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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

December 2013: 

State Small Business Credit Initiative: 

Opportunities Exist to Enhance Performance Measurement and Evaluation: 

GAO-14-97: 

GAO Highlights: 

Highlights of GAO-14-97, a report to congressional committees. 

Why GAO Did This Study: 

The Small Business Jobs Act of 2010 created SSBCI within Treasury. The
program provides direct funding to participants for programs that expand
access to capital for small businesses. The act mandates that GAO 
conduct an annual audit of the program. GAO’s first two reports 
examined Treasury’s implementation of SSBCI and its processes for 
monitoring compliance and procedures for evaluating and communicating 
program outcomes. This third report examines, among other things, the 
extent to which (1) participants have used their SSBCI allocations and 
faced challenges in using the funds, and (2) Treasury has used 
performance measures and program evaluation to manage SSBCI. GAO 
reviewed Treasury’s SSBCI policies and procedures and participants’ 
data on fund usage and interviewed officials from Treasury, eight 
states, and one municipality. GAO selected the states and municipality 
based on usage of SSBCI funds, the number of programs they 
implemented, and geographic dispersion, among other things. 

What GAO Found: 

As of June 30, 2013, State Small Business Credit Initiative (SSBCI)
participants-—states, territories, and municipalities—-had used $549 
million of the $1.5 billion the Department of the Treasury (Treasury) 
allocated to them, nearly four times the amount used as of June 30, 
2012. However, the rates at which participants have used funds 
continue to vary, as shown below. While initial challenges generally 
have been addressed, others remain. Participants’ challenges with 
using funds at the start of the program resulted from some program 
policies not being finalized and low demand for some program types,
among other things. Treasury and participants have since addressed 
many of these issues, but according to agency officials and others, 
participants will likely continue to face some challenges in using 
SSBCI funds. For example, some large lenders have been reluctant to 
partner with SSBCI participants because the variation in participants’ 
programs makes it difficult for lenders to implement the program on a 
national basis, which has limited the program’s reach into the small
business lending market. 

Figure: SSBCI Participants’ (States, Territories, and Municipalities) 
Fund Usage, as of June 30, 2013: 

[Refer to PDF for image: vertical bar graph] 

Percentage of SSBCI allocation used: more than 50%; 
Number of participants: 18. 

Percentage of SSBCI allocation used: more than 25% to less than or 
equal to 50%; 
Number of participants: 14. 

Percentage of SSBCI allocation used: more than 10% to less than or 
equal to 25%; 
Number of participants: 19. 

Percentage of SSBCI allocation used: 0 to less than or equal to 1%; 
Number of participants: 6. 

Source: GAO analysis of Treasury data. 

[End of figure] 

Treasury uses performance measures to manage SSBCI. For example, 
Treasury uses performance measures to adjust staff allocations and to 
identify participants that may need additional assistance. Although 
Treasury has set targets for program administration measures (for 
example, how long it takes the agency to approve participants’ 
requests to modify their programs), it has not set targets for 
performance (for example, the amount of funds used over time). Federal 
internal control standards and performance management leading 
practices encourage agencies to set targets, where appropriate. 
Targets could help Treasury identify program areas needing 
improvement. Treasury has also recently started to determine how it 
will evaluate SSBCI’s effectiveness and plans to form a working group 
of participants to help design the format of the evaluation. GAO 
guidance on designing evaluations encourages agencies to obtain input 
from external stakeholders, including Congress, that are expected to 
be interested in the results. By seeking input from external 
stakeholders early in the design phase, Treasury can help ensure that 
it designs an evaluation that is useful for decision makers and other 
agencies working to promote small business credit access. 

What GAO Recommends: 

GAO recommends that Treasury set targets for selected measures to track
SSBCI’s performance and seek input from Congress and other federal
agencies on what information will be useful in assessing SSBCI’s
effectiveness as Treasury designs its program evaluation. Treasury 
agreed with both of these recommendations. 

View GAO-14-97. For more information, contact Daniel Garcia-Diaz at 
(202) 512-8678 or garciadiazd@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

SSBCI Participants Have Used Funds at Varying Rates and a Number of 
Challenges Have Been Addressed: 

Treasury and Stakeholders Undertake Various Outreach Activities to 
Promote Use of SSBCI: 

Treasury's Efforts to Measure and Evaluate Performance Could Be 
Enhanced: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: SSBCI Participants' Allocation Amount and Fund Usage, as 
of June 30, 2013: 

Appendix III: Comments from the Department of the Treasury: 

Appendix IV: GAO Contacts and Staff Acknowledgment: 

Tables: 

Table 1: Treasury's SSBCI Performance Measures and Targets: 

Table 2: Program Performance Measure Status, as of December 31, 2012: 

Table 3: SSBCI Participants' Allocation Amounts and Usage of Allocated 
SSBCI Funds, June 30, 2013: 

Figures: 

Figure 1: SSBCI Fund Usage, June 30, 2012, to June 30, 2013: 

Figure 2: SSBCI Participants' Usage of Allocated SSBCI Funds, as of 
June 30, 2013: 

Figure 3: SSBCI Fund Usage and Number of SSBCI Programs by Program 
Type, as of June 30, 2013: 

Figure 4: Number of New and Existing SSBCI Programs by Program Type, 
as of June 30, 2013: 

Figure 5: SSBCI Allocation Amount and Percent of Allocation Used, as 
of June 30, 2013: 

Abbreviations: 

CAP: capital access programs: 

CDFI: community development financial institutions: 

Ex-Im: U.S. Export-Import Bank: 

FDIC: Federal Deposit Insurance Corporation: 

NAFCU: National Association of Federal Credit Unions: 

OCC: Office of the Comptroller of the Currency: 

OCSP: other credit support programs: 

OIG: Office of the Inspector General: 

SBA: Small Business Administration: 

SSBCI: State Small Business Credit Initiative: 

USDA: U.S. Department of Agriculture: 

[End of section] 

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548: 

 

December 18, 2013: 

Congressional Committees: 

Congress enacted the Small Business Jobs Act of 2010, which created 
the $1.5 billion State Small Business Credit Initiative (SSBCI) 
program to address difficulties small businesses faced in accessing 
credit due to disruptions of the credit markets in 2008 and 2009. 
[Footnote 1] The act was intended to address concerns that small 
businesses might not be able to access enough capital to enable them 
to spur job creation during the nation's ongoing economic recovery. 
SSBCI, which is administered by the Department of the Treasury 
(Treasury), is designed to create or strengthen state programs that 
support private financing to small businesses and small manufacturers 
that, according to Treasury, are not obtaining the loans or 
investments they need to expand and to create jobs. SSBCI received a 
one-time appropriation and is designed to generate up to $15 billion 
in lending to small businesses. SSBCI participants--states, 
territories, municipalities, and the District of Columbia--are to use 
the funds for programs that leverage private lending to help finance 
small businesses and manufacturers that are creditworthy but have been 
unable to secure the loans needed to expand and to create jobs. 
[Footnote 2] 

The act mandates that we conduct an annual audit of the SSBCI program. 
[Footnote 3] In our first and second reports, we reviewed the 
implementation of SSBCI and made recommendations to improve the 
management oversight of the program.[Footnote 4] This third report 
examines the extent to which (1) SSBCI participants have used their 
SSBCI allocations and faced challenges in using the funds, (2) 
Treasury and program stakeholders have used outreach activities to 
promote use of the program and assessed the success of these efforts, 
and (3) Treasury has used performance measures and program evaluation 
to manage SSBCI. 

To assess the extent to which SSBCI participants have used their SSBCI 
allocations, we analyzed program data, as of June 30, 2013, on fund 
usage, allocation amounts, disbursement requests, and program types, 
as well as whether participants developed new programs to participate 
in SSBCI or expanded existing programs with SSBCI funds. We determined 
that the data were sufficiently reliable for the purposes of 
describing these factors. To examine the extent to which SSBCI 
participants faced challenges in using SSBCI funds, we reviewed 
relevant reports from Treasury's Office of the Inspector General 
(OIG), our 2011 and 2012 reports on SSBCI, and Treasury's policies and 
procedures.[Footnote 5] We also interviewed officials from Treasury; 
nine SSBCI participants (Arizona; Iowa; Maryland; Missouri; Montana; 
New York; City of Carrington, North Dakota; Vermont; and Virginia); 
and representatives from trade associations representing the lending 
and venture capital communities. Factors we used for selecting the 
SSBCI participants included their percentage of funds used, allocation 
amounts, number of programs implemented, and geographic dispersion. 
Appendix I contains detailed information on the process we used to 
select participants. 

To examine the extent to which Treasury and program stakeholders, 
including SSBCI participants, federal banking regulators, and trade 
associations, have used outreach activities to promote use of the 
program and assessed the success of these efforts, we interviewed 
Treasury officials and representatives of stakeholder groups and 
reviewed materials pertinent to SSBCI outreach. Specifically, we 
interviewed officials from Treasury; the nine SSBCI participants 
identified above; the federal banking regulators: Board of Governors 
of the Federal Reserve System (Federal Reserve), Federal Deposit 
Insurance Corporation (FDIC), and Office of the Comptroller of the 
Currency (OCC); and representatives from lending and venture capital 
trade associations to learn about outreach activities they have 
conducted for SSBCI and to obtain relevant materials and 
documentation. We reviewed Treasury guidance on SSBCI outreach, 
including marketing best practices for three SSBCI program types and 
Treasury budget documents. We also reviewed SSBCI outreach materials 
developed by participants, banking regulators, and trade associations 
and all participants' SSBCI websites to understand how they are 
providing information about SSBCI to interested parties.[Footnote 6] 

To assess the extent to which Treasury has used performance measures 
and program evaluation to manage SSBCI, we reviewed performance 
measures and targets Treasury has set for SSBCI and a summary report 
on performance information Treasury developed from participants' 2012 
annual reports. We also interviewed Treasury officials on their 
actions to manage the SSBCI program using performance measures. We 
identified relevant criteria in the Small Business Jobs Act of 2010, 
the federal internal control standards, and leading practices for 
federal agencies' performance management.[Footnote 7] 

We conducted this performance audit from May 2013 to December 2013 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

SSBCI provides direct support to participants for use in programs 
designed to increase access to credit for small businesses. Using a 
formula contained in the Small Business Jobs Act of 2010, Treasury 
calculated the amount of SSBCI funding for which each of the 50 
states, as well as the District of Columbia, the Commonwealth of 
Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, 
American Samoa, and the United States Virgin Islands, were eligible to 
apply. This formula takes into account a state's job losses in 
proportion to the aggregate job losses of all states. In addition to 
states, the act granted permission to municipalities to apply directly 
for funding under SSBCI in the event that their state did not apply 
for funding. Municipalities in Alaska, North Dakota, and Wyoming used 
this option.[Footnote 8] Participants are expected to use their SSBCI 
funds to leverage private financing and investment that is at least 10 
times the amount of their SSBCI allocation (a leverage ratio of 10-to-
1) by December 31, 2016. Forty-seven states; the District of Columbia; 
the Commonwealth of Puerto Rico; the Commonwealth of the Northern 
Mariana Islands; Guam; American Samoa; the United States Virgin 
Islands; Anchorage, Alaska; Carrington, North Dakota; Mandan, North 
Dakota; and Laramie, Wyoming, currently participate in the program. 

The act allowed Treasury to provide SSBCI funding for two program 
categories: capital access programs (CAP) and other credit support 
programs (OCSP). For both CAPs and OCSPs, the act requires that 
lenders have a meaningful amount of their own capital at risk. Loan 
terms, such as interest and collateral, are typically negotiated 
between the lender and the borrower, although in some cases loan terms 
are subject to SSBCI participant approval and, in many cases, the 
SSBCI participant and lender will discuss and negotiate loan terms and 
guarantee options prior to reaching agreement to approve the loan and 
issue a guarantee. 

A CAP is a loan portfolio insurance program wherein the borrower and 
lender, such as a small business owner and a bank, contribute to a 
reserve fund held by the lender. Under a CAP, when a participating 
lender originates a loan, the lender and borrower combine to 
contribute an amount equal to a percentage of the loan to a loan 
reserve fund, which is held by the lender. Under SSBCI, the 
contribution must be from 2 percent to 7 percent of the amount 
borrowed. Typically, the contribution ranges from 3 percent to 4 
percent. The SSBCI participant then matches the combined contribution 
and sends that amount to the lender, which deposits the funds into the 
lender-held reserve fund. Under SSBCI, approved CAPs are eligible to 
receive federal contributions to the reserve funds held by each 
participating financial institution in an amount equal to the total 
amount of the contributions paid by the borrower and the lender on a 
loan-by-loan basis. 

