New GAO Report: Federal Agencies Report Incorrect Data to SBA

A Government Accountability Office (GAO) report, dated April 15, concluded that federal agencies reported incorrect information to the Small Business Administration (SBA) for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for fiscal year 2013.

The SBA’s ability to completely conclude compliance with spending requirements for the SBIR and STTR programs for fiscal year 2013 is incomplete, because most agencies submitted budget numbers, but not their spending obligations. Spending obligations are the foundation for calculating an agency’s spending requirements for SBIR and STTR.

In response, agencies claim that the number is difficult to calculate, as the totals are normally finalized after the data is due to the SBA. 

Ensure Compliance

The GAO did come up with three recommendations for executive action to ensure complete compliance with SBIR and STTR spending and reporting:

1. Notify Congress in SBA’s annual report if it cannot determine agency compliance with program spending requirements when agencies that participate in the SBIR and/or STTR programs do not report extramural R&D obligations data, or develop a proposal to Congress that would change the requirement.
2. Assess the methodology reporting requirement to determine whether it generates adequate information for SBA to analyze the accuracy of agencies’ calculations of their extramural R&D. If SBA finds that the information is inadequate, SBA should update its guidance to require adequate information.
3. Provide greater transparency for the administrative pilot program by requiring participating agencies to provide data on the use of the funds, rather than a total cost for all of the activities under the pilot.

Importance of These Findings

This is absolutely a major program not only for the federal agencies, but also for the small businesses currently doing business and the small business looking to enter the government contracting world. Many small businesses look at these programs as a great way to do business with the government, but since the numbers are now being called into question, a small business needs to be more vigilant with finding potential government business.

This report by no means calls the programs a failure, but does require the SBA and federal agencies to look at the program requirements and potentially come up with a new way to solve the problem. The numbers reported should be the spending obligations and not the budget numbers, since a budget is determined a year in advance.