[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                 SBA MANAGEMENT AND OVERSIGHT OF SCORE

=======================================================================

                                HEARING

                               BEFORE THE

       SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT, AND REGULATIONS

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             JULY 11, 2019

                               __________

 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                              
                               

            Small Business Committee Document Number 116-033
             Available via the GPO Website: www.govinfo.gov
             
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
36-966                     WASHINGTON : 2020                     
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                        TRENT KELLY, Mississippi
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania

                Adam Minehardt, Majority Staff Director
     Melissa Jung, Majority Deputy Staff Director and Chief Counsel
                   Kevin Fitzpatrick, Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. July Chu....................................................     1
Hon. Ross Spano..................................................     3

                               WITNESSES

Mr. Hannibal ``Mike'' Ware, Inspector General, United States 
  Small Business Administration, Washington, DC..................     4
Mr. Allen Gutierrez, Associate Administrator, Office of 
  Entrepreneurial Development, U.S. Small Business 
  Administration, Washington, DC.................................     6

                                APPENDIX

Prepared Statements:
    Mr. Hannibal ``Mike'' Ware, Inspector General, United States 
      Small Business Administration, Washington, DC..............    20
    Mr. Allen Gutierrez, Associate Administrator, Office of 
      Entrepreneurial Development, U.S. Small Business 
      Administration, Washington, DC.............................    28
Questions and Answers for the Record:
    Questions from Hon. Judy Chu and Hon. Ross Spano to Mr. Allen 
      Gutierrez and Responses from Mr. Allen Gutierrez...........    32
Additional Material for the Record:
    The SCORE Association........................................   204

 
                 SBA MANAGEMENT AND OVERSIGHT OF SCORE

                              ----------                              


                        THURSDAY, JULY 11, 2019

                  House of Representatives,
               Committee on Small Business,
                    Subcommittee on Investigations,
                                 Oversight and Regulations,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:57 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Judy Chu 
[chairwoman of the Subcommittee] presiding.
    Present: Representatives Chu, Evans, Craig, Spano, and 
Burchett.
    Chairwoman CHU. Well, good morning. The Subcommittee will 
come to order.
    Everybody is so timely that we are actually starting a few 
minutes ahead of time. But we are actually all here, so why 
not.
    Okay. So thank you for all being here.
    As Chairwoman of the Subcommittee on Investigations, 
Oversight, and Regulations, I, along with my colleague, Ranking 
Member Spano, are responsible for performing oversight of 
Federal programs that affect small business.
    Today, we will have an opportunity to learn about the 
inspector general's audit of the SCORE program, and discuss 
what steps the agency is taking to resolve the IG's 
recommendations.
    SCORE was first established in 1964 as a national volunteer 
nonprofit organization whose mission is to foster vibrant small 
business communities through mentoring and education. Over the 
years, it has grown to one of the largest network of 
volunteers, with more than 11,000 expert business advisors at 
350 chapters nationwide.
    SCORE provides free or low-cost mentoring and training to 
small business owners throughout the country to help them draft 
business plans, market products, and manage cash flow.
    SBA reported that SCORE volunteers mentored and trained 
600,000 clients in fiscal year 2018, and helped launch more 
than 54,000 businesses in 2017. These statistics are 
impressive. And because of the past successes, Congress 
increased funding for the program from $3.5 million in 2000 to 
$11.7 million in 2019, a more than 230 percent increase.
    And with the additional funding came expectations that 
SCORE would help thousands more entrepreneurs thrive and 
achieve new levels of success that help grow the economy and 
strengthen our communities. Congress also expected the 
leadership at SBA and SCORE to use taxpayers' dollars wisely 
and to ensure that the program operates effectively and 
efficiently.
    Unfortunately, SBA's Office of the Inspector General's 
recent audit of the program uncovered systemic issues with 
SCORE's use of Federal funds and SBA's management and oversight 
of the program. That is unacceptable.
    Sadly, the OIG found that SCORE commingled restricted funds 
with unrestricted funds, despite Federal rules and accounting 
standards restricting this practice. This is a result of 
haphazard oversight by SBA and a failure of SCORE's national 
office to enforce the accounting standards. SCORE's chapters 
used 300 separate accounting systems, some on volunteer's 
laptops, making effective oversight next to impossible.
    And because of lack of appropriate financial oversight by 
SBA, Federal funds used for excessive employee bonuses went 
unnoticed, and improperly awarded contracts to vendors were 
made, lessening the likelihood that the prices paid for the 
goods and services were reasonable. I am particularly troubled 
by these findings. As an elected official, I fully expect the 
SBA and its resource partners to be good stewards of taxpayer 
dollars.
    Moreover, the problems identified in audit may just be a 
starting point. The audit only examined $2 million of a $10 
million Federal award for 2017 and part of an award for 2018. 
This is just a snapshot of the funding SCORE has received over 
the past 55 years. I am concerned that this may just be the tip 
of the iceberg and that SBA's lack of financial management of 
the SCORE program could be endemic of the program and possibly 
more widespread throughout the agency.
    Even more troubling is the lack of senior leadership at the 
top of SBA that puts a strain on the agency's ability to 
effectively resolve these issues. The fact that SBA has been 
without an administrator since March 2019 and without a deputy 
administrator since April 2018 is particularly disconcerting. 
While acting heads of agencies can keep the lights on, the SBA 
needs strong leadership at the helm to restore integrity and 
accountability.
    Today, we will have an opportunity to learn about the 
findings of the audit and to hear directly from SBA about the 
steps the Office of Entrepreneurial Development is taking to 
address the IG's recommendations and restore confidence in the 
SCORE program.
    I look forward to hearing from Mr. Ware and Mr. Gutierrez. 
While I understand that the financial irregularities in the 
program preceded Mr. Gutierrez' tenure at SBA, I trust that you 
are making it a priority to restore public confidence in SCORE 
and in the SBA's role to ensure that taxpayers' dollars are 
being used effectively and efficiently and in accordance with 
longstanding Federal accounting standards.
    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. 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 that they 
deserve.
    I thank all the witnesses for being here today. Your 
testimony will help inform the committee as we work toward the 
goal of ensuring that the SCORE program is achieving its stated 
objectives while being a responsible steward of taxpayer 
dollars. I look forward to your testimony.
    I would now like to yield to the Ranking Member, Mr. Spano, 
for his opening statement.
    Mr. SPANO. Thank you, Madam Chair.
    For over 50 years, the Small Business Administration has 
entrusted the SCORE program with fostering vibrant small 
businesses through mentoring and education. Congress has 
entrusted the SBA's Office of Entrepreneurial Development with 
administering the SCORE program according to Federal statutes 
and regulations.
    The SBA's Office of Inspector General has repeatedly 
identified unallowable costs enabled by weak internal controls 
at SCORE and the SBA Office of Entrepreneurial Development. The 
inspector general audit released in April 2019 stated that 
program officials need to make major improvements to the SCORE 
program to ensure effective financial oversight and performance 
measurement. The problems identified in this SCORE audit are 
neither isolated or unique.
    In 2017, the inspector general issued an audit of the SBA's 
$840,000 grant to the SCORE Association to provide technical 
assistance to small businesses impacted by Hurricane Sandy. In 
that report, the inspector general questioned 391,000 of 
unallowable costs, nearly half of the grant award. The report 
stated that the SBA cannot be certain that SCORE effectively 
achieved the Sandy grant objectives.
    As a member of the Florida delegation, I put a lot of faith 
in Federal disaster recovery efforts, and I expect every dollar 
to make an impact on people whose lives have been upended.
    Due to unreliable and conflicting performance data, we 
don't know how many people received SCORE services. The 
inspector general continually identifies significant systemic 
deficiencies throughout SBA grant programs. And this year, 
grants management was elevated to the SBA's top management 
challenges.
    The purpose of today's hearing is to identify systemic 
weaknesses in the SCORE program, measure SBA's progress in 
implementing the inspector general's recommendations.
    Our witnesses are here to provide greater detail about the 
report and outline plans for reform. I appreciate your efforts 
to protect taxpayer dollars and improve entrepreneurial 
development efforts at the Small Business Administration.
    And with that, Madam Chair, I yield back.
    Chairwoman CHU. Thank you, Mr. Spano.
    The gentleman yields back.
    And if committee members have an opening statement 
prepared, we would ask that they be submitted for the record.
    I would like to just take a minute to explain the timing 
rules. Each witness gets 5 minutes to testify and the members 
get 5 minutes for questioning. There is a lighting system to 
assist you. The green light will be on when you begin, and the 
yellow light comes on when you have 1 minute remaining. The red 
light comes on when you are out of time, and we ask that you 
stay within that timeframe to the best of your ability.
    I would now like to introduce our witnesses. Our first 
witness is The Honorable Hannibal ``Mike'' Ware, the Inspector 
General of the Small Business Administration. Mr. Ware was 
sworn in as the Inspector General of the Small Business 
Administration in May 2018. He is responsible for independent 
oversight of SBA's programs and operations, which encompass 
more than $100 billion in guaranteed loans and nearly $100 
billion in Federal contracting dollars.
    Mr. Ware has 28 years of experience within the OIG 
community and has received numerous awards throughout his 
career, including several awards from the Council of the 
Inspector Generals on integrity and efficiency as recognition 
for his significant work in the inspector general community.
    Welcome, Mr. Ware.
    Our second witness is Mr. Allen Gutierrez, the associate 
administrator of that Office of Entrepreneurial Development at 
the Small Business Administration. Prior to joining the SBA, he 
served as the national executive director of The Latino 
Coalition, where it grew to include 1.2 million Hispanic 
business owners and over 90 coalition partners. Before his time 
at The Latino Coalition, Mr. Gutierrez served as the senior 
advisor to the chief operations officer at the SBA from 2001 to 
2006. He earned his Bachelor of Arts in political science, with 
a minor in business administration from the University of 
Southern California.
    Welcome, Mr. Gutierrez.
    Mr. Ware, you are now recognized for 5 minutes.

