WASHINGTON, MARCH 20, 2013 - Members of the House Small Business Committee made clear Wednesday that business development programs, including those run by USDA’s Rural Development office, need to eliminate duplication and do a better job of showing what they are accomplishing or face elimination as Congress moves to address growing federal spending.

The hearing drew testimony from William B. Shear, director of Financial Markets and Community Investment with the General Accounting Office, the congressional watchdog agency. Shear cited a GAO report issued last August showing that the 52 federal programs USDA-RD and Small Business Administration that support entrepreneurial activity are “fragmented and overlap.”

Chairman Sam Graves, R-Mo., cited a $16.7 trillion national debt and annual U.S. government spending of $3.5-3.7 trillion as incentives to assure federal money is spent wisely. However, “I’m not sure these . . . programs are doing enough to justify their costs,” he said.

Doug O’Brien, USDA deputy Under Secretary for Rural Development, and Michael A. Chodos SBA associate administrator for Entrepreneurial Development, both offered prepared testimony touting the business development initiatives achieved by their programs. But both also were called upon to defend the efforts their agencies have taken in meeting the concerns raised by the GAO report issued last August

Shear said that while the agencies have taken steps to collaborate more in administering the technical and financial assistance programs, “they have not implemented a number of good collaborative practices we have previously identified, and some entrepreneurs struggle to find the support they need.”

Shear said the federal Government Performance and Results Modernization Act signed into law in early 2011 provides a “crosscutting framework” that requires agencies to collaborate and address those issues “that transcend more than one agency.”

“Without enhanced collaboration and coordination, agencies may not be able to make the best use of limited federal resources in the most effective and efficient manner,” he said.

The GAO report found that 33 of the 52 programs had set goals for their programs, but 19 of them did not meet any of their goals or only met some of their goals. Furthermore, agencies have conducted evaluations of only 20 of the 52 active programs since 2000.

The GAO recommended that the federal agencies, including the White House Office of Management and Budget, “explore opportunities to enhance collaboration among programs, both within and across agencies, and that the . . . agencies track program information and conduct more program evaluations.”

USDA’s O’Brien said that over the next two years, the department is developing a strategic plan that includes an initiative to improve its quality of performance measurement. He also cited steps initiated by the Obama administration that provide agencies with a mechanism to work together to identify opportunities to enhance collaboration among programs.

The rural development official said the administration has also established an interagency group – including representatives from the Department of Commerce, SBA and USDA – “that aims to streamline existing programs, improve cooperation among and within agencies, ease entrepreneurs’ access to the programs that are right for them, and increase data-based evaluation of program performance.”

But most committee members, facing a tight budget-writing scenario, were not overly impressed, suggesting that Congress cannot afford to wait for the agencies t0o justify their programs’ existence.

“If they don’t have the means to of measuring their performance, why should we continue to fund them?” Rep. Blaine Leutkemeyer, R-Mo., asked.

In closing the hearing, Chairman Graves seemingly summed up committee sentiment by noting that with 52 programs aimed at encouraging entrepreneurial activity being run by the two agencies, “we have more confusion than clarity.”



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