[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                           REDUCING MISMANAGEMENT: GAO 
                       RECOMMENDATIONS FOR IMPROVING THE SBA

=======================================================================

                                 HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             MARCH 6, 2024

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 118-043
             Available via the GPO Website: www.govinfo.gov
             
                             __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
54-983                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------                  
            
                   HOUSE COMMITTEE ON SMALL BUSINESS

                    ROGER WILLIAMS, Texas, Chairman
                      BLAINE LUETKEMEYER, Missouri
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                         BETH VAN DUYNE, Texas
                         MARIA SALAZAR, Florida
                          TRACEY MANN, Kansas
                           JAKE ELLZEY, Texas
                        MARC MOLINARO, New York
                         MARK ALFORD, Missouri
                           ELI CRANE, Arizona
                          AARON BEAN, Florida
                           WESLEY HUNT, Texas
                         NICK LALOTA, New York
                          CELESTE MALOY, Utah
               NYDIA VELAZQUEZ, New York, Ranking Member
                          JARED GOLDEN, Maine
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                          GREG LANDSMAN, Ohio
                  MARIE GLUESENKAMP PEREZ, Washington
                        SHRI THANEDAR, Michigan
                       MORGAN MCGARVEY, Kentucky
                       HILLARY SCHOLTEN, Michigan
                          JUDY CHU, California
                         SHARICE DAVIDS, Kansas
                      CHRIS PAPPAS, New Hampshire

                  Ben Johnson, Majority Staff Director
                 Melissa Jung, Minority Staff Director
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Roger Williams..............................................     1
Hon. Nydia Velazquez.............................................     2

                               WITNESSES

Ms. Courtney LaFountain, Acting Director, Financial Markets and 
  Community Investments, U.S. Government Accountability Office, 
  Washington, DC, accompanied by Ms. Johana Ayers, Managing 
  Director, Forensic Audits, and Investigative Services, U.S. 
  Government Accountability Office, Washington, DC...............     4

                                APPENDIX

Prepared Statement:
    Ms. Courtney LaFountain, Acting Director, Financial Markets 
      and Community Investments, U.S. Government Accountability 
      Office, Washington, DC.....................................    21
Questions and Answers for the Record:
    Questions from Hon. LaLota to GAO and Responses from GAO.....    42
Additional Material for the Record:
    None.

 
   REDUCING MISMANAGEMENT: GAO RECOMMENDATIONS FOR IMPROVING THE SBA

                              ----------                              


                        WEDNESDAY, MARCH 6, 2024

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:02 a.m., in Room 
2360, Rayburn House Office Building, Hon. Roger Williams 
[chairman of the Committee] presiding.
    Present: Williams, Meuser, Alford, Crane, Maloy, Velazquez, 
McGarvey, Scholten, Thanedar, and Davids.
    Chairman WILLIAMS. Before we get started I would like to 
recognize Congressman Mr. McGarvey from the great state of 
Kentucky to lead us in the prayer and the pledge. Stand please.
    Mr. MCGARVEY. Our Father we thank you for allowing us to 
gather here today. And ask that you be with us as we seek to 
serve the people in the way that you see fit with mercy, 
justice, with compassion for all. Amen.
    Chairman WILLIAMS. Amen.
    Mr. MCGARVEY. I pledge allegiance to the Flag of the United 
States of America, and to the Republic for which it stands, one 
nation, under God, indivisible, with liberty and justice for 
all.
    Chairman WILLIAMS. Good morning, everyone. I now call the 
Committee on Small Business to order. Without objection, the 
Chair is authorized to declare the recess of the Committee at 
any time. I now recognize myself for an opening statement.
    Welcome to today's hearing, which will focus on examining 
the Government Accountability Office's recommendations for 
reducing mismanagement at the SBA. I would like to start off by 
thanking our witnesses for joining us today, thank you very 
much, and your attendance is greatly appreciated and we value 
your input we will receive.
    The SBA was thrust in the national spotlight during the 
COVID-19 pandemic. They took an oversized role in the delivery 
of pandemic assistance when American entrepreneurs were in 
great need. Now that that pandemic is over we have been seeing 
all the after action reports on how the agency did during those 
stressful days. Unfortunately, the inspector general and other 
government watchdogs discovered there were hundreds of billions 
of taxpayer dollars stolen by fraudsters. It became abundantly 
clear to this Committee, that the COVID-19 pandemic broke the 
SBA, and it is time to open the hood and fix what has failed 
American taxpayers.
    At the start of each Congress, the GAO releases a high-risk 
list of programs with significant problems that have high 
vulnerability to waste, fraud, abuse, and mismanagement, 
unfortunately the SBA still has many outstanding 
recommendations on this list that we are going it to hear about 
in more detail this morning.
    It is imperative that this Committee evaluates not just how 
the SBA handled the previous pandemic, but also, what role they 
should play in the future. So given their poor track record 
with detecting fraud on the front end, I am very skeptical that 
this agency should ever be charged with delivering such 
quantities of taxpayer dollars ever again. Additionally, since 
we were so much fraud that we saw that took place, I would hope 
that more of the GAO's recommendations would have been 
completed by now, since many of them discuss the integrity and 
the fraud controls within the programs. The SBA's inability to 
address the open GAO recommendations is a concern over its 
ability to aid our nation's job creators. When businesses have 
operational issue changes are quickly made to ensure it does 
not happen again.
    This same entrepreneur spirit does not seem to exist at 
