Evaluation Report 16-21: SBA’s 2015 and 2016 Cash Gifts

On August 23, 2016, the U.S. Small Business Administration (SBA) Office of Inspector General (OIG) published its evaluation report 16-21: SBA’s 2015 and 2016 Cash Gifts.  The Consolidated Appropriations Act, 2016 (the Act) gives SBA the authority to accept gifts to carry out its mission.  Employees may solicit and accept gifts on behalf of SBA after proper approvals, including a conflict of interest determination by SBA’s Office of General Counsel.  The Consolidated Appropriations Act provides that any gift, devise, or bequest of cash accepted by the Administrator shall be held in a separate account and shall be subject to semiannual audits by the Inspector General who shall report his or her findings to Congress.

Our evaluation found that SBA generally complied with the Act regarding the solicitation, acceptance, holding, and utilization of cash gifts.  We determined that SBA’s Office of Communications and Public Liaison obtained proper approval from the Office of General Counsel for the 2014 National Small Business Week.  However, of the 14 entities that cosponsored the 2014 National Small Business Week, 3 were not properly vetted through SBA program offices to ensure no business relationships existed that would cause a conflict of interest.  Also, SBA’s Office of General Counsel did not confirm whether a conflict of interest existed between SBA and two of those entities.  We also determined that SBA’s Office of Communications and Public Liaison did not distribute excess cash contributions in accordance with SBA policy.  Specifically, the fiscal agent retained custody of $75,000 instead of distributing it in accordance with SBA policy.  In addition, SBA did not always use gift funds for allowable expenses in accordance with SBA regulations and policy.

We made four recommendations that the Agency agreed to implement.