Entrepreneurial Assistance: Opportunities Exist to Improve Programs' Collaboration, Data-Tracking, and Performance Management
Highlights
What GAO Found
Federal efforts to support entrepreneurs are fragmented--including among 52 programs at the Department of Agriculture (USDA), Commerce, and Housing and Urban Development (HUD) and the Small Business Administration (SBA). All overlap with at least one other program in terms of the type of assistance they are authorized to offer, such as financial (grants and loans) and technical (training and counseling), and the type of entrepreneur they are authorized to serve. Some entrepreneurs struggle to navigate the fragmented programs that provide technical assistance. For example, some entrepreneurs and technical assistance providers GAO spoke with said the system can be confusing and that some entrepreneurs do not know where to go for assistance. Collaboration could reduce some negative effects of overlap and fragmentation, but field staff GAO spoke with did not consistently collaborate to provide training and counseling services to entrepreneurs. The agencies have taken initial steps to improve how they collaborate by entering into formal agreements, but they have not pursued a number of other good collaborative practices GAO has previously identified. For example, USDA and SBA entered into a formal agreement in 2010 to coordinate their efforts to support businesses in rural areas; however, the agencies' programs that can support start-up businesses--such as USDA's Rural Business Enterprise Grant program and SBA's Small Business Development Centers--have yet to determine roles and responsibilities, find ways to leverage each other's resources, or establish compatible policies and procedures. Without enhanced collaboration and coordination agencies may not be able to make the best use of limited federal resources in the most effective and efficient manner.
Agencies do not track program information on entrepreneurial assistance activities for many programs, a number of programs have not met their performance goals, and most programs lack evaluations. In particular, the agencies do not generally track information on the specific type of assistance they provide or the entrepreneurs they serve, in part because they do not rely on this information to administer the programs. Rather, agencies may rely, for example, on data summaries in narrative format, which cannot be easily aggregated or analyzed. According to government standards for internal control, this information should be available to help inform management in making decisions and identifying risks and problem areas. GAO also found that 19 programs failed to meet their annual performance goals related to entrepreneurial assistance, including USDA's Rural Business Opportunity Grants, Commerce's Economic Development/Support for Planning Organizations, HUD's Indian Community Development Block Grants, and SBA's 504 loans to finance commercial real estate. Programs could potentially rely on results from program evaluations to determine the reasons why they have not met their goals, as well as to gauge overall effectiveness. However, the agencies lack program evaluations for 32 of the 52 programs. Therefore, information on program efficiency and effectiveness is limited, and scarce resources may be going toward programs that are less effective. In addition, without more robust program information, agencies may not be able to administer programs in the most effective and efficient manner. GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.
Why GAO Did This Study
Economic development programs that effectively provide assistance to entrepreneurs may help businesses develop and expand. GAO focused on 52 economic development programs, with an estimated $2.0 billion in funding, at Commerce, HUD, SBA, and USDA that support entrepreneurs. In response to a statutory requirement, this report discusses (1) the extent of overlap and fragmentation, the effects on entrepreneurs, and agencies' actions to address them; and (2) the extent of tracked program information and whether these programs have met their performance goals and been evaluated. To address these objectives, GAO analyzed program information and interviewed agency officials in headquarters and selected field offices, entrepreneurs, and third-party entities, such as nonprofits, that use federal grants to provide assistance directly to entrepreneurs.
Recommendations
GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. |
USDA has taken steps to collaborate more with the other agencies in administering these programs. For example, USDA's Rural Business-Cooperative Service (RBS) noted in March 2017 that it is engaged in several MOUs with other federal agencies that support coordination and collaboration on areas of mutual interest, including a MOU with Commerce's Economic Development Administration to leverage programs and resources to support regional economic development. In addition, RBS noted that it is coordinating with HUD and others to leverage programs and resources to create healthy, economically vibrant neighborhoods through the development of local food systems. In addition, USDA continues to participate on the BusinessUSA Steering Committee with several other agencies. BusinessUSA is a federal website developed to make it easier for businesses to access the services and information they need. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB noted that, in fiscal year 2016, the General Services Administration (GSA) took over the management of the BusinessUSA website and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.
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| Department of Commerce |
Priority Rec.
