[Federal Register Volume 81, Number 225 (Tuesday, November 22, 2016)]
[Proposed Rules]
[Pages 83718-83737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27376]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 81, No. 225 / Tuesday, November 22, 2016 / 
Proposed Rules  

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SMALL BUSINESS ADMINISTRATION

13 CFR Part 131

RIN 3245-AG02


Office of Women's Business Ownership: Women's Business Center 
Program

AGENCY: Small Business Administration.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The U.S. Small Business Administration (SBA) is seeking 
comments on this Notice of Proposed Rulemaking (NPRM) regarding the 
Women's Business Center (WBC) Program. An Advance Notice of Proposed 
Rulemaking (ANPRM) was published on April 22, 2015, which received 
eight comments. This NPRM is being issued to continue the consultative 
process with stakeholders to examine the proposed WBC regulations. This 
NPRM also proposes to codify policy and procedural changes that have 
been included in the Notice of Award, such as language on risk 
determination as required by, limitations on carryovers, who is 
considered key personnel and a reduction in the reporting requirements. 
Implementing these regulations will result in standardization and 
transparency to the delivery of the WBC Program.

DATES: Comments must be received on or before January 23, 2017.

ADDRESSES: You may submit comments, identified by RIN 3245-AG02, by one 
of the following methods:
    (1) Federal Rulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments;
    (2) Mail/Hand Delivery/Courier: U.S. Small Business Administration, 
Attn: Bruce Purdy, Deputy Assistant Administrator for the Office of 
Women's Business Ownership (DAA/OWBO), 409 3rd Street SW., Washington, 
DC 20416;
    (3) Facsimile: (202) 481-0554; or
    (4) Email: [email protected].
    The SBA will post all comments on www.regulations.gov. If you wish 
to submit confidential business information (CBI) as defined in the 
User Notice at www.regulations.gov, you must submit such information to 
the U.S. Small Business Administration, Attn: Bruce Purdy, Deputy 
Assistant Administrator for the Office of Women's Business Ownership 
(DAA/OWBO), 409 3rd Street SW., Washington, DC 20416, or via facsimile 
to (202) 481-0554, or submit them via email to [email protected]. Highlight 
the information that you consider to be CBI and explain why you believe 
the SBA should hold this information as confidential. The SBA will 
review your information and determine whether it will make the 
information public.

FOR FURTHER INFORMATION CONTACT: Sheila Williams, Lead Program Analyst, 
U.S. Small Business Administration, 409 3rd Street SW., Washington, DC 
20416, telephone number (202) 205-7285 or [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. Statutory

    The Women's Business Center (WBC) Program was created under the 
authority of Title II of the Women's Business Ownership Act of 1988 
(Pub. L. 100-533). The WBC Program authority is now codified in section 
29 of the Small Business Act (the Act), 15 U.S.C. 656. The initial 
Demonstration Training Program, later renamed the WBC Program, was 
created with the congressional intent to remove barriers to the 
creation and development of small businesses owned and controlled by 
women and to stimulate the economy by aiding and encouraging the growth 
and development of such businesses. The specific objectives of the 
Demonstration Training Program were to provide long-term Training and 
Counseling to potential and current women business owners, including 
those who are Socially and Economically Disadvantaged as defined in 13 
CFR 124.103 and 124.104.
    Since its creation, the Women's Business Center Program has changed 
through a number of public laws that have turned the WBC Program from a 
Demonstration Training Program into a permanent program. The laws that 
have impacted the WBC Program include: The Women's Business Development 
Act of 1991 (Pub. L. 102-191); The Women's Business Centers 
Sustainability Act of 1999 (Pub. L. 106-165): U.S. Troop Readiness, 
Veterans' Care, Katrina Recovery, and Iraq Accountability 
Appropriations Act of 2007 (Pub. L. 110-28); and, The Small Business 
Jobs Act of 2010 (Pub. L. 111-240).
    Section 29 of the Act, 15 U.S.C. 656, authorizes the SBA to provide 
financial assistance to private nonprofit organizations to conduct 5-
year projects for the benefit of small business concerns owned and 
controlled by women. The Act further authorizes SBA to renew a grant 
for additional 3-year periods and provides that there are no 
limitations on the number of times a grant may be renewed.

