[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28651]
[Federal Register: November 28, 1994]
VOL. 59, NO. 227
Monday, November 28, 1994
SMALL BUSINESS ADMINISTRATION
13 CFR Part 130
Small Business Development Centers
AGENCY: Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: The Small Business Administration (SBA) is proposing
regulations governing the Small Business Development Center (SBDC)
Program. Since the enactment of Pub. L. 96-302 and the establishment of
the program in 1980, the program has been operating under direct
statutory authority, without regulations. The SBA is proposing these
regulations to establish a framework for effective and efficient
operation of the program.
DATES: Written comments should be submitted on or before December 28,
1994.
ADDRESSES: Comments should be submitted to: Johnnie L. Albertson,
Associate Administrator for Small Business Development Centers (AA/
SBDCs), U.S. Small Business Administration, 409 Third Street, SW, Fifth
Floor, Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT:
Hardy Patten, Program Manager, (202) 205-6766.
SUPPLEMENTARY INFORMATION: The SBDC Program, originally established in
1980, is administered pursuant to Section 21 of the Small Business Act,
15 U.S.C. 648. The SBDC program creates a partnership between the SBA
and organizations operating the SBDC networks. Together they provide
business development and technical assistance to small businesses in
order to promote growth, expansion, innovation, increased productivity,
and management improvement. The SBDC program has been operating under
direct statutory authority without regulations. The SBA is proposing
these regulations to establish a framework for effective and efficient
operation of the program. Many of the provisions set forth in this
proposed rule have arisen from legislation. Others codify current
procedures utilized since the inception of the program.
Section-by-Section Analysis
Proposed Sec. 130.100 would serve as the introduction, establishing
the overall objective of the SBDC program to create a broader-based
system of assistance for the small business community, and defining the
relationship between the SBA and the organizations operating the SBDC
networks, known as recipient organizations. The program operates under
the general management and oversight of the SBA, with recognition that
a partnership exists between the SBA and the recipient organization for
the provision of assistance to the small business community. That
assistance is delivered to the small business community pursuant to a
Cooperative Agreement negotiated between the SBA and the organization
operating the SBDC network.
Proposed Sec. 130.110 would provide definitions of terms relevant
to the SBDC program.
Proposed Sec. 130.200 would set forth those entities which, by
statute, are eligible to enter into a Cooperative Agreement with the
SBA for the purpose of establishing or continuing the operation of an
SBDC network.
Proposed Sec. 130.310 would provide that the area of service for
any SBDC network is the state or portion of a state in which it is
located. When more than one SBDC network is to be located in a given
state, the AA/SBDCs shall determine the general geographic areas to be
served by each SBDC network in that state.
Proposed Sec. 130.320 would discuss the location of participants in
the SBDC network, and proposed Sec. 130.330 would set forth the
operating requirements for the SBDC network.
Proposed Sec. 130.340 would provide for the establishment of State
and National Advisory Boards to advise, counsel, and confer with SBDC
directors and the AA/SBDCs on matters pertaining to the operation of
SBDC networks and the national SBDC program.
Proposed Sec. 130.350 would describe the services to be provided by
SBDC networks to ensure convenient access and effective service to
small businesses, including specialized services such as international
trade assistance, rural development, procurement assistance, capital
formation and technical assistance. It would also place certain
restrictions on SBDC assistance. SBDCs would be prohibited from making
loans, servicing loans or making credit decisions. SBDCs would also be
prohibited from making credit recommendations, unless authorized to do
so by the Administrator, or his or her designee.
Proposed Sec. 130.360 would set forth policy development
responsibilities of the SBA and performance implementation
responsibilities of the SBDC Director.
Proposed Sec. 130.400 would describe the application process for
both new and continuing applicants. Pursuant to Sec. 130.410, a new
applicant organization would be required to submit an original and two
copies of its application to the SBA District Office covering the
geographic area in which the applicant organization proposes to provide
services.
Additionally, in order to insure consistency with the current state
plan approved by SBA, an application for initial funding would be
required to include a letter from the Governor, or his or her designee,
of the State in which the applicant organization will operate, or other
evidence that it is not inconsistent with such plan. No such
requirement would be imposed on subsequent applications from current
operating SBDC organizations.
The section would further set forth the information to be contained
in the application.
Proposed Sec. 130.420 would set forth annual application procedures
for applicants continuing in the program. These would be set forth in
the annual Program Announcement, along with the due date for submission
of continuing applications.
Section 130.430 would set forth the three possible decisions in the
application process, approval, conditional approval or rejection. The
section would further describe the right of the SBA, in the event of a
conditional approval, to conditionally fund a recipient organization
for one or more specified periods not exceeding one Budget period.
Proposed Sec. 130.440 would set forth the manner by which the
maximum amount of a grant is determined, as well as the significant
factors to be considered in the allocation of national SBDC funds.
Proposed Sec. 130.450 would delineate the requirements concerning
Matching Funds. This section would explain that a recipient
organization must provide total Matching Funds equal to the total
amount of the SBDC grant and all amendments or modifications thereto.
The section would further detail responsibilities for identification of
all sources of Matching Funds, including cash and cash accounts, and
set forth types of sources which may not be used as sources of Matching
Funds. The section would finally describe the ways that overmatched
amounts (Matching Funds which exceed the required equal match) may be
utilized by the SBDC.
Proposed Sec. 130.460 would delineate the information to be
included in the proposal and in the budget justification portion of an
application. The section would include descriptions of important
concepts and principles required to be addressed by the applicant in
the proposed budget, including the percentage of federal dollars which
must be allocated to Direct costs of program delivery, the inclusion of
separate budgets and Indirect cost base and rate agreements for the
Lead Center and all SBDC service providers, principles for determining
allowable costs and expenses, limitations on the use of federal dollars
for lobbying activities, salary guidelines for SBDC Directors,
subcenter Directors and staff members and guidelines for transportation
and travel expenses. With respect to Indirect cost base rates, the
section would provide that the service provider's predetermined rate
from prior federal activity would be used, and, in the event a service
provider does not already have a predetermined rate as a result of
dealings with another federal agency, the manner in which the rate
shall be negotiated.
Proposed Sec. 130.470 would describe the activities and services
for which an SBDC may charge a fee.
Proposed Sec. 130.480 would provide that program income must be
utilized to accomplish program objectives and would include directions
concerning reporting requirements and limitations on the use of program
income for Matching Funds contributions.
Section 130.500 would provide that federal dollars are transferred
to the SBDC through the SBA internal ``Letter of Credit Replacement
System'', and would set forth the standard forms to be utilized to draw
down funds and to report drawdowns and cash transactions to the SBA.
Proposed Sec. 130.600 would describe the Cooperative Agreement
entered into between the recipient organization and the SBA, as well as
the procedures established to resolve Disputes and Conflicts.
Section 130.610 would describe the general terms to be included in
the Cooperative Agreement.
Section 130.620 would provide the procedure for amending or
revising a Cooperative Agreement due to changes in the scope, work or
funding of an SBDC during the budget year, and would set forth those
changes which require an amendment. The section would further set forth
those revisions or changes which do not require an amendment to the
Cooperative Agreement, such as budget revisions or reallocations of
funds in accordance with applicable OMB circulars.
Proposed Secs. 130.630, 130.640 and 130.650 would respectively set
forth Dispute resolution procedures, Conflict resolution procedures and
the non-renewal procedure to be utilized by SBA in the event of non-
performance or poor performance on the part of an SBDC.
Proposed Sec. 130.700 would explain the grounds and procedures for
suspending or terminating a recipient organization. After the SBA has
entered into a Cooperative Agreement with a recipient organization, the
SBA would not suspend or terminate any such agreement unless the SBA
provides the recipient organization with written notification setting
forth the reasons for the proposed action and affording the recipient
organization an opportunity for a hearing, appeal, or other
administrative proceeding under the provisions of the Administrative
Procedure Act, 5 U.S.C. 553 et seq.
The general procedures that would be applicable are contained in 13
CFR 143.43 and 143.44, Enforcement and Termination for Convenience,
Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments, and in OMB Circular A-110,
Attachment L, Suspension and Termination Procedures for Grants and
Agreements with Institutions of Higher Education, Hospitals, and other
Nonprofit Organizations, Uniform Administrative Requirements.