STATEMENTS OF HANNIBAL ``MIKE'' WARE, INSPECTOR GENERAL, UNITED 
  STATES SMALL BUSINESS ADMINISTRATION; AND ALLEN GUTIERREZ, 
ASSOCIATE ADMINISTRATOR, OFFICE OF ENTREPRENEURIAL DEVELOPMENT, 
               U.S. SMALL BUSINESS ADMINISTRATION

              STATEMENT OF HANNIBAL ``MIKE'' WARE

    Mr. WARE. Chairman Chu, Ranking Member Spano, and 
distinguished members of the subcommittee, thank you for 
inviting me to testify before you today and for your continued 
support of the Office of Inspector General. I am always proud 
to represent the dedicated men and women of the Office of 
Inspector General and to speak to you about their important 
work.
    In recent years, my office has produced two audit reports 
on SCORE, as well as a capping report on SBA's grant management 
programs. 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 defect fraud, waste, and abuse in SCORE. It 
also led to a culture in SCORE in which whistleblowing was 
discouraged.
    In total, we made 27 recommendations to enhance the overall 
management and effectiveness of SCORE, 13 of which are closed.
    We published our most recent report on SBA's oversight of 
SCORE in April of this year. Our objectives were to determine 
whether SBA had effective oversight to ensure SCORE spent 
Federal funds per the cooperative agreement requirements and 
measured achieved program goals.
    We determined that program officials did not effectively 
oversee SCORE's use of Federal funds. They did not perform 
enough reviews to ensure that SCORE adhered to the Federal 
requirements for quarterly financial reporting. As a result, 
SCORE commingled Federal funds with unrestricted donations and 
used Federal funds for unallocable and unsupported costs.
    Furthermore, despite the longstanding partnership between 
SBA and SCORE, program officials did not keep track of the 
total cost of the program and did not perform a complete 
financial examination of SCORE.
    Compounding these issues, SCORE relied on more than 300 
accounting systems to track Federal funds, which affected its 
ability to perform effective oversight.
    We questioned costs totaling over $713,000 that did not 
adhere to the cooperative agreement requirements or were not 
properly supported and made 11 recommendations, 3 of which are 
closed.
    Our previous report on SCORE focused on the $840,000 
supplemental grant that SBA awarded to SCORE in fiscal year 
2013 for disaster technical assistance following Hurricane 
Sandy. We found that SBA did not provide effective oversight 
over SCORE's financial management of grant funds. We also found 
that SBA exempted SCORE from submitting quarterly financial and 
performance reports. As a result, we questioned costs totaling 
more than $391,000, or 47 percent of the grant. The audit 
report included 12 recommendations, 10 of which are closed.
    We issued a capping report in early fiscal year 2019 in 
response to our work on SBA's various grant programs, many of 
which, like SCORE, are under the purview of the Office of 
Entrepreneurial Development. The audit found systemic risks 
with SBA's ability to conduct financial oversight, including 
not enforcing financial reporting requirements, cost category 
reimbursements, exceeding budget, weak financial review 
procedures, and incomplete supporting financial documents.
    We also found systemic issues regarding SBA's performance 
oversight, including inaccurate and incomplete performance data 
and documentation, failure to enforce performance reporting 
requirements, and performance measures lacking outcome results. 
We made four recommendations, all of which remain open.
    In addition, several of our most recent reports on 
entrepreneurial development programs, including SCORE, have 
identified problems with SBA's performance system of record, 
EDMIS. Technology lapses with it continue to impact program 
management. These systemic issues led us to identify grants 
management as one of the most serious management and 
performance challenges facing SBA in fiscal year 2019.
    Additionally, we recently conducted three criminal 
investigations for potential instances of embezzlement and 
whistleblower retaliation violations within the SCORE program, 
two of which were substantiated and are now closed. SBA has not 
yet provided a response to our March 29 report of 
investigation, which substantiated a SCORE volunteer was 
terminated in part for cooperation with my office on one of the 
just mentioned fraud investigations.
    SBA officials acknowledge the systemic issues with grants 
and SCORE management and have documented plans to address them. 
That said, we will continue to perform reviews and make 
recommendations for corrective action to promote efficiencies 
and effectiveness within SBA's grant programs.
    Thank you for the opportunity to speak to you today. I look 
forward to your questions.
    Chairwoman CHU. Thank you, Mr. Ware.
    Mr. Gutierrez, you are now recognized for 5 minutes.