In addition, the following OCSPs are examples of types of programs 
eligible to receive funding under the act: 

* Collateral support programs. A collateral support program is 
designed to enable financing that might otherwise be unavailable due 
to a collateral shortfall. It provides pledged cash collateral to 
lenders to enhance the collateral coverage of individual loans. The 
SSBCI participant and lender negotiate the amount of cash collateral 
to be pledged by the participant. 

* Loan participation programs. SSBCI participants may structure a loan 
participation program in two ways: (1) through purchase transactions, 
also known as purchase participations, in which the SSBCI participant 
purchases a portion of a loan originated by a lender, or (2) by 
participating in a loan as a co-lender, where a lender originates a 
senior loan and the SSBCI participant originates a second loan to the 
same borrower that is usually subordinate to the lender's senior loan 
should a default occur. SSBCI loan participation programs encourage 
lending to small businesses because the lender is able to reduce its 
potential loss by sharing its exposure to loan losses with the SSBCI 
participant. 

* Loan guarantee programs. These programs enable small businesses to 
obtain a term loan or line of credit by providing the lender with the 
necessary security in the form of a partial guarantee. In most cases, 
the SSBCI participant sets aside funds in a dedicated reserve or 
account to collateralize the guarantee of a specified percentage of 
each approved loan. The guarantee percentage is determined by the 
participants and lenders but, under SSBCI, may not exceed 80 percent 
of loan losses. 

* Venture capital programs. These programs provide investment capital 
to create and grow start-ups and early-stage businesses, often in one 
of two forms: (1) a SSBCI participant-run venture capital fund (which 
may include other private investors) that invests directly in 
businesses, or (2) a fund of funds, which is a fund that invests in 
other venture capital funds that in turn invest in individual 
businesses. 

* Direct loan programs. Although Treasury does not consider these 
programs to be a separate SSBCI program type, it acknowledges that 
some participants may identify programs that they plan to support with 
SSBCI funds as direct loan programs. The programs that some SSBCI 
participants label as direct loan programs are viewed by Treasury as 
co-lending programs categorized as loan participation programs, which 
have lending structures that are allowable under the statute. 

OCSPs approved to receive SSBCI funds are required to target small 
businesses with an average size of 500 or fewer employees and to 
target support towards loans with an average principal amount of $5 
million or less. In addition, these programs cannot lend to borrowers 
with more than 750 employees or make any loans in excess of $20 
million. 

After their applications were approved, SSBCI participants entered 
into Allocation Agreements with Treasury before they received their 
funds. SSBCI Allocation Agreements are signed by Treasury and 
participants, and they outline how participants are to comply with 
program requirements. The act requires that each participant receive 
its SSBCI funds in three disbursements or tranches of approximately 
one-third of its approved allocation. As part of its request to 
receive the second and third disbursements, a participant must certify 
that it has expended, transferred, or obligated 80 percent or more of 
the previous disbursement. When participants request subsequent 
disbursements, Treasury reviews the request and certification for 
completeness. Treasury may also review a sample of the participant's 
transactions for compliance with SSBCI requirements. All SSBCI 
Allocation Agreements will expire on March 31, 2017. Treasury may 
terminate any portion of a participant's allocation that Treasury has 
not yet transferred to the participant within 2 years of the date on 
which its SSBCI Allocation Agreement was signed. Treasury may also 
reduce or terminate a participant's allocation at any time during the 
term of the Allocation Agreement upon an event of default under the 
agreement. Under the act, participants are required to submit 
quarterly and annual reports on their use of SSBCI funds. 

Changes to participants' Allocation Agreements generally must be 
approved by Treasury through a program modification. For example, 
participants must submit a program modification to Treasury for 
approval in order to use SSBCI funds for a new program that was not 
originally approved by Treasury, to materially change the scope or 
purpose of an approved program, or to reapportion and transfer 
allocated SSBCI funds among approved programs when the cumulative 
amounts transferred exceed 10 percent of the participant's total SSBCI 
allocation. Treasury has procedures for participants to apply for 
modifications and for its processing of modification approval 
requests. In general, the procedures require participants to submit, 
among other things, justification of the need for the modification and 
the impact of the change on program performance, including the 10-to-1 
private leverage expectation. As of June 30, 2013, Treasury had 
approved 32 modifications of SSBCI participants' programs. 

The act requires Treasury's OIG to conduct audits of participants' use 
of their SSBCI allocations. As of November 8, 2013, Treasury's OIG has 
conducted 12 audits of SSBCI participants' use of SSBCI funds. 
[Footnote 9] 

SSBCI Participants Have Used Funds at Varying Rates and a Number of 
Challenges Have Been Addressed: 

Between June 30, 2012, and June 30, 2013, SSBCI participants nearly 
quadrupled their overall use of SSBCI funds, but individual 
participants continue to use their funds at varying rates and for 
different types of programs. SSBCI participants faced challenges using 
their SSBCI funds in the early stages of the program. For example, 
because Treasury initially implemented the program without issuing 
final policies and procedures, some SSBCI participants experienced 
delays in receiving subsequent disbursements of funds. While initial 
challenges have mostly been addressed, participants continue to face 
ongoing challenges with using SSBCI funds, including reluctance from 
large banks to participate in the program. 

SSBCI Fund Usage Has Increased but Continues to Vary Widely across 
Participants: 

As of June 30, 2013, SSBCI participants had used a total of about $549 
million in SSBCI funds, which represents about 38 percent of the $1.5 
billion allocated for the program.[Footnote 10] As shown in figure 1, 
usage of SSBCI funds by participants has nearly quadrupled since June 
30, 2012, when participants had used about $150 million. 

Figure 1: SSBCI Fund Usage, June 30, 2012, to June 30, 2013: 

[Refer to PDF for image: horizontal bar graph] 

June 30, 2013: 
SSBCI fund usage: $549 million; 
Percentage: 37.6%. 

March 31, 2013: 
SSBCI fund usage: $389 million; 
Percentage: 26.6%. 

June 30, 2012: 
SSBCI fund usage: $150 million; 
Percentage: 10.3%. 

Source: GAO analysis of Treasury data. 

Note: The amount of funds used does not include funds used by 
participants for administrative expenses. 

[End of figure] 

In 2012, we found that participants had used their SSBCI funds at 
different rates.[Footnote 11] As of June 30, 2013, SSBCI participants 
were continuing to use their SSBCI allocations at varying rates, as 
shown in figure 2. Fifty-five of the 57 participants had used some 
portion of their allocation as of June 30, 2013. Idaho had used the 
highest percentage of its allocated funds, approximately 94 percent of 
the $13 million it was allocated. Two territories--American Samoa and 
Northern Mariana Islands--had not used any of their allocation, which, 
according to Treasury officials, is because both territories have 
limited small business credit and investment markets. As of June 30, 
2013, 18 participants had used more than 50 percent of their 
allocations, 14 participants had used more than 25 to 50 percent of 
their allocation, 19 participants had used more than 10 to 25 percent 
of their allocation, and 6 participants had used 10 percent or less of 
their allocation. As previously discussed, participants can request 
subsequent SSBCI disbursements when they have used at least 80 percent 
of their current tranche of SSBCI funds. As of June 30, 2013, Treasury 
had disbursed almost $811 million in SSBCI funding to participants. 
Eight participants had received their third and final disbursement of 
funds, 19 participants had received their second disbursement, and 30 
participants were still working to use their first disbursement of 
SSBCI funding. 

Figure 2: SSBCI Participants' Usage of Allocated SSBCI Funds, as of 
June 30, 2013: 

[Refer to PDF for image: interactive graphic] 

Directions: 
Roll your mouse over each participant to see the percentage of the 
SSBCI allocation the participant has used, the participant's 
allocation amount, and the total amount of funds the participant has 
used, as of June 30, 2013. See appendix II for additional details. 

Sources: GAO analysis of Treasury data; Map Resources (map). 

Note: The four municipalities participating in SSBCI are: Anchorage, 
Alaska (AK); Carrington, North Dakota (ND-C); Mandan, North Dakota (ND-
M); and Laramie, Wyoming (WY). The five U.S. territories participating 
in SSBCI are: American Samoa (AS), Guam (GM), the Northern Mariana 
Islands (NMI), Puerto Rico (PR), and U.S. Virgin Islands (VI).The 
amount of funds used does not include funds used by participants for 
administrative expenses. 

[End of figure] 

SSBCI participants have used their allocations to fund a variety of 
different program types. SSBCI allows participants to use their 
allocations to support program types that best meet their individual 
circumstances and demands. This flexibility has resulted in 
participants implementing numerous types of programs to use their 
SSBCI allocations (see figure 3). Similar to what we reported in 2012, 
loan participation and venture capital programs had used the most 
funds, as of June 30, 2013.[Footnote 12] However, between June 30, 
2012, and June 30, 2013, venture capital programs surpassed loan 
participation programs to become the program type with the highest 
percentage of funds used. As of June 30, 2013, venture capital 
programs accounted for approximately 37 percent of SSBCI funds used. 
Loan participation programs accounted for the next highest percentage 
of funds used (36 percent), followed by loan guarantee programs and 
collateral support programs (each about 13 percent). The remaining 
program type--CAP--represented only approximately 1 percent of the 
funds used. Figure 3 also shows that venture capital programs and loan 
participation programs were the most common program types implemented, 
representing more than half of all SSBCI programs. Three of the six 
participants with whom we spoke during this review said that demand 
for their venture capital programs was higher than their lending 
programs. Further, figure 3 demonstrates that while CAPs accounted for 
17 percent of the programs implemented, their fund usage represented 
only 1 percent of the funds used by SSBCI participants. Multiple 
participants we interviewed during our 2012 and 2013 reviews noted 
that the demand for their CAPs was low, which resulted in them 
reallocating funds to SSBCI programs with higher demand. 

Figure 3: SSBCI Fund Usage and Number of SSBCI Programs by Program 
Type, as of June 30, 2013: 

[Refer to PDF for image: pie-chart and associated data] 

Venture capital: 37%; 
Loan participation: 36%; 
Loan guarantee: 13%; 
Collateral support: 13%; 
Capital access: 1%. 

Number of SSBCI programs by program type: 
Venture capital: 37; 25%; 
Loan participation: 49; 33%; 


Loan guarantee: 22; 15%; 
Collateral support: 16; 11%; 
Capital access: 26; 17%. 

Source: GAO analysis of Treasury data. 

Note: The amount of funds used does not include funds used by 
participants for administrative expenses. The percentage of SSBCI 
programs by program type sums to more than 100 percent due to rounding. 

[End of figure] 

The number of programs participants chose to divide their SSBCI 
allocations among also varied. As of June 30, 2013, SSBCI participants 
were using their SSBCI allocations to fund a total of 150 different 
programs. Fifteen participants used only one program type, whereas 
others used up to five different program types. Most of the 
participants (34) used their SSBCI allocations to fund two or three 
programs. 

SSBCI also provides participants flexibility to use their allocations 
to fund existing state programs or to implement new programs. Of the 
150 SSBCI programs, over half (82) were new programs created 
specifically to utilize SSBCI funds. Figure 4 illustrates the number 
of new and existing SSBCI programs by type, as of June 30, 2013. 

Figure 4: Number of New and Existing SSBCI Programs by Program Type, 
as of June 30, 2013: 

[Refer to PDF for image: stacked 

graph] 

Overall total: 
New programs: 82; 
Existing programs: 68. 

Loan participation: 
New programs: 26; 
Existing programs: 23. 

Venture capital: 
New programs: 21; 
Existing programs: 16. 

Capital access: 
New programs: 9; 
Existing programs: 17. 

Loan guarantee: 
New programs: 11; 
Existing programs: 11. 

Collateral support: 
New programs: 15 ;
Existing programs: 1. 

Source: GAO analysis of Treasury data. 

 

[End of figure] 

Early Challenges Have Mostly Been Addressed, but Participants Face 
Ongoing Challenges with Using Funds: 

SSBCI participants faced challenges with using program funds early in 
the program because Treasury had not finalized all of the program's 
policies and procedures. However, Treasury has generally taken action 
to address these challenges, and most of the nine SSBCI participants 
with whom we spoke said that Treasury has been responsive to questions 
they have received since the program began. Participants also faced 
early challenges related to low demand for some program types and to 
the implementation of new programs. Some participants noted that the 
types of challenges they encountered while SSBCI was first being 
implemented were issues they would expect to occur with the 
implementation of any new program. In addition, some participants with 
whom we spoke explained that some challenges remain, such as 
reluctance from large banks to participate in the program. 