Proposed Sec. 130.800 would explain that the SBA would have the
authority to review and oversee the Cooperative Agreement and ongoing
operations of the SBDC network. In addition, the SBA would have the
authority to make programmatic and financial review visits to Lead
Centers and SBDC service providers to analyze and assess training,
counseling and any other SBDC related activities. Furthermore, an on-
site evaluation of an SBDC network would be conducted by the SBA, with
SBDC participation, as required by law.
Additionally, this section would provide that the recordkeeping
requirements of the SBDC network shall be as set forth in OMB Circulars
A-128 and A-133.
Proposed Sec. 130.830 would also state that all audits are to be
conducted in accordance with provisions governing audits contained in
applicable OMB Circulars.
Compliance With Executive Orders 12612, 12778 and 12866; Regulatory
Flexibility Act, 5 U.S.C. 601 et seq.; and the Paperwork Reduction
Act, 44 U.S.C. ch. 35
The SBA certifies that this proposed rule, if promulgated in final,
would not be considered a significant rule within the meaning of
Executive Order 12866 because it would not have an annual economic
effect in excess of $100 million, result in a major increase in costs
for individuals or governments, or have a significant adverse effect on
competition. The SBA has made this determination based upon the fact
that this proposed rule would establish regulations which conform to
the existing parameters under which the program is already functioning.
Further, pursuant to Public Law 103-121, the Departments of Commerce,
Justice, and State, the Judiciary, and the Related Agencies
Appropriations Act of 1994, the total amount of funds designated for
the SBDC Program is $71,266,000.
For purposes of Executive Order 12612, the SBA certifies that this
proposed rule would have federalism implications. As such, the SBA
offers the following Federalism Assessment.
This proposed rule would implement Section 21 of the Small Business
Act, 15 U.S.C. 648, and is designed to allow the States participating
in the SBDC Program maximum policymaking and administrative discretion
within the requirements of the law and sound program management. In
formulating and implementing the policies governing the SBDC Program
set forth in this proposed rule, the SBA has encouraged the State
participants to develop their own methods of achieving program
objectives and has refrained, to the maximum extent practicable, from
establishing uniform national requirements for the program.
For purposes of Executive Order 12778, the SBA certifies that this
proposed rule is drafted, to the extent practicable, in accordance with
the standards set forth in section 2 of that Order.
For purposes of the Regulatory Flexibility Act, the SBA certifies
that this proposed rule, if promulgated in final, would not have a
significant economic effect on a substantial number of small entities
for the same reason that it is not a significant rule.
For purposes of the Paperwork Reduction Act, the SBA certifies that
this proposed rule, if promulgated in final, would impose no new
reporting or recordkeeping requirements. This proposed rule does,
however, codify, at Secs. 130.800 through 130.830, paperwork
requirements previously cleared by the Office of Management and Budget
under OMB control numbers 3245-0075 (SBA Form 20, National Training
Participant Evaluation Questionnaire); 3245-0090 (SBA Project Officer's
Checklist utilized in monitoring the SBDC); 3245-0091 (SBA Form 641,
Request for Counselling Services); 3245-0108 (SBA Form 1062, Management
Assistance Control Record utilized by the counsellor for each client as
a running record of counselling activity); 3245-0123 (SBA Form 888,
Management Training Form completed as a summary of a training event);
3245-0169 (Standard Forms 269 and 272, financial reporting forms
completed by the SBDC); 3245-0183 (SBA Form 1419, counselling
evaluation form completed by the client); and 3245-0221 (SBA Form 1496,
utilized in the SBDC on-site review process).
List of Subjects in 13 CFR Part 130
Business development, Small businesses, Small Business Development
Center (SBDC), Technical assistance.
For the reasons set out above, Title 13 of Code of Federal
Regulations, Chapter 1 is proposed to be amended by adding a new Part
130 as follows:
PART 130--SMALL BUSINESS DEVELOPMENT CENTERS
Sec.
130.100 Introduction.
130.110 Definitions.
130.200 Entities eligible to establish an SBDC network.
130.300 Small Business Development Centers (SBDCs). [Reserved]
130.310 Area of service.
130.320 Location of lead center and SBDC service providers.
130.330 Operating requirements.
130.340 SBDC Advisory Boards.
130.350 SBDC services and restrictions on service.
130.360 Specific program responsibilities.
130.400 Application procedure. [Reserved]
130.410 New applications.
130.420 Continuing applications.
130.430 Application decisions.
130.440 Maximum amount of grant.
130.450 Matching funds.
130.460 Proposal preparation--Budget justification.
130.470 Fees.
130.480 Program income.
130.500 Funding. [Reserved]
130.510 Transfer of funds.
130.600 Cooperative agreement. [Reserved]
130.610 General terms.
130.620 Amendments and revisions to cooperative agreement.
130.630 Dispute resolution procedures.
130.640 Conflict resolution procedures.
130.650 Non-renewal procedures for non-performance.
130.700 Suspension and termination causes and procedures.
130.800 Oversight of the SBDC program. [Reserved]
130.810 SBA review authority.
130.820 Recordkeeping requirements.
130.830 Audits and investigations.
Authority: Sections 5(b) (6) and (21) of the Small Business Act,
as amended, 15 U.S.C. 634(b)(6) and 648; Pub. L. 101-515, 101 Stat.
2101; Pub. L. 101-574, 104 Stat. 2814; Pub. L. 102-366, 106 Stat.
986; and Pub. L. 102-395, 106 Stat. 1828.
Sec. 130.100 Introduction.
(a) Objectives. (1) The overall objective of the SBDC program is to
create a broad-based system of assistance for the small business
community. To accomplish these objectives, SBDCs link resources of the
Federal, State and local governments with the resources of the
educational community and the private sector to meet the specialized
and complex needs of the small business community.
(2) SBDCs are intended to be responsive to local needs in providing
assistance to the small business community as mutually identified by
the SBA Project Officer and the SBDC Director.
(b) Overview. The SBDC program shall be under the general
management and oversight of the SBA. However, in keeping with the
legislative authority for the SBDC program, the SBA recognizes that a
partnership exists between the SBA and the recipient organization for
the delivery of assistance to the small business community. Services
shall be provided pursuant to a Cooperative Agreement. The SBA shall
also consult with SBDC Directors and recognized organizations
representing SBDCs in the formulation of the annual Program
Announcement and the development of other program guidelines.
(c) Incorporation of amended references. All references in these
regulations to OMB Circulars, Standard Operating Procedures, other SBA
regulations, and other sources of SBA policy guidance are intended to
incorporate all ensuing changes or amendments to such sources.
Sec. 130.110 Definitions.
(a) Applicant organization: The eligible entity under Sec. 130.200
which applies for Federal funding to operate an SBDC network.
(b) Budget period: The 12-month period in which expenditure
obligations are incurred by a SBDC. This period must coincide with
either the calendar year or the Federal fiscal year.
(c) Cash match: Non-Federal funds allocated specifically to the
operation of the SBDC network equaling no less than fifty percent of
the Federal contribution. Cash Match includes Direct costs committed by
the applicant or recipient organization and SBDC service providers, to
the extent that such costs are committed as part of the specific line
item Direct costs verified by their certifying representative prior to
funding. As an example, Cash Match would include non-Federal salaries
and fringe benefits paid to employees of the SBDC. Cash Match does not
include:
(1) Funds contributed from other Federal sources;
(2) Program income or fees collected from small businesses
receiving assistance; or
(3) Indirect costs, overhead costs or in-kind contributions.
(d) Cognizant agency: The Federal agency, other than the SBA, which
has established an indirect cost rate for budgetary and funding
purposes for a recipient organization or sponsoring SBDC organization.
Normally, this is the agency from which the organization has its
largest grant or receives its greatest amount of Federal funding. Once
established for an organization, its Indirect cost rate is universal
throughout the Federal government.
(e) Conflict: For purposes of this part, Conflict means all
programmatic disagreements, whether pre or post award, between an
applicant or recipient organization and the SBA.
(f) Cooperative agreement: The legal instrument pursuant to the
terms of which the SBA awards Federal funds to recipient organizations
and recipient organizations provide services to the small business
community. Cooperative agreements are used because there is substantial
involvement between the funding agency and the recipient organizations.
It is also known at times as a Notice of Award.
(g) Cosponsorship: A ``Cosponsorship'' as defined in and governed
by Sec. 8(b)(1)(A) of the Small Business Act, 15 U.S.C. 637(b)(1)(A),
and SBA's Standard Operating Procedures.