B. History

    On April 22, 2015, the SBA published an Advance Notice of Proposed 
Rulemaking (ANPRM) soliciting comments on the interpretations of 
statutory language, including ``distinct population that would 
otherwise not be served,'' ``whose services are targeted to women'' and 
``full-time program director or program manager to manage the program'' 
(80 FR 22434). The SBA also requested comments on how to define what is 
acceptable for activities that fall under ``in-kind,'' what guidelines 
grantees should use in determining reasonable costs associated with in-
kind activities, acceptable guidelines for documenting in-kind match, 
selection criteria used in deciding whether to award an initial WBC 
grant, guidelines SBA should use in evaluating ``the experience of the 
Applicant Organization'' and ``the proposed location for the women's 
business center,'' and what an appropriate ``minimum amount of time'' 
would be to commence operating as a women's business center following 
receipt of an award. Comments from the ANPRM have been considered in 
the drafting of these proposed regulations.
    Currently, there are over 100 nonprofit entities that participate 
in the WBC Program and provide services as described in the Act. These 
participants are known as SBA Women's Business Centers (WBCs) and 
receive annual Federal funding limited by the authority of the Act and 
subject to the appropriations of Congress and the nonprofit's ability 
to provide the required Matching Funds.
    Through its authority, the SBA's Office of Women's Business 
Ownership

[[Page 83719]]

oversees the WBC Program and the portfolio of WBCs that participate in 
the WBC Program. Since 1988, the number of participating WBCs has grown 
along with the number of women entrepreneurs assisted by these centers. 
The SBA has managed the performance and compliance of the WBCs through 
Cooperative Agreements with each individual nonprofit entity that hosts 
a WBC project, through regular reporting and programmatic and financial 
examinations of each WBC.

II. Proposal

    The proposed rule would incorporate the SBA's oversight of the WBC 
Program into regulations in a new Part 131 of the SBA's regulations by: 
(A) Creating standard definitions for the program (13 CFR 131.110); (B) 
incorporating program-participation requirements and application 
procedures (13 CFR 131.300, 13 CFR 131.400); (C) incorporating 
financial-management and grant-administration requirements (13 CFR 
131.500); (D) incorporating reporting requirements (13 CFR 131.600); 
(E) incorporating oversight and programmatic and financial-examination 
provisions (13 CFR 131.700 and 13 CFR 131.720); (F) incorporating 
procedures for Dispute resolution (13 CFR 131.840), and suspension, 
termination and non-renewal of a grant (13 CFR 131.830); and G) privacy 
requirements (13 CFR 131.900).