Treasury's Program Guidance, Policies, and Procedures: 

As we reported in 2011, Treasury was tasked with quickly starting up 
an SSBCI program office and developing policies, procedures, and 
guidance to implement this new program after the Small Business Jobs 
Act of 2010 was enacted on September 27, 2010.[Footnote 13] As a 
result, the program was rolled out without all of the policies and 
procedures having been finalized and with Treasury officials answering 
participants' questions verbally or through email as they arose. Some 
participants experienced delays in obtaining and using their SSBCI 
funds as a result. For example, we found in our 2011 report that the 
delay in the development of Treasury's disbursement procedures 
potentially delayed participants from receiving their subsequent SSBCI 
disbursements.[Footnote 14] Officials from Missouri confirmed this 
finding and stated that they requested their second disbursement of 
funds within the first 9 months of the program and that they felt that 
the disbursement of funds was slower than anticipated because 
Treasury, among other things, was in the process of developing the 
procedures at the time. Treasury addressed this issue by finalizing 
its disbursement procedures in November 2011 and updating its 
Frequently Asked Questions document to describe the procedures 
participants must follow to request and receive approval for 
subsequent disbursements. 

In addition, as we found in 2012, when Treasury initially implemented 
SSBCI, it had not finalized its policy on how it would use its 
discretionary authority to terminate allocated funds to participants 
that had not met the requirements to receive their full allocation 
within 2 years of having been accepted into the program.[Footnote 15] 
As a result, some participants with whom we spoke at that time had 
concerns about their ability to use SSBCI funds within that time frame 
and what actions Treasury might take to suspend their disbursements. 
Similarly, during the course of this review, officials from three 
SSBCI participants noted that because Treasury had not finalized this 
policy prior to the start of the program, they were uncertain about 
the amount of time they had to use their SSBCI allocations, and two of 
them modified their programs as a result. For example, officials from 
Maryland told us that they were initially concerned about their 
ability to use funds allocated to the state's loan guarantee program 
in the specified time frame and, therefore, submitted a program 
modification to reallocate a portion of the funds to its venture 
capital program, which they believed would allow them to use the 
program funds more quickly. 

In 2012, we recommended that Treasury develop a written policy 
explaining how it would use its authority to terminate disbursements. 
[Footnote 16] In response to our recommendation and to address 
uncertainties about the length of time SSBCI participants have to use 
their allocations, Treasury developed a written policy on how it will 
use its discretionary authority to terminate funds for participants 
that do not meet the requirement to use the funds within the 2-year 
period. In July 2013, Treasury published this policy in its Frequently 
Asked Questions document. The policy states that Treasury will deem a 
participant to have made sufficient progress in implementing its SSBCI 
program and will allow it to retain its full allocation for the 
duration of the program if the participant submits its second 
disbursement request by June 30, 2015, and qualifies to receive that 
disbursement.[Footnote 17] 

Further, because policies were being developed as the program was 
rolled out, some participants made decisions early in the program 
based on informal guidance they received from Treasury, which later 
turned out not to be in compliance with SSBCI policies. For example, 
officials from Montana told us that sometimes there were differences 
between the guidance they were given verbally or through email from 
Treasury and guidance that Treasury later formally released. One such 
instance affected some loans they had made, which followed guidance 
they received from Treasury, but the OIG later found during its audit 
to be impermissible under SSBCI policies. In its audit of Montana's 
use of funds, the OIG noted that, in addition to Montana, several 
other participants had inquired of Treasury about the permissibility 
of loans similar to the ones made by Montana as early as January 2011. 
However, Treasury did not publish guidance on these types of loans 
until April 2012, after some participants had already approved some of 
these loans. Treasury and Montana SSBCI officials noted that the need 
to resolve the OIG audit issue was one reason why Montana's subsequent 
disbursement of SSBCI funds was delayed.[Footnote 18] Montana 
officials stated that the delay resulted in the cancellation of some 
SSBCI transactions, including one $450,000 loan. Treasury officials 
explained that they have now developed procedures for resolving 
similar issues and that, going forward, they expect that these types 
of issues will be handled more quickly. 

Although some initial confusion on the part of participants occurred 
as policies were being developed, multiple participants told us that 
Treasury has been responsive and helpful when they had questions. In 
addition, multiple participants with whom we spoke in 2012 and during 
this review told us that they found the technical assistance Treasury 
provided through conference calls, webinars, and conferences very 
useful in helping them to understand SSBCI policies or compliance 
requirements. Finally, many participants told us that they would 
expect these types of challenges with the implementation of any new 
program and that Treasury's ability to operate the program has 
improved over time. 

Program Demand: 

Ten of the 18 SSBCI participants we interviewed in 2012 and during 
this review told us that some of the SSBCI programs they had 
implemented experienced low demand for funds from small businesses and 
lenders, which resulted in difficulties in using funds in the early 
stages of the program. Officials from 8 of these participants 
explained that to address this issue, they modified their programs and 
reallocated funds from the programs with low demand to programs with 
higher demand. Five participants said that interest from financial 
institutions in their CAPs and loan participation programs was low for 
various reasons and, therefore, they requested approval from Treasury 
to reallocate funds from these programs to other SSBCI programs with 
higher demand. For example, officials from Virginia told us that they 
found that financial institutions preferred to use other government 
small business lending programs rather than the SSBCI CAP because, 
among other things, the other programs provided better risk coverage. 
Two additional participants told us that demand for equity was higher 
than demand for their lending programs, which caused them to 
reallocate funds from their lending programs to their venture capital 
programs. Treasury officials explained that participants that reacted 
to low demand early in the program and submitted modifications have 
been more successful at using SSBCI funds than participants that did 
not react to signs of low program demand. 

New Program Development: 

Treasury officials, some SSBCI participants, and representatives from 
trade associations stated that participants that implemented new 
programs to utilize SSBCI funds faced more challenges in using funds 
initially than participants that used SSBCI funds to fund existing 
programs. As described earlier, over half of the 150 programs were 
newly created to utilize SSBCI funds. Treasury officials said that 
participants that implemented new programs generally required more 
time to get their SSBCI programs operational than participants that 
expanded existing programs. Treasury officials added that participants 
that reactivated existing programs that had been inactive or operating 
at low levels of activity prior to SSBCI being rolled out also faced 
challenges in using SSBCI funds initially because it took time to get 
the programs back in operation. In addition, we reported in 2012 that 
some participants that implemented new SSBCI programs said that it 
could take more time to use SSBCI funds because they had to conduct 
extensive outreach to lenders to make them aware of the programs and 
encourage them to commit to small business lending.[Footnote 19] This 
position was reiterated to us during this review by two SSBCI 
participants that had implemented new SSBCI programs. The participants 
explained that they did not have existing networks of lenders and 
economic development organizations that they could immediately contact 
to promote their programs and that it took time to develop these 
networks. For example, Arizona program officials stated that when 
SSBCI was initially rolled out, they did not have an existing network 
of potential participants. They said that after dedicating significant 
time to outreach to lenders, community development financial 
institutions (CDFI), local Chambers of Commerce, and others, they 
developed a network of interested participants and have seen increased 
demand for the program. 

Ongoing Challenges: 

SSBCI participants, Treasury officials, and representatives from trade 
associations stated that SSBCI participants will likely continue to 
face some challenges in using SSBCI funds. One ongoing challenge 
identified by multiple SSBCI participants has been difficulty in 
gaining participation by large national banks. Treasury officials 
stated that large national banks are sources of a significant amount 
of small business lending and that weak participation by large 
national banks has had a sizable impact on CAPs supported by SSBCI. 
Because of the way CAPs operate, lenders need to generate a high loan 
volume, which large lenders are generally able to do more easily than 
smaller lenders. Treasury officials and representatives from a trade 
association attribute the reluctance of large national banks to 
participate in SSBCI to the variation in SSBCI participants' programs. 
They explained that national banks typically design programs that can 
be implemented consistently throughout the country and that they are 
reluctant to tailor different processes to each SSBCI participant's 
program. 

A second ongoing challenge identified by several SSBCI participants 
with whom we spoke is that some lenders and investors have questioned 
the act's requirement for obtaining certifications from lenders and 
borrowers that they have not been convicted of a sex offense against a 
minor.[Footnote 20] One SSBCI participant with whom we spoke noted 
some banks have determined that, for legal reasons, they are not able 
to sign the certification, while other banks do not understand the 
need for the certification requirement. Two SSBCI participants told us 
that there were banks that refused to participate in their SSBCI 
programs because of the sex offender certification requirement. 

A third ongoing challenge identified by Treasury officials and several 
SSBCI participants is that some lenders have concerns about being 
subject to additional regulatory scrutiny for using SSBCI programs to 
underwrite loans. For example, Maryland officials stated that some 
lenders they met with were unwilling to participate in Maryland's loan 
guarantee program because they did not want to underwrite loans that 
contained a federal guarantee because they were concerned that 
regulators would subject them to heightened regulatory scrutiny. To 
help address these concerns, Treasury officials said they briefed 
officials from the federal banking regulators--FDIC, Federal Reserve, 
and OCC--on SSBCI and provided the regulators with periodic program 
updates. In addition, Treasury held a regulatory panel at its October 
2012 SSBCI national conference during which officials from the federal 
banking regulators addressed lenders' concerns about additional 
scrutiny related to participating in SSBCI. Further, FDIC and OCC 
published guidance assuring their regulated entities that solely 
participating in SSBCI does not subject them to increased regulatory 
scrutiny. OCC officials added that Treasury's efforts to include the 
federal banking regulators in implementing the program were key in 
helping to encourage lenders to participate. Finally, we reported in 
2011 that multiple SSBCI participants indicated that reaching a 10-to-
1 leverage ratio of private financing and investment to program funds 
could prove challenging, especially for participants creating new 
programs.[Footnote 21] A few participants in this review also noted 
similar concerns with meeting the requirement. 

Treasury and Stakeholders Undertake Various Outreach Activities to 
Promote Use of SSBCI: 

Treasury, SSBCI participants, federal banking regulators, and trade 
associations all conduct numerous outreach activities to promote the 
use of SSBCI. These activities include presenting information on SSBCI 
at conferences and lender roundtables, conducting face-to-face 
meetings with lenders and investors, and distributing information 
through brochures and websites. Challenges with promoting SSBCI have 
been identified by Treasury and SSBCI stakeholders, including the 
variation among SSBCI participants' programs and the amount of time 
and resources involved in conducting outreach. To address these 
challenges, Treasury is working with SSBCI participants to identify 
best practices for marketing SSBCI. 

Treasury Collaborates with Stakeholders to Promote Use of SSBCI: 

Treasury conducts numerous outreach activities to promote the use of 
SSBCI, many of which are conducted in conjunction with program 
stakeholders, including federal banking regulators, trade 
associations, and SSBCI participants. Outreach conducted in 
collaboration with external stakeholders is consistent with federal 
internal control standards, which state that adequate means of 
communicating with, and obtaining information from, external 
stakeholders that may have a significant impact on the agency 
achieving its goals should exist.[Footnote 22] To help promote use of 
the participants' SSBCI lending programs, Treasury officials stated 
that they work with federal banking regulators on a regular basis. For 
example, Treasury officials have participated in lender roundtables 
sponsored by federal banking regulators and written articles for their 
newsletters that describe SSBCI and, in some cases, contain case study 
examples of some SSBCI participants' programs. Treasury officials also 
said that they have developed a national awareness campaign in which 
they work with relevant trade associations--representing both the 
lending and venture capital communities--to promote use of SSBCI. 
Treasury officials explained that this outreach consists of presenting 
information on SSBCI at trade associations' conferences and writing 
articles for their member newsletters. Treasury officials also 
participate in SSBCI participants' outreach activities. For example, 
representatives from Montana's SSBCI program told us that the Treasury 
SSBCI program director participated in meetings with CDFIs that they 
held when the program was first started. Finally, Treasury maintains a 
webpage dedicated to SSBCI. The site contains program policy and 
procedure documents, guidance materials on specific program types, and 
links to each participant's SSBCI program website, among other items. 

