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NOW: Rubio Chairs Hearing on Reauthorizing the Small Business Administration’s Entrepreneurial Development Programs

May 1, 2019 | Press Releases

Washington, D.C. — U.S. Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business and Entrepreneurship, has convened a hearing titled “Reauthorization of the SBA’s Entrepreneurial Development Programs.”
 
The hearing is currently being live-streamed on the committee’s website here.
 
Chairman Rubio’s opening remarks as prepared can be found below.
 
Chairman Rubio: “Today’s hearing, titled ‘Reauthorization of the SBA’s Entrepreneurial Development Programs’ is the Committee’s third in a series focused on reauthorization of the Small Business Act.
 
“It is vital that as this committee reauthorizes the Act, that we take a look at the SBA’s small business programs to ensure they are meeting the needs of today’s entrepreneurs and operating in an efficient way.
 
“The hearing today will focus on the Small Business Administration’s four main entrepreneurial development programs.
 
“Specifically, we will be examining the Small Business Development Center, or SBDC, program; the Women’s Business Center, or WBC, program;  the Service Corps of Retired Executives, or SCORE, program; and the Veteran’s Business Outreach Centers, or VBOC, program.
 
“Each of these programs is aimed at providing entrepreneurs and small business owners with specific and tailored training to help them start and scale their businesses.
 
“With the SBA Office of Advocacy reporting roughly 30.7 million small businesses in the United States, 2.5 million of which are located in my home state of Florida, the potential impact that these programs can have on business creation and growth is truly immense.
 
“So what do these programs offer to our nation’s entrepreneurs?
 
“The SBDC program focuses on providing technical and managerial training to entrepreneurs at every stage of business creation.
 
“The SBDC network is the SBA’s largest entrepreneurial development program, with nearly 1,000 center locations nationally, in rural and urban areas of our country alike.  
 
“The WBC program, like SBDCs, offers entrepreneurs with business training and counseling.
 
“WBCs, however, specialize in entrepreneurial training targeted to meet the unique needs of female entrepreneurs.
 
“Currently, there are more than 100 WBCs located throughout the United States.  
 
“In addition to SBDCs and WBCs, the SBA supports the SCORE program, which focuses on providing entrepreneurs with personalized business mentorship and training.
 
“SCORE provides mentorship services both online and at more than 300 centers, often co-located with SBA district offices.
 
“The final SBA entrepreneurial development program that we will be discussing today is the VBOC program.
 
“VBOCs provide U.S. military veterans, and their families, with entrepreneurship education and assistance at 22 center locations.
 
“Additionally, VBOCs serve a unique, and vital role within the Department of Defense’s Transition Assistance Program, by providing transitioning members of the military with a 2-day Boots to Business entrepreneurship course.
 
“Undoubtedly, small business owners are benefiting from the SBA’s entrepreneurial development programs.
 
“In Florida alone, the SBDC network reported that their services impacted more than 280,000 jobs, generated more than $36.7 billion in sales, and resulted in the creation of more than 4,500 new businesses since 2011.
 
“All of the SBA entrepreneurial development programs, however, have not been without criticism.
 
“Just last Thursday, the SBA’s Office of Inspector General, or OIG, released an audit report on the SBA’s oversight of the SCORE Association.
 
“The audit uncovered systemic issues within the SCORE Association and the SBA’s oversight of the SCORE program.
 
“Specifically, the report notes that the SCORE Association misused federal grant funds.
 
“Some of the most egregious instances of misuse include:
 
“The SCORE Association redistributed more than $100,000 worth of grant money to be used for year-end bonus for SCORE employees, 66 percent of which went to 4 senior-level SCORE Association executives;
 
“The SCORE Association awarded nine of their 25 contracts without following the cooperative agreement’s requirements, including a failure to solicit proposals through open competition and failure to obtain proposals from at least 3 firms;
 
“The CEO of the SCORE Association, whose salary from federal and foundation funds totals more than $440,000, solely used federal grant dollars, rather than non-profit foundation funds, to hire an executive coaching consultant; and
 
“The SCORE Association used federal funds for prohibited costs such as alcohol and unallowable local travel expenses.
 
“These egregious infractions of taxpayer dollars went undetected by the SBA.
 
“And unfortunately, this is not the first time that the SCORE Association has been criticized for the mismanagement and comingling of federal funds.
 
“Following Hurricane Sandy, the SBA awarded a number of disaster technical assistance grants to resource partners aiding in recovery efforts.  
 
“The SCORE Association received one such grant.
 
“Later, in 2017, the OIG audited SCORE’s use of those disaster technical assistance funds, specifically auditing $840,000 worth of programs expenses.
 
“The OIG audit reported that SCORE failed to consistently comply with grant requirements, ultimately recommending that SBA recover approximately 46 percent, or roughly $391,000, of SCORE’s total disaster grant.  
 
“While the SCORE program did repay those funds to the SBA over time, there is clearly an overarching issue within the program that has continued to allow for the misuse of federal funds without SBA detection.
 
“Unfortunately, concerns surrounding the SCORE program do not stop with the misuse of taxpayer dollars.  
 
“It has recently come to the attention of the Committee that the SBA OIG is currently managing three separate criminal investigations of embezzlement and whistleblower protection violations related to the SCORE program.
 
“In one such instance, the OIG has substantiated that a SCORE chapter Treasurer who identified an instance of fraud, was removed from their position in an act of retaliation for whistleblowing, a decision that was sanctioned by a SCORE District Director and the Association’s National Vice President of Field Operations.
 
“Clearly, after reviewing the Inspector General’s audit report and the details surrounding these criminal investigations, I have severe concerns about the operation, oversight, and management of the SCORE program.
 
“I look forward to not only discussing these concerns, but also examining the entrepreneurial development programs as a whole throughout today’s hearing.”