III. Section-by-Section Analysis

131.100 Introduction
    The WBC Program was created under the authority of Title II of the 
Women's Business Ownership Act of 1988 (Pub. L. 100-533) to remove 
barriers to the creation and development of small businesses owned and 
controlled by women and to stimulate the economy by aiding and 
encouraging the growth and development of such businesses. Since its 
creation, the WBC Program has changed through a number of public laws 
that have turned the WBC Program from a Demonstration Training Program 
into a permanent program. The WBC Program has grown and evolved to 
provide a variety of services to many entrepreneurs, ranging from those 
interested in starting businesses to those looking to expand existing 
businesses.
    Over the last several years, the SBA has incorporated processes to 
monitor the WBC Program, including conducting financial examinations 
required by statute. The SBA proposes to implement this rule to 
incorporate its oversight of the WBC Program into regulations to ensure 
consistency in application and provide transparency for applicants and 
participants.
131.110 Definitions
    This section defines 57 words and phrases used in the management 
and oversight of the WBC Program. These definitions have been 
consolidated from existing documents, including Program Announcements 
and Cooperative Agreements, to ensure consistency and clarity within 
the WBC Program.
    Through the ANPRM, commenters raised concerns on whether Distinct 
Populations were limited to Socially and Economically Disadvantaged 
populations. Under this proposed rule, definitions are provided for 
Distinct Population and Socially and Disadvantaged populations. Under 
the statute, 15 U.S.C. 656, a representative portion of clients should 
be Socially and or Economically Disadvantaged women. However, WBCs are 
expected to serve all women entrepreneurs and not just those that are 
Socially and Economically Disadvantaged.
131.200 Eligible Entities
    This proposed section codifies the types of organizations that are 
eligible by statute to participate in the WBC Program and those 
organizations that are prohibited from participating in the program. 
Section 29 of the Act, 15 U.S.C. 656, identifies eligible entities as 
private nonprofit organizations that are described in section 501(c) of 
title 26 and exempt from taxation under section 501(a) of that title.
131.300 Women's Business Centers (WBCs)
    This section describes how SBA proposes to provide financial 
assistance to private nonprofit organizations to conduct projects for 
the benefit of small business concerns owned and controlled by women, 
as authorized in 15 U.S.C. 656. In addition, under 15 U.S.C. 656(5), 
the SBA may renew a grant for an additional 3-year period, if the 
nonprofit organization submits an Application for such renewal at such 
time, in such manner, and accompanied by such information as the SBA 
establishes. This section describes the SBA's proposed process for 
renewal applicants to continue in the WBC Program.
131.310 Operating Requirements
    This proposed section codifies the statutory requirement at 15 
U.S.C. 656, on the process by which the SBA must issue Notices of 
Award, which outline the terms and conditions of the awards to the WBC 
Recipient Organizations. To ensure that the Recipient Organization 
maintains clear and separate functions from the WBC, as stated in the 
Cooperative Agreement, this rule proposes to require that the Recipient 
Organization manage the WBC Program as a separate entity within its 
organization, consistent with 2 CFR part 303, Internal Controls.
    Historically, Women's Business Centers that have established 
partnerships in the community in conjunction with an advisory board 
have had less difficulty working within the community and meeting the 
match requirements of the program. This section proposes to require 
that each WBC establish an advisory board that will confer with and 
provide recommendations to the WBC Program Director on matters 
pertaining to the operation of the WBC and assist the WBC in raising 
Matching Funds.
    This section also provides a proposed description of WBC facilities 
and administrative infrastructure requirements, including the 
requirement that the facility comply with the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and section 504 of 
the Rehabilitation Act of 1973 (29 U.S.C. 794). These requirements 
serve to ensure that the WBC has the capacity to deliver the Counseling 
(including space to provide one-to-one Counseling that will ensure 
client privacy), Training and other services outlined in its statement 
of work.
    In the past, the SBA has found that some WBCs do not clearly 
reference that they are Women's Business Centers, with an emphasis on 
providing services to prospective or existing women entrepreneurs. 
Therefore, the SBA is proposing that any new WBC accepted into the WBC 
Program after the effective date of the rule be required to include the 
specific identification ``WBC'' as part of its official name. The SBA 
is further proposing that all other WBCs prominently include on their 
Web sites and promotional documents that the ``Women's Business Center 
is funded in part by the U.S. Small Business Administration''. This 
transparency would ensure that WBCs are clearly discernable and are 
easily recognized by women attempting to contact organizations for 
business services focused on women.
    Historically, WBCs with insufficient staff have been identified as 
more likely to face difficulties in providing services at an adequate 
level as outlined in their statements of work. The SBA also has 
concerns related to the inability for a WBC to grow or expand services 
when the WBC is not properly staffed. To ensure maximum productivity of 
a WBC, this rule proposes to require that

[[Page 83720]]

