The Government Accountability Office (GAO) has found that the Small Business Administration (SBA) needs to reevaluate its estimates for initial funding to support its centers for training and counseling small businesses.
GAO said in a report released Monday that Congress appropriated $135 million and the president requested $101 million for fiscal year 2020 to fund SBA’s Small Business Development Center (SBDC) program.
According to the watchdog, the large gap between the estimated and actual funds resulted in challenges for the centers that needed to revise their budgets in accordance with the appropriations.
Most of the SBDCs that GAO surveyed said they “have a harder time obtaining matching funds” and face challenges in hiring and retaining staff, meeting performance goals and providing services to small businesses.
GAO noted that if SBA continues its current practice for fiscal 2021, the funding estimate will be 35 percent lower than 2020 Congress appropriations.
“Under SBA's current practice for funding estimates, SBDCs will continue to experience (or may experience increasing) challenges given the growing divergence between the initial estimate and appropriated amounts,” the watchdog noted.