this agency which seems to be weighed down by slow-moving 
bureaucracy. So look no further than the agency's work from 
home policy. Even though the Biden administration's been 
pushing hard to get employees back in the offices, the SBA is 
still only utilizing around 10 percent of their office space. 
This is not only a slap in the face to small business owners 
that get dressed and go to work every day, but also undoubtedly 
reducing the quality of work from people who might be able to 
focus on walking their dog or doing laundry than helping an 
entrepreneur in need.
    It is my hope that today's conversation can point us in the 
right direction regarding what needs to change at the SBA. Our 
Committee's job is to be main street's voice at the table and 
we will continue to do our best on their behalf.
    I now would like to recognize--once again, thank our 
witnesses for being here with us and I am very much looking 
forward to our conversation.
    And with that, I yield to our distinguished Ranking Member 
from New York, Ms. Velazquez.
    Ms. VELAZQUEZ. Thank you, Chairman Williams, and thanks to 
our witnesses for your willingness to testify before our 
Committee today. I always look forward to hearing testimony 
from GAO, because the information provided is fact-based, 
nonpartisan, and focused on improving government services.
    Today, I hope we can set aside partisanship, learn more 
about your findings and discuss ways to improve the delivery of 
services to small businesses. Beginning with the pandemic 
relief programs, SBA executed 14 years of lending in 14 days, 
to help keep small businesses afloat during the pandemic. These 
programs helped millions of businesses across the country. 
Unsurprisingly, there were bumps in the road with the 
implementation of these new programs. We have learned through 
reports that the potential fraud ranges from $36 billion to 
$200 billion.
    While we may never know the full extent of that fraud, we 
do know for certain that the majority of that fraud took place 
in the first 9 months of the pandemic. We took that seriously 
then, which is why this Committee held a number of oversight 
hearings. Due to the work of GAO and the IG we were able to put 
internal controls in place to prevent fraud in the PPP and EIDL 
programs. And let me tell you, it wasn't easy.
    Congress and our nonpartisan agencies like GAO and the IG 
had an incredibly difficult time getting basic information from 
the Trump administration and the agency was less than 
forthcoming with documentation and access to data.
    When Administrator Guzman was confirmed, that all changed. 
In testimony before the Committee on April 20, 2021, GAO 
testified that the new administration was more forthcoming with 
information. GAO's May 15, 2023, letter to SBA which delineates 
priority open recommendations validates Administrator Guzman's 
commitment to implementing GAO's recommendations. In fact, 
their 4-year implementation rate was 100 percent for the past 3 
years, well above the 77 percent rate government wide. I hope 
to learn more about the agency's progress in implementing the 
remaining 36 open recommendations, which include 10 priority 
recommendations.
    In 2021, and at the beginning of the 117th Congress, SBA 
was added to GAO's high-risk list due to its mishandling of the 
pandemic relief program. Hearing more about SBA's progress in 
addressing the areas that left the agency susceptible to fraud 
will be useful. Looking to the future, I hope to hear GAO's 
perspective on SBA efforts to stand up the Fraud Risk 
Management Board to prevent fraud and other challenges facing 
the agency.
    GAO's priority recommendations can offer a blueprint for 
the Committee's oversight work. Through hard work and a true 
commitment to bipartisanship, we can confront these challenges 
together and improve the effectiveness of the SBA.
    Thank you, Mr. Chairman. I yield back.
    Chairman WILLIAMS. Yields back.
    I will now introduce our witnesses. Our first witness here 
with us today is Dr. Courtney LaFountain. Dr. LaFountain is the 
acting director of financial markets in community investments 
at the U.S. Government Accountability Office right here in 
Washington, D.C. At the GAO she has launched the emerging risk 
task force to support the agency's ability to provide Congress 
with reliable, high-quality information and emerging risks.
    She also had led teams that examine the effects of the U.S. 
Government's pandemic response, and has been instrumental in 
the GAO's work on financial market resilience and stability, 
social safety net program design and public finance.
    Prior to working at the GAO Dr. LaFountain was an assistant 
professor at the University of Texas in Arlington. That is in 
my district. Home of the Mavericks.
    Ms. LAFOUNTAIN. That is right.
    Chairman WILLIAMS. And Dr. LaFountain earned a bachelor of 
arts degree in mathematics from Washington University in St. 
Louis, and went on to earn her Ph.D. in economics also from 
Washington University. She is recipient of the 2022 Arthur S. 
Flemming award recognizing outstanding federal employees. I 
thank you for joining us today and we look forward to our 
conversation.
    Our next witness here with us today is Johana Ayers. Ms. 
Ayers is the managing director of the forensic audits and 
investigative service team at the U.S. Government 
Accountability Office here in Washington, D.C. At the GAO, Ms. 
Ayers leads and oversees efforts to provide Congress with high 
quality forensic audits and investigation fraud, waste, and 
abuse, other special investigations and security vulnerability 
assessments. Prior to being named managing director, Ms. Ayers 
served as director in GAO's defense capabilities and management 
team. Ms. Ayers earned her bachelor of arts degree in 
international relations and affairs from the American 
University and went on to earn her master of arts in 
international relations and affairs from George Washington 
University. Thank you for joining us today and we look forward 
to the conversation we are going to have.
    And before we recognize the witnesses, I would like to 
remind them that their whole testimony is restricted to 5 
minutes in length. If you see the light turn red in front of 
you it means your 5 minutes have concluded and you should wrap 
up your testimony. And periodically you may, if you go over you 
will hear this, and that is to remind you to wind it up, okay?
    I now recognize Dr. LaFountain for her 5-minute opening 
remarks.