the WBC include at least a Full-time WBC Program Director and at least 
one other staff person, preferably a business counselor.
131.320 Area of Service
    This section proposes to require WBCs to identify their geographic 
service area(s) as part of the application process. Currently, many 
WBCs do not clearly define their proposed geographic service areas; 
rather, they indicate that services will be provided for an entire 
state. Historically, this has caused some confusion, as some WBCs 
include service areas where an existing SBA-funded WBC is already 
providing services. This is especially true in states where there is 
more than one WBC and more than one Recipient Organization. Under this 
proposed rule, SBA plans to define, in writing, the geographic area for 
each Recipient Organization funded under the WBC Program. WBCs would 
also be required to submit a written request to change a geographic 
service area so as to ensure that no two WBCs are awarded WBC Project 
Funds to provide services in the same area while some areas remain 
underserved. To that end, this rule proposes that Applicant 
Organizations submitting new WBC projects within proximity of an 
existing WBC include a justification of need, including a discussion of 
the population density, submitted in its proposal. The SBA is seeking 
comment on how to best define proximity.
131.330 WBC Services and Restrictions on Services
    This proposed section lists the required services that Women's 
Business Centers must provide to participate in the WBC Program. 
Consistent with the statute, 15 U.S.C. 656, the Office of Women's 
Business Ownership requires in its program announcement(s) that Women's 
Business Centers provide Training and Counseling services to women, as 
well as services that will assist their businesses in securing business 
credit and investment capital. In accordance with this requirement, 
WBCs assist women business owners in identifying available funds from 
lenders, the SBA and other resources. These resources include 
collaboration with state, local and federal government agencies and 
assisting its clients pursue designation as women-owned, small 
businesses. This section also names the proposed services that a WBC 
can provide to assist a women business owner access capital. To assist 
with delivery of its access to capital services, the WBCs rely on 
programs provided by other agencies. These programs include, but are 
not limited to, use of the FDIC Smart Money Curriculum, Census Bureau 
data tools, and the SBA's Microloan Program. Further, many of the WBC 
host organizations are microlenders and work with other lenders in the 
community.
    Historically, (see links below) men have started their businesses 
with significantly more capital than women, and women's access to 
capital remains an obstacle to women growing their businesses. This has 
been included in reports by the U.S. Department of Commerce and the 
National Women's Business Council included here. http://www.esa.doc.gov/sites/default/files/women-owned-businesses.pdf.
    https://www.sba.gov/sites/default/files/files/Gender%20Differences%20in%20Startup%20Financings.pdf. OWBO will monitor 
the WBCs support of capital access services through the review of WBC 
reporting, as described in Section 131.600 of this proposed rule. Under 
15 U.S.C. 656 (B)(1), the SBA is authorized to provide financial 
assistance to private nonprofit organizations to conduct projects for 
the benefit of small-business concerns owned and controlled by women. 
The services provided under these projects can include Training and 
Counseling on how to apply for and secure business credit and 
investment capital, preparing and presenting financial statements, and 
managing cash flow and other financial operations of a business 
concern. Given this authorization, this rule proposes to require WBCs 
to provide specific services related to access to capital for women 
entrepreneurs as authorized in 15 U.S.C. 656. The SBA further proposes 
to provide guidance concerning the provision of access to capital 
services in this section.
    Given the SBA's involvement in disaster-relief assistance and the 
WBCs' participation in addressing the business needs in communities 
impacted by catastrophes, the SBA is also proposing to include a 
section on Specialized Services.
131.340 Specific WBC Program Responsibilities
    This proposed section outlines the role of the Assistant 
Administrator/OWBO, as defined in 15 U.S.C. 656. This rule also 
proposes to explicitly define the roles of the WBC Program Director and 
Principal Investigator of the Recipient Organization. Additionally, 
under this proposed rule, the SBA clearly defines the tasks and 
responsibilities for the WBC Program Director, as the Full-time Key 
Employee for the WBC, as those completed solely for the WBC project.
131.350 Selection and Retention of the WBC Program Director
    This section outlines the proposed competencies for the WBC Program 
Director, as well as the process the WBC must undertake if the position 
is vacant. The WBC Program Director, considered by the Agency as the 
key position for the WBC project, is responsible for managing the day-
to-day operation of the WBC. Responsibilities related to the overall 
management of the WBC may include providing direct services (i.e., 
Counseling and Training), marketing the program and ensuring program 
compliance. To ensure effective management of the WBC project, this 
rule proposes core competencies for the WBC Program Director position 
and proposes rules for the Interim Program Directors when the Program 
Director position is vacant.
131.400 Application Procedure
    This section outlines the proposed grant application submission 
process for new and existing WBC Applicant Organizations to participate 
in the WBC Program. It also identifies proposed general selection 
criteria. In the ANPRM, comments were received that suggest the SBA 
should not use geography to help determine the location of a WBC and 
that proximity to another WBC is not a disqualifier. The SBA follows 
statutory guidance that individual Applicant Organizations reach a 
Distinct Population that would not be otherwise served. The Agency 
proposes Applicant Organizations within proximity of an existing WBC 
provide a justification for the need of an additional WBC within that 
area including information about the population density. This helps to 
ensure that the WBC Program is serving the maximum number of clients 
with as much coverage as possible, while meeting the statutory 
requirement of reaching a Distinct Population that would otherwise not 
be served. This section also outlines the proposed criteria that SBA 
will use to determine a WBC's level of risk, consistent with 2 CFR part 
200, subpart C.
131.410 New Applications
    This proposed section codifies the Agency's statutory authority at 
15 U.S.C. 656 (B)(1), to use unawarded amounts to fund new Women's 
Business Centers. This section outlines the process proposed by the SBA 
to fund new WBCs.
131.420 Renewal Applications
    This proposed section proposes to codify the Agency's statutory 
authority at U.S.C. Code 656 (2), to fund

