Entrepreneurial Assistance: Opportunities Exist to Improve Programs' Collaboration, Data-Tracking, and Performance Management

What GAO Found

In summary, we found the following:

• Federal programs that support entrepreneurs are fragmented and overlap based on 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. Much of the overlap among these 52 programs tends to be concentrated among programs that provide a broad range of technical and financial assistance. In addition, while agencies have taken steps to collaborate more in administering these programs, they have not implemented a number of good collaborative practices we have previously identified, and some entrepreneurs struggle to find the support they need. GPRAMA's crosscutting framework requires that agencies collaborate in order to address issues such as economic development that transcend more than one agency, and GPRAMA directs agencies to describe how they are working with each other to achieve their program goals. 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 practice that is not consistent with government standards for internal controls. In addition, we found that 33 of the 52 programs had set goals for their programs, but 19 of these 33 programs did not meet any of their goals or only met some of their goals. Two programs have goals but did not have goal accomplishment information. Goal accomplishment information for HUD's Section 4 Capacity Building for Affordable Housing and Community Development program is unknown because HUD did not provide it. In addition, goal accomplishment information for USDA's Small Business Innovation Research program is not available because the program goals are based on 2-year time periods and the current period has not yet ended. Further, agencies have conducted evaluations of only 20 of the 52 active programs since 2000. As a result, information on program efficiency and effectiveness is limited, and scarce resources may be going toward programs that are less effective. GPRAMA requires agencies to set and measure annual performance goals, and recognizes the value of program evaluations because they can help agencies assess programs' effectiveness and improve program performance. Without more robust program information, agencies may not be able to administer programs in the most effective and efficient manner.

Based on our findings, we recommended that the four agencies and OMB explore opportunities to enhance collaboration among programs, both within and across agencies, and that the four agencies track program information and conduct more program evaluations. The agencies neither agreed nor disagreed with the recommendations but did provide information on their plans to address them.

Why GAO Did This Study

This testimony discusses our work on economic development programs that provide entrepreneurial assistance. Entrepreneurs play a vital role in the U.S. economy, and the federal government provides a variety of support and assistance to them. In August 2012, we reported information on 52 programs at the Departments of Commerce (Commerce), Housing and Urban Development (HUD), Agriculture (USDA), and the Small Business Administration (SBA) that support entrepreneurs. According to agency officials, these programs, which typically fund a variety of activities in addition to supporting entrepreneurs, spent an estimated $2 billion on economic development efforts in fiscal year 2011. Economic development programs that effectively provide assistance to entrepreneurs, in conjunction with state and local government and private sector economic development initiatives, may help businesses develop and expand. However, the ways that these programs are administered could lead to inefficient delivery of services, such as requiring entrepreneurs to fill out applications to multiple agencies with varying program requirements. These inefficiencies could compromise the government’s ability to effectively provide the needed services and meet the shared goals of the programs.

In January 2011, Congress updated the Government Performance and Results Act of 1993 (GPRA) with the GPRA Modernization Act of 2010 (GPRAMA). GPRAMA establishes a new framework aimed at taking a more crosscutting and integrated approach to focusing on results and improving government performance. Among other things, GPRAMA requires the Office of Management and Budget (OMB) to coordinate with agencies to establish outcome-oriented federal government priority goals covering a limited number of policy areas, as well as goals to improve management across the federal government. The President's 2013 budget submission includes the first interim federal government priority goals, including one to increase federal services to entrepreneurs and small businesses, with an emphasis on start-ups and growing firms and underserved markets.

This testimony is based on information on these 52 programs that is discussed in our August 2012 report. Specifically, this testimony discusses (1) the extent of overlap, fragmentation, and duplication and their effects on entrepreneurs, as well as agencies' actions to address them; and (2) the extent to which agencies collect information necessary to track program activities and whether these programs have met their performance goals and have been evaluated. This testimony also provides information on the agencies' actions to address recommendations we made in our August 2012 report.

For further information, contact William B. Shear at (202) 512-8678 or shearw@gao.gov