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Federal Market Intelligence for Small Business |
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IG: SBA lax in removing ineligible 8(a)sA recent audit of about two dozen firms in the Small Business Administration’s 8(a) Business Development program found that 80% of those firms were ineligible to be in the program. “We found that 20 of 25 firms we reviewed should have been removed from the 8(a) program,” the SBA’s inspector general wrote in the audit. Those ineligible firms received $127 million in new 8(a) set-aside contracts in fiscal 2017, at the expense of eligible disadvantaged firms, the report said. The inspector general’s office reviewed the 15 individually-owned 8(a) companies that received the largest 8(a) set-aside contracts in fiscal 2016, totaling $461 million. The IG also reviewed 10 8(a) companies that had been previously flagged for possible ineligibility. Overall, the auditors found that the SBA in fiscal 2016 and 2017 was slow to identify ineligible firms in the 8(a) program, and when it did identify such a firm, it did not always remove them from the program. In addition, SBA has been lax about performing the required continuing eligibility reviews when it receives specific and credible complaints regarding firms’ eligibility; furthermore, the agency did not log all such complaints, the IG wrote in the report. “We found internal control deficiencies that permitted firms to remain in the program after SBA found them to be ineligible. Specifically, SBA did not have an adequate system to track the removal of firms or the resolution of eligibility issues once district offices or OCE recommended removing firms,” the report said. The IG made 11 recommendations to improve oversight. SBA agreed with 7 of the recommendations, and five have been resolved.
More information:
IG report release: https://www.sba.gov/node/1626894
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