(h) Counseling: Individual advice, guidance or instruction given to
a person or entity concerning the formation, management, financing and
operation of small business enterprises. Counseling may be provided by
different modes of transmission, including face-to-face, electronic
media, publications and video.
(i) Direct costs: ``Direct costs'' as defined in Office of
Management and Budget (OMB) Circular A-21, A-87 or A-122, as
appropriate. Under these Circulars, SBDC recipient organizations are
required to allocate at least 80 percent of the Federal funds provided
through the Cooperative Agreement to the Direct costs of program
delivery.
(j) Dispute: For purposes of this part, Dispute means any financial
disagreement arising between a recipient organization and the SBA.
(k) Full-time employee: An employee of the recipient organization
who is assigned to the SBDC and who performs work for it during the
full customary work week of the recipient organization.
(l) Grants/cooperative agreement appeals committee: The SBA
committee responsible for, among other things, resolving appeals
arising from disputes between an applicant or recipient organization
and the SBA. The membership of the Committee and its Chairperson are
designated by the SBA Administrator.
(m) Grants management specialist: An individual in the SBA's
Central Office designated by the SBA Administrator to be responsible
for the financial review, negotiation, award, and administration of one
or more SBDC Cooperative Agreements.
(n) Host: See ``Recipient Organization''.
(o) Indirect costs: ``Indirect costs'' as defined in Office of
Management and Budget (OMB) Circular A-21, A-87, or A-122, as
appropriate.
(p) In-kind contributions: Property, facilities, services or other
non-monetary contributions from non-Federal sources. Some examples of
in-kind contributions are donated printing, supplies, or the value of
volunteer services (except that SCORE services cannot be used as in-
kind match). See OMB Circular A-87, A-102, or A-110, as appropriate.
(q) Key SBDC employee: Any employee in the SBDC network having
managerial or budgetary control over the activities of the Lead Center
or its SBDC service providers.
(r) Lead Center: The entity of the SBDC network which administers
and operates the SBDC network. The Lead Center may also provide
assistance directly to the small business community.
(s) Lobbying: As applied to the recipient organization of a Federal
grant, loan, or cooperative agreement, ``lobbying'' shall have the
meaning given in OMB Circulars A-21, A-87 and A-122, and Pub. L. 101-
121, section 319.
(t) Matching funds: The statutorily required amount of non-Federal
contribution to SBDC project costs. In the SBDC program, this required
amount is equal to the Federal contribution. At least 50% of the
statutorily required matching funds must be provided in the form of
Cash Match. The remaining 50% of the statutorily required matching
funds may be provided through any allowable combination of additional
cash, in-kind contributions, or indirect costs. Any non-Federal
contributions in excess of the statutorily required amount are
considered Overmatched Amounts. No portion of the matching funds may be
from Federal sources or be program income or fees collected from
clients or attendees.
(u) Notice of award: See ``Cooperative agreement''.
(v) Overmatched amount: That amount of indirect, in-kind or cash
contributions by the recipient organization or by a third party to the
recipient organization which exceeds the statutorily required non-
Federal contribution.
(w) Part-time employee: An employee of the recipient organization
who is assigned to and who performs work for the SBDC for less than the
full customary work week of the recipient organization.
(x) Program announcement: The SBA's annual publication of items
which an applicant organization must address in its application in
order to be considered for SBDC funding by the SBA.
(y) Program income: Income earned or received by the SBDC recipient
organization or SBDC subrecipient from any SBDC supported activity as
defined in Attachment D of OMB Circular A-100 and Attachment E of OMB
Circular A-102.
(z) Program manager: An individual in the SBA's Central Office
designated by the AA/SBDC to oversee the operations of one or more
SBDCs.
(aa) Project officer: An individual designated by the AA/SBDCs who
negotiates the annual Cooperative Agreement and monitors the ongoing
operations of an SBDC.
(bb) Project period: The period of time in which an SBDC actively
participates with the SBA in providing assistance to the small business
community served by the SBDC. A project period begins on the day of
award and normally continues over a number of budget periods, in twelve
(12) month increments.
(cc) Proposal: The written submission by a proposed or existing
SBDC explaining its projected SBDC activities for an upcoming budget
period and requesting that the Small Business Administration provide
funding for use in its operations.
(dd) Recipient organization: After funding is approved and the
applicant enters into a Cooperative Agreement with the SBA, the
applicant organization becomes the recipient organization. The
recipient organization receives the Federal funds and is responsible
for establishing the Lead Center. The recipient organization is also at
times referred to as the Host.
(ee) SBDC: An abbreviated name for a Small Business Development
Center network, created pursuant to Sec. 21 of the Small Business Act,
15 U.S.C. 648.
(ff) SBDC Director: The full-time senior manager designated by each
recipient organization and approved by the SBA.
(gg) SBDC network: The combination of the Lead Center or recipient
organization, extension offices, satellite locations, subcenters, and
any other directly affiliated entity officially authorized to perform
SBDC services. An SBDC network may be statewide or, in states having
more than one recipient organization, may be regional.
(hh) SBDC service providers: The term used to describe all SBDC
network participants. This term would include extension offices,
satellite locations, subcenters, and any other directly affiliated
entity officially authorized to perform SBDC services as part of the
SBDC network.
(ii) Sponsoring SBDC organizations: Organizations or entities which
sponsor SBDC service providers as part of the SBDC network under a
contract or agreement with the recipient organization.
(jj) Training: The process of teaching individuals or entities in
group sessions concerning the formation, management, financing and
operation of small business enterprises. Training methods may include
in-person group sessions or other communication modes including
teleconferences, videos, publications and electronic media.
(kk) Working days: All days except Saturdays, Sundays and those
holidays designated in a Cooperative Agreement.
Sec. 130.200 Entities eligible to establish an SBDC network.
(a) The following entities are eligible to enter into a Cooperative
Agreement with the Small Business Administration for the purpose of
establishing the operation of an SBDC network:
(1) Any public or private institution of higher education;
(2) Any land-grant college or university;
(3) Any college or school of business, engineering, commerce or
agriculture;
(4) Any community or junior college; or
(5) Any entity formed by two or more of the above entities.
(b) In addition to the entities shown in subparagraph (a) of this
section, any entity which was operating as a recipient organization as
of December 31, 1990, is eligible to continue to serve as a recipient
organization.
(c) Other SBDC service providers are not required to meet the
eligibility requirements of a recipient organization. However, the
recipient organization shall primarily utilize institutions of higher
education to provide services to the small business community.
Sec. 130.300 Small Business Development Centers (SBDCs). [Reserved]
Sec. 130.310 Area of service.
(a) Generally, the area of service for any recipient organization
shall be the State in which it is located. In exceptional
circumstances, more than one recipient organization may be located in
any State in which the AA/SBDCs determines it is necessary or
beneficial to effectively implement the program and to provide services
to all interested small businesses.
(b) Where more than one recipient organization is to be located in
a given State, the AA/SBDCs shall determine in writing the general
geographic areas to be served by each recipient organization in that
State. Such determination shall be consistent with the State plan. Each
recipient organization shall provide assistance and services to those
small businesses of the State located in the general area to which it
is assigned.
Sec. 130.320 Location of Lead Centers and SBDC service providers.
(a) The facilities and staff of each Lead Center and SBDC service
provider shall be located so as to provide maximum accessibility and
benefits to the small businesses which the SBDC network is intended to
serve.
(b) Lead Centers and SBDC service providers should be organized and
located to serve the needs of the small business community of the
service area.
(c) The locations of the Lead Center and the SBDC service providers
will be reviewed as a part of the application review process for each
budget period. Addresses and telephone numbers of existing or new
locations shall be noted in the annual application proposal.
(d) A request for approval of any SBDC service provider not in the
application proposal which is to be funded in whole or in part by
Federal funds must be submitted as an amendment to the Cooperative
Agreement to the appropriate SBA district office, and shall be
processed according to the procedures used for approving amendments to
applications.
Sec. 130.330 Operating Requirements.
(a) The Lead Center shall operate as an independent entity within
the state or regional sponsoring organization.
(b) The Lead Center shall have a full-time staff, including a full-
time SBDC Director.
(c) The Lead Center and other SBDC service providers shall have a
conflict of interest policy applicable to their SBDC consultants,
employees, instructors and volunteers.
(d) One-to-One counseling shall be provided to small businesses
without charge.
(e) Training courses that respond to the needs of the small
business community shall be provided throughout the geographical area
serviced by the SBDC network.