  STATEMENT OF DR. COURTNEY LAFOUNTAIN, ACTING DIRECTOR, U.S. 
    GOVERNMENT ACCOUNTABILITY OFFICE, FINANCIAL MARKETS AND 
 COMMUNITY INVESTMENTS, ACCOMPANIED BY JOHANA AYERS, MANAGING 
   DIRECTOR, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, FORENSIC 
               AUDITS, AND INVESTIGATIVE SERVICES

              STATEMENT OF DR. COURTNEY LAFOUNTAIN

    Ms. LAFOUNTAIN. Thank you, Chairman Williams, Ranking 
Member Velazquez, and Members of the Committee. Thank you for 
the opportunity to discuss GAO's work on Small Business 
Administration programs.
    SBA's mission is to help Americans start, build, and grow 
businesses and help communities recover from disasters. Based 
on our work, I would like to highlight three areas where SBA 
can improve program management and more effectively meet that 
mission in the future.
    The first area, as you have alluded to, is SBA's pandemic 
relief programs. SBA quickly set up programs to respond to the 
unprecedented economic shock of the pandemic, and altogether, 
it made or guaranteed more than $1 trillion in loans and grants 
and assisted more than 10 million small businesses.
    However, quick loan approvals came at the expense of 
oversight and Fraud Risk Management, especially early in the 
pandemic. Our work uncovered a number of weaknesses, such as 
reliance on inefficient pay and chase approaches instead of up-
front prevention of fraud and other improper payments. These 
early decisions also affected the reliability of SBA's 
financial reporting, and its independent financial auditor has 
repeatedly identified weaknesses and its ability to support the 
numbers on its balance sheet.
    Where SBA has addressed our recommendations, it has 
significantly strengthened oversight and management of fraud 
risks. For example, it put controls in place to prevent funding 
for potentially fraudulent or ineligible applications, and 
monitor forgiveness of certain loans. As a of fiscal year 2023, 
we estimated that taking these steps saved the government at 
least $12 billion.
    So, we think SBA should keep going. It should continue to 
build out data analytics for preventing and detecting fraud and 
fully addresses the weaknesses in its financial statements. 
With a robust system of internal controls and Fraud Risk 
Management, SBA will be better placed to support small 
businesses in future emergencies, and in normal operations 
while also ensuring that taxpayer dollars are going where they 
should.
    The second area I will highlight is SBA's disaster loan 
program, which offers low-interest loans to small businesses 
and households after disaster. For example, SBA made over $7 
billion in loans to those affected by hurricanes Harvey, Irma, 
and Maria in 2017.
    Our reviews of this program uncovered obstacles to those 
providing and obtaining disaster recovery assistance. We found 
that SBA struggled to operate effectively after the 2017 
hurricanes where the power was out, or the phone lines were 
down, and especially in rural areas. We also found issues with 
clear communication and an uneven playing field for accessing 
federal disaster assistance in general.
    So, SBA has made a start here. It has improved disaster-
specific action planning and started looking at its operating 
risks. But we would urge SBA to take further action. We 
recommended that SBA review its lending standards and see if it 
can reduce barriers while still managing its credit risk.
    We also think SBA should continue working with other 
federal agencies to level the playing field for access to 
disaster assistance. These steps can improve how communities 
recover in the future.
    The last area I will highlight cuts across multiple SBA 
activities. Our reviews of SBA's 8(a) program, its oversight of 
small business research programs, and its efforts to support 
veteran-owned small businesses all revealed that SBA wasn't 
providing required reports to Congress in a timely or complete 
manner. These reports contain key data elements describing 
program participation and funding amounts and various outcomes, 
and fully addressing our recommendations in this area would 
improve SBA's capacity to deliver reports on time, completely, 
and provide information needed for effective oversight for 
small business programs.
    So, this concludes my opening remarks. Thank you again for 
the opportunity to speak here today. And my colleague and I 
would be glad to take your questions.
    Chairman WILLIAMS. Thank you. And we will now move to the 
Member questions under the 5-minute rule we talked about. I 
recognize myself now for 5 minutes.
    The COVID-19 pandemic showed some serious weaknesses within 
the SBA which we have already heard. The agency's inspector 
general estimates there was over $200 billion in fraudulent 
pandemic dollars stolen by criminals. This is unacceptable and 
it is a high number, and I am proud of the creative solutions 
coming out of this Committee to get some of these funds 
returned to the taxpayers. However, I don't want everything we 
do to be backwards looking. If there is ever another time where 
the SBA needs to deliver funds quickly, I am extremely 
concerned that they have yet to institute the proper guardrails 
to prevent and detect fraud within these programs.
    So, the GAO has also highlighted some outstanding concerns 
on this issue. So, I am going to open the floor to either one 
of you, both of you: What is the single most important fraud 
control measure that the SBA could implement to fix the 
remaining vulnerabilities. Johana?
    Ms. AYERS. So thank you for that question. I think the key 
control that SBA does need to put in place is what you alluded 
to, and that is, focusing on prevention. So if I could ask for 
one thing for SBA to do, it is to end the reliance on self-
certification. And I will take a second to make a pitch for 
data analytics so that SBA can appropriately screen 
applications as they come in, flag those that look suspicious, 
and quickly take actions to resolve them. And if the fraudster 
does happen to receive money, have those analytics in place so 
that SBA can readily detect when fraud has occurred. But the 
number one thing would be to end self-certification.
    Chairman WILLIAMS. You want to add to that?
    Ms. LAFOUNTAIN. No, nothing to add, sir.
    Chairman WILLIAMS. Okay. All right.
    Ms. LAFOUNTAIN. Thank you.
    Chairman WILLIAMS. So, one of the high-risk recommendations 
has been identified as a major issue for the agency is their 
weakness in the audited financial statements. For any small 
business owner, complete and accurate financial statements are 
necessary to stay in business. They have to be able to track 
all the money coming in and out of their businesses. So can, 
again, either of you discuss in greater detail some of why this 
recommendation remains on the SBA's priority list and what the 
agency has yet to do to it.
    Ms. LAFOUNTAIN. So, this is a really important issue that 
you are raising. As you mentioned, to operate effectively and 
efficiently as possible, we need to understand the, you know, 
status of the balance sheet, what is happening in SBA. So, what 
SBA's financial auditors found were a number of material 
weaknesses related to the pandemic relief programs, that 
basically boiled down to a lack of documentation and being able 
to just support where the numbers on its balance sheet came 
from. There are a lot of details to dig into there but that is 
the main issue.
    Some driving factors that led to this situation were the, 
you know, the speed and the size and the newness of the 
programs, but what we see here is a real opportunity for SBA to 
address the weaknesses in its internal controls around these 
programs so that, you know, going forward, they will have a 
stronger financial management system.
    Chairman WILLIAMS. Just do what they are told, that always 
works.
    I have a little time left here, can either of you summarize 
a recent GAO report on the SBIR programs so this Committee can 
ensure it is receiving all the pertinent information on the 
program before it expires in a few years.
    Ms. LAFOUNTAIN. So, this is another important issue, the 