                  STATEMENT OF ALLEN GUTIERREZ

    Mr. GUTIERREZ. All right. Thank you very much, Chairwoman 
Chu, Ranking Member Spano, and members of the subcommittee, for 
inviting me to testify this morning.
    I appreciate the opportunity to appear before the 
Subcommittee again. As you know from my previous hearing, I am 
associate administrator of SBA, the Office of Entrepreneurial 
Development. Our program office is the agency's technical 
assistance arm, oversees SBA's primary counseling and training 
programs.
    Today's hearing is focused on one of our three resource 
partners, the SCORE program, and recent findings of an 
inspector general report on the program.
    First, let me acknowledge that the agency, unfortunately, 
did not exercise adequate program oversight in the past. SBA 
did not have proper internal controls in place to monitor the 
spending activities as outlined in the IG report. We have been 
correcting this and will be doing better in the future.
    With the SCORE program, SBA provides the funding to the 
national SCORE Association, who then distributes to their more 
than 300 chapters across all 50 States and U.S. territories. 
This is different process than other--than our other resource--
two resource partners, where the grant is provided directly to 
the 63 small business development centers or directly to the 
hundred-plus women business centers.
    The primary manner in which the agency exercised oversight 
of our resource partners is through the terms and conditions 
outlined in the cooperative agreements.
    When I was first appointed to my role in May of 2017, the 
SCORE program was two-thirds of the way through their 2017 
cooperative agreement and their fiscal year 2018 cooperative 
agreement was mostly completed.
    In fiscal year 2019, the cooperative agreement, we were 
finally able to establish some fundamental foundational items 
that we had been working on for over a year. In 2018, I 
initiated change management processes that included changing 
the performance matrix for all three resource partners to make 
them more consistent and to hold them more accountable.
    I also revised the funding announcement opportunities and 
terms and conditions in the cooperative agreement for all three 
resource partners to strengthen the agency's oversight.
    One example with SCORE was the inclusion of language in 
their fiscal year 2018 cooperative agreement for potential 
financial examinations. In the past, the agency, unfortunately, 
did not prioritize financial examinations. We are now and will 
be performing an examination of the SCORE for the first time in 
August.
    I have also focused on addressing longstanding audit 
findings in the SBA's Inspector General. Working 
collaboratively with IG, my office has successfully closed 90 
percent of all recommendations. We anticipate closing the 
remaining recommendations in the next 2 months.
    With the IG April report, my office has continued to work 
collaboratively with their auditors, and we have closed three 
and resolved eight of these newly issued recommendations.
    Since the IG issuance of the audit report, we have 
increased oversight of the program. As previously mentioned, we 
are nearing the completion of the SCORE's standard operating 
procedure, a first in the program. We also have modified 
SCORE's terms and conditions to clarify language regarding 
whistleblower reporting. Further, my office has developed 
guidance and will be providing training on Federal financial 
management as SCORE's upcoming national leadership conference 
that will take place this August.
    Please know that I take this issue raised in the IG report 
very seriously. I remain committed to making improvements in 
the oversight and monitoring of SCORE's use of government funds 
and its reporting of performance results. I feel the changes we 
have been making and the new parameters we have established 
will help to prevent abuses in the future.
    Thank you again for the chance to testify, and I look 
forward to answering any questions you may have.
    Chairwoman CHU. Thank you, Mr. Gutierrez.
    Well, I will begin by recognizing myself for 5 minutes.
    Mr. Ware, SCORE was first established in 1964. Today, it is 
the largest network of volunteers, with more than 11,000 expert 
business advisors at more than 350 chapters nationwide. SCORE 
offers free and low-cost counseling and training to about 
600,000 clients each year.
    I am particularly troubled by the findings in your audit, 
since SCORE could serve such great purposes. And I would like 
to know, on a scale of 1 to 10, with 10 being the most serious, 
how substantial are your findings and why? I want to know how, 
relative to other audits that you have done, how serious this 
is.
    Mr. WARE. On a scale from 1 to 10, I would be comfortable 
giving it an 8. And I can explain.
    It is not uncommon--as we have said, you know, we find 
systemic issues across programs. It is not uncommon to find the 
type of issues we found. What elevates it to this is where you 
have a culture where whistleblowers are penalized for reporting 
fraud, waste, and abuse. And that, to me, is completely 
unacceptable. We substantiated the fact that a whistleblower 
was, in fact--which is basically an unpaid employee, a 
volunteer--was, in fact, removed, in part, because he reported 
fraud to us, which resulted in a conviction. And that for me 
raises it to a level 8.
    Chairwoman CHU. Well, that is--that is really incredible.
    And, Mr. Ware, your report found that SCORE commingled 
Federal funds with unrestricted funds. Federal regulations 
require recipients to maintain financial management systems to 
identify the source and application of funds for federally 
funded activities. Moreover, the program announcement for SCORE 
specified that the program income may not be commingled.
    So how many years have these regulations been in place, and 
why didn't SCORE comply with the Federal regulations, and why 
didn't SBA take steps to ensure that SCORE was adhering to this 
clear guidance?
    Mr. WARE. So I have been auditing for a long time, you 
know, since like 1990. And if I--that prohibition has been in 
place, not just for SCORE, but across government from then. I 
remember circular--OMB Circular A110. I believe that was in 
1993. That definitely made it clear that you could not 
commingle funds--Federal funds, period, not just for SCORE. And 
that was superseded recently--recently, like 2014 recently--by 
the uniform guidance, but it maintained the same prohibition of 
using it.
    But my auditors determined that the volunteers placed in 
charge of the chapter funds are not properly guided on the 
requirement of separating funds. And with no uniform accounting 
system in place, it is almost--it is almost impossible to do 
so.
    When I say they have 300 accounting systems, I am being 
generous. You know, if you want to call an Excel spreadsheet an 