In 2012, Treasury piloted a program in which it hired consultants to 
assist three SSBCI participants--Mississippi, Ohio, and South 
Carolina--with program outreach. The goal of the pilot was to increase 
financial institutions' awareness and use of the states' SSBCI lending 
programs. In each state, consultants developed action plans detailing 
the assistance they would provide to the state to help promote the use 
of SSBCI by lenders. The consultants also conducted in-person meetings 
or telephone calls directly to lending institutions to discuss SSBCI, 
designed program marketing materials, and reviewed the states' 
websites, among other things. In addition, in South Carolina, the 
consultant assisted in the development of a webinar presentation, 
which was offered to all South Carolina banks and was later posted to 
the state's website. Treasury officials said that while the 
consultants' work could provide a useful outside perspective and help 
to identify improvements needed in participants' programs, the process 
of finding and contracting with an appropriate consultant is time 
consuming and its effectiveness depends on whether participants are 
able to take advantage of the consultants' recommendations. Treasury 
officials explained that they would like to continue to provide 
consultant assistance to participants and have requested additional 
funds for their 2014 budget to do so. They explained that, with 
congressional approval for additional funding, they would expand the 
amount of time the consultants work with the states. For example, the 
outreach consultant pilot program provided for 100 hours of consultant 
assistance to each state, and officials said they would like to expand 
this type of assistance to selected participants for 6 to12 months. 

Treasury officials explained that it is difficult to quantify the 
success of their outreach efforts and that they mostly rely on the 
feedback they receive from SSBCI participants to gauge the success of 
their outreach efforts. Treasury officials also explained that they 
conduct satisfaction surveys after each conference to ask what 
attendees thought of the conference. Our review of Treasury's analysis 
of the conference survey results showed that the majority of those 
that responded to the surveys found the conferences very good or 
excellent. Treasury officials said that they also track some 
indicators in addition to conference survey results. For example, they 
track the number of attendees at the SSBCI conferences, the number of 
participants that join webinars or conference calls, and, when 
feasible, the number of hits received by articles posted on the SSBCI 
webpage. 

Treasury plans to continue to provide assistance to SSBCI participants 
on program outreach in order to increase the effectiveness and rate of 
deployment of SSBCI funds. Treasury's 2014 SSBCI Congressional 
Justification for its budget notes that Treasury will expand 
individualized technical assistance to participants by training and 
supporting SSBCI participants on outreach to financial institutions. 
Treasury officials explained that they plan to do this in several 
ways, including conducting state-specific outreach to state banking 
associations and state banking regulators. They also plan to conduct 
roundtables consisting of local bankers, some of whom have used SSBCI 
and can share their experiences with bankers who have not used the 
program. As described previously, they would also like to provide 
longer-term consultant assistance to states. Finally, Treasury 
officials would like to develop a "tool box" of SSBCI marketing 
materials, such as templates for websites, presentations, work plans, 
and forums. The 2014 Congressional Justification also noted that 
Treasury is planning to add additional relationship managers to 
support state outreach to the lending industry. SSBCI relationship 
managers are responsible for working with an assigned group of 
participants to help them successfully allocate funds to lenders and 
subsequently borrowers. Treasury officials explained that SSBCI 
currently has three relationship managers, each of whom handles a 
portfolio of between 15 and 20 participants, which officials view as a 
heavy workload. Treasury officials noted that all outreach efforts 
discussed in Treasury's 2014 Congressional Justification, including 
its ability to expand assistance to participants on program outreach 
and to hire additional relationship managers, are contingent upon 
congressional approval of Treasury's proposed budget for the agency. 

SSBCI Stakeholders Also Conduct Outreach Activities: 

In addition to Treasury's outreach efforts, SSBCI participants, 
federal banking regulators, and a number of trade associations also 
independently conduct outreach to promote the use of the program. 
Treasury's program guidance states that one of the roles of SSBCI 
participants is to conduct program outreach. The guidance varies 
depending on the type of program. For example, guidance on venture 
capital programs is general and states only that SSBCI participants 
are responsible for marketing the program in their region or 
community. Guidance on loan guarantee programs is more explicit and 
instructs that participants are responsible for conducting outreach to 
inform lenders and trade associations of the program, including 
activities such as distributing press releases and speaking at 
industry or small business conferences. 

All of the SSBCI participants with whom we spoke conduct outreach on 
an ongoing basis to promote use of their programs. Many of the 
outreach activities they conduct are similar to those used by Treasury. 

* Collaboration with other organizations. Eight of the nine SSBCI 
participants with whom we spoke told us that they collaborate with 
other organizations to help them promote SSBCI. Many work with state 
banking associations, local economic development groups, small 
business development centers, and local or regional Chambers of 
Commerce to reach potentially interested parties. For example, 
officials from Virginia's SSBCI program explained that they 
collaborate with the Virginia Bankers Association, Virginia 
Association of Community Banks, small business development centers, 
regional Chambers of Commerce, and Virginia Economic Development 
Partnership by educating these groups about SSBCI and soliciting their 
assistance in promoting the program to their members. 

* Presentations on SSBCI. SSBCI participants also told us that they 
hold lender roundtables; present information on SSBCI to groups of 
potentially interested parties, including CDFIs, economic developers, 
and manufacturing associations; and hold conference calls and webinars 
for potential program users. 

* Face-to-face meetings. Five of the nine participants with whom we 
spoke discussed having face-to-face meetings with lenders or economic 
developers to promote use of the program. In fact, some participants 
stated that they found this type of outreach, although time consuming, 
to be the most effective in encouraging use of the program. 

* Distribution of information. SSBCI participants also distribute 
marketing materials, such as program brochures and electronic 
newsfeeds; issue press releases; publish print advertisements and 
testimonials on the experiences of program users; send emails with 
program information; and use social media to promote SSBCI. 

* Website. Each SSBCI participant also maintains a website where SSBCI 
program information can be found. Our review of all SSBCI 
participants' websites found that the majority included detailed 
descriptions of their SSBCI programs, links to related materials, 
information on how to apply for the program, and contacts for 
additional information.[Footnote 23] In addition, some websites 
included other useful promotional information, such as a list of 
participating financial institutions and testimonials on the program's 
benefits. 

In addition to Treasury and SSBCI participants, federal banking 
regulators also conduct outreach activities to promote the use of 
SSBCI. Outreach conducted by the federal banking regulators has been 
done on both a national and regional basis. However, regulators' 
regional offices focus more specifically on states in their regions 
and tend to be in a better position to focus on the differences 
between SSBCI participants' programs. Specific outreach activities 
they have conducted include participating in or sponsoring lender 
roundtables, conferences, and forums in which SSBCI is discussed. 
These events are often held in conjunction with the promotion of other 
small business credit programs and include representatives from each 
of the federal banking regulators, as well as state economic 
development agencies. For example, an official from OCC's Southern 
District office stated that her office held a series of outreach 
events throughout the district. Each event included a regulatory panel 
of officials from OCC, FDIC, and the Federal Reserve Bank of Atlanta 
in which they discussed SSBCI with lenders and CDFIs. In addition, 
some federal banking regulators have used their newsletters to provide 
information about SSBCI. For example, regulators have written articles 
about how states are using SSBCI to increase the amount of credit 
available for small businesses, and they have also published articles 
that Treasury has written on SSBCI. Further, as discussed previously, 
both FDIC and OCC published a list of Frequently Asked Questions to 
address their regulated entities' concerns regarding the regulatory 
implications of participating in SSBCI. 

Finally, trade associations for lenders, CDFIs, and venture 
capitalists have also helped to promote the use of SSBCI to their 
members. Similar to the types of outreach activities conducted by 
Treasury, SSBCI participants, and federal banking regulators, trade 
associations have provided information on SSBCI at their conferences 
and, as noted earlier, included articles in member newsletters and 
magazines. In addition, some trade associations, including the 
American Bankers Association, Opportunity Finance Network, and Council 
of Development Finance Agencies, hosted conference calls and webinars 
for their members to promote the use of SSBCI. Representatives from 
the Opportunity Finance Network--a national network of CDFIs--
explained that because some CDFIs were not familiar with SSBCI and 
some agencies that implement SSBCI at the state level were not 
familiar with the function of CDFIs, they used conference calls and 
webinars to connect their members with the appropriate SSBCI 
stakeholders. 

Treasury and Stakeholders Identified Challenges to Promoting SSBCI, as 
Well as Promising Practices for Conducting Outreach: 

Treasury and other stakeholders have identified various challenges 
with promoting SSBCI, including variation among SSBCI participants' 
programs, limited time and resources, and limited experience with 
marketing small business programs. 

* Variation among SSBCI participants' programs. Treasury, Federal 
Reserve, and OCC officials, as well as representatives from the 
National Association of Federal Credit Unions (NAFCU), all said that 
the variation among SSBCI participants' programs creates marketing 
challenges because different program types have different users. For 
example, if a SSBCI participant operates only a venture capital 
program, lenders, such as credit unions in that state or territory, 
would not be eligible to participate in SSBCI. Treasury officials 
added that the variation makes it hard for them to build awareness of 
SSBCI at a national level, and representatives from NAFCU stated that 
the variation in participants' programs made it difficult to educate 
their member credit unions about how they could promote SSBCI to their 
customers. 

* Time and resources. Five of the nine SSBCI participants with whom we 
spoke stated that reaching out to and educating interested parties on 
SSBCI has been a challenge because of the time commitment and a lack 
of resources. For example, officials from the municipality of 
Carrington, North Dakota--whose SSBCI program consists of a consortium 
of 36 municipalities--explained that outreach is challenging because 
of the amount of time involved in developing relationships, setting up 
meetings, and educating lenders and CDFIs about their program. As 
noted earlier, some participants who implemented new programs did not 
have established networks of lenders and said that establishing such 
networks was time consuming. Further, the Carrington, North Dakota, 
officials noted that small community banks and rural economic 
development groups can have high turnover rates, which requires them 
to conduct continual outreach to re-educate staff on the program. 
Officials from both Carrington and Montana also added that the large 
geographic footprint covered by their SSBCI programs makes it 
difficult to reach all lenders in the communities. Montana officials 
added that this is why they collaborated with other organizations in 
the state, such as CDFIs, to help promote SSBCI. 

* SSBCI participants' experience. SSBCI participants' experience with 
marketing small business programs may also vary, resulting in 
challenges in promoting use of the program. At its October 2012 
national SSBCI conference, Treasury identified participants' lack of 
experience in program marketing as a challenge for participants' 
deploying funds in SSBCI lending programs. 

Other challenges that participants mentioned with conducting outreach 
for SSBCI include that it can be difficult to distinguish SSBCI from 
other federal and state programs that assist small businesses and, as 
noted earlier, that some lenders have concerns about being subject to 
additional regulatory scrutiny for using SSBCI programs to underwrite 
loans. 

Treasury has stated that promoting best practices in marketing is one 
of SSBCI's priorities. To achieve this goal and to help address some 
of the challenges mentioned above, Treasury developed working groups 
consisting of officials from participating states, territories, and 
municipalities for the different SSBCI program types. These groups 
have been working to identify best practices for how to operate each 
program type, including best practices on marketing the program. As of 
September 2013, working groups for loan guarantee programs, loan 
participation programs, and collateral support programs had issued 
best practice guidance for these program types. Best practices 
identified in the guidance for all three program types include using 
consistent marketing; developing and maintaining websites that are 
current, easy to find, and contain all pertinent information; 
identifying and reaching out to the small group of key small business 
lenders; publishing testimonials from lenders that have successfully 
used SSBCI; and asking the state banking regulators for the 
opportunity to brief the state examiners so that the examiners can 
inform lenders about SSBCI. The guidance also includes additional best 
practices unique to each program type. Treasury officials said that 
they are working with the group for venture capital programs as well 
to develop similar best practice guidance for SSBCI participants who 
operate that type of program. The federal banking regulators also 
offered some examples of best practices they have identified to 
promote their programs. One of these was using technology and mobile 
resources to conduct outreach, such as using webinars to reach a 
larger audience. OCC officials stated that they have found that 
collaborating with state banking associations to help design the 
outreach efforts is effective, as is having lenders that participate 
in the program share their experiences with other lenders. Similarly, 
FDIC officials noted that it is important to leverage relationships 
with the appropriate networks of organizations and to conduct follow-
up on activities in which relationships are established. 