small business research programs. So, SBA's role in the Small 
Business Innovation Research is an oversight role, and kind of 
a central body for communicating and policymaking, and then 
also producing a report to Congress on various outcomes related 
to the Small Business Research Programs. Some of the challenges 
we have highlighted with those programs are staffing at SBA, 
and resource constraints, but also, there's a lot of variety in 
the federal agencies from whom SBA is trying to collect 
information. But we think there is some opportunities here for 
SBA to improve that process, to fully document, you know, a 
plan and some policies and procedures to improving the 
timeliness with which it can produce that information.
    Chairman WILLIAMS. Well, they require so much from the 
borrower. They probably need to do the same thing they require 
the borrower to do; fill the right paperwork out and fill all 
the blanks in and do what they are asked to do.
    I now recognize the Ranking Member for 5 minutes of 
questions.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman. Administrator 
Guzman has said that she takes GAO's recommendations seriously. 
In your view, is SBA cooperating with ongoing audits and 
working to implement the open recommendations in a timely 
manner?
    Ms. LAFOUNTAIN. So, there is a couple of indicators we can 
look at to shed some light on SBA's responsiveness and get a 
sense of how seriously they are taking GAO's recommendations. 
One is their 4-year implementation rate. In the past few years 
that has been high at 100 percent, I think for the past 3 
years. And then for a handful of years prior to that, it was 
mostly at or higher than the government average of about 77 
percent. So, they are on the high end of the distribution 
there.
    Ms. VELAZQUEZ. Thank you.
    Ms. Ayers, could you share your experience with the current 
administration, and then discuss the difficulties you face in 
obtaining PPP and EIDL data from the previous administration?
    Ms. AYERS. Yes, thank you for that question. I think I will 
answer it in a little bit reverse order. So throughout 2020, as 
SBA was designing and implementing the pandemic relief 
programs, we did, as you alluded to in your statement, 
encounter significant challenges and delays in receiving the 
data and documentation that we needed to help support 
congressional oversight of these programs. And those delays and 
challenges certainly hindered accountability and transparency 
in those programs.
    In 2021, we did start to receive large volumes of the data 
and documentation that we needed for oversight of those 
particular programs. And I think on the whole, we have 
continued to see cooperation and responsiveness from SBA 
officials at all levels in response to our request, not only on 
the pandemic relief programs, but across the range of programs 
that SBA is responsible for.
    Ms. VELAZQUEZ. Thank you, thank you.
    Ms. Ayers, in 2015 GAO developed a Fraud Risk Framework to 
help agencies manage their risk both in normal operations and 
in emergencies. In 2016, the Fraud Reduction and Data Analytics 
Act required the Office of Management and Budget to incorporate 
these leading practices into guidelines for agencies. What 
steps did the Trump administration's SBA take to implement 
these practices?
    Ms. AYERS. So unfortunately between 2015 when we released 
the Fraud Risk Framework and its leading practices, and 2020, 
at the start of the pandemic, SBA had not taken action to 
implement the various controls outlined in the Fraud Risk 
Framework for preventing, detecting and responding to fraud in 
a strategic manner. And as a result, when the pandemic began, 
SBA was not well-positioned to manage the heightened fraud risk 
that emerged.
    Ms. VELAZQUEZ. Would you say that if these practices were 
in place could some of that fraud have been prevented?
    Ms. AYERS. Yes.
    Ms. VELAZQUEZ. Okay. What steps has the Biden SBA under the 
leadership of Administrator Guzman taken to implement this 
recommendation?
    Ms. AYERS. SBA has taken a number of actions that are in 
alignment with the Fraud Risk Framework. For example, it has 
designated an entity to lead its antifraud efforts, the Fraud 
Risk Management Board. It has also begun conducting fraud risk 
assessments in alignment with leading practices. And it has 
also developed antifraud strategies for some of programs, and 
that can serve as a blueprint for going forward.
    Ms. VELAZQUEZ. Thank you. Are there areas where SBA can 
improve?
    Ms. AYERS. I certainly think there is always room for 
improvement. I think in the fraud risk management space, 
specifically what SBA has done to date does represent important 
steps forward. But SBA needs to build on those in terms of 
broadening across the range of programs that SBA is responsible 
for administering, and then ensuring that Fraud Risk Management 
culture is engrained throughout the agency. From not only the 
administrator, but to the lowest-level employee and also to the 
contractors and service providers that SBA works with.
    Ms. VELAZQUEZ. Thank you. In the fiscal year 2024 budget, 
President Biden recommended $47 million for the Office of 
Inspector General. Unfortunately, we have been operating under 
a continuing resolution that provides level funding. How does 
underfunding the inspector general hinder their ability to 
recover fraudulent money?
    Ms. AYERS. So I believe IG Ware has testified before this 
Committee on the importance of his office receiving full 
funding so that it can carry out the necessary investigations 
and audits, not only related to the pandemic relief programs 
and the fraud that occurred there, but across the range of SBA 
programs.
    Ms. VELAZQUEZ. Thank you. I yield back.
    Chairman WILLIAMS. Lady yields back.
    I now recognize Representative Crane from the great State 
of Arizona for 5 minutes.
    Mr. CRANE. Thank you, Mr. Chairman and thank you for 
holding this hearing today. So am I correct that there was 
about $200 billion worth of fraud that we have--that we have 
calculated with the PPP loans? Is that correct?
    Ms. AYERS. So the SBA inspector general has estimated that 
fraud in the PPP and COVID-19 EIDL programs was $200 billion, 
yes.
    Mr. CRANE. Okay. Are we going after any of that money? Is 
the SBA going after any of that trying to recuperate any of it?
    Ms. AYERS. So I will start off by saying the SBA OIG under 
Inspector Ware's direction has an aggressive effort to conduct 
investigations and refer cases for prosecution. SBA has also 
taken steps to review previously approved loans under the 
pandemic relief programs and to flag those that are potentially 
fraudulent and refer those to the SBA OIG for further 
investigation.
    Mr. CRANE. Ms. Ayers, you said that one of the things you'd 
recommend in a future crisis is prevention mechanisms. Is that 
correct?
    Ms. AYERS. Yes.
    Mr. CRANE. To make sure that vetting was done on the front 
end?
    Ms. AYERS. Yes.
    Mr. CRANE. Is that correct?
    Ms. AYERS. Yes.
    Mr. CRANE. Do you think that that is happening right now at 
the SBA?
    Ms. AYERS. So in terms of pandemic relief programs. 
Obviously at this point, the funds have been distributed and we 
did see numerous indicators early in the pandemic that the 
proper vetting was not being done. And as a result, fraudsters 
did get money that they should not have.
    Mr. CRANE. That is not the question I asked, ma'am.
    Ms. AYERS. In terms of the current programs----
    Mr. CRANE. Yeah, has anybody been fired, ma'am, to your 
knowledge?
    Ms. AYERS. Not to my knowledge, no.
    Mr. CRANE. So why would any of these prevention mechanisms 
be put in place if nobody's been held accountable?
    Ms. AYERS. We have seen, based on our discussions as well 
as information that SBA has provided to us, we do see several 
indications that preventative measures are being put in place 
and that SBA has an understanding that these measures do need 
to be in place, you know, not only looking back at the pandemic 
relief programs, but also looking towards, for example, the 
regular programs it has such as the 7(a) and the regular EIDL 
