of the
people. I really do. Otherwise, there is no other way to know.
Ms. CHU. Well, this seems like a high priority so I hope
that you can highlight it even more as far as your challenges.
But there is also the issue of proper training. You talked
about SBA's progress in providing proper training but you talk
about it in the context of severe hurricanes. And this is for
the thousands of reserve staff that it brings on for major
disasters. But can you talk about your response to wildfire
disasters and the training system? Is it relevant to wildfires
or is there any kind of specialist training for that?
Mr. WARE. My understanding is that each disaster is treated
the same relative to getting the applications in, processing
them as quickly as possible, and from my view, making sure that
the proper controls are in place before that money goes out.
But it is the same. I do not believe that they have specific
training for whether it is a wildfire or it is a hurricane.
They treat the disasters pretty much the same. The metrics are
the same.
Ms. CHU. Okay. So now let me ask a question about human
capital management. Your report found that SBA made substantial
progress in addressing human capital management but this
Committee has received reports of numerous vacancies within
SBA, and it seems particularly problematic in the Office of
Field Operations where there are potentially 100 vacancies and
then there are vacancies in the Office of Investment and
Innovation.
So Mr. Ware, did OIG consider the number of vacancies at
SBA in making its findings on SBA's human capital management?
Mr. WARE. So the findings on the Top Management Challenges
Report are much more general in terms of what the challenge is.
So we specifically entered that only relative to what they have
in place to address a challenge that is as you have described.
You have a lot of vacancies. You are going to have a lot of
turnover due to retirement. What do you have in place in terms
of a strategy to mitigate these issues? That we looked into.
And they have actually, like I said, 11 new human capital SOPs,
some that deal with that. And this is why we gave them the mark
that they got in the area. We have not, as part of this, gone
into a specific and detailed review of each one of the sections
as of yet.
Ms. CHU. It just seems like 100 vacancies is very, very
problematic and, you know, requires so much more intervention.
Mr. WARE. Right. So our normal oversight work would address
something like the 100 vacancies. The Top Management Challenges
Report just talks about the challenge that they have in
addressing that.
Ms. CHU. Thank you. I yield back.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Now we recognize the gentleman from Pennsylvania, Mr.
Evans, for 5 minutes. He is the Committee Vice Chair.
Mr. EVANS. Thank you, Madam Chairperson. And thank you for
this hearing.
Mr. Ware, according to the OIG report, the SBA currently
has no system to assist program officials in monitoring the
8(a) participant business development to assist the
effectiveness of the program. To address this, the SBA has
formed a tiger team to develop solutions in fiscal 2020.
Mr. Ware, what is a tiger team, and how much progress has
this team made in developing solutions to this program?
Mr. WARE. Right. The tiger team is they establish, they are
a group of employees that they have identified who could assist
in terms of making sure their system works the way it does. We
have not yet assessed where they are on that. That is not what
the Top Management Challenges does. So we have not gotten to
that level of our work yet in that area.
Mr. EVANS. Okay. The 8(a) program has seemingly declined in
the number of participants in recent years going from 7,000 in
2010 to about 4,500 participants in 2019.
Mr. Ware, do you believe the application process is a
source of decline and participation in the 8(a) program, and is
the SBA properly addressing the decline?
Mr. WARE. It is difficult to tell. The work that we have
done has not shown that that is the reason. As a matter of
fact, they have streamlined the process. So the streamlining of
the process was said to be how they would address the root
cause of the numbers going down. So I do not believe that that
is the process and I our work has not informed yet as to what
the cause of the numbers declining is but I do not believe it
is definitely not because of any additional controls they have
put in place. As a matter of fact, they have relaxed the
controls.
Mr. EVANS. The Chairwoman sort of mentioned this when she
was talking. The report states SBA has currently spent $27
million on the online certification process, the 8(a) program
at 27 to implement the online process for the women-owned. Is
this same 27 million, does this cost seem excessive for
developing an online certification process?
Mr. WARE. That is a very interesting question. So, well,
kind of a deep question, too. Thank you.