Prior to the development of the loan participation, collateral 
support, and loan guarantee programs best practice guidance, Treasury 
had not provided SSBCI participants with any specific written guidance 
on program outreach. Instead, Treasury officials told us they mostly 
relied on peer-to-peer learning among SSBCI participants. Treasury 
officials explained that its SSBCI conferences provide a good forum 
for participants to exchange ideas on how to market their programs. In 
addition, each of Treasury's three SSBCI conferences has included a 
session on different aspects of conducting program outreach. The March 
2012 SSBCI conference included a session on how to market SSBCI to 
underserved communities, the October 2012 conference session focused 
on how to market SSBCI to lenders, and the June 2013 conference 
session was on how to market SSBCI with partner organizations. 

Treasury's Efforts to Measure and Evaluate Performance Could Be 
Enhanced: 

Treasury uses performance measures to manage SSBCI in a number of 
ways, such as to allocate program resources and to identify 
participants that might need additional assistance. However, Treasury 
has not developed targets for all of its performance measures. Federal 
internal control standards and leading performance management 
practices identified in prior GAO work state that, where appropriate, 
management should set performance targets and measure results against 
these targets, and this practice can help management to identify 
performance gaps. In addition, Treasury has started to determine how 
it will evaluate the performance of SSBCI at the end of the program in 
2017. Our guidance on designing program evaluations suggests that 
gathering input from external stakeholders during the design of an 
evaluation can help better ensure that the evaluation is useful for 
decision makers and other interested parties. 

Treasury Uses Performance Measures to Manage SSBCI but Has Not Set 
Targets for All Measures: 

* In 2012 we reported that Treasury had established performance 
measures for both the timeliness of program administration and the 
monitoring of program performance, which are listed in table 1. 
[Footnote 24] 

Table 1: Treasury's SSBCI Performance Measures and Targets: 

Program administration: 

Measure: Number of requests for modification to Allocation Agreements 
approved or disapproved; 
Target: 90 percent of requests approved or rejected within 90 days of 
receiving a final submission. 

Measure: Number of requests for subsequent disbursements under 
existing Allocation Agreements approved or rejected; 
Target: 90 percent of requests approved or rejected within 90 days of 
receiving a formal submission. 

Measure: Number of quarterly reports received; 
Target: 90 percent of quarterly reports received within 5 days of the 
deadline. 

Program performance: 

Measure: Amount of SSBCI funds used over time, as reported on SSBCI 
quarterly reports; 
Target: None. 

Measure: Volume and dollar amount of loans or investments supported by 
SSBCI funds, as reported in SSBCI annual reports; 
Target: None. 

Measure: Amount, in dollars, of private-sector leverage in SSBCI 
annual reports; 
Target: None. 

Measure: Estimated number of jobs created or retained in SSBCI annual 
reports; 
Target: None. 

Source: Treasury. 

[End of table] 

Treasury officials explained that they have used these performance 
measures in a variety of ways to manage SSBCI. First, Treasury 
officials stated that they use the measure on the amount of SSBCI 
funds participants have used to adjust staff allocations, which has 
helped them to improve efficiency in program operations. For example, 
by tracking quarterly report data on participants' use of SSBCI funds, 
officials realized that a large number of participants would be 
submitting requests for subsequent disbursements of funds. To manage 
this increase in disbursements, Treasury increased the number of 
compliance team staff from two to four in order to better handle the 
processing of the requests. Second, Treasury officials also stated 
that they use information on participants' fund usage to identify 
participants that have been slow to request subsequent disbursements 
of funds, and that they contact these participants to see if they need 
additional technical assistance from Treasury. Treasury officials 
explained that the relationship managers monitor participants' fund 
usage each quarter and develop action plans for participants with the 
lowest fund usage to help them address challenges they are facing in 
using SSBCI funds. Third, Treasury officials told us that they use 
performance measures on the timeliness of program administration to 
help manage staff performance. They explained that they compare the 
amount of time it takes Treasury staff to respond to program 
modifications and disbursement requests to the goals they have set. 
They maintain a spreadsheet to track the status of pending 
modifications and disbursements and distribute it during weekly staff 
meetings for staff to see if they are on track to meet the performance 
goals. Officials added that they have started to use these measures in 
staff performance reviews to hold staff accountable. 

As shown in table 1, Treasury has created targets for its measures 
related to the timeliness of program administration but not for its 
measures used to monitor the performance of SSBCI. In our 2012 review 
of SSBCI, as well as in this review, Treasury officials said that they 
have not developed targets for their measures that monitor program 
performance and that SSBCI's performance cannot be summarized using a 
single number or performance indicator because SSBCI now consists of 
150 different programs.[Footnote 25] Further, they explained that 
specific numeric indicators, such as the number of loans resulting 
from participants' programs, may or may not indicate the performance 
of SSBCI. They added that outcomes can also be highly dependent on 
factors outside of the program's control, such as the demand for 
credit in a given locality and the quality of the small business 
borrowers' requests for such funds. In addition, because many 
participants did not receive their first SSBCI allocation until late 
2011, they did not submit annual reports--which contain data on SSBCI 
funds used to support small business loans or investments--for that 
year. As a result, Treasury had little data to assess program 
performance and set baselines for the targets for program performance 
measures. In early 2013, Treasury received participants' 2012 annual 
reports, which represent the first complete set of annual reports 
Treasury has received since the inception of the program. 

Federal internal control standards state that management should review 
performance reports and measure results against targets.[Footnote 26] 
Leading practices in federal agency performance management previously 
identified by GAO also state that, where appropriate, performance 
measures should have quantifiable, numerical targets, and that 
agencies can use baselines to set realistic but challenging targets. 
[Footnote 27] Numerical targets facilitate future assessments of 
whether overall goals and objectives were achieved because comparisons 
can be easily made between projected performance and actual results. 
In addition, numerical targets can also create motivation for 
improving program performance. Further, Treasury has established 
targets for performance measures for other programs, including its 
CDFI Fund programs--programs similar to SSBCI that are administered by 
locally based organizations and help to promote access to capital and 
local economic growth.[Footnote 28] Our previous work has recognized 
the challenges and provided strategies for agencies in measuring 
performance and setting performance targets when factors outside of an 
agency's control impact the results of a program.[Footnote 29] For 
example, one strategy is to set goals at the lowest, most 
disaggregated level for distinct target populations for which the 
agency has different expectations. In the case of SSBCI, this could 
mean setting different performance targets for different program 
types. Despite these challenges, developing targets for selected SSBCI 
measures that monitor program performance could help Treasury identify 
performance gaps and highlight program areas that need additional 
attention. 

Treasury Recently Released SSBCI Performance Information: 

Treasury officials stated that they share the performance information 
they collect on SSBCI with Treasury management, other agencies, and 
SSBCI participants. For example, officials told us that they share 
SSBCI performance information regularly with SSBCI program management, 
including the director and deputy director, and with Treasury 
departmental management to provide information on the progress of the 
program. In addition, Treasury shares SSBCI performance information 
with other agencies working on the Entrepreneurship and Small Business 
Cross-Agency Priority goal.[Footnote 30] This Cross-Agency Priority 
goal seeks to increase federal services, including promoting access to 
capital, to entrepreneurs and small businesses. Within the Cross-
Agency Priority goal, a working group consisting of Treasury, U.S. 
Export-Import Bank (Ex-Im), Small Business Administration (SBA), and 
U.S. Department of Agriculture (USDA) was developed specifically for 
the goal's objective related to increasing access to capital for 
entrepreneurs and small businesses. SSBCI is one of the programs that 
will help to contribute to this objective. The fiscal year 2013 third-
quarter status update for this Cross-Agency Priority goal included 
information on the amount of new private sector lending or investment 
that SSBCI supported and the percentage of participants who had used 
SSBCI funds to support loans or investments. 

Treasury has also shared some performance information with SSBCI 
participants and recently released summary performance information 
from participants' 2012 annual reports to the public. Officials from 
Treasury and some participants with whom we spoke told us that 
Treasury has also been sharing some SSBCI performance information with 
participants at its SSBCI national conferences. For example, at its 
June 2013 conference, Treasury shared preliminary performance 
information from the 2012 annual reports on the number of loans and 
investments made with SSBCI funds and the amount of SSBCI funds loaned 
or invested. In 2012 we recommended that in order to provide 
information on the progress of SSBCI to Congress and the SSBCI 
participants, Treasury should make information publicly available on 
its performance indicators for SSBCI.[Footnote 31] In September 2013, 
Treasury released a summary report of performance information 
collected in participants' 2012 annual reports.[Footnote 32] The 
report contains information on each of Treasury's program performance 
measures, as of December 31, 2012 (see table 2). The report also 
summarizes participants' data in numerous ways, such as by program 
type, distribution of loans or investments by size and industry, loans 
or investments made in low-and moderate-income communities, and lender 
and investor participation by size of lender. Treasury officials added 
that they expect to continue to release quarterly report data and 
issue annual reports to the public going forward. 

Table 2: Program Performance Measure Status, as of December 31, 2012: 

Performance measure: Amount of SSBCI funds used[A]; 
Status: $271 million. 

Performance measure: Volume and dollar amount of loans or investments 
supported by SSBCI funds; 
Status: Number of loans or investments: 4,676; 
Amount loaned or invested: approximately $1.9 billion. 

Performance measure: Amount, in dollars, of private-sector leverage; 
Status: $6.58 to $1.00. 

Performance measure: Estimated number of jobs created or retained; 
Status: 53,422. 

Source: Treasury, State Small Business Credit Initiative: A Summary of 
States' 2012 Annual Reports. 

[A] The amount of SSBCI funds used includes funds used by participants 
for administrative expenses. 

[End of table] 

Treasury Should Seek Input as It Begins to Determine How to Evaluate 
SSBCI's Effectiveness: 

As previously discussed, because of the variety of SSBCI programs 
implemented by participants, as well as the influence of factors 
beyond Treasury's control, Treasury officials said that SSBCI's 
performance cannot be evaluated using a single number or performance 
indicator. Further, performance measures may not always give a 
complete understanding of a program's effectiveness. To address these 
issues, Treasury has started to determine how it will evaluate the 
performance of SSBCI at the end of the program in 2017. As part of 
Treasury's SSBCI oversight and performance strategy, all Allocation 
Agreements require participants to conduct a final assessment on their 
programs' performance at the end of the program in 2017. Treasury 
officials explained that they are in the early stages of thinking 
about how they will use this information to help them evaluate SSBCI's 
performance and to determine if the program model for SSBCI was 
successful. Officials explained that they are planning on convening a 
working group of program participants to help Treasury design the 
format for participants' final assessments. They added that they are 
planning on inviting experts in program measurement to the meeting to 
help determine the design of the evaluation. Officials added that they 
have reviewed evaluations of other Treasury programs, as well as 
evaluations conducted by other agencies and SSBCI participants, to 
help them in their planning process. Treasury officials explained that 
they expect to convene the working group of participants by the end of 
2013, but that they expect that the design of the evaluation will not 
be finalized until late in 2014. 

The Small Business Jobs Act of 2010 was signed by the President on 
September 27, 2010. As described in this report, as well as our 2011 
and 2012 reports, Treasury has spent the last few years starting up 
the SSBCI program office; developing policies, procedures, and 
guidance; assisting participants with the implementation of their 
programs; and developing measures to monitor program administration 
and performance. Also as previously discussed, 2013 is the first year 
in which Treasury had a complete set of participants' annual reports. 
As a result, Treasury now has more complete information to analyze the 
program. As Treasury begins to design its evaluation, it should 
consider requirements in the act, including the Secretary of the 
Treasury consulting with SBA and the appropriate federal banking 
agencies on the administration of the program.[Footnote 33] In 
addition, because the SSBCI program is included as one of the programs 
that will help to meet a Cross-Agency Priority goal, obtaining input 
from the agencies involved in the working group on increasing access 
to capital for entrepreneurs and small businesses (Ex-Im, SBA, and 
USDA) could help to ensure that the evaluation is useful in measuring 
progress toward that goal. Further, our guidance on designing program 
evaluations encourages agencies to obtain input from external 
stakeholders, such as Congress, that are expected to be interested in 
the evaluation results.[Footnote 34] By seeking input from Congress on 
the types of information in which it is interested, Treasury can help 
ensure that it designs an evaluation that is useful for decision 
makers. 