program. So they are recognizing the importance of having 
preventative controls put in place.
    Mr. CRANE. Okay. So you are saying that they are putting 
measures in place, but still, you acknowledge that nobody yet 
has been held accountable at SBA. Is that accurate?
    Ms. AYERS. I would say, again, to my knowledge, I am not 
aware of anyone being fired.
    Mr. CRANE. Do you think that is a problem, Ms. Ayers? I 
mean, we are talking about $200 billion, right?
    Ms. AYERS. Yes. I believe what was experienced at SBA was a 
systemic issue. As I discussed previously, there were not, 
across the agency, a range of mechanisms that had been put in 
place to manage the fraud risk. So it really very much was a 
systemic issue as opposed to the fault of one or two 
individuals.
    Mr. CRANE. Thank you. Is it true that SBA only utilizes 
about 10 percent of their office space? Either one of you.
    Ms. LAFOUNTAIN. I am not aware that we have looked at that.
    Mr. CRANE. Okay. All right, moving on.
    Can you repeat the issues you found with SBA's failure to 
support our veteran business community? I think that was you, 
Ms. LaFountain.
    Ms. LAFOUNTAIN. Thank you. So, this recent work identified 
two issues: One is that SBA is required by statute to give 
special consideration in its lending programs to veteran-owned 
small businesses.
    Mr. CRANE. Are they doing that, ma'am?
    Ms. LAFOUNTAIN. They pointed to some areas where they--
where veterans are benefiting from some of their lending 
programs, but they couldn't point to how SBA is giving them 
special consideration, no.
    Mr. CRANE. So by statute, they are required to do that and 
they are not doing that?
    Ms. LAFOUNTAIN. That's right.
    Mr. CRANE. Why do you think that is, ma'am? Do you think 
this current administrator doesn't care about veterans or 
statute? If you had to take a guess, why aren't they, by 
statute, doing what they are supposed to to help veteran small 
business owners?
    Ms. LAFOUNTAIN. That is an important question. When we had 
talked to them, they cited a lack of awareness. And so one 
thing that we would look SBA to do to remedy this situation is 
put policies and procedures in place so that doesn't happen in 
the future.
    Mr. CRANE. A lack of awareness?
    Ms. LAFOUNTAIN. Yes, sir.
    Mr. CRANE. I yield back.
    Chairman WILLIAMS. The gentleman yields back.
    I now recognize Representative Davids from the great State 
of Kansas for 5 minutes.
    Ms. DAVIDS. Thank you, Chairman Williams. And thank you to 
you and the Ranking Member both for holding this hearing today. 
Thank you to our witnesses from the Government Accountability 
Office. I definitely appreciate the work that you all do. I 
just want to touch on a couple of things here.
    In August of 2022, GAO published a report on Tribal 
economic development. And since coming to Congress, I have 
definitely been diligently working to improve access to capital 
and entrepreneurship opportunities in general for Native 
communities. And I, of course, am very excited and thrilled 
that we just passed out of the House my bill to improve the 
Office of Native American Affairs at the Small Business 
Administration. And actually, I got the chance to work with my 
colleague, Mr. Crane, on that bill. So with that in mind, I am 
curious if you could speak to the recommendation that you made 
regarding SBA and the analysis to improve their Tribal economic 
development assistance, and what progress you've seen made to 
date or additional issues that I need to be aware of?
    Ms. LAFOUNTAIN. I apologize, I do not know those details. 
So, we would be glad to connect with our experts and follow up 
with you on those topics.
    Ms. DAVIDS. Okay. Thank you. We will also follow up with 
probably some additional written questions to get into more 
specifics. We don't get a ton of time with 5 minutes here.
    So the second thing I was hoping to touch on is GAO's 
review of the disaster recovery activities that happen at--at 
various agencies and at SBA specifically. I know that your 
office recently released a report about the SBA disaster 
assistance in rural communities. And certainly in Kansas, we 
are absolutely facing a number of unique challenges. On the 
eastern side of the State, folks are often hit with severe 
storms and flooding that can have just a devastating impact on 
our entrepreneurs. And then on the western side of the State we 
are dealing with drought and, you know, that is threatening 
crop yields and this sort of thing, which we are seeing rising 
costs at grocery stores.
    So I am just curious if you have a chance to expand on your 
recommendations that you made to SBA regarding the disaster 
assistance outreach, and then the challenges that that program 
is facing with regard to the rural communities that they are 
trying to serve.
    Ms. LAFOUNTAIN. So, this is a really important issue. So 
one thing we observed in our work on the disaster loan program 
is that SBA doesn't have--doesn't fully have a grasp on some of 
its operating risks for doing business in areas after a 
disaster, like, physically, in areas after a disaster, 
especially in rural areas it can run into things like downed 
power lines or poor cell phone service that can just inhibit 
its ability to deliver the services that its providing or that 
it should be providing. So, one thing we have recommended is 
that they take a look at their operational risks and come up 
with plans for mitigating those risks, including in rural 
areas.
    Ms. DAVIDS. Did you want to add anything?
    All right, thank you so much. And we will follow up with a 
few written questions regarding a Tribal economic development 
activities. Thank you and I yield back.
    Chairman WILLIAMS. Yields back.
    I now recognize Representative Meuser from the great State 
of Pennsylvania for 5 minutes.
    Mr. MEUSER. Thank you very much, Mr. Chairman. I appreciate 
being here. Thank you to or witnesses very much.
    So I want to continue with the Chairman again speaking 
about earlier related to fraud issues, billions and billions 
from, as you well know EIDL and the PPP, and not assigning any 
blame, but we certainly want to avoid this in the future. So 
what is the GAO looking at? What have you determined? What have 
you assessed, and have you offered any--I apologize I haven't 
seen them--written ideas for solutions to keep this from 
happening again in the future?
    Ms. AYERS. Yes, thank you for that question. So we have a 
body of work going back to, you know, the early days of the 
pandemic where we made a number of recommendations to SBA to 
enhance controls related to the various pandemic relief 
programs. And many of those recommendations are tied to our 
Fraud Risk Framework that we issued in 2015 that outlines 
leading practices for managing fraud risk. And as I previously 
noted, prior to the pandemic, SBA had not been acting on those 
leading practices. I am very pleased that in recent years, SBA 
has started taking action to implement those leading practices. 
And going forward, as we think about future programs, SBA needs 
to continue implementing the leading practices from the Fraud 
Risk Framework so that it is better positioned to manage its 
fraud risk during normal times, and certainly during 
emergencies when risks are heightened.
    Mr. MEUSER. So I said I am not assigning blame, you are 
kind of assigning blame to the previous SBA. And if you look at 
the numbers, there was just as much fraud in the PPP and the 
EIDL from this administration as the previous administration. 
So what has been done? Back to my question. Okay, if you write 
a paper, that is wonderful. That is a wonderful bureaucratic 
action to take, was that followed up, was there any 
improvements actually done, such as new IT systems? New 
procedures? Bringing in people from the private sector? Credit 
card companies that are so much better at detecting and keeping 
fraud, because it's their money that they are losing? It is 
not, you know, the American taxpayer dollars which sometimes 
doesn't get the respect that it deserves. Okay, does the GAO 
actually do anything besides write reports?
    Ms. AYERS. So we have evaluated the actions that SBA did 