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organizations seeking the renewal of grant awards under the WBC 
Program. This proposed rule also lists the application criteria and 
process for existing participants requesting to renew a grant award 
under the WBC Program.
131.430 Application Decisions
    This section outlines the proposed conditions for approval or 
rejection of an Application for the WBC Program, as authorized by 15 
U.S.C. 656 (3)(C). This section also proposes the appeal process WBCs 
can complete if a renewal application is rejected, as outlined in 
Section 131.840.
131.500 Grant Administration and Cost Principles
    This proposed section codifies the Agency's statutory authority at 
15 U.S.C. 656 to fund projects following grant administration guidance 
under 2 CFR part 200--Uniform Administrative Requirements, Cost 
Principles and Audit Requirements for Federal Awards.
131.510 Maximum Grant
    This proposed section codifies the Agency's statutory requirement 
that no individual WBC project receive funds in excess of the amount 
authorized by statute. This rule proposes to include this section to 
clarify that while an individual WBC project cannot exceed the 
statutory limit, a Recipient Organization is not limited from 
establishing multiple WBC projects so long as the projects are distinct 
from each other and are serving Distinct Populations that would not 
otherwise be served. A Recipient Organization seeking additional 
funding for a new project shall follow the Application process, as 
defined in section 131.400 of this proposed rule for new Applications.
131.520 Carryover of Federal Funds
    This proposed section outlines the requirements for the use of 
Carryover Funds and proposes to limit the number of Carryovers to 
prevent a WBC from creating a cycle of dependency on Carryover funding. 
Historically, a significant number of WBCs have consistently requested 
Carryover of funds. A Carryover of funds generally occurs when a WBC 
does not fully spend the Federal funds or the Matching Funds as 
requested and approved in the WBC's budget. This Carryover results in a 
Recipient Organization having both the Carryover Funds and Option Year 
funding running concurrently, both of which require Matching Funds. 
When the Carryover is granted, the Recipient Organization has the 
responsibility of raising Matching Funds for the Carryover Funds, if 
not already matched, as well as Option Year funding. This often creates 
a cycle in which the Recipient Organization will match and spend the 
Carryover funding, but is then not able to spend the current year 
funding, thus creating a situation where it must request Carryover 
funding the following year. While there is never a penalty to 
requesting less funding, Carryover funding represents an 
underutilization of the Federal funds provided. The rule proposes to 
limit Carryover of Federal funds to those WBCs in the first or second 
year of an initial phase grant.
    WBCs in an initial phase of funding may have fewer expenses in the 
first year as the WBC is establishing itself. However, the WBCs may 
need additional resources as the programming offered grows. Permitting 
new WBCs the flexibility to carry over funds during the first two years 
of participating in the WBC Program ensures that the SBA is utilizing 
WBC funding efficiently. If a WBC in the initial phase requests a 
Carryover for both of the first two years, SBA proposes to reduce the 
funding in the third year by the amount of the second year Carryover to 
eliminate the cycle of Carryover funding.
131.530 Matching Funds
    This proposed section codifies the statutory requirement at 15 
U.S.C. 656 for a Recipient Organization to provide Matching Funds equal 
to half of the Federal amount of the SBA funding for the first two 
years of its initial award. For the remainder of the time the Recipient 
Organization participates in the WBC Program, it must provide match of 
one dollar for every one Federal dollar of its annual Federal award 
amount, as prescribed in the statute, 15 U.S.C. 656. This rule proposes 
language which clarifies the process of documenting the match funds and 
also identifies types of funding that cannot be used as match, such as 
other Federal funding.
    Section 200.306 of Title 2 requires any funds used to match the 
Federal grant, to be verifiable from the Non-Federal Entity's records. 
The WBC Program requires a 1 to 1 match for WBCs that have been in the 
WBC Program for more than two years. A 2 to 1 match (for every two 
dollars of Federal funds used, 1 dollar of Matching Funds) is required 
for WBCs in the first two years of the WBC Program). In other words, 
the statute requires a 2:1 (Federal to non-Federal dollars) match for 
the first year; 2:1 match for the second year; 1:1 match for the third 
year; 1:1 match for the fourth year; and a 1:1 match for the fifth 
year. WBCs can provide Overmatch if they choose to do so; however, if 
they have used Federal funds to raise match above the required amount, 
these funds must be used to meet the Federal objective of the WBC 
Program and must be verifiable. This does not prohibit the Recipient 
Organization from raising funds separate and apart from the WBC 
Program. Those funds that are not used as match and are not raised with 
WBC funds are not subject to the same recordkeeping requirements, as 
they are not tied to the WBC Program.
131.540 Program Income and Fees
    Consistent with 2 CFR 200.307, Recipient Organizations are allowed 
to charge clients fees for WBC Program services and use the income to 
defray the costs of delivering the objectives of the grant. This rule 
proposes to codify that WBCs may charge fees for services provided to 
their clients. This rule also proposes to identify the type of 
activities for which the WBC can charge fees and allows WBCs to use the 
fee income to be counted towards the cash portion of Matching Funds 
required under section 131.530 of this proposed rule. Historically, 
WBCs have often collected fees for Training classes to cover the cost 
of materials and supplies affiliated with providing a Training session 
or fees when helping clients complete a loan package. Some WBCs have 
also used a membership model that includes fees. Over the past several 
years, many WBCs have been exploring ways to charge fees for Counseling 
in order to ensure that clients commit to participation for a 
Counseling session. This rule proposes to allow WBCs to charge a 
retainer fee for Counseling services; however, such fees must not 
restrict access to any services for economically disadvantaged 
entrepreneurs.
131.550 Budget Justification
    Consistent with 2 CFR part 200, subpart E, Recipient Organizations 
must follow the cost principles when completing and submitting a budget 
along with an Application or Annual Work Plan. The budget must include 
justification for the expenses. This section clarifies several specific 
cost categories, including Indirect Cost rates and audit expenses. This 
rule proposes to include guidance on salaries and travel. Under the 
cost principle section, all costs must be reasonable. Salaries vary by 
state and region and position. Using a reasonableness standard, SBA 
proposes that salaries for WBC staff be comparable to similar positions 
within similarly sized programs in other states