accounting system, okay. You know, but that is why.
    Chairwoman CHU. Well, I would have to say that that was one 
of the most astounding findings, that there were 300 separate 
accounting systems and some were on the private laptops of 
volunteers.
    So, now, SCORE is moving towards a consolidated accounting 
and banking system, which would require all chapters to be part 
of this new system by September 2020.
    In your view, will this consolidation of all chapter-level 
banking into a single account controlled by headquarters be 
sufficient to reduce the risk of Federal dollars being misused?
    Mr. WARE. On the surface, I would say that it--as a matter 
of fact, let me just say it this way. It has a great potential 
to be sufficient. I say that because a system in and of 
itself--clearly, this system, when you had 300 before, will 
make things work a lot better in terms of oversight. But the 
system is just a system. It is up to the folks who are 
responsible for oversight to still conduct the type of 
oversight responsibilities like reconciliation, like asking 
questions when things come up that look fishy and things of 
that nature. So it has to be coupled with that real oversight 
drive by the agency and by SCORE.
    Chairwoman CHU. And would a full-time compliance officer 
help in this situation?
    Mr. WARE. That is a--that is a tough question for me. I am 
not certain if that would help, but it does speak to our 
recommendation to SBA that they consolidate their grant 
function so that they have one person who is responsible for 
the success of all its grants programs.
    Chairwoman CHU. Okay. Thank you.
    And now, Mr. Spano.
    Mr. SPANO. Thank you, Madam Chair.
    Thank you, gentlemen, for being here. We appreciate your 
time.
    Many of the financial and performance issues have been 
identified in previous IG reports on the SCORE program. And so 
my question for you is this: Have any action--any substantive 
actions been taken to address those issues after the 2017 
report, or did things pretty much remain status--status quo 
between 2017 and 2019?
    Mr. WARE. Well, I could answer. So some improvements were 
made. We had 12 recommendations. We had 10 that we were able to 
close based on the information. The problem was, with the two 
that are outstanding, have to do with the SOPs that Mr. 
Gutierrez spoke about that would really drive that true 
financial oversight and drive at real performance, outcome-
based performance measures. So they haven't put those SOPs out, 
so they haven't been sent out to the field or to anybody else 
for use.
    Mr. SPANO. Okay. So to summarize your comment there, 
essentially, what you are saying is that the sum and substance 
of what would make a difference hasn't really been implemented.
    Mr. WARE. Correct.
    Mr. SPANO. Okay. And then I will sort of ask you, Mr. 
Gutierrez, can you explain why that is the case?
    Mr. GUTIERREZ. Sure. Couple of things. One is, I think as 
mentioned in my oral, is that when I first got there, as Mr. 
Ware mentioned, is the culture in the oversight. For me, I take 
it near and dear and very personal in that sense.
    So in terms of making everything effective and efficient, 
when looking at everything that was presented to me in arriving 
there in 2017, was really to--couple of lanes. One lane was the 
outstanding IG items that were there that had never been taken 
care of, right? And taking those, within a year, 90 percent of 
wiping those out and taking care of them, working hand-in-hand 
with the IG to make that statement to staff and internally also 
to the agency that we take things very seriously and I take 
things very seriously. So that was one area.
    The other thing I would say too is that as this audit was 
being done by the IG in terms of SCORE, as we got to the final 
draft of being--three of them already had been taken care of. 
Why? Not because they were already doing the audit. It was 
because I had already started doing stuff when I first got 
there and looking and looking under the rug to really take care 
and ownership of the overall Office of Entrepreneurial 
Development.
    So I really have expressed that--and the culture in 
changing that ongoing with the team of accountability and 
everybody on the team being held accountable, including myself, 
in moving forward.
    Mr. SPANO. Would you disagree with Mr. Ware's testimony 
just a moment ago that the primary recommendations in terms of 
accounting and how to effectively oversee and provide 
oversight, would you disagree or agree with his comment that 
that has not been implemented by the SBA?
    Mr. GUTIERREZ. Well, the accounting process is--first of 
all, I am--it is good to see that SCORE has mentioned that they 
have--will be consolidating everything to headquarters. That is 
a positive step. But I am disheartened in terms of his 
testimonies and his--especially to the Senate, where in his 
responses, he mentioned in March of 2020 that he will have it 
done, and here he responds back in saying that now in September 
of 2020. He keeps kicking the can down the road.
    I feel that that is not--that is not good. I am going to 
follow up with his office in that. Because I think the first 
priority, it shouldn't take since 2016 for the SCORE 
Association to be consolidating the 300 accounts into one in 
headquarters. That needs to be a number one priority for them, 
to recognize from this report that this means serious business.
    By them doing it sooner than later, that is--we are going 
to still do the first financial exams in August, but certainly 
that is going to enable us even more oversight with them when 
they consolidate everything at headquarters in Herndon.
    Mr. SPANO. Okay. So that begs the question, how is the SBA 
going to make sure that happens?
    Mr. GUTIERREZ. I have a followup that I will be sitting 
down with them. I am going to ask for more extra data from 
their side.
    I think that instead of doing events across the country and 
asking for $900,000 for next year's budget, he should hire 
folks and get this thing done sooner than later. That should be 
the number one priority. The number one priority should not be 
doing events in the next couple of years. The number one 
priority should be consolidating all those accounts, making 
that Herndon a one-stop shop in accounting and having that up 
and implemented October 1 of this year.
    Mr. SPANO. Thank you. I yield back.
    Chairwoman CHU. Thank you. The gentleman's time has 
expired.
    And now the gentleman from Pennsylvania is recognized for 5 
minutes, Mr. Evans.
    Mr. EVANS. Thank you, Madam Chair. I appreciate this 
opportunity.
    Inspector General Ware, I applaud your work on the audit of 
the SCORE program, and I hope the SCORE is listening intently. 
These are some very serious issues. Providing more robust 
oversight of the SCORE program is a priority for the Small 
Business Committee.