take to address fraud as it emerged during the pandemic, and we 
did find that the controls that were added such as data 
analytics, enhanced screening of applications as they came in, 
and then doing post award reviews did help prevent fraud and 
help more readily detect it.
    I do think it is fair to say based on our work as well as 
the work of the inspector general that while there was progress 
made, there were, at times, plans that SBA put into place that 
weren't always followed. For example, SBA, for a period of 
time, had not been running applications through Treasury's Do 
Not Pay system to flag people--applicants--with potential 
problems. SBA then began running applications through the Do 
Not Pay system. But in some cases, for reasons that are not 
necessarily clear to us or the IG they made decisions not to 
run all of the applications through that portal.
    Mr. MEUSER. Thank you. Could we see some of the ideas and 
the plan that you have to improve? Do you have that in outline 
form or, in some way, an action plan for minimizing fraud?
    Ms. AYERS. So we have outlined the steps that we think SBA 
does need to take and that is outlined in the Fraud Risk 
Framework. It is up to SBA to develop that action plan to see 
how it will carry it out. And we have seen action plans that 
SBA has developed related to Fraud Risk Management and we will 
continue to follow up with them to see the status of the 
implementation, to make sure that it isn't just a plan on the 
shelf gathering dust, but it is resulting in real change.
    Mr. MEUSER. That is great. I yield back, Mr. Chairman.
    Chairman WILLIAMS. The gentleman yields back. And we are 
going to kind of go into a little mini second round here, we 
haven't asked all of our questions.
    This Committee has been investigating the SBA's Community 
Navigator's pilot program. Now this program essentially is a 
duplicative of existing SBA programs such as Small Business 
Development Centers. However, it is much less effective. This 
leads to a waste of taxpayers' dollars. So, can you all discuss 
how the GAO is looking at this program and what you are 
finding?
    Ms. LAFOUNTAIN. So, these are important issues that you are 
raising and we do have ongoing work looking at the Community 
Navigator program. Because it is ongoing work, we don't have 
any findings to share at this time, but we would be glad to 
when that work is completed.
    Chairman WILLIAMS. When do you think it will be completed?
    Ms. LAFOUNTAIN. I think our goal is to complete it later 
this fall but let me double-check that detail.
    Chairman WILLIAMS. Yeah, we need to follow through so we 
can see what you have found, okay?
    All right. Next go back to Congressman Meuser for his 
second round of questions----
    Mr. MEUSER. Thank you again, Mr. Chairman. Thanks again for 
being with us.
    So during a GAO review, agencies seem to, don't know for 
sure, appease the GAO recommendation, and turn around and 
revert back to the old ways of implementing the recommendations 
in an inadequate manner. It is imperative that, in this case, 
the SBA, commits to addressing the GAO's concerns in a lasting 
and effective way. However, audits of internal SBA controls and 
processes paint a picture that the agency struggles with 
developing such adequate processes that protect taxpayer 
dollars. With that in mind, how does the GAO look at the long-
term effectiveness of the SBA's actions in closing out these 
recommendations, and how can that improve?
    Ms. LAFOUNTAIN. So, this is another important issue that 
you are raising. We do have a robust recommendation follow-up 
procedure. As agencies are trying to address our 
recommendations, we are applying the same scrutiny and 
evidentiary standards and professional skepticism that we apply 
when we write the original reports. After a recommendation has 
been closed, then we rely on working with our congressional 
partners to see if additional follow up needs to happen, and we 
need to open another audit.
    Mr. MEUSER. Okay. You don't have an easy job, I can see 
that, but it can also be an extremely important job that can 
really make a difference.
    Let me ask you if I can about the Community Navigator. Is 
this a point of focus for the GAO? Are you aware of some of the 
discrepancies and problems that some small businesses have 
brought to our attention regarding not being part of a targeted 
group, and therefore not receiving some of the benefits or 
access? Is this something that your--something you are looking 
at?
    Ms. LAFOUNTAIN. So, we do have ongoing work looking at the 
Community Navigator program. And like I said, because it is 
ongoing work, we don't have findings yet to share with you, but 
you are raising some important issues and we--you know, we 
would be glad to work with the Committee to look into them 
further.
    Mr. MEUSER. Great, yeah. My understanding is it is very 
important and it probably doesn't need a lot to necessarily 
improve in the manner it was designed to perform.
    We--I will just ask, is the SBA prepared, in your view, the 
next major national disaster in dealing with the various 
responsibilities they have in such a situation?
    Ms. AYERS. I certainly think it is fair to say that they 
are better prepared today than they were in 2020. But I do 
think there is more action that they can and should take. This 
includes implementing our open recommendations related to Fraud 
Risk Management generally, and then also the recommendations we 
have related to the disaster programs, as well as 
recommendations from the inspector general. So there are 
actions that they should continually be taking to improve and 
be better prepared in this area.
    Mr. MEUSER. Okay. Do you have a team at the GAO that 
focuses on, or a couple of people anyway, that focuses on the 
SBA exclusively?
    Ms. LAFOUNTAIN. So, the Financial Markets and Community 
Investment Team where I am currently situated, we do a lot of 
reviews of various SBA programs. But other teams across the 
agency have also looked at what SBA is doing, and yeah, in 
various aspects of its operations.
    Mr. MEUSER. Can you point to one area that you got 
involved, showed them how it could be improved and it actually 
did get improved?
    Ms. LAFOUNTAIN. An area that springs to mind is the 
oversight of the PPP and EIDL programs. We had some 
recommendations for them to develop and implement an oversight 
plan, and they did that.
    Mr. MEUSER. Okay. Thank you. I yield back, Mr. Chairman.
    Chairman WILLIAMS. The gentleman yields back.
    I now recognize Representative Scholten from the great 
State of Michigan for 5 minutes.
    Ms. SCHOLTEN. Thank you so much, Mr. Chair. Thank you to 
our witnesses for being here today. Though our numbers might be 
a little bit sparse, your testimony is critical for the work 
that we do every single day.
    One positive trend I observed is that the SBA's 4-year 
implementation rate for GAO recommendations since 2021 is 100 
percent. It is no surprise that the SBA met their goals under 
the leadership of Administrator Guzman who I have had the 
pleasure of hosting twice now in our district, as well as in 
conjunction with a visit by Vice President Harris just a couple 
weeks ago. This question is for both Dr. LaFountain and Ms. 
Ayers: With Administrator Guzman coming to testify in the next 
couple of weeks, what component of what we have discussed here 
today would you like us to share with the Administrator?
    Ms. LAFOUNTAIN. I can start. I think what is really 
important is for SBA to keep going where it has made 
significant progress and addressing our recommendations related 
to the pandemic relief programs, so there is more work to be 
done, and we would like to see them move forward there. And 
also, move forward with the work they are doing on the disaster 
loan program, and leveling out the playing field for disaster 
recovery assistance.
    Ms. AYERS. And I would simply add to that that we hope and 
expect that SBA continues to broaden and deepen its Fraud Risk 
Management efforts across the agency implementing the lessons 
learned and the experiences that it had during the pandemic so 