Excessive is not something that I would use. It is what is
necessary to ensure that they are providing efficient and
effective services to small business owners and that the proper
controls are in place to ensure it is going to the right
recipients. And that they are able to measure progress in a way
that informs Congress and informs the public as to whether or
not their programs are successful. So I do not know what cost I
would put to that but I would say it is excessive for a program
that has not worked.
Mr. EVANS. So what would you say to us who represent the
taxpayers you are describing then? How would you say that then?
Mr. WARE. I would say that SBA has some work to do to
either make a decision as to whether they are going to throw
good money after bad or they are going to switch and pivot to a
system that provides us the assurances I just laid out.
Mr. EVANS. I yield back the balance of my time, Madam
Chairperson.
Chairwoman VELAZQUEZ. The gentleman yields back.
Mr. Balderson, the member from Ohio who is the Ranking
Member of the Subcommittee on Innovation and Workforce
Development is now recognized.
Mr. BALDERSON. Thank you, Madam Chairwoman.
Holy cow, bam. Here we go.
Good morning, Mr. Ware, and thank you for being here.
I just, you know, I have got a little bit of update on what
the conversation has been here this morning and what we have
been talking about during the two to three Committee piece
today, so just kind of bouncing back and forth. But my great
policy small businessman has been updating me.
You know, we are talking about the disasters you are
speaking of. In your testimony, you mention the four core
strategic goals for the Small Business Administration. Of these
you state that the SBA should be working to strengthen their
ability to serve small businesses. Unfortunately, I have been
alarmed to routinely hear from constituents on my Small
Business Advisory Panel that they do not feel like the SBA is
prioritizing them. Specifically, my constituents have mentioned
how rural small businesses seem to be forgotten about or
underserved.
Your report pinpoints human capital as a major challenge
facing the SBA. More specifically you write, ``The office is
currently planning to assess the effectiveness of SBA's actions
to mitigate its workforce challenge risk.'' And I know that
this has been a focus today. But can you kind of turn it around
a little bit for the rural piece also?
Mr. WARE. Right. Regarding the rural piece, this is a
discussion that we have just begun having in our office because
we are hearing the same things. We hear from our hotline. We
hear from your constituents about these issues, so the question
comes up. I mean, are they really looking at the rural areas?
Our work to date has not informed that but I assure you that
our work going forward will. It is a discussion that we
recently had within our office.
Mr. BALDERSON. Okay. That is good. And my office, and
including myself, would be happy to help with you addressing
those issues because I think it is a very, very important piece
and I know that you understand it is, too, but I think we need
to take some action on it.
So I appreciate it and thank you very much, Madam Chair.
Chairwoman VELAZQUEZ. The gentleman yields back.
The Chair recognizes the gentlelady from Kansas, Ms.
Davids, for 5 minutes.
Ms. DAVIDS. Thank you, Chairwoman.
And thank you for being here today to talk to us about this
report on the SBA.
Last month, this Committee held a management review hearing
on the SBIC program and had many concerns and questions about
the mismanagement of the program and the decrease in issued
licenses, the issues around some of the requirements related to
trainings on the regs. The Senate Small Business Committee held
a similar hearing earlier in the year as well.
Can you tell me why the SBIC program issues were not
addressed in the report that you put together?
In the Top Management Challenges Report?
Uh-huh.
Mr. WARE. It was not specifically addressed. We have not
done work on SBICs in a minute. The SBICs are the next up for
2020 in terms of our reports and our work that will inform it.
So our work that we are doing are informing the challenges,
and this goes over the 40-year existence of the office in terms
of the depth of knowledge that we have in these programs.
Strangely enough, when the IG's office was first set up as one
of the original 12, SBICs was their primary focus and primary
work more than anything else before it was turned over to the
agency. But that is the reason why it was not addressed in this
body, in this version of the Top Management Challenges.
Ms. DAVIDS. Okay. I just would, I guess when I was looking
at the purpose of this specific report that gets done it
includes what the report considers the most serious management
and performance challenges facing the agency. And based on the
testimony that we heard that we heard last month when we were
looking at the SBIC program from the current acting director of
the program, I would definitely say that there are serious
challenges and management challenges there and would just
encourage you to please have a look at that. And I think our
office is probably going to be reaching out as well.