[[Page 83722]]

or regions. For travel, reasonableness should be justified in terms of 
the benefit to the small business community that the WBC is serving. 
The proposed requirements are consistent with standard cost principles 
and serve to provide clarity to the Applicant or Recipient 
Organization. See Sec.  131.600 Reports for details.
131.560 Restricted and Prohibited Costs
    Consistent with 2 CFR part 200, subpart E, Recipient Organizations 
must not use Federal funds or Matching Funds to pay for certain items 
that are prohibited. This rule proposes language that establishes what 
costs are considered prohibited. For example, there have been instances 
in which WBCs have requested the use of WBC Project Funds as collateral 
for loans. Because this would bind the Federal dollars for a purpose 
other than delivering the WBC project, the viability of the WBC could 
be jeopardized. Recipient Organizations have also inquired about using 
Project Funds to purchase items that could be viewed either as 
promotional materials, marketing materials, or gifts. Although 
marketing/advertising the WBC Program is considered an allowable cost 
under 2 CFR 200.421, certain types of materials are considered gifts 
for individual use and are not broad-based marketing materials that 
will reach the population that the women's business center serves.
131.570 Payments and Reimbursements
    This proposed section codifies the Agency's statutory authority at 
15 U.S.C. 656, to provide payments in lump sum or installments, and in 
advance or by way of reimbursement to Recipient Organizations. The 
Agency may disburse up to 25 percent of each year's Federal share 
awarded to a recipient organization after the Notice of Award has been 
issued and before the non-Federal Matching Funds are obtained. This 
rule proposes payments be disbursed as quarterly advances for the first 
three quarters and on a reimbursement basis for the final quarter, 
except in cases where a Recipient Organization has not demonstrated its 
ability to obtain match or has not provided adequate information to 
demonstrate the use of the Project Funds. On a case-by-case basis, the 
Agency may determine that a Recipient Organization has not fully 
complied with the terms of the grant, in which case payments may be 
made by reimbursement.
131.600 Reports
    This section proposes a list of the types of reports required to be 
submitted and the frequency of submission of the reports. This rule 
proposes using semi-annual reporting of programmatic and financial 
reports, and quarterly reporting of Counseling and Training data. In 
instances where the Agency may have reasons to believe that a Recipient 
Organization poses a higher risk of non-performance or non-compliance, 
the Agency will include any additional requirements to report quarterly 
in the annual Notice of Award. Consistent with 2 CFR part 200, subpart 
C, the Agency is required to assess the risk level of each WBC or WBC 
Applicant Organization prior to making an award. Section 131.400 of 
this rule proposes the risk assessment criteria the Agency will use for 
WBC awards. This rule also proposes to require Recipient Organizations 
to submit client activity reports, including Counseling and Training 
Records. These reports are submitted electronically and allow the 
Agency to monitor and report on WBC Program performance for each 
Recipient Organization and the WBC Program as a whole. The information 
also enables the Agency, in a streamlined process, to conduct detailed 
WBC Program evaluations, assess program management and performance, and 
conduct performance monitoring and program-outcome reporting. 
Performance reports should be consistent with the budget justification 
that is submitted as part of the application process or Annual Work 
Plan submission.
131.700 Oversight of the WBC Program
    This proposed section codifies the statutory requirement at 15 
U.S.C. 656 for the Agency to conduct annual programmatic and financial 
examinations of each WBC. Currently, to satisfy these requirements, the 
Agency utilizes reports submitted by the WBCs, reports submitted by the 
SBA District Office staff, programmatic site visits, and financial 
examinations. This combination of oversight allows the Agency to 
effectively monitor the WBC portfolio without requiring WBCs to submit 
all of the documentation for the program. Additionally, the Agency has 
also recently changed the frequency of the reporting schedule outlined 
in 131.600 to minimize the burden on WBCs that are effectively 
delivering the program.
131.710 SBA Review Authority
    This section of the rule proposes how the SBA will monitor program 
performance consistent with 2 CFR 200.328.
131.720 Audits, Examinations and Investigations
    This section proposes to require new Women's Business Centers 
participating in the Women's Business Center Program for the first time 
to have post-award financial examinations conducted by Agency staff or 
designee(s). Many new initial Recipient Organizations have never 
received Federal funds and may never have been required to meet Federal 
financial management standards. As part of the proposed post-award 
examination process, the examiner would determine the adequacy of the 
WBC's financial management system and make recommendations for 
improvement, if needed. The Agency anticipates that the examinations 
and recommendations will assist the WBC in avoiding financial findings 
and/or recoupment during future financial examinations or audits.
    In addition to the post-award examination, this section outlines 
the SBA's proposed requirement, consistent with the statute 15 U.S.C. 
656, that all other WBCs receive comprehensive financial examinations, 
as scheduled by the SBA's Financial Examination Unit. The proposed 
process for complying with this requirement is outlined in this 
section.
131.800 Cooperative Agreements and Contracts
    This proposed section codifies the statutory requirement at 15 
U.S.C. 656 for the Agency to provide financial assistance to Recipient 
Organizations in the form of grants, contract, or Cooperative 
Agreement. Currently, a Cooperative Agreement serves as the vehicle to 
provide the financial assistance to the Recipient Organization to 
establish and maintain a WBC. The Cooperative Agreement is signed 
annually and contains the amount of Federal funding, a negotiated 
budget and agreed-upon performance milestones. The Cooperative 
Agreement contains the terms and conditions of the award and identifies 
any special considerations, including the annual determination of risk 
level. This rule proposes to require SBA District Offices to negotiate 
the annual performance goals with each Recipient Organization. SBA 
District Offices have a better understanding of local and regional 
economic conditions and the needs of women entrepreneurs, and can 
therefore make a better informed determination of the appropriate 
performance milestones with Recipient Organizations in their