that it continues to be better positioned for the next disaster 
as well as its everyday operations.
    Ms. SCHOLTEN. So continuing to keep going on the programs 
that are successful and that are delivering, but also 
broadening and deepening areas of need. What elements do you 
think are essential from us as Members of Congress to ensure 
that those things can happen?
    Ms. AYERS. Well, I think events like today's hearing and 
the continued oversight. And the one aspect I would mention is 
that stressing to agencies like SBA that it is not just enough 
to deliver the funds quickly. I know at various times, that is 
the appropriate focus, but it also needs to be stressed that 
when you are delivering funds quickly, it is not an either/or. 
You can manage fraud risk; you can protect taxpayer interest 
while also delivering funds quickly. And that is the message 
that I believe SBA is starting to understand in a way it did 
not before. But I think that pressure and that message needs to 
stay on SBA, as well as any number of other federal agencies.
    Ms. SCHOLTEN. Yeah. Thank you. Anything to add on that?
    Ms. LAFOUNTAIN. I would just add that there are some themes 
in our recommendations that we highlighted today. And so not 
just focusing on addressing a single recommendation for a 
single program. But if there are lessons learned that can have 
positive spillovers across the agency, that seems like a great 
opportunity.
    Ms. SCHOLTEN. Yeah. My second question, the SBA's delivered 
over $1 trillion to small businesses through economic relief 
programs during the pandemic, as we have talked about. Part of 
this Committee's role is to exercise oversight. You referenced 
that in your response, Ms. Ayers, of the SBA and ensuring the 
agency is being a good steward of those taxpayers' hard-earned 
dollars. If there were to be another crisis, like the pandemic 
in 2020, is the SBA better prepared to handle it today than it 
was 4 years ago? And is it in any better position to combat 
fraud?
    Ms. AYERS. I would say yes to both questions.
    Ms. SCHOLTEN. What specifically do you think puts it in 
that position?
    Ms. AYERS. So SBA has, in the last couple of years, taken 
actions that implement controls for better managing fraud risk 
to prevent, detect, and respond to fraud in a strategic way. It 
had been either not paying sufficient attention to fraud or 
handling it in an ad hoc manner. It is now better positioned to 
do so strategically and that is, again, where I believe it does 
need to broaden and deepen those efforts across the range of 
programs. It may be a completely different program that is 
called on next time to provide assistance and relief. And that 
program needs to build on what SBA has done to date and not 
start over, as we saw PPP and COVID EIDL having to do.
    Ms. SCHOLTEN. Yeah, that is very helpful. Thank you very 
much. I yield back.
    Chairman WILLIAMS. Lady yields back.
    And I now recognize Representative Maloy from the great 
State of Utah for 5 minutes.
    Ms. MALOY. Thank you, Mr. Chairman. Thank you both for 
being here. One of the nice things about being a really new 
Member of Congress is I get to go last on these things and back 
clean up. So I get to ask the fun questions.
    I read through the report and I read through the materials 
for the hearing and some of the things that GAO's finding in 
your report are very upsetting. And I know that you are part of 
the executive branch and you have a responsibility for making 
sure that the SBA is accountable, but we as the legislative 
branch also have a responsibility to hold the executive branch 
accountable and clean up waste, fraud, and abuse. And it looks 
like you are working with us to do that, and I appreciate that. 
But one of the things I noticed is that these SBA programs are 
failing to help some of the groups they are supposed to help, 
like Veterans, Women Owned Small Businesses, or WOSBs, and 
rural areas in the wake of disasters.
    Rep. Scholten, who just asked questions, and I have a bill 
to try to address some of the loopholes in the WOSB program and 
make it cleaner, more accountable and more transparent. I want 
more accountability, you want more accountability. What have 
you not had a chance to talk about today that this Committee, 
or Congress can do, to help make SBA more accountable, more 
transparent and make sure the dollars we are spending are 
actually helping small businesses in America?
    Ms. LAFOUNTAIN. Well, a thing that springs to mind, and 
thank you for the question, is having a hearing like this where 
we get to talk about how the issues that we are finding at SBA, 
how they have an effect, again where they have made progress, 
but where they really need to keep going.
    Ms. MALOY. So we have your report, is there anything other 
than your report that we can use to help make sure that 
happens?
    Ms. LAFOUNTAIN. It is a great question. In addition to the 
report we have provided, we have--we would welcome or actually 
we would welcome talking to you all about what your interests 
and priorities are and seeing where we can do work on those 
topics. Actually, that would probably be my answer to that 
question. Thank you.
    Ms. MALOY. Okay. Thank you. I am going to have my staff 
reach out, because I would like to work with you on how we can 
make these programs work better for veterans, women-owned small 
businesses, and rural communities. Those are really important 
constituencies for me. Ms. Ayers?
    Ms. AYERS. So I would echo what my colleague said. And, 
while the focus of my work has largely been on fraud and Fraud 
Risk Management, the programs you mentioned are ones that, you 
know, we can talk to you about as well through that lens. And 
so, we are here to support you as a legislative body, and in 
fact, I will mention that we actually are part of the 
legislative branch ourselves.
    Ms. MALOY. Thank you for that correction.
    Ms. AYERS. And we are happy to support you and your 
colleagues in your oversight role in a nonpartisan, non-
ideological, fact-based way. And so, yes, we have the reports 
that we issue, but we also have a wealth of knowledge and 
expertise that goes behind that. And we are always happy to 
meet with you or your staff to discuss issues of interest.
    Ms. MALOY. Okay, I am going to have any staff reach out to 
you as well because I am also interested in reducing fraud. I 
mean, that is something that is nonpartisan that we all want to 
get under control so work with us on that, let's come up with 
some ideas to close these loopholes and accountability.
    With that, Mr. Chairman, I yield back the remainder of my 
time.
    Chairman WILLIAMS. Yields back.
    I now recognize Representative Thanedar from Michigan, the 
great State of Michigan for 5 minutes.
    Mr. THANEDAR. I think I am going to pass.
    Chairman WILLIAMS. Okay. I next recognize Representative 
Alford from the great State of Missouri for 5 minutes.
    Mr. ALFORD. Thank you, Mr. Chair, I appreciate it. Thank 
you for our witnesses being here today. This is a very 
important meeting. You know, one of the core duties of 
Congress, I don't have to tell you, is to conduct oversight of 
the executive branch. We have to make sure that the agencies 
are using their budget sufficiently to complete their duties 
for the American people. A key tool of Congress center 
oversight of the executive branch is the Government 
Accountability Office, an independent nonpartisan government 
agency with the legislative branch.
    Right now, the SBA has a staggering 41 open recommendations 
from the GAO leading to the conclusion on the high-risk list. 
One glaring recommendation the SBA has not adopted is to meet 
reporting requirements in a timely manner. And right now, many 
of the SBA's Veterans' business outreach centers are not 
submitting their quarterly or yearly reports, and the SBA does 
not even have a process to make sure it happens.
    Another major problem is the SBA's minimal return-to-work 
policy. When we tried to visit the Small Business 
Administration just down the street here to conduct 
congressional oversight, our request was repeatedly denied. 
Sitting Members of Congress were not allowed in the building. 
