Staff Writer, March 31, 2008
A recent report, released by the Government Accountability Office (GAO), accuses the Small Business Administration (SBA) of gross oversight and many of the nation’s undeserving companies of stealing money that were intended to go to small businesses and boost local economies. The SBA’s Historically Underutilized Business Zone, or HUBZone, was created in 1997 to provide assistance to small businesses in economically distressed areas of the country. Larger businesses, which are ineligible for federal money, paid out by the SBA are using dishonest practices to skirt the rules and claim some of the funds. Many are misrepresenting their companies by claiming that they have an outlying office in a distressed area, though investigation generally proves that these addresses do not exist, or are inhabited by individuals who have nothing to do with the companies. Small businesses, which are in great need during this time of national financial downturn, have to struggle, because less government assistance is available. This discovery comes at a time when President Barack Obama and his Republican opponents are both touting the growth of small businesses as a crucial step in revitalizing the economy.
Many government officials have called for the SBA’s HUBZone program to be shut down, but for the present, the SBA has said that it will re-organize and re-evaluate its practices. It will implement stronger screening procedures and utilize unannounced site visits. President Obama’s pick for the new head of the SBA, Karen Mills, is currently being approved by the Senate.
