State Small Business Credit Initiative: Opportunities Exist to Improve Program Oversight
Highlights
Congress enacted the Small Business Jobs Act of 2010 in September 2010 in response to concerns that small businesses have been unable to access capital that would allow them to create jobs. Among other things, the act aims to stimulate job growth by establishing the $1.5 billion State Small Business Credit Initiative (SSBCI) within the Department of the Treasury (Treasury) to strengthen state and territory (state) programs that support lending to small businesses and small manufacturers. Participating states are expected to leverage the SSBCI funds to generate an amount of private financing and investment at least 10 times the amount of their SSBCI funds (that is, a leverage ratio of 10:1). The act also requires GAO to audit SSBCI annually. Accordingly, this report examines (1) which states applied for SSBCI funds and the planned uses of those funds; (2) Treasury's implementation of SSBCI; and (3) Treasury's efforts to measure whether SSBCI achieves its goals. GAO surveyed state SSBCI applicants (for a 100 percent response rate), analyzed data from Treasury case files, and interviewed officials from Treasury and eight participating states.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Treasury | To improve its implementation and oversight of the SSBCI program, and to help ensure that the performance measures for the SSBCI program are as robust and meaningful as possible, the Secretary of the Treasury should direct the SSBCI Program Manager to consider key attributes of successful performance measures as the program's measures are developed and finalized. |
As GAO reported in December 2011, Treasury officials had not yet established performance measures for the State Small Business Credit Initiative (SSBCI) program. Although Treasury planned to rely primarily on the Department's overall performance measures in evaluating the SSBCI program, officials noted they were considering several draft performance measures to assess the efficiency of SSBCI. However, Treasury officials were struggling to develop measures that focused on the aspects of the program under Treasury's control, and they did not have a time frame for fully developing and finalizing SSBCI-specific performance measures. GAO recommended that the Secretary of the Treasury direct the SSBCI Program Manager to consider key attributes of successful performance measures as the program's measures were developed and finalized. In response, Treasury reported in August 2012 that it considered the attributes of successful performance measures identified by GAO as it developed and adopted performance goals and measures for the SSBCI program.
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