Conclusions: 

In SSBCI's third year, participants' fund usage has started to 
accelerate, with participants nearly quadrupling the amount of funds 
they used between June 30, 2012, and June 30, 2013. Treasury 
implemented measures in 2012 to help monitor the administration and 
performance of SSBCI. However, while it developed targets for the 
measures related to administration, it did not develop targets for the 
measures related to program performance. Treasury officials stated 
that it did not develop these targets because, among other things, 
factors outside of the program's control can have a significant impact 
on SSBCI's outcomes. Federal internal control standards and leading 
performance management practices state that agencies should set 
performance targets, where appropriate. Targets for selected 
performance measures could help Treasury better manage SSBCI by 
identifying performance gaps and highlighting program areas that may 
need additional attention. While we recognize that it could be 
challenging to set performance targets when the program is influenced 
by external factors, SSBCI is not the only federal program facing this 
challenge, and our previous work has identified strategies for setting 
targets in similar situations. Moreover, Treasury has set targets for 
performance measures of other programs that, like SSBCI, include 
multiple programs that are administered locally and help to promote 
access to capital. In addition, now that Treasury has received 
participants' 2012 annual reports, it has baseline data to analyze and 
use to help set targets for selected measures on program performance. 

Treasury has also begun to consider how it will evaluate the 
effectiveness of the program at the program's conclusion in 2017. Our 
guidance on designing performance evaluations encourages agencies to 
obtain input from external stakeholders, including Congress, who are 
expected to be interested in the evaluation results. In addition, the 
Small Business Jobs Act of 2010 requires the Secretary of the Treasury 
to consult with SBA and the appropriate federal banking agencies on 
the administration of SSBCI. Because Treasury's SSBCI evaluation could 
be useful in informing future policymakers about programs that are 
intended to increase capital to small businesses in distressed credit 
markets, gathering input from external stakeholders on what 
information would be most valuable to them is essential. 

Recommendations for Executive Action: 

We recommend that the Secretary of the Treasury take the following 
actions: 

To enhance the use of performance measures to manage SSBCI and assess 
progress, Treasury should establish targets for selected performance 
measures related to monitoring program performance. 

To better ensure that Treasury's SSBCI program evaluation provides 
information useful for future decision making and effective management 
and oversight, Treasury should seek input from program stakeholders--
including other agencies involved in promoting small businesses and 
Congress--as it designs its SSBCI program evaluation. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to Treasury, FDIC, Federal Reserve, 
and OCC for their review and comment. Treasury provided written 
comments, which are reprinted in appendix III. FDIC, Federal Reserve, 
and OCC did not provide written comments on the draft report. In its 
written comments, Treasury agreed with our recommendations and stated 
that it has begun to take steps to implement both of them. 
Specifically, Treasury said it has begun establishing targets for 
program performance measures and gathering input from program 
stakeholders in designing SSBCI's program evaluation. Treasury noted 
that the report reflected the progress SSBCI participants have made in 
using their SSBCI funds and that program stakeholders have undertaken 
numerous outreach activities to promote SSBCI. Treasury also stated 
that it is confident that as SSBCI progresses it will continue to 
promote access to credit for small businesses, allowing them to expand 
and create new jobs. Treasury also provided a technical comment on the 
draft report, which we've incorporated in the final report. 

We are sending copies of this report to appropriate congressional 
committees and Treasury, FDIC, Federal Reserve, and OCC. In addition, 
the report is also available at no charge on the GAO website at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-8678 or garciadiazd@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix IV. 

Signed by: 

Daniel Garcia-Diaz: 
Director, Financial Markets and Community Investment: 

List of Committees: 

The Honorable Debbie Stabenow: 
Chairwoman: 
The Honorable Thad Cochran: 
Ranking Member: 
Committee on Agriculture, Nutrition and Forestry: 
United States Senate: 

The Honorable Barbara Mikulski: 
Chairwoman: 
The Honorable Richard Shelby: 
Vice Chairman: 
Committee on Appropriations: 
United States Senate: 

The Honorable Tim Johnson: 
Chairman: 
The Honorable Mike Crapo: 
Ranking Member: 
Committee on Banking, Housing, and Urban Affairs: 
United States Senate: 

The Honorable Patty Murray: 
Chairwoman: 
The Honorable Jeff Sessions: 
Ranking Member: 
Committee on the Budget: 
United States Senate: 

The Honorable Max Baucus: 
Chairman: 
The Honorable Orrin G. Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Mary L. Landrieu: 
Chairwoman: 
The Honorable James E. Risch: 
Ranking Member: 
Committee on Small Business and Entrepreneurship: 
United States Senate: 

The Honorable Frank D. Lucas: 
Chairman: 
The Honorable Collin C. Peterson: 
Ranking Member: 
Committee on Agriculture: 
House of Representatives: 

The Honorable Harold Rogers: 
Chairman: 
The Honorable Nita M. Lowey: 
Ranking Member: 
Committee on Appropriations: 
House of Representatives: 

The Honorable Paul Ryan: 
Chairman: 
The Honorable Chris Van Hollen: 
Ranking Member: 
Committee on the Budget: 
House of Representatives: 

The Honorable Jeb Hensarling: 
Chairman: 
The Honorable Maxine Waters: 
Ranking Member: 
Committee on Financial Services: 
House of Representatives: 

The Honorable Sam Graves: 
Chairman: 
The Honorable Nydia Velázquez: 
Ranking Member: 
Committee on Small Business: 
House of Representatives: 

The Honorable Dave Camp: 
Chairman: 
The Honorable Sander Levin: 
Ranking Member: 
Committee on Ways and Means: 
House of Representatives: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to examine the extent to which (1) State Small 
Business Credit Initiative (SSBCI) participants have used their SSBCI 
allocations and faced challenges in using the funds, (2) the 
Department of the Treasury (Treasury) and program stakeholders have 
used outreach activities to promote use of the program and assessed 
the success of these efforts, and (3) Treasury has used performance 
measures and program evaluation to manage SSBCI. 

To assess the extent to which SSBCI participants have used their SSBCI 
allocations, we analyzed Treasury program data on participants' 
allocation amounts, disbursement requests, and program types, and 
whether participants developed new programs to participate in SSBCI or 
expanded existing programs with SSBCI funds. In addition, we analyzed 
participants' June 30, 2013, SSBCI quarterly report data--the most 
recent quarter available--on the total amount of funds used and fund 
usage by program type. To show the trend in participants' total fund 
usage from June 30, 2012, to June 30, 2013, we also analyzed data from 
participants' June 30, 2012, and March 31, 2013, quarterly reports. To 
assess the reliability of SSBCI data on participants' fund usage, 
allocation amount, and program type, and whether participants 
developed new programs or expanded existing ones, we performed 
electronic testing for obvious errors in accuracy and completeness and 
compared Treasury's data on program type to participants' quarterly 
data. Where there were questions or discrepancies we identified 
related to the data, we clarified them through discussions with 
Treasury officials. We also interviewed knowledgeable Treasury 
officials on how they assess the reliability of participants' 
quarterly data and the information they maintain on SSBCI. We 
determined that the data were sufficiently reliable for the purposes 
of describing these factors. 

To examine the extent to which SSBCI participants faced challenges in 
using SSBCI funds, we reviewed reports from Treasury's Office of the 
Inspector General (OIG) on participants' usage of SSBCI funds; our 
2011 and 2012 reports on SSBCI; and Treasury's policies and 
procedures, including its policies on disbursing subsequent tranches 
of SSBCI funds and terminating the availability of participants' SSBCI 
allocations.[Footnote 35] In addition, we interviewed officials from 
Treasury and nine SSBCI participants: Arizona; Iowa; Maryland; 
Missouri; Montana; New York; City of Carrington, North Dakota; 
Vermont; and Virginia. We selected these nine participants from the 
total of 57 participants--which included 47 states; Washington, D.C.; 
four municipalities; and five U.S. territories--using participants' 
March 31, 2013, quarterly report data. We based our selection on the 
following criteria: (1) the percentage of SSBCI funds participants had 
used as of March 31, 2013; (2) the amount of SSBCI funds allocated to 
participants; (3) the number of programs participants implemented and 
whether the programs were new or existing; and (4) geographic 
dispersion. We selected this nonrandom sample of participants because 
we assumed that the types of challenges related to using SSBCI funds 
would vary for participants characterized by a mix of fund usage 
histories, allocation amounts, and numbers of new and existing 
programs across all regions. To reduce administrative burden, we 
excluded from our selection (1) the seven participants that the OIG 
told us it was in the process of auditing or was planning to audit at 
the time we selected the participants, and (2) the nine participants 
we interviewed in our 2012 SSBCI review.[Footnote 36] When we selected 
participants to interview, the March 31, 2013, quarterly data were the 
most recent available. Because Treasury had not completed its review 
of the data at that time, we used preliminary quarterly report data 
for our selection. We also reviewed testimonial evidence we obtained 
during our 2011 and 2012 SSBCI reports related to challenges SSBCI 
participants faced in using SSBCI funds.[Footnote 37] Finally, we 
interviewed representatives from a number of trade associations 
representing the lending and venture capital communities: the 
Conference of State Bank Supervisors, Community Development Venture 
Capital Alliance, Council of Development Finance Agencies, Independent 
Community Bankers Association, National Association of Federal Credit 
Unions, Opportunity Finance Network, and State Science & Technology 
Institute. We selected these trade associations based on information 
from Treasury officials on the organizations with whom they had worked. 

To examine the extent to which Treasury and program stakeholders, 
including SSBCI participants, federal banking regulators, and trade 
associations, have used outreach activities to promote use of the 
program and assessed the success of these efforts, we interviewed 
Treasury officials and representatives of stakeholder groups and 
reviewed materials pertinent to SSBCI outreach. Specifically, we 
interviewed Treasury officials, representatives from the nine SSBCI 
participants and seven trade associations identified above, and 
officials from the federal banking regulators--Board of Governors of 
the Federal Reserve System (Federal Reserve), Federal Deposit 
Insurance Corporation (FDIC), and Office of the Comptroller of the 
Currency (OCC)--to learn about outreach activities they have conducted 
for SSBCI and to obtain relevant materials and documentation. We 
reviewed Treasury guidance on SSBCI outreach, including marketing best 
practices for SSBCI loan participation, loan guarantee, and collateral 
support programs, as well as Treasury budget documents. We also 
reviewed materials related to Treasury's pilot program to hire 
outreach consultants for the SSBCI programs in Mississippi, Ohio, and 
South Carolina. These materials included the solicitation for subject-
matter experts for lender outreach support, technical assistance 
plans, and final reports developed by the consultants for the three 
states. We reviewed outreach materials SSBCI participants, federal 
banking regulators, and trade associations had developed related to 
SSBCI. We also reviewed all 57 SSBCI participants' websites to 
understand how SSBCI participants are providing information about 
SSBCI to interested parties.[Footnote 38] We examined the websites to 
determine if they contained detailed program descriptions; information 
on the amount of SSBCI funds allocated to the participants; links to 
additional, related materials; information or materials on how to 
apply for the program; and contact information for additional 
information, among other things. We interviewed officials from 
Treasury, the federal banking regulators, and the nine SSBCI 
participants identified above on the methods they used to assess the 
success of their outreach efforts. We also reviewed Treasury's 
conference summary memorandums, which include conference attendees' 
responses to the satisfaction surveys that Treasury administers after 
each conference, as well as other general observations on the 
conferences. 

To assess the extent to which Treasury has used performance measures 
and program evaluation to manage SSBCI, we reviewed performance 
measures and targets Treasury has set for SSBCI. We also reviewed a 
tool Treasury uses to track its progress on some performance measures 
and interviewed officials on actions they have taken to manage the 
program by using performance measures. We identified relevant criteria 
on setting targets for performance measures in the federal internal 
control standards and leading practices for federal agencies' 
performance management.[Footnote 39] In addition, we reviewed 
performance information Treasury has shared with SSBCI participants at 
its conferences and a summary report of performance information that 
Treasury developed in September 2013, and we interviewed officials on 
their plans to publicly release SSBCI performance information. We also 
reviewed the second and third quarter fiscal year 2013 status update 
documents developed for the Cross-Agency Priority goal on 
Entrepreneurship and Small Business to identify SSBCI performance data 
Treasury has shared with other federal agencies. Finally, we reviewed 
the Small Business Jobs Act of 2010 to identify requirements for 
Treasury to evaluate SSBCI.[Footnote 40] We also interviewed Treasury 
officials on their plans to evaluate SSBCI, including how they intend 
to use participants' 2017 assessments of their programs, as required 
by their Allocation Agreements. We used criteria from our guidance on 
designing program evaluations to evaluate Treasury's plans for its 
evaluation of SSBCI.[Footnote 41] 

We conducted this performance audit from May 2013 to December 2013 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: SSBCI Participants' Allocation Amount and Fund Usage, as 
of June 30, 2013: 

We reviewed Treasury's program data and SSBCI participants' quarterly 
report data as of June 30, 2013, and found that SSBCI participants had 
used their SSBCI allocations at varying rates. 

