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Washington, D.C.—Today, Rep. Judy Chu (D-CA) Chairwoman of the Small Business Subcommittee on Investigations, Oversight, & Regulations gathered officials from the U.S. Small Business Administration (SBA) to answer questions regarding the agency’s oversight of the SCORE program. Chu called the hearing following an April report from the office of the SBA Inspector General that found systemic issues in the program related to the monitoring of federal funds and the measurement of the program’s effectiveness. The SCORE program provides free or low-cost business consultation services to entrepreneurs across the country.

“SCORE’s mission has always been to foster vibrant small business communities through mentoring and education and to give every person the support they need to thrive as a small business owner,” said Chairwoman Chu. “But when there is misuse and abuse of taxpayer dollars, the real victims are the small business owners and entrepreneurs who are not getting the service they deserve.”

The Score Association was established as a national, volunteer nonprofit organization to provide free business mentoring services. The program offers face-to-face counseling at nearly 350 chapters nationwide with more than 11,000 volunteer expert business advisors. Volunteers provide a variety of personalized services such as business plan development, strategic marketing, and financing ideas. In FY 2018, 600,000 clients were mentored and trained through SCORE.

During the Spring of 2019, the office of the SBA Inspector General released their findings from an audit of the SCORE program. The IG set out to determine whether the SBA was conducting adequate oversight of SCORE. Throughout the review, the IG identified systemic issues related to the SBA’s financial and performance monitoring of the program. The IG found that improvements were needed to ensure the SCORE program minimizes the risk of fraud or misuse of program funds and takes steps to accurately measure the effectiveness of the program.

During the hearing, members questioned witnesses on the issues highlighted in the report and discussed potential solutions to the identified problems.

In recent years OIG has produced two audit reports on SCORE as well as a capping report on SBA’s grant management programs,” said Mike Ware, Inspector General at the SBA. “All three reports point to systemic issues in the Agency’s grants management function and deficiencies by the Agency for oversight and monitoring of federal funds. This lack of oversight and monitoring coupled with IT issues associated with the Agency’s performance system of record, EDMIS, hampered SBA’s ability to detect fraud, waste, and abuse in SCORE.”

We were deeply troubled to read the OIG’s findings that SCORE has used federal and commingled funding for unallowable, unallocable, and unsupported costs,” said Allen Gutierrez, Associate Administrator at the `Office of Entrepreneurial Development at the SBA.  “These are funds that should have been used to provide mentoring services to America’s small businesses. We take the issues raised in the OIG’s audit report very seriously, and I remain committed to making significant improvements in the oversight and monitoring of SCORE’s use of government funds and its reporting of performance results.”

“We owe it to American taxpayers to be good agents of their hard-earned dollars,” said Chairwoman Chu. “And we need to ensure that SBA’s counseling and training programs are operating effectively and efficiently for the 30 million small business owners and aspiring entrepreneurs throughout the country.”

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