(f) The Lead Center is responsible for the overall management and
coordination of the SBDC network. The administrative services the Lead
Centers are required to provide include, but are not limited to:
program development, program management, financial management, reports
management, promotion and public relations, program assessment and
evaluation, and internal quality control.
(g) The SBDC network shall extend its service to the public on a
nondiscriminatory basis in accordance with 13 CFR parts 112, 113 and
117 of the Regulations issued by the SBA. 13 CFR parts 112, 113 and 117
require that no person shall be excluded on the grounds of age, color,
handicap, marital status, national origin, race, religion or sex from
participation in, be denied the benefits of, or otherwise be subjected
to discrimination under any program or activity for which the recipient
organization received Federal financial assistance from the SBA.
(h) The Lead Center shall be open to the public twelve months each
year, operating on a 40 hour week basis or during the normal business
hours of the recipient organization. Anticipated closures for holidays
and other organizational shutdowns shall be included in the annual
application submitted by the SBDC. Emergency closures shall be reported
to the SBA Project Officer as soon as is feasible. Other SBDC service
providers shall operate during the normal business hours of their
sponsoring SBDC organizations.
Sec. 130.340 SBDC Advisory Boards.
(a) State/Regional Advisory Boards. (1) The Lead Center shall
establish an advisory board to advise, counsel, and confer with the
SBDC Director on matters pertaining to the operation of the SBDC
network.
(2) The advisory board shall be referred to as a State SBDC
Advisory Board in a State having only one recipient organization.
(3) The advisory board shall be referred to as a Regional SBDC
Advisory Board in a State having more than one recipient organization.
(b) These boards shall represent the entire service area and shall
include, among others, small business owners.
(c) New Lead Centers are required to establish a State or Regional
SBDC Advisory Board no later than the second budget period.
(d) A State or Regional SBDC Advisory Board member may also be a
member of the National SBDC Advisory Board.
(e) Travel of Advisory Board Members. Travel of any Board member
for official Board activities may be paid for out of the SBDC's
budgeted funds.
(f) National SBDC Advisory Board. (1) The SBA shall establish a
National SBDC Advisory Board consisting of nine members who are not
part of the Federal workforce, appointed by the SBA Administrator.
Three members of the National SBDC Board shall be from universities or
their affiliates and six shall be from small businesses or associations
representing small businesses. All Board members serve three year
terms. Terms are staggered with three Board members appointed each
year. The Administrator may also appoint successors to fill unexpired
terms.
(2) The National SBDC Advisory Board shall elect a Chairman and
shall advise, counsel, and confer with the SBA's AA/SBDCs on policy
matters pertaining to the operation of the SBDC program. The Board
shall meet, with the AA/SBDCs, at least semiannually at the call of the
Chairman.
Sec. 130.350 SBDC Services and Restrictions on Service.
(a) General. The SBDC network shall maximize accessibility to small
businesses by providing extension services and utilizing satellite
locations when necessary. To the extent possible, the SBDC shall make
full use of other Federal, State, and local government programs that
are concerned with aiding small business. Under the direction and
administration of the SBDC Director, the SBDC network shall provide:
(1) Access to business analysts to counsel, assist and inform small
business clients;
(2) Access to technology transfer agents to provide state-of-the-
art technology to small businesses;
(3) Access to information specialists to assist in providing
information searches and referrals to small business;
(4) Access to part-time professional specialists to conduct
research or to provide counseling assistance whenever the need arises;
(5) Access to laboratory and adaptive engineering facilities;
(6) Access to international trade assistance; and
(7) Access to procurement assistance.
(b) Services. (1) The assistance provided through the SBDC network
shall reflect local small business needs. Services should be
periodically assessed and improved to keep pace with changing small
business needs. The SBDC network shall provide prospective and existing
small business owners and managers with comprehensive small business
assistance. These services may include, but are not limited to, help
with financing, marketing, production, organization, engineering and
technical problems, research and feasibility studies. Special SBDC
programs and economic development activities may include, but are not
limited to advocacy, technology assessment, transfer and
commercialization, international trade centers and programs to
encourage exporting, business law information and guidance, procurement
assistance, rural development, agribusiness, convention, tourism and
small business incubators. SBDCs shall provide free one-on-one
counseling. SBDCs may also sponsor or cosponsor training for
individuals interested in going into a small business or improving or
expanding an existing small business.
(2) SBDCs are encouraged to provide financial counseling services
that increase a small business concern's access to capital. For
example, SBDCs are encouraged to assist small business concerns in
areas such as business plan development, financial statement
preparation and analysis, and cash flow preparation and analysis. These
services are considered ``counseling'' and shall be provided to clients
free of charge.
(c) Restrictions on SBDC assistance.
(1) SBDCs are not authorized to make loans, service loans or make
credit decisions regarding the award of loans. SBDCs are also
prohibited from making credit recommendations unless specifically
authorized to do so by the Administrator, or his or her designee.
(2) In assisting small businesses with the preparation of financial
packages, SBDCs must ensure that their clients are sufficiently
involved in the process to gain the knowledge to represent themselves
to the lending institution. While the SBDCs may attend meetings with
lenders for the purpose of assisting the client in the preparation of
the financial package, the SBDCs may not take a direct role in
representing clients in loan negotiations.
(3) SBDCs must ensure that their clients know that any financial
packaging assistance provided does not in any way guarantee receipt of
a loan.
(4) In terms of SBA financial assistance, SBDCs may assist in
completing forms for submitting loan applications and may assist a
client in formulating a business plan and preparing financial
statements. A representative of an SBDC may appear before the SBA with
an applicant for SBA financial assistance. Unless authorized by the
Administrator with respect to a specific program, an SBDC may not
advocate, recommend approval or otherwise attempt in any manner to
influence the SBA to provide financial assistance to any of its
clients. In addition, an SBDC cannot collect fees for assisting a
client in preparing an application for SBA financial assistance.
(d) Special emphasis groups. From time to time, the SBA shall
identify special groups to be targeted for assistance by SBA grantees.
Support of SBA special emphasis groups should be negotiated each year
as part of the application proposal process and included in the
Cooperative Agreement when appropriate. SBDCs shall endeavor to serve
small business owners from all populations represented in the
geographic area served by the SBDC.
Sec. 130.360 Specific program responsibilities.
(a) Policy development. The SBA shall be responsible for the
development of policies relating to the management of the national SBDC
program and for the development of practices to ensure compliance with
applicable laws, regulations, OMB Circulars and Executive Orders. For
those policies and practices directly affecting the operation of an
SBDC, the SBA should consult, to the extent practicable, with
recognized organizations representing SBDCs to ensure that the policies
or practices promote the effective and efficient delivery of services
to the small business community by the SBDC.
(b) Responsibilities of the SBDC Directors. Subject to SBA's
oversight responsibilities, performance of the Cooperative Agreement is
the responsibility of the SBDC Director. The SBDC Director shall direct
and monitor the activities of the SBDC network to ensure compliance
with the law, regulations, OMB Circulars, Executive Orders and the
terms and conditions of the Cooperative Agreement. The SBDC Director
shall direct the programmatic activities and financial affairs of the
SBDC network to deliver effective services to the small business
community in the geographic region included in the Cooperative
Agreement. The SBDC Director shall serve as the recipient organization
official responsible for program implementation, evaluation, and
program adjustments necessary to meet the needs of the small business
community. The SBDC Director shall have authority to make expenditures
under the Lead Center's budget. SBDC Directors may manage other
programs in addition to the SBDC Program as long as these programs
serve small businesses and do not unnecessarily duplicate the services
provided through the Cooperative Agreement with the SBA. However, SBDC
Directors may not receive additional compensation from these other
programs for managing them. The SBDC Director shall serve as the
principal contact point for all matters involving the SBDC network.
Sec. 130.400 Application procedure. [Reserved]
Sec. 130.410 New applications.
(a) When the SBA declines to renew an existing recipient
organization or the recipient organization declines to reapply, the SBA
may accept applications from other organizations interested in becoming
a recipient organization. An eligible entity may apply to participate
in the Small Business Development Center Program by submitting an
original and two copies of an application to the SBA district office
covering the state or portion of a state (when there is more than one
SBDC located or authorized in a state) in which the applicant proposes
to provide services. The application shall meet the requirements set
forth in Executive Order 12372. The application shall indicate which
officials are authorized to amend the application with regard to all or
particular parts of such application.