The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. |
Commerce has taken steps to collaborate more with the other agencies in administering these programs. For example, Commerce's Economic Development Administration (EDA) noted in March 2017 that it established an economic development integration team in fiscal year 2016 to facilitate direct engagement between communities and federal agencies with complementary economic development resources to collaboratively support regional economic development across the nation. EDA added that the team has executed a memoranda of understanding (MOU) with HUD's Office of Community Planning and Development and USDA Rural Development and is working with SBA to collaborate, enhance relationships, and cross-promote resources. In addition, Commerce continues to participate on the BusinessUSA Steering Committee with several other agencies. BusinessUSA is a federal website developed to make it easier for businesses to access the services and information they need. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB noted that, in fiscal year 2016, the General Services Administration (GSA) took over the management of the BusinessUSA website and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.
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| Department of Housing and Urban Development | The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. |
HUD has taken steps to collaborate more with the other agencies in administering these programs, including developing a training module for small construction contractors with SBA to enable them to access performance bonds for HUD-funded construction projects. In addition, through BusinessUSA, a federal website developed to make it easier for businesses to access the services and information they need, HUD and other federal agencies are able to increase public awareness of the resources they offer. In November 2016, OMB noted that the General Services Administration (GSA) took over the management of BusinessUSA website in fiscal year 2016 and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.
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| Office of Management and Budget | The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. |
In November 2016, OMB noted that the General Services Administration (GSA) took over the management of BusinessUSA in fiscal year 2016, a federal website developed to make it easier for businesses to access the services and information they need. Through the website, federal agencies are able to increase public awareness of the resources they offer. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB added that GSA has integrated BusinessUSA's content and services in the USA.gov website. This provides users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow. Finally, the BusinessUSA Steering Committee, composed of staff from across several agencies, continues to meet regularly and assemble agency stakeholders to collect feedback and create the strategic vision for moving the tool forward.
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| Small Business Administration |
Priority Rec.
The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. |
SBA has taken steps to collaborate more with the other agencies in administering these programs. For example, SBA noted in March 2017 that it has engaged in a number of collaborative efforts with the other agencies, including the development of a training module for small construction contractors with HUD enabling them to access performance bonds for HUD-funded construction projects, and a MOU between SBA's Office of Veterans Business Development and USDA to explore opportunities for supporting veteran-owned businesses in agriculture-related sectors. In addition, SBA continues to participate on the BusinessUSA Steering Committee with several other agencies. BusinessUSA is a federal website developed to make it easier for businesses to access the services and information they need. The one-stop shop website directs customers to federal services that match their requirements (i.e., financing, export assistance, federal contracting), so a customer does not need to visit disparate websites. OMB noted that, in fiscal year 2016, the General Services Administration (GSA) took over the management of the BusinessUSA website and integrated its content and services in the USA.gov website, which is intended to provide users with a more accessible and centralized one-stop platform for entrepreneurs to access the services that could help them grow.
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| Department of Agriculture | The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs. |
In September 2019, USDA/RBS stated that there are numerous types of technical assistance that can be provided to assist rural businesses and communities through its grant programs--including managerial, financial, and operational analysis, business consultation, feasibility studies, market research, or business preparedness and education. In addition, USDA/RBS stated that individual applications for program funding do provide information on the type(s) of technical assistance that the recipient will provide to local businesses if their application is funded, and that assistance method is generally directed to meet a local need. However, USDA/RBS stated that it did not plan to collect and segregate the types of assistance provided to ultimate recipient businesses as it would not provide help in the administration of its programs.
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| Department of Commerce |
Priority Rec.
The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs. |
EDA stated that in May 2020 the Office of Management and Budget approved its revised information collection instruments, which are designed to gather comprehensive information on program outputs (activities) and outcomes from all of EDA's non-infrastructure program recipients (including entrepreneurs served and type of assistance provided). EDA plans to fully implement the updated information collection instruments in fiscal year 2020. These revised instruments should provide EDA with information to help administer its programs.
