Republicans blast Small Business Administration over $100M taxpayer-funded 'boondoggle'
The SBA was dinged by its inspector general regarding the agency's oversight of the Community Navigation Program, which was funded through the American Rescue Plan
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The top Republicans on the House and Senate's respective Small Business Committees are accusing the Small Business Administration (SBA) of wasting taxpayer dollars over the agency's handling of a $100 million program it was charged with overseeing.
The SBA's Office of Inspector General (OIG) released a report this week that flagged gaps in the SBA's ability to measure and manage its Community Navigator Pilot Program (CNPP), which was created through the American Rescue Plan Act of 2021 for the purpose of helping underserved small businesses with pandemic recovery.
President Biden, from left, Vice President Harris, Jill Scarbro, chief executive officer of Bright Futures Learning Services, and Isabel Casillas Guzman, administrator of the US Small Business Administration (SBA), speaks during a National Small Busi (Ting Shen/Bloomberg via Getty Images / Getty Images)
The SBA issued $99.9 million in grants for the two-year program, but the OIG highlighted several concerns over the agency's oversight. For instance, the audit showed the SBA did not set a target for the number of underserved clients to reach and failed to ensure that some of the organizations tasked with carrying out services avoided double counting performance results – thus the program's success could not be fully evaluated.
The OIG made five recommendations to improve the SBA’s oversight of the program if it is renewed, and the SBA agreed with some of them in its response to the report. But the SBA raised concerns about setting targets for underserved populations, citing legal and programmatic risks. The agency also acknowledged the challenge of data sharing limitations due to privacy laws.
When contacted by FOX Business about the OIG report, the SBA said the final program data is still undergoing analysis, but the agency does know that as just part of its work, the Community Navigator Program trained over 350,000 people, and more than 33,000 received one-on-one counseling sessions
The agency said many of the people the program reached were not being served by existing government programs, saying that around 75% of those who went through the one-on-one program hadn’t worked with the SBA at all in at least the previous five years.
The SBA argues that the program succeeded in delivering on its mission to reach underserved businesses, saying that a higher share of women, Black, Asian and Hispanic business owners were served by the Community Navigators than by the SBA’s other counseling and training offerings.
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The Biden-Harris administration and several prominent Democrats have touted the CNPP as one of the success stories of the American Rescue Plan. But after the release of the OIG audit, House Small Business Committee Chairman Roger Williams, R-Texas, and Senate Small Business Committee Ranking Member Joni Ernst, R-Iowa, both pointed to the program as a failure.
Representative Roger Williams, a Republican from Texas who is Chairman of the House Small Business Committee, speaks during a House Financial Services Committee hearing in Washington, DC, US, on Tuesday, Dec. 13, 2022. (Photographer: Al Drago/Bloomberg via Getty Images / Getty Images)
"It is disappointing to see that the SBA’s Community Navigator program fell short on its promise to support America’s small businesses," Williams told FOX Business. "Not only has this program yielded uncertain results, but it did so at a cost of $100 million to the American Taxpayer."
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He added, "As we have seen repeatedly with the Biden-Harris SBA, mismanagement of this program has left us with serious doubts surrounding the transparency and accountability of the taxpayers’ investment."
Sen. Ernst had strong words for the SBA over the OIG report.
Sen. Joni Ernst speaks during a news conference following the weekly Senate Republican policy luncheon at the U.S. Capitol on September 10, 2024 in Washington, DC. During the news conference Senate republicans spoke on a range of topics including the (Anna Moneymaker/Getty Images / Getty Images)
"The Community Navigator program was a complete dumpster fire and textbook example of government throwing away taxpayer dollars while failing to strengthen small businesses," Ernst said, referring to the program as a "boondoggle."
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"The Biden-Harris administration spent $100 million without an ‘established target’ as part of their inflation creation spending spree," the Republican continued. "While this might be a drop in the bucket in the sea of Washington waste, small businesses operating on razor-thin margins would be forced to close if they were this financially irresponsible."
In response to the GOP lawmakers' criticisms, an SBA spokesperson told FOX Business in a statement, "It comes as no surprise that members of Congress who opposed the Community Navigators program when it was created are still attacking it today despite its successful record."
The spokesperson added, "The SBA fostered valuable partnerships with hyper-local trusted organizations through the Community Navigators program that helped reach underserved and the smallest of the small businesses, connecting thousands of entrepreneurs who had not previously worked with the SBA – including Veteran, rural, and minority-owned businesses – to crucial government resources they could leverage to start, grow, and prosper."