(b) An application for the initial funding of a new SBDC network
must include a letter by the Governor, or his or her designee, of the
State in which the SBDC will operate, or other evidence, confirming
that the applicant's designation as an SBDC would be consistent with
the plan adopted by the State government and approved by the SBA. No
such requirement is imposed on subsequent applications from existing
recipient organizations.
(c) The application shall set forth the eligible entity or entities
operating or proposing to operate in the SBDC network; a list of the
Lead Center and SBDC service providers by name and address; the
geographic areas to be serviced; the resources to be used; the services
that will be provided; the method for delivering the services,
including a description of how and to what extent academic, private and
public resources will be used; a budget; a listing of the proposed
members of the State or Regional Advisory Board and other relevant
information set forth in the Program Announcement.
(d) The applicant should make every effort to ensure an application
is complete when filed. Authorized SBA officials may request that the
applicant amend an application. At any time, an applicant or recipient
organization may file an amendment for the SBA's review and approval.
An amendment shall be signed by the official of the applicant or
recipient organization authorized to do so on the original application.
(e) Upon written recommendation for approval by the SBA District
Director, the proposal shall be submitted through appropriate SBA
channels to the AA/SBDCs for review.
Sec. 130.420 Continuing applications.
(a) The SBA shall announce the due date for submission of all
continuing applications in an annual Program Announcement. This Program
Announcement shall include a due date for SBDCs funded on a Federal
fiscal year basis and a due date for SBDCs funded on a calendar year
basis. SBDCs shall meet these due dates to receive consideration of
their application. However, an extension may be granted by the SBA
Project Officer with the concurrence of the Program Manager.
(b) Eligible entities shall submit an original and two (2) copies
of a proposal to the appropriate SBA district office covering the state
or portion of a state (when there is more than one SBDC located in a
state) in which the applicant proposes to continue to provide service.
(c) The proposal format shall correspond to the annual SBDC Program
Announcement.
(d) The applicant should make every effort to ensure an application
is complete when filed. Authorized SBA officials may request that the
applicant amend an application.
(e) A timetable for appropriate SBA review will be included as a
part of the annual Program Announcement.
(f) A proposal shall be reviewed by the SBA Project Officer in the
SBA district office.
(g) Upon written recommendation for approval by the SBA District
Director, the proposal shall be submitted through appropriate SBA
channels to the AA/SBDCs for review. Project Officers may request
further information to ensure the proposal conforms to all
administrative, budgetary and programmatic requirements of the Program
Announcement.
(h) The Office of SBDCs Grants Management Specialist shall
negotiate and determine that all dollars committed are reasonable,
allowable and allocable, to assure conformity of the application with
applicable statutory, financial, and regulatory requirements, and OMB
Circulars. The Grants Management Specialist may request additional
information or amendments to the application prior to issuing the
Cooperative Agreement.
(i) At any time, an applicant or recipient organization may file an
amendment for the SBA's review and approval. An amendment shall be
signed by the official of the applicant or recipient organization
authorized to do so on the original application. Amendments must be
reviewed and incorporated into the Cooperative Agreement by the Central
Office Grants Management Specialist before they may take effect.
Sec. 130.430 Application decisions.
(a) The AA/SBDCs or his or her designee may approve, conditionally
approve, or reject any application or amendment to an application. If
the application or amendment is rejected, the AA/SBDCs shall
communicate the reasons for rejection simultaneously to the applicant
and any appropriate SBA field office. If the approval is conditional,
the conditions shall be set forth in the Cooperative Agreement. Upon
approval or conditional approval, a Cooperative Agreement may be issued
by the Grants Management Specialist.
(b) In considering the application, significant factors shall
include:
(1) The ability of the applicant to contribute Matching Funds; and
(2) For applicants who have been previously funded, the quality of
their performance in the previous Budget period.
(c) In the event of a conditional approval, SBA reserves the right
to conditionally fund a recipient organization for one or more
specified periods of time up to a maximum of one Budget period in order
to provide the recipient organization with time to resolve the
conditions set forth in the conditional approval. When the SBA
conditionally funds a recipient organization, the specific conditions
and applicable remedies which must be addressed will be set forth as
special terms and conditions in the Cooperative Agreement. In the event
the recipient organization fails to resolve such conditions to SBA's
satisfaction within the time period provided by SBA, SBA has the right
to determine not to continue to fund the SBDC, subject to the
provisions of Sec. 130.700(a).
Sec. 130.440 Maximum amount of grant.
No recipient of funds shall receive an SBDC grant which would
exceed the greater of:
(a) The minimum statutory amount, or
(b) Its pro rata share of all SBDC grants as determined by the
statutory formula set forth in section 21(a)(4) of the Small Business
Act.
Sec. 130.450 Matching Funds.
(a) As a condition of any Cooperative Agreement or amendment or
modification thereof, the recipient organization must provide total
Matching Funds equal to the total amount of the SBA funding and all
amendments or modifications thereof.
(b) All sources of Matching Funds must be identified as
specifically as possible. In the case of cash, sources shall be
identified by name and account number in the budget proposal and shall
be certified by an authorized official of the recipient organization or
by any sponsoring SBDC organization providing a Cash Match through a
sub-contract agreement. The account containing such cash must be under
the direct management of the SBDC Director, or, if provided by a
sponsoring SBDC organization, by its SBDC employee. If the State is
providing such cash, and if the State appropriation cycle permits, the
recipient organization must verify that sufficient funds will be
available prior to the use of Federal dollars.
(c) The Grants Management Specialist is responsible for determining
Matching Funds or Cash Match meet the requirements of the statute and
appropriate OMB circulars.
(d) Overmatched amounts. (1) SBDCs are encouraged to furnish
Overmatched Amounts.
(2) Once approved as part of the budget, any Overmatched Amount can
be applied to any additional Matching Funds requirements that would be
necessary in the case of a supplemental funding increase received by
the SBDC during the budget period, as long as the total Cash Match
being provided by the SBDC remains at 50% or more of the total SBA
funds provided during the budget period.
(3) If used in the manner described in paragraph (d)(2) of this
section, such Overmatched Amount is reclassified as committed Matching
Funds.
(4) Allowable Overmatched Amounts which have not been used in the
manner described in paragraph (d)(2) of this section may, with the
approval of the AA/SBDCs, be used as a credit to offset any confirmed
audit disallowances applicable to the Budget period in which the
Overmatched Amount exists. Offsetting funds shall be considered to be
used as Matching Funds and are not again allowable as Matching Funds
for past or future Budget periods.
(5) Overmatched Amounts applicable to one Budget period cannot be
used as Matching Funds for a different Budget period, except that
Overmatched Amounts applicable to one Budget period may be used as a
credit to offset audit disallowances of the previous two Budget periods
only.
(6) Impermissible sources of Matching Funds. Under no circumstances
may the following be used as sources of the Matching Funds of the
recipient organization:
(i) Uncompensated student labor;
(ii) SCORE, ACE, or SBI volunteers;
(iii) Program income;
(iv) Funds or indirect or in-kind contributions from any other
Federal program.
Sec. 130.460 Proposal preparation--Budget justification.
(a) General requirements. The proposal must include all items
required by the Program Announcement. The AA/SBDCs shall send the
Program Announcement to each SBDC immediately after issuance.
(b) Submission of budget justification. The budget justification
for the upcoming Budget period must be prepared and submitted (as a
part of the proposal package) to the SBA Project Officer in the SBA
district office by the SBDC Director on behalf of the recipient
organization, or by the applicant organization's authorized
representative in the case of a first time SBDC application. The budget
shall be reviewed annually upon submission of a renewal proposal and
shall be considered during the course of negotiation of the renewal
Cooperative Agreement. All budgets are subject to appropriation of the
necessary funds by Congress.
(1) Direct costs. Unless otherwise provided for in applicable OMB
circulars, at least eighty percent (80%) of any funding provided by SBA
must be allocated to Direct costs of program delivery. In the event
that all Indirect costs are waived by the applicant organization in
order to meet the Matching Funds requirement, one hundred percent
(100%) of the SBA funding provided must be allocated to program
delivery. If some, but not all, Indirect costs are waived to meet the
Matching Funds requirement, the lesser of the following may be
allocated as Indirect costs of the program and charged against SBDC
funding provided by SBA:
(i) Twenty percent (20%) of SBDC funding provided to the recipient
organization by SBA, or
(ii) The amount remaining after the waived portion of Indirect
costs is subtracted from the total indirect costs.