Table 3: SSBCI Participants' Allocation Amounts and Usage of Allocated 
SSBCI Funds, June 30, 2013: 

SSBCI participant: Alabama; 
Funds used: $19,351,944; 
Allocation amount: $31,301,498; 
Percent of allocation used: 61.8%. 

SSBCI participant: Alaska--Anchorage; 
Funds used: $,090,000; 
Allocation amount: $13,168,350; 
Percent of allocation used: 15.9%. 

SSBCI participant: American Samoa; 
Funds used: 0; 
Allocation amount: $10,500,000; 
Percent of allocation used: 0.0. 

SSBCI participant: Arizona; 
Funds used: $4,516,833; 
Allocation amount: $18,204,217; 
Percent of allocation used: 24.8%. 

SSBCI participant: Arkansas; 
Funds used: $10,068,873; 
Allocation amount: $13,168,350; 
Percent of allocation used: 76.5%. 

SSBCI participant: California; 
Funds used: $26,866,053; 
Allocation amount: $167,755,642; 
Percent of allocation used: 16.0%. 

SSBCI participant: Colorado; 
Funds used: $1,985,775; 
Allocation amount: $17,233,489; 
Percent of allocation used: 11.5%. 

SSBCI participant: Connecticut; 
Funds used: $108,025; 
Allocation amount: $13,301,126; 
Percent of allocation used: 0.8%. 

SSBCI participant: Delaware; 
Funds used: $4,447,131; 
Allocation amount: $13,168,350; 
Percent of allocation used: 33.8%. 

SSBCI participant: District of Columbia; 
Funds used: $2,317,500; 
Allocation amount: $13,168,350; 
Percent of allocation used: 17.6%. 

SSBCI participant: Florida; 
Funds used: $32,545,048; 
Allocation amount: $97,662,349; 
Percent of allocation used: 33.3%. 

SSBCI participant: Georgia; 
Funds used: $11,794,132; 
Allocation amount: $47,808,507; 
Percent of allocation used: 24.7%. 

SSBCI participant: Guam; 
Funds used: $1,516,172; 
Allocation amount: $13,168,350; 
Percent of allocation used: 11.5%. 

SSBCI participant: Hawaii; 
Funds used: $3,440,000; 
Allocation amount: $13,168,350; 
Percent of allocation used: 26.1%. 

SSBCI participant: Idaho; 
Funds used: $12,394,744; 
Allocation amount: $13,136,544; 
Percent of allocation used: 94.4%. 

SSBCI participant: Illinois; 
Funds used: $26,566,573; 
Allocation amount: $78,365,264; 
Percent of allocation used: 33.9%. 

SSBCI participant: Indiana; 
Funds used: $21,125,845; 
Allocation amount: $34,339,074; 
Percent of allocation used: 61.5%. 

SSBCI participant: Iowa; 
Funds used: $7,578,473; 
Allocation amount: $13,168,350; 
Percent of allocation used: 57.6%. 

SSBCI participant: Kansas; 
Funds used: $5,340,258; 
Allocation amount: $13,168,350; 
Percent of allocation used: 40.6%. 

SSBCI participant: Kentucky; 
Funds used: $2,198,025; 
Allocation amount: $15,487,998; 
Percent of allocation used: 14.2%. 

SSBCI participant: Louisiana; 
Funds used: $7,721,522; 
Allocation amount: $13,168,350; 
Percent of allocation used: 58.6%. 

SSBCI participant: Maine; 
Funds used: $2,442,117; 
Allocation amount: $13,168,350; 
Percent of allocation used: 18.5%. 

SSBCI participant: Maryland; 
Funds used: $4,164,550; 
Allocation amount: $23,025,709; 
Percent of allocation used: 18.1%. 

SSBCI participant: Massachusetts; 
Funds used: $10,430,111; 
Allocation amount: $22,032,072; 
Percent of allocation used: 47.3%. 

SSBCI participant: Michigan; 
Funds used: $56,336,431; 
Allocation amount: $79,157,742; 
Percent of allocation used: 71.2%. 

SSBCI participant: Minnesota; 
Funds used: $3,373,673; 
Allocation amount: $15,463,182; 
Percent of allocation used: 21.8%. 

SSBCI participant: Mississippi; 
Funds used: $2,813,738; 
Allocation amount: $13,168,350; 
Percent of allocation used: 21.4%. 

SSBCI participant: Missouri; 
Funds used: $16,798,664; 
Allocation amount: $26,930,294; 
Percent of allocation used: 62.4%. 

SSBCI participant: Montana; 
Funds used: $10,938,462; 
Allocation amount: $12,765,037; 
Percent of allocation used: 85.7%. 

SSBCI participant: Nebraska; 
Funds used: $5,350,000; 
Allocation amount: $13,168,350; 
Percent of allocation used: 40.6%. 

SSBCI participant: Nevada; 
Funds used: $2,731,215; 
Allocation amount: $13,803,176; 
Percent of allocation used: 19.8%. 

SSBCI participant: New Hampshire; 
Funds used: $10,784,753; 
Allocation amount: $13,168,350; 
Percent of allocation used: 81.9%. 

SSBCI participant: New Jersey; 
Funds used: $11,173,982; 
Allocation amount: $33,760,698; 
Percent of allocation used: 33.1%. 

SSBCI participant: New Mexico; 
Funds used: $3,054,318; 
Allocation amount: $13,168,350; 
Percent of allocation used: 23.2%. 

SSBCI participant: New York; 
Funds used: $34,503,708; 
Allocation amount: $55,351,534; 
Percent of allocation used: 62.3%. 

SSBCI participant: North Carolina; 
Funds used: $30,911,655; 
Allocation amount: $46,061,319; 
Percent of allocation used: 67.1%. 

SSBCI participant: North Dakota--Carrington; 
Funds used: $400,000; 
Allocation amount: $3,433,709; 
Percent of allocation used: 11.6%. 

SSBCI participant: North Dakota--Mandan; 
Funds used: $4,507,956; 
Allocation amount: $9,710,768; 
Percent of allocation used: 46.4%. 

SSBCI participant: Northern Mariana Islands; 
Funds used: 0; 
Allocation amount: $13,168,350; 
Percent of allocation used: 0.0. 

SSBCI participant: Ohio; 
Funds used: $6,453,089; 
Allocation amount: $55,138,373; 
Percent of allocation used: 11.7%. 

SSBCI participant: Oklahoma; 
Funds used: $4,130,000; 
Allocation amount: $13,168,350; 
Percent of allocation used: 31.4%. 

SSBCI participant: Oregon; 
Funds used: $7,662,963; 
Allocation amount: $16,516,197; 
Percent of allocation used: 46.4%. 

SSBCI participant: Pennsylvania; 
Funds used: $5,229,906; 
Allocation amount: $29,241,232; 
Percent of allocation used: 17.9%. 

SSBCI participant: Puerto Rico; 
Funds used: $1,721,440; 
Allocation amount: $14,540,057; 
Percent of allocation used: 11.8%. 

SSBCI participant: Rhode Island; 
Funds used: $3,945,832; 
Allocation amount: $13,168,350; 
Percent of allocation used: 30.0%. 

SSBCI participant: South Carolina; 
Funds used: $16,308,424; 
Allocation amount: $17,990,415; 
Percent of allocation used: 90.7%. 

SSBCI participant: South Dakota; 
Funds used: $8,378,768; 
Allocation amount: $13,168,350; 
Percent of allocation used: 63.6%. 

SSBCI participant: Tennessee; 
Funds used: $16,180,272; 
Allocation amount: $29,672,070; 
Percent of allocation used: 54.5%. 

SSBCI participant: Texas; 
Funds used: $25,874,999; 
Allocation amount: $46,553,879; 
Percent of allocation used: 55.6%. 

SSBCI participant: U.S. Virgin Islands; 
Funds used: $609,325; 
Allocation amount: $13,168,350; 
Percent of allocation used: 4.6%. 

SSBCI participant: Utah; 
Funds used: $2,893,125; 
Allocation amount: $13,168,350; 
Percent of allocation used: 22.0%. 

SSBCI participant: Vermont; 
Funds used: $4,068,681; 
Allocation amount: $13,168,350; 
Percent of allocation used: 30.9%. 

SSBCI participant: Virginia; 
Funds used: $1,561,807; 
Allocation amount: $17,953,191; 
Percent of allocation used: 8.7%. 

SSBCI participant: Washington; 
Funds used: $10,624,150; 
Allocation amount: $19,722,515; 
Percent of allocation used: 53.9%. 

SSBCI participant: West Virginia; 
Funds used: $12,339,500; 
Allocation amount: $13,168,350; 
Percent of allocation used: 93.7%. 

SSBCI participant: Wisconsin; 
Funds used: $6,570,000; 
Allocation amount: $22,363,554; 
Percent of allocation used: 29.4%. 

SSBCI participant: Wyoming--Laramie; 
Funds used: $70,000; 
Allocation amount: $13,168,350; 
Percent of allocation used: 0.5%. 

SSBCI participant: Total; 
Funds used: $549,310,540; 
Allocation amount: $1,459,154,481; 
Percent of allocation used: 37.6%. 

Source: GAO analysis of Treasury data. 

[End of table] 

Figure 5: SSBCI Allocation Amount and Percent of Allocation Used, as 
of June 30, 2013: 

[Refer to PDF for image: 2 vertical bar graphs] 

Percentage of SSBCI allocation used: 

ID: 94.4%; 
WV: 93.7%; 
SC: 90.7%; 
MT: 85.7%; 
NH: 81.9%; 
AR: 76.5%; 
MI: 71.2%; 
NC: 67.1%; 
SD: 63.6%; 
MO: 62.4%; 
NY: 62.3%; 
AL: 61.8%; 
IN: 61.5%; 
LA: 58.6%; 
IA: 57.6%; 
TX: 55.6%; 
TN: 54.5%; 
WA: 53.9%; 
MA: 47.3%; 
NDM: 46.4%; 
OR: 46.4%; 
NE: 40.6%; 
KS: 40.6%; 
IL: 33.9%; 
DE: 33.8%; 
FL: 33.3%; 
NJ: 33.1%; 
OK: 31.4%; 
VT: 30.9%; 
RI: 30%; 
WI: 29.4%; 
HA: 26.1%; 
AZ: 24.8%; 
GA: 24.7%; 
NM: 23.2%; 
UT: 22%; 
MN: 21.8%; 
MS: 21.4%; 
NV: 19.8%; 
ME: 18.5%; 
MD: 18.1%; 
PA: 17.9%; 
DC: 17.6%; 
CA: 16%; 
AK: 15.9%; 
KY: 14.2%; 
PR: 11.8%; 
OH: 11.7%; 
NDC: 11.%; 
CO: 11.5%; 
GM: 11.5%; 
VA: 8.7%; 
VI: 4.6%; 
CT: 0.8%; 
WY: 0.5%; 
AS: 0; 
NMI: 0. 

SSBCI allocation (dollars in millions): 

ID: $13.14; 
WV: $13.17; 
SC: $17.99; 
MT: $12.77; 
NH: $13.17; 
AR: $13.17; 
MI: $79.16; 
NC: $46.06; 
SD: $13.17; 
MO: $26.93; 
NY: $55.35; 
AL: $31.3; 
IN: $34.34; 
LA: $13.17; 
IA: $13.17; 
TX: $46.55; 
TN: $29.67; 
WA: $19.72; 
MA: $22.03; 
NDM: $9.71; 
OR: $16.52; 
NE: $13.17; 
KS: $13.17; 
IL: $78.37; 
DE: $13.17; 
FL: $97.66; 
NJ: $33.76; 
OK: $13.17; 
VT: $13.17; 
RI: $13.17; 
WI: $22.36; 
HA: $13.17; 
AZ: $18.2; 
GA: $47.81; 
NM: $13.17; 
UT: $13.17; 
MN: $15.46; 
MS: $13.17; 
NV: $13.8; 
ME: $13.17; 
MD: $23.03; 
PA: $29.24; 
DC: $13.17; 
CA: $167.76; 
AK: $13.17; 
KY: $15.49; 
PR: $14.54; 
OH: $55.14; 
NDC: $3.43; 
CO: $17.23; 
GM: $13.17; 
VA: $17.95; 
VI: $13.17; 
CT: $13.3; 
WY: $13.17; 
AS: $10.5; 
NMI: $13.17. 

