SBA squanders $14.8 million in questionable costs for underutilized small business portal

This week's Golden Horseshoe is awarded to the Small Business Administration for lax oversight of a $25 million grant for the creation of a COVID-19 relief small business portal that ran up $14.8 million in questionable costs for an underutilized hub, according to a report by the agency's Office of Inspector General.

The SBA's Office of Entrepreneurial Development (OED) received $25 million through the CARES Act to create a portal to help small businesses during the pandemic. An $18.6 million grant was awarded for the Resource Partner Training Portal program, but the intended results were not achieved. A combination of a failed marketing strategy to let small businesses know of the portal's existence and unsupported or unallowable invoices led the inspector general to question $14.8 million in costs.

"SBA did not did not ensure the grant recipient developed and implemented an effective marketing and outreach strategy to ensure the hub successfully achieved the legislative purpose of the CARES Act," Inspector General Hannibal "Mike" Ware stated in the report.

In fact, the watchdog found less than 300,000 small businesses ever used the portal.

"In the critical first year of the disaster response and launching the hub, less than 1 percent of the 30 million small businesses it was intended to help used it and only 62 of approximately 14,000 resource partner counselors and mentors completed any of the training modules," according to the report.

The grant was awarded to America's Small Business Development Centers (ASBDC), which partnered with the Association for Women's Business Centers, to develop the portal. The watchdog found the ASBDC failed to meet federal procurement cost control requirements and also authorized work the grant did not allow.

The marketing campaign by ASBDC and its partner focused on their own limited network while neglecting the vastly larger small business community across the U.S., resulting in the multimillion-dollar portal funded by taxpayers going largely underutilized.

"The grant recipient used social media posts on Facebook, Twitter, Instagram, and LinkedIn to promote the information portal and reach resource-partner counselors and mentors," the watchdog reported. "However, the grant recipient's approach focused primarily on reaching the 1.1 million small businesses already within the resource partners' network and not the other 28.9 million small business concerns."

The SBA approved the ASBDC's budget, including its $1 million digital media campaign, "without a detailed plan on how the funds would be spent," the IG found.

As a result, the SBA paid invoices by the awardee that were "unallowable, unreasonable and unsupported," the IG determined.

Just The News visited the portal and found it contained little information and some of its search tools produced no results. For instance, its "Find Resources by Topic" had no topics listed. JTN tried to speak to a "virtual small business agent" on the site, but no one responded.

The OED agreed with some of the inspector general's findings.

"Prior to this OIG audit, we recognized some of the challenges facing the various programs and had begun addressing them," Mark L. Madrid, associate administrator of the OED, wrote to Ware. "We will continue to strengthen the agency's oversight and implementation of OED programs. 

"My management team and I are committed to ensuring the agency's entrepreneurial development programs serve the nation's small businesses to the maximum potential. We will work expeditiously to ensure the recommendations below are resolved."