(2) SBDC service provider costs. (i) As a separate attachment to
the budget, the applicant organization shall include separate budgets
for all sub-contracted SBDC service providers in conformity with OMB
financial requirements. Applicable Indirect cost base and rate
agreements shall be included for the Lead Center and all SBDC service
providers. The rate used shall be equal to or less than the negotiated
predetermined rate. If no such rate exists, then one shall be
negotiated between the sponsoring SBDC organization or SBDC service
provider and its Cognizant Agency. In the event the sponsoring SBDC
organization or SBDC service provider does not have a Cognizant Agency,
the rate shall be negotiated with the SBA Project Officer. The rate
shall be negotiated and agreed upon in accordance with OMB Circular A-
21.
(ii) The amount of cash, in-kind contributions and indirect costs
for the Lead Center and all sub-contracted SBDC service providers shall
be indicated in accordance with OMB financial requirements.
(iii) Expenses. (A) Cost principles. Principles for determining
allowable costs are contained in OMB Circulars A-21 (cost principles
for grants, contracts, and other agreements with educational
institutions), A-87, (cost principles for programs administered by
State and local governments), and A-122 (cost principles for nonprofit
organizations).
(B) Costs associated with lobbying. No portion of the Federal
dollars received by an SBDC may be used for lobbying activities, either
directly by the SBDC or indirectly through outside organizations,
except those activities permitted by the provisions of OMB Circular A-
122. Restrictions on and reports of lobbying activities by the SBDC
recipient of a Federal grant, loan or cooperative agreement shall be in
accordance with OMB Circulars A-21, A-87, and A-122, Section 319 of
Public Law No. 101-121, and the annual Program Announcement.
(C) Salaries. (1) If an SBDC is based in a university or college,
the SBDC Director's salary should approximate the average annualized
salary of a full professor in the school or department in which the
SBDC is located organizationally (e.g., School of Business, School of
Engineering). The salary of the subcenter Director should approximate
the average annualized salary of an assistant professor in such school
or department.
(2) If an SBDC is based in an entity other than a university or
college, the annualized salaries of the SBDC Director and the subcenter
Director should approximate the average salaries of parallel positions
within the recipient organization. Salaries for all other positions
within the SBDC shall be established based upon the level of
responsibility, and shall be comparable to salaries for similar
positions in the area served by the SBDC.
(3) Recruitment and salary increases for SBDC Directors, subcenter
Directors and staff members shall conform to the administrative policy
of the recipient organization.
(D) Travel. Transportation costs shall be at coach class; per diem
rates, including lodging, shall not exceed those authorized by the
written travel policies of the Host. All travel must be separately
identified in the proposed budget as planned in-State, planned out-of-
State, unplanned in-State or unplanned out-of-State. In order for any
travel to be approved by the SBA, it must be in accordance with the
written travel policies of the recipient organization or the sponsoring
SBDC organization and directly attributable to specific work of the
SBDC or incurred in the normal course of administration of the program.
All proposed travel by the SBDC Director and the SBDC staff must be
reasonable, justified in writing, and included in the SBDC's proposed
annual budget. Such justification must indicate the estimated cost,
number of persons traveling, and the benefit to be derived by the small
business community from the proposed travel. A specific projected
amount, based on past experience where appropriate, must also be
included in the budget for any unplanned travel. A justification in
greater detail shall be required for unplanned out-of-State travel. Any
proposed unplanned out-of-State travel that exceeds the approved
budgeted amount for travel must be submitted to the Project Officer for
approval on a case-by-case basis. Any such submission must contain a
written budget revision and written narrative explaining the need for
such travel and the relation of such travel to the efficient operation
of the SBDC. Travel outside the United States must have prior approval
by the AA/SBDCs on a case-by-case basis.
(E) Dues. Costs of membership in business, technical, and
professional organizations shall be allowable expenses. The use of
Federal dollars in payment of such dues shall be permitted, provided
that all such payments are anticipated in the budget proposal, approved
by the SBA as reasonable and comply with Sec. 130.460(b)(2)(iii)(B).
Sec. 130.470 Fees.
SBDC clients may be charged a reasonable fee to cover program costs
in connection with training activities sponsored or cosponsored by the
SBDC, or costs associated with approved specialized services. Fees may
not be imposed for counseling, as defined in Sec. 130.110(h).
Sec. 130.480 Program income.
(a) Treatment of program income for recipient organizations or SBDC
service providers based in universities or nonprofit organizations
shall be subject to the provisions of Attachment D of OMB Circular A-
110. Treatment of program income for recipient organizations or SBDC
service providers based in State or local governments shall be subject
to the provisions of Sec. 7.e and Attachment E of OMB Circular A-102
and 13 CFR 143.25.
(b) Program income, including any interest earned on program
income, must be used to accomplish program objectives. It cannot be
used to satisfy the requirements for Matching Funds. Each SBDC must
report in detail, on Financial Reporting Form SF 269, receipts and
expenditures of program income, including any income received through
co-sponsored activities. A narrative description of how program income
was used to accomplish program objectives shall be included or attached
to the SF Form 269.
(c) The phrase ``to accomplish program objectives'' means expanding
the quantity or quality of services, resources or outreach provided by
the SBDC network. The Project Officer is responsible for monitoring
financial expenditures to ensure that program objectives are being met.
Any unused program income will be carried over to be utilized to
further program objectives in a subsequent Budget period.
Sec. 130.500 Funding. [Reserved]
Sec. 130.510 Transfer of funds.
(a) All SBDC Cooperative Agreements will be funded through the SBA
internal ``Letter of Credit Replacement System'' (LORS), formerly
administered under the Department of Treasury's Letter of Credit (LOC)
system. The Standard Forms 1193A and 1194 will be used to establish and
modify letters of credit.
(b) SBDCs shall utilize the Standard Form 5805 in order to draw
down funds. It is critical that recipients ``draw down'' only those
funds required to meet their estimated or actual expenses. The
frequency of drawdowns and the amount of the cash-on-hand balance are
monitored by examining the Standard Form 272 (Federal Cash Transactions
Report), submitted quarterly by the recipient. Repeated drawdowns in
excess of immediate cash needs may result in the cancellation of the
LOC. In the event any interest results from the deposit of any
drawdowns in an interest-bearing account, SBDCs, other than state
government sponsored SBDCs, must report and return such interest
annually to the SBA.
Sec. 130.600 Cooperative Agreement. [Reserved]
Sec. 130.610 General Terms.
(a) Upon approval of the initial or renewal application, the
recipient organization and the SBA shall enter into a Cooperative
Agreement. The Cooperative Agreement shall set forth the programmatic
and fiscal responsibilities of the recipient organization and the SBA,
and describe the scope of the project to be funded as well as the
budget of the program year covered by the Cooperative Agreement.
(b) Principles for determining applicable administrative
requirements are contained in the following OMB Circulars and are
applicable to the Cooperative Agreement: A-110 (for programs
administered by educational institutions and nonprofit organizations)
and A-102 (for programs administered by State and local governments).
Sec. 130.620 Revisions and amendments to Cooperative Agreement.
(a) Requested revisions. A revision to the Cooperative Agreement
may be requested in writing by the recipient organization at any time
during the Agreement period. These revisions will normally relate to
changes in the scope, work or funding during the specified budget year.
Any request for revision must be submitted on an SF-424 ``Application
for Federal Assistance,'' signed by the recipient organization's
``authorized representative,'' and include a revised budget and budget
narrative, if applicable. Any revision to the Cooperative Agreement
must be mutually agreed upon by the recipient organization and the
responsible SBA district office and be approved by the AA/SBDCs. All
procedures for revisions must conform to the requirements of the
applicable OMB Circular (See Sec. 130.620 (b) and (c)).
(b) Revisions which require amendment to Cooperative Agreement. The
Cooperative Agreement under the section entitled ``Prior Approval''
shall list the proposed actions which require Project Officer
concurrence, approval of the AA/SBDCs and amendment of the Cooperative
Agreement. No application for an amendment submitted after the
Cooperative Agreement has been issued shall be effective until it is
approved and incorporated into the Cooperative Agreement. Revisions
which require amendments shall include:
(1) Any change in project scope or objectives;
(2) The addition or deletion of any subgrants or contracts;
(3) The addition of any new budget line items;
(4) Budget revisions and fund reallocations which exceed the
limitations established by applicable administrative regulations or OMB
Circulars, either individually or in the aggregate with other such
revisions or allocations;
(5) Any proposed sole-source or one-bid contracts exceeding the
limits established by applicable regulations or OMB Circulars; and
(6) The carryover from one Budget period to the next Budget period
of unobligated, unexpended SBA funds allocable under the Cooperative
Agreement to nonrecurring, nonservable bona fide needs of the SBDC
network as provided in the applicable OMB Circular and the Annual
Program announcement.
