GAO finds lax reviews of HUBZones

      The Government Accountability Office found a lack of documentation for nine out of 12 HUBZone firms it reviewed in Puerto Rico that were certified between March 2017 and March 2018. The 12 firms reviewed were not chosen randomly.

      “SBA did not consistently document or follow its policies and procedures for certification reviews,” the GAO said in its report.

      In the case of the missing documents for the nine firms in Puerto Rico, SBA officials said they used alternative procedures to determine firms' eligibility. However, GAO said that SBA has not updated its internal policy manuals to reflect these procedures. Furthermore, there was no documentation of the new procedures.

      In four of 12 cases, SBA did not follow its policy to conduct three levels of review to determine if the firm was eligible to be certified as a HUBZone.

      Overall, the GAO concluded that the SBA’s standards for internal controls need to be tightened.

      “Because SBA has not updated its internal policy manuals or conducted a documented review of staff compliance with its quality review procedures, it lacks reasonable assurance that firms are eligible or its review process is effective. In turn, this increases the risk of ineligible firms participating in the HUBZone program and receiving contracting preferences to which they are not entitled,” the GAO said. GAO made two recommendations.

More information: GAO Report: https://bit.ly/2RdOdhq

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