What did the GAO find?
The State Small Business Credit Initiative (SSBCI) provides funds to eligible states—states, territories, the District of Columbia, and tribal governments—to support small business lending and investment programs through its capital program. Jurisdictions eligible to support certain businesses applying for the SSBCI program or other government small business program may apply for technical assistance funding (such as legal, accounting, and financial advisory services).
The Treasury Department, which administers SSBCI, has multiple application deadlines for capital and technical assistance programs (see figure). All 50 states, five territories and the District of Columbia have submitted capital program funding applications, and as of September 30, 2022, the Treasury has approved 31 applications and awarded $1.3 billion.
State Small Business Loan Initiative Application Deadline Extensions, March 2021-March 2023
Partly because of these deadline extensions and the time needed to review and approve multiple applications, Treasury took longer than expected to disburse SSBCI funds. Significant SSBCI implementation steps remain, such as reviewing remaining applications and implementing compliance monitoring and performance measurement plans. However, Treasury’s planning efforts did not fully incorporate some of the best practices GAO had previously developed for reliable project scheduling. For example, Treasury’s work plan does not identify which employees or contractors are responsible for each task. Fully incorporating these best practices can help limit the potential for delays and manage current costs and program funds.
Treasury has been developing a framework to support and monitor states’ compliance with SSBCI guidelines. In the year In November 2022, Treasury published the jurisdictional and regulatory standards used for their programs. Officials said they plan to develop processes used for the main SSBCI and prepare compliance monitoring processes (for Treasury use) by December 31, 2022. Treasury has also published data collection and reporting requirements for SSBCI and is developing key indicators. Measuring program performance.
Why did the GAO do this study?
SBI is authorized by the 2021 American Recovery Plan Act (ARPA) to support small businesses recovering from the economic impact of the Covid-19 pandemic. Congress appropriated $10 billion for the program.
The CARES Act and ARPA include provisions for the GAO to monitor the federal government’s efforts to respond to COVID-19. Among its objectives, this report examines Treasury’s efforts to complete key implementation steps for SSBCI and to manage program risks and measure program performance.
GAO reviewed relevant legislation and SSBCI documents and analyzed Treasury data on funds appropriated and disbursed. GAO interviewed Treasury officials selected to represent diverse geographic regions and other characteristics, representatives from four states, and representatives from a general sample of 12 states and three tribal governments.