This is why we introduced the Congressional Access to 
Bureaucratic Office, or the CABO Act. The CABO Act would 
require any agency headquarters to allow sitting Members of 
Congress and their staff in their buildings.
    As a result of introducing the CABO Act, we were finally 
allowed in, and led a delegation with Chairman Williams to the 
SBA and met with the Administrator Guzman. We were later told, 
however, that the administration had condensed the staff to two 
floors that we were allowed on to make it appear that the 
workplaces were active, and it still looked meager. Rows and 
rows of empty desks. Look, we need bureaucrats to get back to 
work. It is time, COVID is over. Let's get back to work for the 
American people.
    Dr. LaFountain, how often do you work from home or phone it 
in?
    Ms. LAFOUNTAIN. I make sure I am in the office----
    Mr. ALFORD. Why is that?
    Ms. LAFOUNTAIN.--as needed.
    Mr. ALFORD. Why do you feel a need to be in the office?
    Ms. LAFOUNTAIN. So, this question about telework and work 
from home is actually--it is a really important issue. There is 
a lot of open questions about the effect of telework.
    Mr. ALFORD. Just answer the question, why do you feel a 
need to be in the office?
    Ms. LAFOUNTAIN. I--for some of my work tasks it is good to 
be in person----
    Mr. ALFORD. Why?
    Ms. LAFOUNTAIN.--to interact with my colleagues in person.
    Mr. ALFORD. To interact, to build camaraderie, to get 
things done. Ms. Ayers, how about you?
    Ms. AYERS. Yes, I similarly am in the office as needed for 
in-person meetings. And with my colleagues to help build 
culture and camaraderie.
    Mr. ALFORD. Culture and camaraderie. You know the federal 
government operates more than half a billion square feet of 
offices space. It has cost taxpayers $7 billion to operate. 
According to a September 2023 study, 17 of the 24 federal 
agencies uses an estimated average of 25 percent or less of 
their capacity. The SBA is estimated at 10 percent of their 
office space. This is a waste of taxpayer money. Down at the 
Department of Ag, 2 million square feet, they won't let us in 
either. We are getting in there. They have about 11 percent of 
the people showing up for work.
    This is my schedule today. I am running ragged but I'm here 
working for the American people earning my pay, 16 appointments 
I have today. I can't do this from home. Why are people in the 
federal government not at their desk working for the American 
people? Doctor.
    Ms. LAFOUNTAIN. So, we have looked at the effects of 
telework and work-from-home policies in a recent report. And 
its--the effects of telework are really uncertain on 
productivity.
    Mr. ALFORD. Well, if it is uncertain, then let's go with 
what we know works, get them back to the office. Let's start 
this community of workers together so we can have this 
camaraderie and collective thought and practice and get 
something done. Why are we waiting on studies to figure out if 
this works as continued telehealth--telework?
    Ms. LAFOUNTAIN. You are raising some really important and 
timely issues, and we would be glad to work with you to find a 
way to look into this further.
    Mr. ALFORD. Well, thank you. I know that is a bit of a 
rant. But I am really upset that we even had to file this act 
that sitting Members of Congress cannot go down to the offices 
that we have oversight. And then when we get down there, it is 
staged to make it look like an act of workforce is down there. 
I look forward to Administrator Guzman coming here and 
answering some of these questions. Thank you for being here. I 
appreciate your service to our nation. With that, I yield back, 
Mr. Chairman.
    Chairman WILLIAMS. The gentleman yields back. I now 
recognize Representative Thanedar from the great State of 
Michigan for 5 minutes.
    Mr. THANEDAR. Thank you, Chairman. I appreciate your 
consideration here. I appreciate both your organization and how 
bipartisan it is. And in this partisan environment, it is 
refreshing to see that. You know, I am a small business owner. 
I have owned small businesses for 25 years, and I have had some 
really good luck with SBA, able to get things like 504 loan 
programs so that can help my business succeed.
    I also had some frustrations with the red tape and the 
paperwork and getting things approved. What immediate steps can 
SBA take, in your mind? Maybe give me two, three things that 
they could do to improve its effectiveness and ability to serve 
the business community?
    Ms. LAFOUNTAIN. So, one perspective on this based on our 
recent work is that SBA could improve its capacity to turn in 
some of its required reports in a timely manner. There are some 
themes there where SBA has, for a variety of reasons, faced 
some obstacles providing outcome information about its 
programs. And we think that if it addresses our recommendations 
in this area, it would provide more information to Congress and 
others who want to effectively oversee how its programs are 
performing.
    Mr. THANEDAR. Thank you. And, particularly, I represent 
Detroit, Michigan, a 78 percent African American city, we have 
some amazing entrepreneurs very, very successful. But many of 
my small businesses are struggling. They are struggling. They 
don't have the time to go through the paperwork and be able to 
access SBA services. Often, they are unaware of what is 
available. Now, SBA has indicated they want to work with your 
organization. But are there any else where there is 
disagreement between your organization and SBA, and if so, what 
are those?
    Ms. LAFOUNTAIN. So, SBA has generally agreed with the 
recommendations that we have made, particularly, the ones we 
have highlighted today. Yeah, there may be a detail here and 
there that they push back. However, we have found that they are 
willing to take steps to address our recommendations and are 
doing that. Yeah.
    Mr. THANEDAR. Any disagreement? Is there total agreement, 
100 percent, or can you identify any areas where you are 
struggling?
    Ms. LAFOUNTAIN. I think what I would say here is that some 
of the things we have asked SBA to do are not easy. And the 
recommendations will take time to address, and may need some 
sustained attention. So as an example, we have asked SBA to 
work with other agencies on improving access to federal 
disaster assistance. And that, you know, looking to see, is the 
playing field uneven? Do you have the right data and analytics 
to look into this issue? If you find a gap, do you have the 
right structures in place to address it? And that is a big 
thing to do. It is also an extremely important thing to do. So, 
we understand that it takes time to address the issues we have 
raised, but we see them--we do see them trying.
    Mr. THANEDAR. All right. Thank you. And in terms of--under 
the Biden administration, I see there is a lot more--Latino 
ownership has increased. African American ownership of small 
businesses have increased. We have seen more women-owned 
businesses flourishing. But we still need to do more to help, 
especially the Black and Brown community in terms of, you know, 
being able to--their ability to achieve the American Dream. 
What specific steps would you recommend to SBA to help improve 
access for the minority businessowners?
    Ms. LAFOUNTAIN. So here I will just say that you are 
raising some really important questions, and we would love an 
opportunity to work with you and the Committee to look into 
them further.
    Mr. THANEDAR. All right. Thank you, and my time is up.
    Chairman WILLIAMS. The gentleman yields back. And I would 
like to thank our witnesses today for your testimony and for 
appearing before us.
    Without objection, the Members have five legislative days 
to submit additional materials and written questions for the 
witnesses to the Chair, which will be forwarded to the 
witnesses. I ask the witnesses to please respond promptly. And 
if there is no further business, without objection, the 
Committee is adjourned.
    [Whereupon, at 11:14 a.m., the Committee was adjourned.]
                           
                           
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