    With components like personalized one-on-one counseling, 
convenient online and local community workshops, multilingual 
guides and programs targeted towards women, minorities, and 
veteran entrepreneurs, I honestly believe that if operated 
appropriately and effectively, this program has the potential 
to help a lot of entrepreneurs who just need the right tools 
and guidance to thrive.
    In your view, Inspector General, what more can Congress do 
to ensure that the program is operating effectively?
    Mr. WARE. Thank you. In my view--and I kind of prepared for 
this question in the last testimony and wasn't asked. But in my 
view, I think it has to do with--as a matter of fact, let me 
use a different program, the STEP program. So in the STEP 
program, Congress put in specific performance measures to 
ensure that the program was meeting its intended purpose. Well, 
that hasn't necessarily been done for SCORE.
    But I have to say that Mr. Gutierrez and his team, in 
making some of our--in implementing some of our 
recommendations, put in some pretty good outcome-based 
performance measures this time around. But if it is not 
measured properly, it almost doesn't--doesn't matter. And to 
this date, that is done based on Mr. Gutierrez'--and the SBA's, 
to be more correct--SBA's understanding of what the purpose of 
the program is. The Congress has not defined--fully defined 
what their true intent for the program is in terms of 
measurables. So we would like this measured. And I think it 
worked really well for STEP, and I think that that would work 
well for SCORE and some of the other programs as well.
    Mr. EVANS. Can you give an example of it?
    Mr. WARE. Well, an example of some of them that they did 
implement recently was like the financial impact to the 
businesses, the growth in the businesses. That is what you want 
to see in terms of it, not just how many people showed up to 
one of your mentoring things or one of your workshops. And 
those things drive at what we believe would be--what is the 
obvious to us, you know, the reason the program exists.
    Mr. EVANS. Uh-huh.
    Mr. WARE. And they put that in the 2020 CBJ, and they have 
also put it in the grant announcement, I think, for 2019, if I 
am not mistaken. Yeah, the program announcement.
    Mr. EVANS. Mr. Gutierrez, can you please explain to the 
committee why SBA failed to conduct a financial audit of the 
SCORE program?
    Mr. GUTIERREZ. As I mentioned--let me add a little bit to 
the performance too as well, sir, if I may.
    All three resources partners, when I got there, they had 
never been held accountable for all their expected outcomes and 
performances. They had been given a free pass for many years. 
And that is truly unacceptable with taxpayers' dollars. Because 
what we want is we want more effective and efficient to reach 
out to our entrepreneurs, to reach out to all small businesses 
that have that dream to become a large company and provide jobs 
for all Americans.
    So from that standpoint, I just wanted to add that we added 
performance outcomes and performance matrix, first time for 
many years that we released this past year. It hadn't been 
touched for many, many years.
    In regards to the financial audit, by then moving 
everything to a one system in Herndon, that will enable us to 
really work hand-in-hand doing that financial oversight 
financial exam.
    It hadn't been done in the past, I will admit that and I 
mentioned in my testimony. I don't know for many reasons in the 
past for my predecessors why they didn't, but we will be 
implementing that in August. And, certainly, what I would like, 
as I mentioned earlier, more expedited from the SCORE 
Association, to have this all implemented by October 1 so we 
can have even more stronger checks and balances and oversights 
on them.
    Mr. EVANS. Thank you, Madam Chair. I yield back the balance 
of my time.
    Chairwoman CHU. Thank you. The gentleman yields back.
    And now the gentleman from Tennessee, Mr. Burchett, is 
recognized for 5 minutes.
    Mr. BURCHETT. Thank you, Chairlady and Ranking Member.
    Mr.--is it Gutierrez? Tell me your name. Mine gets 
massacred every time somebody says it, and I just nod. So tell 
me how to say your name.
    Mr. GUTIERREZ. Gutierrez.
    Mr. BURCHETT. Gutierrez. All right. And I got Mr. Ware. I 
believe I am going to stick with that.
    I appreciate y'all being here. And, again, I appreciate the 
Ranking Member and the Chairlady for letting me speak.
    This is for both of y'all and just whichever one wants to 
handle it first. Is it the SBA's responsibility to monitor and 
oversee the ongoing SCORE operations for effective and 
efficient use of Federal funds? And how do your offices define 
effective and efficient of Federal funds?
    Mr. WARE. I could go first, if I may.
    Mr. BURCHETT. Yes, sir, please.
    Mr. WARE. It is our belief that it is the SBA's 
responsibility. SBA is the person administering the grant and 
running the grant. They are the ones with real responsibility 
to the American public to ensure that integrity exists in a 
program and that taxpayer dollars are being used for its 
intended purpose.
    And what was the next part, the other part? Sorry.
    Mr. BURCHETT. Yes, sir. How do your offices define 
effective and efficient use of Federal funds?
    Mr. WARE. Oh, that would be--from an inspector general 
standpoint, that would be where proper internal controls are in 
place to mitigate the risk of any fraud, waste, or abuse in the 
programs, which is not as complicated as that sounds. It is 
doing general oversight, doing general reconciliation, asking 
for the right financial reports and reviewing them when they 
come in.
    And the next problem that we have where--let me flip it so 
that it would be in a positive--would be a program that 
adequately measures the program outcomes.
    Mr. GUTIERREZ. I would say definitely. You know, yes, sir, 
in a sense, effective and efficient is the reason why I put in 
more performance matrix and more accountability to all the 
three resources partners. We are talking close to $200 million 
a year in appropriated dollars, and we want that to be more 
effective and efficient and reach out to all stakeholders 
across the country.
    What I would say, that the internal controls is something 
that, you know, my staff, you know, they have gotten to know me 
even more these last 2 years, but I get into the weeds on 
things, right? Why? Because I take it seriously, and I want to 
make sure that from the vision of previous Administrator 
McMahon and the future administrator too, that we always are 
taking the agency to the next step, right?
    So as mentioned, the SOP, as it should be, I would say in 
the next couple of weeks ready to be released. And that is 
something that had never been done before, never been done. No 
SOP for SCORE for many, many years. For me, it was mind-