Mr. WARE. It is up next in 2020.
Ms. DAVIDS. Okay.
Mr. WARE. Mm-hmm.
Ms. DAVIDS. So I know that the IG report does delve into
multiple issues around the 8(a) program and we have heard a
little bit about the oversight capability and trying to ensure
that ineligible firms are not participating in that program.
Can you please talk to me, us, a little bit about how we
make sure that we not only increase the number of 8(a)
certified programs that are having access to the contracts, but
also how we increase the accuracy of the reporting of it?
Mr. WARE. All right. So thanks for that question.
I will start with the accuracy of the reporting, mainly
because our work is informed on the accuracy of the reporting.
It has to do with their systems. And I have to talk a little
bit more about systems because folks keep thinking that this
technology is the end all, be all. So whether it is certified
SBA, whatever you come up with, it is just technology that is
making what should be a good foundational system easier to use.
So we need to look into how those systems are put in place,
especially in relation to the human side of things that are
actually working on these systems.
So when you have a system that is a repository, it is like
anything else. It is garbage in, garbage out. And on top of it,
some of these systems lose information. So that is the
challenge in terms of being accurate with the reporting, a
significant challenge that SBA has. But that is where it stems
from. And we are challenging SBA to take a look at system more
holistically than just an IT fix.
Ms. DAVIDS. And I am just curious because I feel like there
are a couple of threads in the report here. Do you think that
some of the underlying foundational issues stem from the need
for the effective human capital strategies? And we are running
out of time, but perhaps you could submit a little bit more
information about some specific steps that we need to take to
increase the human capital.
Mr. WARE. Thank you.
Ms. DAVIDS. Thank you. I yield back.
Chairwoman VELAZQUEZ. The gentlelady yields back.
The gentleman from Maine, Mr. Golden, Chairman of the
Subcommittee on Contracting and Infrastructure, is recognized
for 5 minutes.
Mr. GOLDEN. Thank you, Madam Chair.
Inspector General Ware, thank you for being with us. And I
hate to continue to focus on 8(a) but I think that your report
here did point out that it is one of two areas where we did not
see the kind of progress that we saw elsewhere in fiscal year
2019. And so I think it is important to keep talking about
this, particularly as the Chair of the Subcommittee. So I do
not think it is harmful to give you more and more opportunities
to talk about what we can do about 8(a).
My good friend from Minnesota, the Ranking Member,
Congressman Stauber talked about the women-owned business
issues as well with some of the self-certification and other
things, so I just want to keep giving you some opportunities to
tell us what we should be looking into and prioritizing with
our oversight, because I think that there is going to be some
significant focus on certification in the Subcommittee going
forward.
So knowing that, what would you have us focus on? And I do
have another question.
Mr. WARE. Sure. I will be quick on this one so you have
time.
We made very specific recommendations to SBA on how best to
address that. And one of them has to do with, I will read it,
``Implement controls so that ineligible firms in the 8(a)
program during the continuing eligibility reviews''--because
that is one of the areas where we have a major problem with--
''and effectively address complaints received regarding 8(a)
firms and remove ineligible firms from the 8(a) program timely.
So we have challenged them to meet this recommendation, and
right now they have been moving kind of slow. They said that
their revisions to the SOP, they have an expected publication
of March of 2020. So, but the SOP does not really cover it all,
and we are still working with them. When I said earlier that
they do not necessarily agree with everything, this is one of
those areas, so we have been in, my team and their leadership
within Economic Development have been in the back and forth,
but that is one of the principal ways.
Mr. GOLDEN. Thank you.
My colleagues on the Committee have pointed out that a
prior OIG audit had found that SBA failed to fully document
whether 30 out of 48 certified firms that you reviewed were
eligible for the 8(a) program. Those are some pretty bad
numbers in my opinion. I do not know if you have seen any
improvement since then in this regard or if this was just a
particularly bad audit. But can you explain how this failure to
properly document firms' eligibility for the program impacts
your ability to investigate cases of fraud against SBA? Because
I do think an important aspect of your work is the ability to
fully investigate and root out fraud.