[[Page 83723]]

respective districts. In addition, this section proposes specific 
requirements when WBCs use Federal funds to contract for goods and 
services. This is to ensure WBCs do not supersede the contracting 
limits and thereby, in effect, change the grant to a pass-through 
grant.
    It is the Agency's policy that contracting out more than 49 percent 
of a grant (except in certain circumstances) constitutes a subgrant. 
Consistent with this policy, this rule proposes that the WBC not expend 
more than 49 percent of its total Project Funds on contractors and 
consultants.
131.810 Other Federal Grants
    This proposed section codifies the statutory requirement at 15 
U.S.C. 656(d) to allow a WBC to enter into a contract with other 
Federal departments or agencies to provide specific assistance to women 
entrepreneurs. With the exception of Community Development Block Grants 
(CBDG), grants received from other Federal entities may not be used as 
Matching Funds for the WBC grant. CDBG statutory language allows CDBG 
funds to be used as Matching Funds to other Federal programs. The CDBG 
regulations at 24 CFR 570.201(g) further elaborate on this eligibility 
criterion. On occasion, the Agency may provide additional assistance to 
a WBC through programs such as the Recovery Improvements for Small 
Entities (RISE) After Disaster Act. These funds are separate from the 
regular WBC grants but are provided to WBCs to spur disaster recovery.
131.820 Revisions and Amendments to Cooperative Agreements
    Consistent with 2 CFR part 200, subpart D, Post Federal Award 
Requirements, Recipient Organizations are required to report deviations 
from budget or project scope or objective, and request Prior Approvals 
from Federal awarding agencies for budget and WBC Program plan 
revisions. This proposed rule outlines the common revisions that 
require Prior Approval by the Agency. These include changes in the 
staffing of the WBC Program Director, changes in project scope, program 
activity or location that could potentially alter the negotiated 
milestones in the Cooperative Agreement.
131.830 Suspension, Termination and Non-Renewal
    Consistent with 2 CFR 200.338, the Agency may take action to 
suspend, terminate or non-renew a grant to a Recipient Organization for 
cause. This rule proposes the instances for which the Agency may take 
action, identifies the administrative procedures for each action, and 
outlines the appeal rights for each action. This rule also proposes the 
process that the SBA will take when an action is reversed.
131.840 Dispute Resolution Procedures
    Consistent with 2 CFR 200.341, the Agency currently provides 
opportunity for Recipient Organizations to Dispute financial and 
programmatic decisions of the Office of Women's Business Ownership. 
This rule proposes to codify the current Dispute procedures to provide 
an opportunity for a Recipient Organization to submit a written 
statement describing the subject of a Dispute and to submit an appeal 
if the Recipient Organization receives an unfavorable decision from the 
Agency.
131.850 Closeout Procedures
    Consistent with 2 CFR 200.343, this rule proposes to codify the 
current process by which the Agency would close out a Federal award if 
it is determined that all applicable administrative actions and all 
required work of the Federal award have been completed by the Recipient 
Organization. These actions help to ensure that the final proper 
payment can be made to the Recipient Organization after completing a 
reconciliation of all accounts, including an inventory of property and 
usable supplies, WBC Program Income balances, and client and financial 
records. After receiving the final annual financial report to ensure 
proper final payments, the Agency would issue a final letter indicating 
that all financial and WBC Program issues are fully reconciled.
131.900 Ensuring Client Privacy
    SBA proposes to codify the legislative requirements for WBCs and 