boggling. For women business, OWBO, for example--we are not 
here for OWBO, but same thing, no SOP ever. And we are almost 
finalizing that as well.
    So those are measures and steps of proactiveness approach 
and creating those internal controls.
    Another example, in terms of--I know Mr. Ware talked about 
grants, right? Other thing too is that creating--you know, we 
all know about, you know--you know, we get the option when we 
are on our phones or emails to create a two-step verification 
process, right, so we don't get hacked, right? Well, my thought 
is, and what I will be implementing is, same thing as well, a 
two-step verification process.
    Because in the past, the reimbursable that would come in 
from SCORE on a quarterly basis would go to the program 
manager, but the program manager that reports to the head of 
that office would never really see that. And I am like, that 
just--we want to have more accountability for everybody on my 
team. So that two-step verification process we are going to be 
implementing before it goes to grants to pay that particular 
reimbursement.
    I feel that that way, it is accountability for everybody, 
everybody is on the hook, that we continue to improve and make 
everything more effective and efficient.
    Mr. BURCHETT. Thank y'all very much.
    Chairlady, I yield back the reminder of my time.
    Chairwoman CHU. The gentleman yields back.
    And we actually have time for a second round of 
questioning, and so I will just start it off.
    Mr. Ware, SCORE used more than $100,000 of remaining funds 
to increase its bonus pool with a significant portion going to 
four SCORE executives. Your report found that SBA did not 
detect the fact that SCORE redistributed these funds for these 
bonuses for the staff.
    Could you discuss the rules and regulations governing the 
reprogramming of these funds and the seriousness of this issue? 
And is this type of reprogramming allowed under SBA rules and 
regulations?
    Mr. WARE. Right. So under grant rules and regulations, 
there are ways that the grantee is allowed to reprogram funds. 
Some of those require that--you could just do it as long as it 
is under 10 percent. It is not specific to bonuses. It might be 
for anything. You just find that you need it somewhere else for 
the efficient and effective running of your program, right?
    Chairwoman CHU. Yeah.
    Mr. WARE. So bonuses are a little bit different to me, the 
way that I think about it.
    Anyway, if you go over 10 percent, like they did in the 
case with the bonuses, you are required to notify the agency 
first, and the agency can determine whether or not that is 
allowable. In this case, that didn't happen. And as a matter of 
fact, they called it--they did a line item called additional 
personnel budget line item, which meant that when SBA looked at 
it--well, when they looked at it, they didn't--they didn't know 
that it was for bonuses. Now, something like additional 
personnel budget would beg the question, like, what is 
additional personnel budget?
    But what was more egregious to us was they used the money 
that was left over on the grant to decide that that was going 
to bonuses. And, I mean, I think that just opens up a terrible 
Pandora's box, if you may, that, well, we could just--we know 
how much bonuses we really want to give, right, so how about we 
just cut off what we are doing? I am not saying that is what 
they did. I am saying it opens the box, and we would like to 
see that box closed.
    So, yeah, that was our main problem with it.
    Chairwoman CHU. Mr. Gutierrez, what are you doing to make 
sure that box is closed?
    Mr. GUTIERREZ. All right. I hear you. Let's close the box, 
huh? That is the term of the day, ``let's close the box.''
    No. Certainly, as Mr. Ware mentioned, there is that 10 
percent threshold that they do moving forward, at any 
discretion for them. But one thing that I was talking to my 
staff and my team is that we are looking at some language in 
the terms and conditions and the funding opportunity to require 
them to provide us what is the formula, you know. It is very 
interesting that in there--and it is unfortunate, you know, 
that it is top heavy in terms of bonuses. I think that that is 
just not an incentive for the whole team over there to know 
that only the top are the ones that are receiving the most.
    I think that a lot of times, as we know, is that people in 
middle and lower staff are the ones that do a lot of the work, 
right? And they deserve to be compensated in that aspect.
    So I would say that what we are looking at is putting in 
language in there to ask them what are the formulas up hand and 
give them guidance in terms of it. Because he was asking like, 
well, what is excessive related? It is very interesting that he 
mentioned, you know, that the range of 5 to 20 percent of SES 
executive pays receive bonuses.
    I am on the PRB, the performance resource board. I have not 
seen something where we give 20 percent to SES, noncareer--I 
mean, career individuals. So I don't know where he is getting 
that from. But certainly, we are going to create guidance and 
more language in the terms and conditions and also on the 
funding opportunity.
    So there is no--so he knows--everyone knows what the 
expectations are and that we are all on the same page.
    Chairwoman CHU. Thank you.
    And, Mr. Ware, SBA overreported SCORE's accomplishments for 
numbers of clients trained by 31 percent and underreported 
SCORE's accomplishments for the total number of clients 
mentored. And you concluded in your report that SBA should 
improve its performance measures and program oversight.
    How could we improve the performance metrics for SCORE?
    Mr. WARE. Yeah. So those metrics--SBA is getting at it in 
terms of doing the outcome-based, but in reality, even the 
output-based measures could be questionable, because their 
system of record, it has a tendency to lose information and the 
proper information is not in it.
    Their own internal auditors, when they--of all the--let's 
say they tested a whole--their test pool, they found errors in 
100 percent. Yeah. So, you know, they are going to need to 
clean up EDMIS as best they can. I know that is not a simple 
ask or a simple task, but it needs to be done if we are going 
to know if the--if we are going to have accurate measures.
    Chairwoman CHU. Thank you. My time has expired.
    And, Mr. Spano, you are now recognized for 5 minutes.
    Mr. SPANO. Thank you, Madam Chair.
    Mr. Gutierrez, as far as the misallocated moneys, it seems 
pretty clear, obviously, from the testimony that that occurred, 
okay? What does the--I guess the first question is, have you 
communicated with SCORE and their representatives and asked 
them whether they plan to return the misallocated money, and 
what has been their response?
    Mr. GUTIERREZ. Sure. Thank you. Where we are at so far of 
the 696--696, we are at a point where it is close to 113, per 
