Despite big budget cut, SBA would get more funds for IT, oversight

Administration wants funding for core agency work, including IT spending, building up SBA’s workforce, and protecting programs from fraud

President Barack Obama proposed to slash the Small Business Administration’s overall fiscal 2012 budget by 45 percent, but his  proposal would slightly enhance funding for IT projects and program oversight.

SBA would receive $985 million for fiscal 2012, a huge decrease from what Congress gave the agency in 2010, when the agency also received a $962 million supplemental appropriation.

Despite the decrease, the SBA CIO’s office would get a slight boost. The office would receive $51 million in the fiscal 2012 budget proposal, a $7 million increase from what the office received in fiscal 2010 and $1 million more than what the continuing resolution to fund the government this fiscal year has offered.

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The administration would direct money to upgrade SBA’s financial management systems to improve its financial reporting. Last year, the Office of Management and Budget ordered an immediate review of SBA’s financial systems IT projects. Administration officials want these systems modernized in a way that they reduce project costs and match the top priorities of the agency's business needs.

In addition, the budget would give money for SBA's Loan Management and Accounting System as officials make it run more efficiently and bring better results. Obama wants funding for core agency activities, including spending on IT and building up SBA’s workforce, particularly its acquisition workforce.

The proposal would strengthen procurement program oversight. In recent years, the SBA inspector general investigators and the Government Accountability Office have come across problems in the small-business programs. The SBA had struggled with fraud in several of its business development programs, including the programs that support the Historically Underutilized Business Zone program and service-disabled veterans.

Ineligible business owners gained access to the service-disabled veterans program and won roughly $100 million in set-aside contracts, GAO reported in 2009. More recently, GAO has also found SBA has certified companies that used fake addresses in HUBZones.

The SBA's IG would get $19.4 million, a $2 million increase from 2010. The economic stimulus law gave the IG $10 million to use from fiscal years 2009 to 2013 to review the use of the stimulus money. SBA's Office of Government Contracts and Business Development would receive $36 million in 2012, an increase above 2010 and the current funding levels.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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