The Small Business Administration’s largest financing initiative, its 7a program, guarantees loans made by private sector lenders to small businesses that cannot otherwise get funding, but while the agency has made management improvements in recent years, it has been overwhelmed by the volume of applications following last year’s hurricane season, the Government Accountability Office has said.
It cited three factors for why the agency’s workforce and new loan processing system are unable to keep up with the increase in applications: unprecedented volume, outages in the new loan processing system and slow response times accessing information, and inadequate planning efforts to address a disaster of this magnitude.
While SBA has applied some key practices important to successful organizational change in its workforce transformation efforts begun in 2002, the agency has overlooked aspects that emphasize transparency and communication, according to GAO-06-605.
It said however that SBA has implemented past GAO recommendations to improve in these areas, has made progress addressing financial management issues, and administered its disaster loan program following the Sept. 11, 2001 attacks effectively, providing about $1 billion in loans to affected businesses and individuals.