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| Department of Housing and Urban Development | The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs. |
In July 2021, HUD stated that Community Development Block Grant (CDBG) grantees are required to report accomplishments and detailed performance measures on 26 eligible activities using 85 different matrix codes in the department's Integrated Disbursement and Information System (IDIS). However, the CDBG program does not require grantees to track subsets of economic development programs, such as those assisting entrepreneurs, as this represents a very small portion of the CDBG portfolio. Additionally, IDIS is not constructed in a way to allow for the recording of the granular details of every project a grantee implements.
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| Small Business Administration |
Priority Rec.
The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs. |
In June 2019, SBA described actions the agency has previously taken and plans to take related to consistently collecting information and using it to help administer its programs. For example, in April 2018, SBA and the Department of Agriculture (USDA) entered into an agreement to promote strong businesses and agricultural economies in rural America. Under the agreement, SBA and USDA shared loan program data to better coordinate strategy and improve program effectiveness. The agencies' analysis of borrower and lender characteristics for SBA's 7(a) and 504 loan and USDA's Business and Industry loan programs showed that both agencies collect similar information on their borrowers and lenders; a few borrowers used both USDA and SBA programs; the programs appear to reach different business populations and lenders; and the SBA loan programs support smaller dollar loans, serve newer businesses (which is a prime characteristic of a small business), and reach more minority borrowers. According to SBA, both agencies plan to use the results of their analysis to improve coordination. In addition, SBA stated that the agency has requested authority from Congress to collect unique client data from the resource partners, including Small Business Development Centers and Women's Business Centers, for internal evaluation purposes. SBA noted that this information would allow the agency to determine whether these entrepreneurs access other SBA or other federal programs, including USDA, and determine the impacts associated with these services. These actions should provide SBA with information to help administer its programs.
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| Department of Agriculture | The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness. |
In September 2019, USDA/RBS described actions it is taking to evaluate its programs. For example, every five years USDA/RBS conducts a management control review of each program. Among other things, these reviews are intended to evaluate the effectiveness of administrative operations, identify weaknesses or deficiencies in program and administrative operations, and identify the effectiveness and efficiency of management controls in Rural Development. In addition, USDA/RBS state offices conduct state internal reviews of each field office and centralized program functions at least once every 5 years. These reviews are comprehensive evaluations of the delivery of program and administrative functions in field offices and centralized program functions within a state. Continuous evaluations should help USDA/RBS assess program effectiveness and improve performance.
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| Department of Commerce |
Priority Rec.
The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness. |
EDA has taken steps to improve program evaluation. For example, EDA contracted with an independent firm to develop metrics to assess the impact of economic development programs on capacity building and long-term economic performance (final report dated November 2017). In addition, this same firm developed a toolkit to help EDA and economic development practitioners better collect, aggregate, and analyze data from economic development projects in order to assess their impact. Finally, EDA conducted an independent evaluation of its Regional Innovation Strategies Program--a national grant program dedicated to increasing regions' capacity to translate innovation into jobs. The final report (published in July 2019) provided an analysis of the program's effectiveness and economic impacts and recommended program improvements. According to EDA officials, the agency has already implemented many of the recommendations. These steps should help EDA assess and improve program performance.
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| Department of Housing and Urban Development | The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness. |
In July 2021, HUD stated that the department continues to work closely with its Office of Policy Development & Research on numerous studies to improve effectiveness and program outcomes. However, because of the small proportion of HUD funding used for entrepreneurial assistance, evaluations focused on this topic might not have the interest or be an efficient use of limited funding.
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| Small Business Administration |
Priority Rec.
The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should conduct more program evaluations to better understand why programs have not met performance goals and their overall effectiveness. |
In August 2017, SBA finalized a program evaluation framework that outlines the structure of the agency's program evaluation function, defines roles and responsibilities, and establishes guiding principles. As of February 2018, SBA stated that the agency had published evaluation reports for seven programs and initiatives. In addition, SBA, Commerce, and USDA participated in the Office of Management and Budget-chaired Evaluating Business Technical Assistance Program interagency working group, which publicly-released its guide titled Building Smarter Data for Evaluating Business Assistance Programs: A Guide for Practitioners, in May 2017. The guide identifies critical data and best practices that support the use and improvement of administrative data and other existing data sources for rigorous impact evaluations. Conducting more program evaluations should help SBA assess program effectiveness and learn how to improve program performance.
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