Mr. WARE. I am glad that you brought that up because it
brings me to a soapbox issue for me. And hopefully, I do not
get on a soapbox too much.
But it harms us in terms of our ability not to investigate
but to get a conviction. And what it does is because they did
not have the documentation in the files but in many cases, and
this is documented, defense attorneys are able to say my client
gave everything that they asked for. They either had it right
in front of them, they did not put it in the files or whatever
it is, but this is our evidence that we have given it. And the
court has ruled that SBA had it and still allowed them to
continue in the program, or to get in and that the burden was
on the agency. And we have been unable to obtain convictions
because of this. This is something that we have been working
with the agency in terms of drilling down on the importance of
making sure that that action is taken on the documentation. And
they are moving forward on a lack of documentation. When we
said lack of documentation, they were able to remedy the
majority of the 30 by obtaining the documentation. But without
the documentation, the people should not have been eligible.
The documentation had to have come first. Somebody had to
review that.
Mr. GOLDEN. Yeah. Because you have mentioned I think
several times that at the very least like they have this
platform where they can upload the documents but we actually
need to cross our T's, dot our I's, and demand the documents.
Mr. WARE. Right. Well, that is all it is, is just upload.
Mr. GOLDEN. Yeah.
Mr. WARE. Right.
Mr. GOLDEN. All right. Thank you. I appreciate it.
Mr. WARE. Sure.
Chairwoman VELAZQUEZ. The gentleman yields back.
The gentleman, Mr. Hern, from Oklahoma, Ranking Member of
the Subcommittee on Economic Growth, Tax, and Capital Access,
is recognized for 5 minutes.
Mr. HERN. Thank you, Madam Chairwoman, Ranking Member
Chabot, and Mr. Ware, thank you for being here today.
As a small business owner and businessman for the past 34
years, I know firsthand how valuable the Small Business
Administration's aid can be. However, I am also aware that the
SBA has had wasteful expenditures and mismanaged programs in
the past. I think it is part of the bureaucracy, what happens
when you get too big, which can be a big determinant to this
aid, and therefore, cause damage to small businesses in
America.
As a member of Congress who came to Washington help
reconcile waste and to eradicate fraudulent abuses of
government programs, this is extraordinarily concerning to me.
Because of this, I am fully supportive of the SBA's Office of
Inspector General and the work they do to improve the integrity
and performance and accountability of the SBA. Every program
needs that and taxpayers should demand it.
So my first question is, as you know, the 7(a) program is
the SBA's flagship program and it helps to be a vital source of
capital access for thousands of small businesses, and this
program also happens to be under the jurisdiction of the
Subcommittee for which I am the Ranking Member.
In April, as part of our Subcommittee work, we held a
hearing on the SBA's 7(a) budget proposal and impact to fee
structures changes, and in this hearing we reviewed the SBA's
concerning request for a $99 million taxpayer provided subsidy
to the 7(a) program which has traditionally never received
appropriations from Congress. The Chairwoman was adamant that
we had accountability for this, and so it is furthering my
concerns with the 7(a) program. In your fiscal year 2019 high-
risk 7(a) loan review you found noncompliance in five of the
eight loans that were studied.
Why has the SBA not fully addressed the material
deficiencies that you highlighted? And do you think this
noncompliance is part of the reason the SBA is asking for a $99
million subsidy from the American taxpayers?
Mr. WARE. Thank you.
I am not certain if the noncompliance is part of it. I can
tell you what our work has informed. And our work has informed
that we are catching things when we go in as an audit entity
that they should have caught. What we are reviewing in that
report that you reference is work that they already did. They
already paid out the guarantee. They already did all their
assurances. And we are coming in later, which at times is
problematic to the banks and everything else because we are now
saying you owe this money. You did not do what you were
supposed to do. But we are coming in later and seeing glaring
things that should have been found if the proper level of
review and scrutiny was taken by the agency.