(c) Revisions which do not require amendments to Cooperative
Agreement--(1) Budget revisions. Revision may be requested by the
recipient organization at any time and requires approval of the SBA
Project Officer in the SBA district office and the AA/SBDCs as
prescribed by OMB Circular A-110, Attachment J, or 13 CFR 143.30.
(2) Reallocation of funds. Reallocation of fund shall be conducted
in accordance with OMB Circular A-110, Attachment J, or 13 CFR 143.30.
Additional guidance on this matter may be included in the annual
Program Announcement.
Sec. 130.630 Dispute Resolution Procedures.
(a) Any recipient organization that wishes to resolve a Dispute
concerning one or more elements of its Cooperative Agreement must
submit a written statement describing the subject of the Dispute,
together with any relevant documents or other evidence bearing on such
Dispute, to the Grants Management Specialist, with a copy of such
statement and accompanying evidence being sent to the Project Officer.
The Grants Management Specialist shall respond in writing to the
recipient organization concerning such Dispute within 30 calendar days
of receipt of the descriptive statement.
(b) The procedures thereafter shall be as follows:
(1) If the recipient organization receives an unfavorable decision
regarding the Dispute from the Grants Management Specialist, the
recipient organization will have 30 calendar days during which to file
an appeal with the AA/SBDCs. The AA/SBDCs shall respond in writing to
the recipient organization concerning such Dispute within 15 calendar
days of receipt of the appeal.
(2) If the recipient organization receives an unfavorable decision
regarding the appeal from the AA/SBDCs, the recipient organization may
make a final appeal to the SBA Grants and Cooperative Agreements
Appeals Committee (the ``Committee''). The appeal must be received by
the Chairman of the Committee within 30 calendar days of the date of
issuance of the AA/SBDCs' written decision. All appeals shall be sent
to the following address: SBA Grants and Cooperative Agreements Appeals
Committee, 409 3rd Street, S.W., Washington, D.C. 20416. Copies of the
appeal shall also be sent to the Grants Management Specialist and the
Project Officer.
(3) There shall not be any prescribed form for submission of an
appeal. Formal briefs and other technical forms of pleading shall not
be required. However, all appeals must be in writing and should be
concise and logically arranged. Appeals are required to contain at
least the following:
(i) Name and address of the recipient organization;
(ii) Identify of the SBA office/program and the Cooperative
Agreement/Grant;
(iii) A statement of the grounds for appeal, with reasons why the
appeal should be sustained;
(iv) A request for the specific relief desired on appeal; and
(v) A statement as to whether or not a hearing is requested, and if
requested, the reasons why a hearing would materially assist in
resolving the Dispute. Requests for hearing will not usually be granted
unless significant material facts are substantially in dispute.
(4) The AA/SBDCs or the Committee shall have the right to request
from the SBDC or the district office additional information or
documentation not previously furnished to the Grants Management
Specialist.
(5) In connection with an appeal proceeding under this section, the
recipient organization will be afforded an opportunity to explain its
position directly to the Committee, either in person or in writing.
(6) If a request for a hearing is made, the Committee may solicit
additional information or material before reaching its decision to
grant or deny a hearing.
(7) If a request for a hearing is granted, the Committee will issue
appropriate written instructions to the recipient organization
pertaining to the hearing.
(8) The Committee will reach a decision on the merits of the appeal
as soon as practicable. The Committee may solicit additional
information or material before reaching its final decision.
(9) The Chairperson, with advice from the Office of General
Counsel, will prepare a written final decision to be transmitted to the
recipient organization with copies to the Grants Management Specialist
and the Project Officer. This will be the final decision of the Agency
on the Dispute.
(c) Expedited dispute appeal process. When a Dispute which may
affect refunding arises within 120 days of the end of the Budget
period, the Committee, in consultation with the AA/SBDCs, shall meet,
with at least a majority of the members in attendance. By an
affirmative vote constituting a majority of its total membership, the
Committee shall have discretion to shorten all response times as
necessary to attain final resolution of the Dispute before the date on
which a new Cooperative Agreement would be due to be issued. At any
time during the appeal process within 120 days of the end of the Budget
period, the recipient organization may submit a written request to use
an expedited process.
Sec. 130.640 Conflict resolution procedures.
(a) Any Conflict that is not resolved at the SBA district office
level within 15 calendar days shall be referred by the SBA Project
Officer to the next SBA administrative level having authority to review
such Conflict. The SBA Project Officer shall make the referral in
writing and shall include the comments of the SBDC Director.
(b) If such Conflict is not resolved at any intermediate SBA
administrative level within 15 calendar days, it shall be forwarded, in
writing, to the AA/SBDCs for final resolution. All comments of the SBDC
Director must be included in any package forwarded to the AA/SBDCs.
(c) The AA/SBDCs shall transmit a final decision in writing to the
recipient organization, the SBDC Director, the SBA Project Officer and
other appropriate SBA field office personnel within 30 calendar days of
receipt of such documentation, unless an extension of time is mutually
agreed upon by the recipient organization and the AA/SBDCs.
Sec. 130.650 Non-renewal procedure for non-performance.
(a) In situations where the SBS District Director believes there is
sufficient evidence of an SBDC's nonperformance or poor performance
under the terms of the Cooperative Agreement or these regulations, and
subject to the provisions of Sec. 130.700(a), the SBA District Director
shall notify the SBDC Director any other appropriate official of the
recipient organization of an intention not to renew the SBDC.
(b) This notification can be forwarded to the recipient
organization at any time during the budget year, but normally should be
sent no later than 3 months prior to the deadline for receipt of an
application by the SBA Project Officer. When there is sufficient
evidence of an SBDC's violation of these regulations, or of any other
causes which may lead to the initiation of suspension or termination
procedures as set forth in Sec. 130.700 of this part, the SBA District
Director may waive the notification period with the concurrence of the
AA/SBDCs.
(c) This notification shall specifically cite the reasons for the
intention not to renew the SBDC. It shall allow the recipient
organization a 60-day period within which to change and adjust its
operations in order to correct any problems cited in the notice, and to
report to the SBA district office, in writing on the results of such
changes or adjustments.
(d) If the recipient organization is unwilling or unable to resolve
the specific problem areas to the satisfaction of the SBA district
office within the 60-day period, the SBA Project Officer shall have ten
(10) calendar days after expiration of such period to submit to the AA/
SBDCs, through appropriate SBA channels, a written description of any
unresolved issues, a summary of the positions of the District office on
the issues, and any supportive documentation.
(e) The AA/SBDCs shall transmit a final decision in writing to the
recipient organization, the SBDC Director, the SBA Project Officer and
other appropriate SBA field office personnel within 30 calendar days of
receipt of such documentation, unless an extension of time is mutually
agreed upon by the recipient organization and the AA/SBDCs.
(f) To reach a final decision, the AA/SBDCs shall consider written
documentation of the issues to be resolved, including all relevant
correspondence between the Project Officer, District Director and any
other SBS personnel and the affected recipient organization. At a
minimum, such documentation shall commence with the first written
notice of issues resulting in the invocation of the non-renewal
procedure. In addition to the written documentation, the AA/SBDCs shall
also communicate in person, in writing or by E-Mail with both the
recipient organization and appropriate SBA personnel.
(g) If the AA/SBDCs determines that the evidence submitted
establishes nonperformance, ineffective performance or an unwillingness
to implement suggested changes to improve performance, the AA/SBDCs
shall have full discretion to order termination of the SBDC. The SBA
district officer shall then pursue proposals from other organizations
interested in applying for SBDC designation. The incumbent SBDC shall
have 60 days to conclude operations and to submit close-out documents
to the appropriate SBA district office. Close-out procedures shall be
in conformance with OMB Circular A-133.