Source: GAO analysis of Treasury data. 

 

Note: The four municipalities participating in SSBCI are: Anchorage, 
Alaska (AK); Carrington, North Dakota (ND-C); Mandan, North Dakota (ND-
M); and Laramie, Wyoming (WY). The five U.S. territories participating 
in SSBCI are: American Samoa (AS), Guam (GM), the Northern Mariana 
Islands (NMI), Puerto Rico (PR), and U.S. Virgin Islands (VI). 

[End of figure] 

[End of section] 

Appendix III: Comments from the Department of the Treasury: 

Department Oof The Treasury: 
Washington, D.C. 20220: 

December 4, 2013: 

Daniel Garcia-Diaz: 
Director: 
Financial Markets and Community Investment: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Garcia-Diaz: 

Thank you for the opportunity to review the draft report entitled 
Opportunities Exist to Enhance Performance Measurement and Evaluation 
(the Report). This letter provides the official response of the 
Department of the Treasury (Treasury). 

The Report examines the State Small Business Credit Initiative 
(SSBCI), a Treasury program established by the Small Business Jobs Act 
of 2010. We are pleased that the Report acknowledges that SSBCI 
participants have nearly quadrupled their use of SSBCI funds and that 
Treasury and program stakeholders have undertaken numerous outreach 
activities to promote SSBCI, including conferences, lender 
roundtables, in-person meetings with lenders and investors, and other 
methods of information distribution. Treasury is confident that as the 
program progresses it will continue to promote access to credit for 
small businesses, allowing them to expand and create new jobs.
Treasury agrees with both of GAO's recommendations and has begun the 
process of establishing targets for program performance measures and 
gathering input from program stakeholders in designing SSBCI's program 
evaluation. In addition, we appreciate GAO's support in providing 
previous GAO reports to assist with Treasury's development of 
performance targets. 

Thank you once again for the opportunity to review the Report. 
Treasury values GAO's review of its programs and looks forward to 
continuing to work with your team. 

Sincerely, 

Signed by: 

Don Graves: 
Deputy Assistant Secretary: 
Small Business, Community Development, and Affordable Housing Policy: 

[End of section] 

Appendix IV: GAO Contacts and Staff Acknowledgment: 

GAO Contact: 

Daniel Garcia-Diaz, (202)-512-8678, garciadiazd@gao.gov. 

Staff Acknowledgments: 

In addition to the individual named above, Kay 

(Assistant Director), Bethany Benitez, Anna Chung, Elizabeth Curda, 
Pamela Davidson, Christine Houle, Beverly Ross, Jennifer Schwartz, and 
Jena Sinkfield made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 111-240, § 3003, 124 Stat. 2504, 2570 (codified at 12 
U.S.C. § 5702). 

[2] For the purposes of this report, we refer to the states, 
territories, municipalities, and the District of Columbia that 
participate in SSBCI generally as "participants." 

[3] § 3011(b), 124 Stat. at 2581 (codified at 12 U.S.C. § 5710(b)). 

[4] GAO, State Small Business Credit Initiative: Opportunities Exist 
to Improve Program Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-12-173] (Washington, D.C.: Dec. 7, 
2011) and Small Business Lending: Opportunities Exist to Improve 
Performance Reporting of Treasury's Programs, [hyperlink, 
http://www.gao.gov/products/GAO-13-76] (Washington, D.C.: Dec. 5, 
2012). 

[5] [hyperlink, http://www.gao.gov/products/GAO-12-173] and 
[hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[6] We were unable to review three SSBCI participants' websites 
because the website links listed on Treasury's SSBCI website did not 
work. 

[7] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999); Internal Control Management and 
Evaluation Tool, [hyperlink, http://www.gao.gov/products/GAO-01-1008G] 
(Washington, D.C.: August 2001); Tax Administration: IRS Needs to 
Further Refine Its Tax Filing Season Performance Measures, [hyperlink, 
http://www.gao.gov/products/GAO-03-143] (Washington, D.C.: Nov. 22, 
2002); Managing for Results: Strengthening Regulatory Agencies' 
Performance Management Practices, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-00-10] (Washington, D.C.: Oct. 28, 
1999); and Designing Evaluations: 2012 Revision (Supersedes PEMD-
10.1.4), [hyperlink, http://www.gao.gov/products/GAO-12-208G] 
(Washington, D.C.: Jan. 31, 2012). Leading practices are performance 
management practices and key attributes of performance measures that 
we have identified in previous work based on information from a 
variety of federal and state organizations that would help federal 
agencies more effectively manage and measure program performance. 

[8] The act allowed multiple municipalities in a state to collectively 
submit a joint application for funds. SSBCI policy requires that 
municipalities submitting joint applications had to designate a "lead 
applicant" to serve as the point of contact and to ensure that all 
parties to the application comply with program requirements. 
Carrington, North Dakota, is the lead applicant for 36 North Dakota 
communities that participate in SSBCI. Mandan, North Dakota, is the 
lead applicant for 38 municipalities in North Dakota, and Laramie, 
Wyoming, is the lead applicant for 17 Wyoming municipalities. 

[9] Treasury's OIG website contains the full list of reports it has 
conducted of SSBCI participants' use of funds. See [hyperlink, 
http://www.treasury.gov/about/organizational-tructure/ig/Pages/Office-
of-Small-Business-Lending-Fund-Program-Oversight.aspx]. 

[10] Throughout this report we use "funds used" to represent the 
amount of SSBCI funds participants have used to support small business 
lending and investments. This definition is similar to Treasury's 
definition of "funds expended, obligated, or transferred," except our 
definition of "funds used" does not include funds used by participants 
for administrative expenses. Treasury used the following definitions: 
(1) SSBCI "funds expended" are funds used to support loans or 
investments or for administrative expenses; (2) SSBCI "funds 
obligated" are funds legally committed to support loans or 
investments, including obligations to intermediaries; and (3) SSBCI 
"funds transferred" are funds transferred to a contracting entity as 
reimbursement of expenses incurred or to fund a loan or investment. 

[11] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[12] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[13] [hyperlink, http://www.gao.gov/products/GAO-12-173]. 

[14] [hyperlink, http://www.gao.gov/products/GAO-12-173]. 

[15] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[16] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[17] The policy further explains that for participants that do not 
qualify for their second disbursement by June 30, 2015, Treasury 
expects to conduct an analysis of the participant's progress in 
implementing its SSBCI program to determine whether Treasury should 
exercise its authority to terminate the availability of the remaining 
allocation. 

[18] Treasury officials also attribute the delay in Montana receiving 
its disbursement to: (1) the final determination that Montana had 
defaulted under its Allocation Agreement, (2) Montana's disbursement 
request overlapping the OIG audit, and (3) Treasury having not yet 
developed policies for audit resolution procedures and participants 
receiving partial disbursements. 

[19] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[20] Pub. L. No. 111-240, § 3011(c)(2), 124 Stat. 2504, 2581 (codified 
at 12 U.S.C. § 5710(c)(2)). 

[21] [hyperlink, http://www.gao.gov/products/GAO-12-173]. 

[22] See [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
and [hyperlink, http://www.gao.gov/products/GAO-01-1008G]. 

[23] We were unable to review three SSBCI participants' websites 
because the website links listed on Treasury's SSBCI website did not 
work. 

[24] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[25] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[26] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] and 
[hyperlink, http://www.gao.gov/products/GAO-01-1008G]. 

[27] [hyperlink, http://www.gao.gov/products/GAO-03-143] and 
[hyperlink, http://www.gao.gov/products/GAO/GGD-00-10]. 

[28] The Riegle Community Development and Regulatory Improvement Act 
of 1994, Pub. L. No. 103-325, 108 Stat. 2160, created the Community 
Development Financial Institutions (CDFI) Fund to help promote access 
to capital and credit in underserved urban and rural communities 
across the country. Sec. 104(a), 108 Stat. at 2166 (codified at 12 
U.S.C. § 4703). In fiscal year 2011, Treasury began to establish 
targets for a CFDI Fund performance measure on the number of 
affordable housing units created by CDFI Fund programs. Treasury used 
fiscal year 2011 to collect baseline performance data on the measure 
and subsequently set a target for fiscal year 2012. 

[29] For example, see GAO, The Government Performance and Results Act: 
1997 Governmentwide Implementation Will Be Uneven, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-97-109] (Washington, D.C.: June 2, 
1997); Managing for Results: Measuring Program Results That Are Under 
Limited Federal Control, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-99-16] (Washington, D.C.: Dec. 11, 
1998); Results-Oriented Government: GPRA Has Established a Solid 
Foundation for Achieving Greater Results, [hyperlink, 
http://www.gao.gov/products/GAO-04-38] (Washington, D.C.: Mar. 10, 
2004); and Managing For Results: Executive Branch Should More Fully 
Implement the GPRA Modernization Act to Address Pressing Governance 
Challenges, [hyperlink, http://www.gao.gov/products/GAO-13-518] 
(Washington, D.C.: June 26, 2013). 

[30] As required by the GPRA Modernization Act of 2010, the Office of 
Management and Budget coordinates with agencies to establish federal 
government priority goals--Cross-Agency Priority goals--that include 
outcome-oriented goals covering a limited number of policy areas. Pub. 
L. No. 111-352, § 5, 124 Stat. 3866, 3873 (codified at 31 U.S.C. § 
1120(a)(1)(A)). 

[31] [hyperlink, http://www.gao.gov/products/GAO-13-76]. 

[32] Department of the Treasury, State Small Business Credit 
Initiative: A Summary of States' 2012 Annual Reports (Washington, 
D.C.: Sept. 25, 2013). Treasury simultaneously released a summary 
report of participants' June 30, 2013, quarterly data, which included 
information on disbursements and funds expended, obligated, or 
transferred, as of June 30, 2013. 

[33] Pub. L. No. 111-240, § 3009(a)(1), 124 Stat. 2504, 2580 (codified 
at 12 U.S.C. §5708(a)(1)). 

[34] [hyperlink, http://www.gao.gov/products/GAO-12-208G]. 

[35] GAO, State Small Business Credit Initiative: Opportunities Exist 
to Improve Program Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-12-173] (Washington, D.C.: Dec. 7, 
2011) and Small Business Lending: Opportunities Exist to Improve 
Performance Reporting of Treasury's Programs, [hyperlink, 
http://www.gao.gov/products/GAO-13-76] (Washington, D.C.: Dec. 5, 
2012). 

[36] In 2012, we interviewed representatives from the following SSBCI 
participants: Colorado, Florida, Georgia, Illinois, Massachusetts, 
Michigan, New Jersey, Oregon, and Texas. 

[37] In 2011, we interviewed representatives from the following SSBCI 
participants: California, Hawaii, Indiana, Kansas, Maryland, Missouri, 
North Carolina, and Vermont. 

[38] We were unable to review three SSBCI participants' websites 
because the website links listed on Treasury's SSBCI website did not 
work. 

[39] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999); Internal Control Management and 
Evaluation Tool, [hyperlink, http://www.gao.gov/products/GAO-01-1008G] 
(Washington, D.C.: August 2001); Tax Administration: IRS Needs to 
Further Refine Its Tax Filing Season Performance Measures, [hyperlink, 
http://www.gao.gov/products/GAO-03-143] (Washington, D.C.: Nov. 22, 
2002); and Managing for Results: Strengthening Regulatory Agencies' 
Performance Management Practices, [hyperlink, 
http://www.gao.gov/products/GAO/GGD-00-10] (Washington, D.C.: Oct. 28, 
1999). Leading practices are performance management practices and key 
attributes of performance measures that we have identified in previous 
work based on information from a variety of federal and state 
organizations that would help federal agencies more effectively manage 
and measure program performance. 

[40] Pub. L. No. 111-240, 124 Stat. 2504 (codified at scattered 
sections of 12, 15, and 42 U.S.C.). 

[41] GAO, Designing Evaluations: 2012 Revision (Supersedes PEMD-
10.1.4), [hyperlink, http://www.gao.gov/products/GAO-12-208G] 
(Washington, D.C.: Jan. 31, 2012). 

[End of section] 

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