Mr. HERN. Mr. Ware, if I may interject, as that testimony--
obviously, you were not here, but that testimony and that quote
``need for the $99 million'' was based on historical problems
and then forecasting those forward. And if we kept doing the
same bad behaviors, then we were going to need $99 million.
Now, the Chairwoman, again, I am going to go back and give her
a lot of credit in saying, do not come back here and ask for
that again until you have cleaned up your act. And we have not
seen them back, so that must mean their act has not been
cleaned up. So I appreciate what you are saying, but historical
precedence, if you are making bad decisions and having a
default rate that you should not be having, that is setting the
tone and the precedent for the trend line to request this
appropriation from the taxpayer. And so that is very
problematic.
And so judicially, our Full Committee had a hearing in
September regarding the SBA-led initiative, the SBIC program,
another concern that we all have. Through that hearing, this
Committee heard about significant delays coming from the Office
of Investment and Innovation as it pertains to SBIC licenses,
something else that is very concerning. I mean, ridiculous. I
think it was a $1.8 million budget to service 40 loans as I
recall. If we could broadcast this in lieu of impeachment
conversations there would be an uprising among the taxpayers
about the wasteful spending that is going on in this program
right now.
Has your office heard about these delays? And will your
office investigate this matter?
Mr. WARE. We have heard about the delays, and an audit of
the SBIC program will be conducted in the next cycle. So which
starts very soon. So in our 2020 cycle. It is something that we
met about, particularly after reviewing the testimony on SBIC
hearings. So it is next up.
Mr. HERN. Well, again, it is very troubling to see how
little had been done for the budget because really, the only
amount that the person that was testifying, the director of
that particular area could attest to was how much they had
spent for his budget. Other than that he could not recall. He
was dodging all of the questions that both sides of the aisle
had for him. So it was very troubling.
And, again, I thank you so much for what you are doing and
I think, again, the taxpayers should demand full
accountability, and they are. We need to have more of these
hearings and oversight on a lot of things we are doing. So
thank you so much.
I yield back.
Mr. WARE. Thank you very much.
Chairwoman VELAZQUEZ. The gentleman yields back.
The gentlelady, Ms. Finkenauer, the Chairwoman of the
Subcommittee on Rural Development, Agriculture, Trade, and
Entrepreneurship from Iowa is recognized for 5 minutes.
Ms. FINKENAUER. Well, thank you, Madam Chair.
And thank you so much, Mr. Ware, for being here again. It
is good to see you. And I know as Inspector General, you are
absolutely key to helping us identify wasteful spending, weed
out fraud, and make sure that agencies run efficiently and
effectively like they should.
As members of this Committee, it is part of our job making
sure that the Small Business Administration is working like it
should. And obviously, the mission of the Small Business
Administration and this Committee is to strengthen our economy
through our small businesses and every program and process at
the Small Business Administration should not only support that
mission, obviously, but also be a good use of taxpayer dollars.
And in your report, I know this has been touched on but I
want to just again bring it up because it is really important.
You mentioned an issue with the Women-Owned Small Business
Federal Contracting Program, and I am concerned that this
program has been left open to fraud and abuse from what we have
seen. Currently, Federal contracts can be awarded to women-
owned small businesses without competition. However, the law
requires that businesses' eligibility must be certified by a
third party such as a Federal agency, a state government, SBA's
administrator, or a national certifying entity approved by the
administrator. But SBA has gone ahead with awarding these
contracts but never set up a certification program. As a
result, we now know around $52 million has been awarded to
firms that we do not know were eligible to have received a
sole-source contract. This is not obviously very good for our
small businesses or the taxpayers who expect that their tax
dollars be spent responsibility.
And Mr. Ware, can you help us with this a little bit and
tell us why do you think the Small Business Administration did
not set up a certification process when it began awarding these
sole-source contracts?
Mr. WARE. The ``why'' to that is a little tricky because, I
mean, you get various things. Documentation is something
different. But they really wanted to get this program going
they said and, you know, that is basically what they are
measured on. And we are coming in talking about oversight and
controls. And hey, this has to go to the right people. We have
to make sure that bad actors are not in our program. So it was
at the expense of speed.