(h) The Agency may employ an abbreviated process for refusing to
provide continued funding to an SBDC for actions other than an SBDC's
poor performance. If a District Director has reason to believe an SBDC
or its key personnel is engaged in any of the conduct referred to in
Sec. 130.700(b) (1) through (9) or any other serious and flagrant
violation of these regulations or the terms and conditions of a prior
agreement, the AA/SBDCs, upon approval from the General Counsel, may
shorten response times in the best interests of the Agency and the
public.
(i) Effect of action on subcenter. If competing applications are
being accepted, nothing shall preclude a subcenter of the previously
funded recipient organization from applying for designation as the
recipient organization, as long as the subcenter is not involved in the
conduct leading to non-renewal of the former recipient organization.
Sec. 130.700 Suspension and Termination Causes and Procedures.
(a) General. After the SBA has entered into a Cooperative Agreement
with a recipient organization, it shall not suspend, terminate or fail
to renew any such agreement unless the SBA provides the recipient
organization with written notification setting forth the reasons
therefor and affording the recipient organization an opportunity for a
hearing, appeal or other administrative proceeding under the provisions
of the Administrative Procedure Act, 5 U.S.C. 553 et seq. Subject to
this requirement, and except as provided in this paragraph and the
provisions of Secs. 130.630, 130.640 and 130.650 regarding Dispute
resolution, Conflict resolution and non-renewal procedures, the
applicable general procedures for suspension and termination are
contained in 13 CFR 143.43 and 143.44, Enforcement and Termination for
Convenience, Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments and in OMB
Circular A-110, Attachment L, Suspension and Termination Procedures for
Grants and Agreements with Institutions of Higher Education, Hospitals,
and other Nonprofit Organizations, Uniform Administrative Requirements.
(b) Causes. Causes which may lead to the initiation of suspension,
termination, or failure to renew procedures include disregard or
material violation of these regulations, or any of the following
reasons:
(1) A willful or material failure to perform under the Cooperative
Agreement or under this part;
(2) Conduct reflecting a lack of business integrity or honesty;
(3) A conflict of interest causing real or apparent detriment to
any small business concern, any contractor, the SBDC or the SBA;
(4) Improper use of Federal funds;
(5) Failure of a Lead Center or its subcenters to consent to audits
or investigation or to maintain required documents or records;
(6) Failure of the SBDC Director to work at the SBDC Lead Center on
a full-time basis;
(7) Failure to promptly suspend or terminate the employment of an
SBDC Director, subcenter Director or key SBDC employee upon notice that
such individual has a criminal conviction for a felony; a criminal
conviction for a misdemeanor involving fraud, bribery, embezzlement,
false claims, false statements, falsification or destruction of
records, forgery, obstruction of justice, receiving stolen property, or
theft; or a civil judgment resulting from any conduct which reflects
adversely upon his or her business integrity.
(8) Violation of the SBDC's standards of conduct as specified in
these rules and as established by the SBDC pursuant to this part; or
(9) Any other cause not otherwise specified which seriously and
adversely affects the operation or integrity of an SBDC or the SBDC
program.
Sec. 130.800 Oversight of the SBDC Program. [Reserved]
Sec. 130.810 SBA review authority.
(a) The SBA shall monitor and oversee the Cooperative Agreement and
ongoing operations of the SBDC network to ensure the effective and
efficient use of SBA funds for the benefit of the small business
community.
(b) Required on-site reviews. A periodic on-site evaluation of the
SBDC network shall be conducted by the SBA with SBDC participation, as
required by law. This evaluation will include a thorough analysis of
the records, procedures, organizational structure, management, and
services of the SBDC. The evaluation shall be both qualitative and
quantitative, shall measure the effectiveness of the program and shall
include an assessment of the benefits accruing to the areas served. The
resulting on-site report by the SBA will review the strengths and
weaknesses of the SBDC network and contain recommendations for
improving the management and operation of the SBDC. SBDC Directors
shall work with their SBA Project Officer and other appropriate SBA
personnel to develop responses in writing within 30 working days to the
recommendations contained in the On-site Review Report, with timeliness
for any remedial action to be taken.
(c) Site visits. The AA/SBDCs, or a representative, is authorized
to make programmatic and financial review visits to Lead Centers and
SBDC service providers to inspect SBDC records and client files, and to
analyze and assess training, counseling and any other SBDC related
activities. These visits shall be coordinated, in advance, with the
SBDC Director.
(d) SBA examiners reviews. (1) From time to time, SBA examiners
shall perform limited scope reviews of SBDC operations. Reviews may be
financially related, programmatically related or a combination of both,
and shall consider ways to improve the efficiency of the program as
well as to monitor compliance with laws, regulations and other general
guidance, and shall be conducted according to published guidelines.
(2) The reviews by the SBA examiners shall not substitute for
audits required of Federal grantees under the Single Audit Act of 1984
or Office of Management and Budget (OMB) Circular A-110, A-128 or A-
133. Nor shall such internal review substitute for audits to be
conducted by the SBA Office of Inspector General under authority of the
Inspector General Act of 1978, as amended.
Sec. 130.820 Recordkeeping requirements.
(a) In order to comply with OMB circulars which require
recordkeeping, as well as to monitor the SBDC Program properly, the
SBDC network shall keep records, as set forth in paragraph (c) of this
section, and shall submit quarterly, semiannual and annual performance
and financial reports as outlined in this section. Those reports and
the clients' evaluations of services provided shall be reviewed by SBA
to:
(1) Determine the quality of services provided by the SBDC network;
(2) Determine the completeness and accuracy of SBDC records; and
(3) Compare the actual SBDC network accomplishments with the SBDC
network performance objectives, such as the Planned Milestone
Accomplishment Chart submitted with the proposal for initial or
subsequent funding which is listed in the Cooperative Agreement.
(b) Client control records. The recipient organization shall
maintain control records, as necessary, for a thorough Lead Center
audit and shall provide required SBA reports. SBDC service providers
and Lead Centers which provide services to small business shall
maintain detailed, complete and accurate client activity files,
specifying counseling, training and other assistance provided.
(c) Performance reports. For those recipient organizations in the
SBDC program for more than three years, interim reports shall be due 30
days after completion of six months of operation; for those recipient
organizations in the program three years or less, reports shall be due
30 days after completion of each of the first three quarters. The
annual report shall include the second semiannual or the fourth quarter
report and shall be due 90 days after the applicable period (December
30 for Fiscal Year and March 30 for Calendar Year SBDCs). These reports
shall reflect accurately the activities, accomplishments and
deficiencies of the SBDC network.
(d) Financial reports. The recipient organization shall provide
three quarterly and one annual financial report to the appropriate SBA
Project Officer. The required financial reports will be set forth in
the Program Announcement and the Cooperative Agreement, in compliance
with the OMB Circulars governing such reports.
(e) Availability of records. As required by OMB Circular A-133, all
Lead Center and subcenter records shall be made available to the SBA
for review upon request.
Sec. 130.830 Audits and Investigations.
(a) Access to records. OMB Circulars A-128 and A-133 set forth the
requirements concerning record access and retention.
(b) Audits--(1) Pre-award audit. All applicant organizations that
propose to enter the SBDC Program for the first time may be subject to
a pre-award audit. The purpose of a pre-award audit is to verify the
adequacy of the accounting system, the suitability of proposed costs
and the nature and source of proposed Matching Funds.
(2) Audits of the SBDC network may be conducted by the recipient
organization or by the SBA. All audits will be conducted in accordance
with Government Auditing Standards (Yellow Book), promulgated by the
Comptroller General of the United States.
(3) Audits by the recipient organization will be conducted as a
single audit of a recipient organization pursuant to OMB Circular A-
102, A-110, A-128, and A-133, as applicable.
(4) Audits by the SBA will be conducted, supervised, or coordinated
by the SBA Office of Inspector General or its agents. At SBA's
discretion, audits of the SBDC network may have been performed even
though single audits may have been performed. In such instances, the
Agency will conduct such audits in compliance with Government Auditing
Standards and all applicable OMB Circulars.
(c) Investigations. The SBA may conduct such investigations as it
deems necessary to determine whether any person has engaged in any acts
or practices which may constitute a violation of the Small Business
Act, as amended (15 U.S.C. 631, et seq.) any rule or regulation under
that Act, any order issued under that Act, or any other applicable
Federal law. If any such violation is about to occur, the SBA may
conduct such investigation as it deems necessary.
Dated: November 15, 1994.
Cassandra M. Pulley,
Acting Administrator.
[FR Doc. 94-28651 Filed 11-25-94; 8:45 am]
BILLING CODE 8025-01-M