se, that they are already saying that they are going to submit 
back in repayment. Still there are--there is still a 
significant amount there.
    There are certain areas that we are still waiting for, 
which is kind of interesting, he submitted. I did the same 
process--and it is not like I like doing this every year. But 
as we were talking about the Sandy, when I got there, it was--
the culture when I got there was like let's just slap on the 
wrist and tell them not to do things ever again. I am like, no, 
we are not doing that. We are going to give them a chance, 
submit anything that they have that substantiates for us to go 
to Mr. Ware's team to reconcile and let go.
    So I did the same process on this one, gave them an 
opportunity up to June 30 to submit any additional things that 
we can go back to the team and IG to work on.
    Mr. SPANO. Let me just interrupt you. Have they suggested 
that they use money from the grant to repay the misallocated 
moneys?
    Mr. GUTIERREZ. They haven't--what they so far have--on some 
of the items that they responded in saying, yes, we will repay 
this, this only--in the formal writing, they are saying we 
admit and we will repay this. They haven't said how they are 
going to pay it. But because--my thing is, we want to get to 
more of getting as much as we need----
    Mr. SPANO. I understand that. But I want to make sure that 
they are not using grant money to repay misallocated grant 
money. That doesn't make a whole lot of sense.
    Mr. GUTIERREZ. I hear you, yes.
    Mr. SPANO. So then I would also ask, as far as the 
cooperative agreement is concerned, okay?
    Mr. GUTIERREZ. Uh-huh.
    Mr. SPANO. Is it a contract per se, as we typically would 
know it, where both parties would have responsibilities and 
then there are enforcement mechanisms?
    Okay. You are nodding your head yes.
    So my question is, as it relates to potential future 
failure to not meet whatever the metrics are as it relates to 
their failure to repay misallocated money, you know, as it 
relates to the violation of the whistleblower law, what in the 
cooperative agreement do we have--does the SBA have that is--we 
could use--SBA can use as a hammer to enforce compliance?
    Mr. GUTIERREZ. Yeah, good question. Certainly, I would say 
that, you know, if you don't put something in there, then you 
can't hold them accountable, right? So in revising and updating 
all of the cooperative agreements and terms and conditions that 
hadn't been done for many years--I mean, I went in there when I 
first got there and looked at all of them, there was stuff 
there that was still language when I was there in 2001 that no 
longer was there.
    So by putting those measures in there now, it is, you know, 
a notice, if you don't meet these, I think we will look at 
areas of how do we--we are going to hold them more accountable.
    On the performance matrix, as Mr. Ware mentioned, you know, 
I will say that we do now a quarterly audit in that sense. So 
now we look at what they have submitted into EDMIS and make 
sure that it is all apples to apples. And before, no one used 
to do that.
    Mr. SPANO. All right. So let me just interrupt you in for a 
second, if you don't mind. I apologize. I have only got a 
minute and 11 seconds left.
    So my understanding is that now you are incorporating the 
ability to be able to hold them accountable under the new 
cooperative agreement.
    What are the provisions, what can you do under the 
cooperative agreement?
    Mr. GUTIERREZ. I think there are measures of holding them 
at the end of the year for the new fiscal year 2020, if they 
don't meet all the systems, to really look at something 
seriously of really how effective we can--should this program 
really be viable, in that sense, or what are other measures to 
continue having that volunteer base across the country but with 
an organization that will meet all the needs.
    Mr. SPANO. Okay. So it sounds to me what the--the hammer 
is, is, well, we may not use you in the future.
    But my question is, and I would suggest, maybe, you have 
your attorneys look at very specifically what is it that we can 
do during the term of an agreement to enforce compliance. Not 
just say, well, when we are done with this cooperative 
agreement, we may not--there has got to be something more than 
that, would be my suggestion.
    Thank you.
    Mr. GUTIERREZ. Definitely. We will take that into 
consideration.
    Mr. SPANO. I yield back.
    Chairwoman CHU. Thank you.
    And now the gentleman from Pennsylvania is recognized, Mr. 
Evans.
    Mr. EVANS. Thank you, Madam Chair.
    Mr. Guchella, did I get that right?
    Mr. GUTIERREZ. Gutierrez.
    Mr. EVANS. Gutierrez. I apologize.
    It is my understanding that the Office of Entrepreneurship 
at the SBA oversees the SCORE program, and the Office of Grant 
Management awards the cooperative agreement to SCORE and also 
monitors it to adhere to the terms and conditions of the 
agreement.
    Does the lack of leadership at SBA restrict your ability to 
work within the agency's organization structure to resolve and 
close out the inspector general's recommendations?
    Mr. GUTIERREZ. I would say, as I mentioned earlier, that 
two-step process verification now, with my head of the Office 
of Entrepreneur Education, where the reimbursement comes in 
from the quarterly basis from SCORE, before it goes to grants 
management for processing, now I have the head of that office 
also reviewing and signing off on it.
    So that is an additional layer of internal controls that I 
am implementing in that aspect to make sure that whatever goes 
to the Office of Grants Management to be ready to be signed off 
by them to payment, that we--I am holding my team accountable 
as well.
    Mr. EVANS. Can you please explain specific steps that it 
will take to ensure there will be effective coordination 
between the office--what was that, what you just were 
describing to me there?
    Mr. GUTIERREZ. Yes, sir, that is what I was describing. 
That was not--in the past, that process of two-step 
verification and internal controls had not been implemented 
before.
    Mr. EVANS. From where you are now and after just listening 
to the inspector general, how long do you think it will take 
you to respond to these recommendations and make this happen?
    Mr. GUTIERREZ. I think--I am not going to put words in Mr. 
Ware's mouth, but I know that him and I had--he knows that when 
I mean something, I am going follow through on it.
    And in the matter of that year of wiping out 90 percent of 
all the IG findings--and on these, three were already done. We 
have several ones that we will be closing very shortly. So we 
have put certain dates in for each of them that we agreed upon 
between us and Mr. Ware's team. But obviously, the sooner the 
better on all of them. And I wouldn't be surprised, with my 
great team, that we will get that done.