Ms. FINKENAUER. Yeah. So it was more just about getting
something done versus ensuring that it was done in the right
way.
Okay. So could you talk a little bit, too, so if we change
this, how could swift implementation of a certification program
so we get that thing done ensure that Federal contracts go to
deserving small businesses?
Mr. WARE. That is what our office is all about. Our office
is trying to be proactive in terms of our approach to
oversight. So not just coming in on the back end and constantly
finding findings and millions of dollars went this way and
millions went that way. We are trying to prevent the millions
of dollars from going out, which is why this process is so
important for them to implement in a timely manner. And we are
still working with them on that, and they gave us some dates.
They are talking, I think, March 2020, if I remember correctly.
So it is looking like we will be making a shift in this area.
Ms. FINKENAUER. So they are taking some of your
recommendations to heart?
Mr. WARE. I actually had the exact date of that somewhere
in here.
Ms. FINKENAUER. Okay. Well, if you find it later I would
love to have it because this is something that matters a lot. I
mean, women small business, you know, it is something we care a
great deal about on this Committee and making sure that these
programs that are set up are actually done in the right way and
achieving the objective that we all up here believe in. It is
just so important.
So thank you so much for your work and looking into the
things that need to be looked into.
And did you find the date?
Oh, I was going to say I saw by your face you might have
found that date. That is totally fine if you did not. But just,
you know, if you could follow up with that, that would be
great. I think this is just, again, something we need to
continue to keep our finger on and make sure that these things
are getting done and these changes are made so these programs
work the way that they should.
Mr. WARE. Okay.
Ms. FINKENAUER. Thank you, Mr. Ware. I really appreciate
it. Good to see you.
Mr. WARE. Thank you. All right. Good to see you, too.
Chairwoman VELAZQUEZ. The gentlelady yields back.
With that, I want to thank Mr. Ware for taking time out of
his schedule to be with us today. This committee greatly
appreciates the hard work the OIG is doing to identify critical
challenges facing the SBA. Your office continues to shine a
light on issues that demand attention from the SBA leadership
and that demand continued oversight from this committee.
While I am pleased to see progress being made in certain
areas, the SBA needs to do more. This committee remains
committed to working with the SBA in a bipartisan fashion to
ensure these challenges are appropriately addressed.
I do have another question to address to you, Mr. Ware.
Does the OIG have trouble receiving documents that it requests
from SBA?
Mr. WARE. We do not. We have basically had an issue to deal
with when the administration was brand new and we handled it.
We have no issues receiving now.
Chairwoman VELAZQUEZ. Thank you.
Before we conclude, I would like to take this opportunity
to express my deep disappointment in the SBA's lack of
responsiveness to this committee's inquiries regarding the
Women-Owned Small Business Contracting Program and the SCORE
program. As I noted in my opening statement today, SBA has
unreasonably delayed implementing the women certification
process, a process that is required by law. While this delay is
troubling, equally concerning is SBA's refusal to provide this
committee answers to its legitimate oversight questions
regarding this program.
On June 19, a bipartisan letter was sent to Associate
Administrator Rob Wong requesting information concerning the
Women's Procurement Program, but today, almost 4 months later,
SBA has failed to provide any response and it has given no
indication of when a response may be expected. Moreover, on
July 11, 2019, the Subcommittee on Investigations, Oversight,
and Regulations held a hearing titled ``SBA Management and
Oversight of SCORE,'' after which questions for the record were
submitted to Associate Administrator Allen Gutierrez. Despite
an August 1st deadline, the subcommittee has not received a
response from the SBA.
Therefore, I would like to submit for the record the June
19, 2019, letter to Associate Administrator Wong and the July
11, 2019, questions for the record on the SCORE program.
Without objection, so ordered.
I request on the record that SBA provide the committee a
swift response to its questions. I call on SBA to work with
this committee proactively in a bipartisan fashion to address
the serious issues facing the agency.
I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered.
If there is no further business to come before the
committee, we are adjourned. Thank you.
[Whereupon, at 12:42 p.m., the committee was adjourned.]
A P P E N D I X
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