    Mr. EVANS. I think Mr. Ware wanted to comment on it.
    Mr. WARE. Yeah. To your question--I think your question had 
to do with how to--the absence of leadership----
    Mr. EVANS. Correct.
    Mr. WARE. Right. And the way that our process works 
internally, Mr. Gutierrez and his team works directly with our 
assistant inspector general for audits, her director and their 
team, to resolve the--when it--the only way it gets to the top 
is when there are issues, when you don't have a willing 
partner, to--who is really interested in implementing the 
recommendations and seeing change. And the audit team has a 
short meeting on the way over here that they found this to be 
the case with Mr. Gutierrez and his team since he has gotten 
here.
    Mr. EVANS. I would like to go back and the same question I 
asked to Mr. Ware. If you had--in your view, what can Congress 
do to ensure the program is operated effectively? I heard the 
recommendations was made about the STEP program, building some 
things specifically.
    Do you have any other thoughts, comments on that?
    Mr. GUTIERREZ. Yes. You know, again, putting in the 
performance matrix--and actually, we included more for the 
SCORE foundation--the SCORE Association and holding them more 
on the performance matrix. And they assured me--before, in the 
past, when I got there, it was done always on a year lag. But 
we will in fiscal year 2020 be able to, on a quarterly basis, 
look at the numbers and hold them accountable for all.
    And so, for me, putting those measures in place and holding 
everybody accountable, on all three resource partners, like I 
mentioned, are close to $200 million, and they weren't held 
accountable for meeting their numbers. And they are, and they 
know it, that they will be under my leadership at OED.
    Mr. EVANS. Madam Chair, I will return the balance of my 
time, and I thank you very much.
    Chairwoman CHU. Thank you. The gentleman yields back.
    And now the gentlelady from Minnesota, Ms. Craig, is 
recognized for 5 minutes.
    Ms. CRAIG. Thank you so much, Chairwoman.
    And I apologize, I was a bit late. So if you got the answer 
to these questions before I do, my apologies in advance.
    I worked for a Fortune 500 company and obviously had a 
board of directors. We had a foundation, et cetera. And I was 
really interested in this topic of SCORE--the SCORE program and 
the foundation, having identical board of directors, its 
leadership, its foundation, et cetera, et cetera.
    Is this--how unusual is this arrangement, and sort of how 
do we make sure that there is proper oversight?
    Mr. GUTIERREZ. Great question, ma'am. Certainly, for me--I 
will tell you, in my personal experience running national 
nonprofits in the private sector, I was very always cognizant 
of that, because you always want to have a line--a separation, 
a line as it relates to a 501(c)(6) and a 501(c)(3).
    Given the nature that a 501(c)(3), in terms of their 
mission statements and what the IRS expects them to provide in 
terms of their resources, right? I--it is a very gray area that 
I am not really--we are not really--we can't control the 
foundation. Let's make that clear. What we can control is the 
association and the grant.
    We are entertaining and looking at ways to put some 
additional language in there that really should clarify and--
the fact of having a CEO for a 501(c)(6) and a 501(c)(3), the 
same CEO, that is not good optics, it is not good ways of 
really effectively managing two nonprofit organizations.
    Ms. CRAIG. So I guess more specifically and as followup, 
are you going to recommend that the board of directors and your 
foundation not serve on each of those programs specifically?
    Mr. GUTIERREZ. We are limited in terms of what we can hold 
accountable on the 501--the association, but not on the 
foundation. That is something that is separate from and we have 
no oversight on that one. But we certainly are--would be 
encouraged if the board of directors and the Chairmen look at 
ways to really have a line of separation going on in the 
future, given the IG report.
    Ms. CRAIG. Thank you very much for that.
    The topic of compensation also caught my attention. I was 
head of the compensation committee of a private, again, Fortune 
500 company.
    And so can I just ask you about the at-risk portion of 
this? Can you explain a little bit more to me about, you know, 
what the regulations governing executive compensation and 
detail what specific steps SBA plans to take to make sure that 
all compensation is reasonable and appropriate?
    Mr. GUTIERREZ. Yes, ma'am. Certainly, we mentioned a little 
bit earlier that it is one of the things that we are going to 
put into the terms and conditions in the funding announcement, 
is--so we are all on the same level playing field in terms of 
as it relates to what kind of formula, what is their 
methodology that they are coming on.
    Because I was very bothered and concerned that it was very 
top heavy. And it needs to be fair and equitable for the entire 
23 employees that they have. Certainly, I mean, we all to want 
to strive and give incentives for everybody on the team to do 
their best for an organization. But certainly, I think that 
having the right formula and understanding it and the right 
expectations of what we deem as excessive and unexcessive, we 
will be writing those guidelines for them for fiscal year 2020.
    Ms. CRAIG. Thank you so much.
    And, Madam Chairwoman, I yield back.
    Chairwoman CHU. Thank you. The gentlelady yields back.
    And we want to thank all the witnesses for taking time out 
of their schedules to be with us today.
    Let me thank Mr. Ware for shining a bright light on the 
systemic issues that need to be addressed at the SBA. It is my 
hope that your work will lead to programmatic changes that will 
strengthen accountability and restore confidence in SCORE. 
Sunshine is said to be the best disinfectant, and we can now 
begin the process of rebuilding the public's trust.
    And that falls to you, Mr. Gutierrez. Without permanent 
leadership at the helm of SBA, the full responsibility of 
closing out the inspector general's recommendations will be 
within your purview. I strongly recommend that you take the 
necessary steps to ensure that every penny of every Federal 
dollar appropriated is well spent and accounted for. We owe it 
to the American taxpayers to be good agents of their hard-
earned dollars. 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.
    I would ask unanimous consent that members have 5 
legislative days to submit statements and supporting materials 
for the record.
    Without objection, so ordered.
    And if there is no further business to come before the 
committee, we are adjourned.
    Thank you.
    [Whereupon, at 11:56 a.m., the subcommittee was adjourned.]
                           
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