the Administration to protect the privacy of any individual or small 
business receiving assistance in the Program. Under this proposed rule, 
in accordance with Section 21(a)(7) of the Act, a WBC, including its 
contractors and other agents, is not permitted to disclose to an entity 
outside the individual WBC, the name, address, or telephone number, 
referred to as `client contact data' of any individual or small 
business without the consent of such individual or small business with 
three exceptions.
    This rule proposes to require WBCs to provide an opportunity for 
clients to opt in to allow the SBA to obtain their contact data. The 
rule would codify how the SBA could use the permitted client contact 
data only to conduct studies that help stakeholders better understand 
how the services the client received affect their business outcomes 
over time. These studies would include, but not be limited to, program 
evaluation and performance management studies.
    In the past, SBA District Offices may have used client contact data 
to solicit loan applications. The functions and goals of the District 
Offices have changed over the years. Today this type of solicitation is 
not a function of SBA District Offices and has not been in recent 
years. The agency will not allow use of client contact data for any 
other purpose beyond program studies.
    This rule also proposes to prohibit the denial of services to 
clients solely based on a client's refusal to provide consent to use 
their contact data for study purposes. Section 21(a)(7)(C) of the Act 
directs the agency to publish standards for requiring disclosures of 
client information during a financial audit. This rule proposes to 
require other Federal or State agencies making such disclosure requests 
to submit formal requests including a justification for the need for 
individual client contact and/or program activity data for the 
Administrator's review on a case-by-case basis. Public comments on 
these proposed standards are encouraged.
    This rule also proposes to codify the current privacy protections 
in place in the Program currently employed by the agency. Under this 
proposed rule, any reports on the Program produced by a WBC, including 
its contractors and other agents, and the agency, cannot disclose 
individual client information without consent from the client. Any such 
reports must only report activity data in the aggregate, unless given 
consent, so as to protect the individual privacy of clients.

IV. Comments Request

    Readers are encouraged to review closely each section of the 
proposed rule in conjunction with current regulations to fully 
comprehend the extent of the rule and its changes. The SBA invites 
comment on all aspects of this proposed rule, including the underlying 
policies. Submitted comments will be available to any person or entity 
upon request.

Compliance With Executive Orders 12866, 13563, 12988, 13132, the 
Regulatory Flexibility Act (5 U.S.C. 601-612), and the Paperwork 
Reduction Act (44 U.S.C. Ch. 35)

Executive Order 12866

    The Office of Management and Budget has determined that this 
proposed rule constitutes a ``significant regulatory action'' under 
Executive Order 12866.

[[Page 83724]]

This is not a major rule, however, under the Congressional Review Act, 
5 U.S.C. 800.

Regulatory Impact Analysis

1. Is there a need for this regulatory action?
    The WBC Program was established in 1988 as a pilot program and 
became permanent in 2007. Regulations for the WBC Program had not been 
previously promulgated. The SBA has used the Program Announcement and 
Notice of Award to incorporate statutory requirements to implement the 
WBC Program. The annual Program Announcement and Notice of Award have 
become, for all practical purposes, documents which interpret the 
statute. The SBA believes it is past time for regulations outlining 
guidance for the policies and procedures for the WBC Program. This 
regulation incorporates the changes required by the OMB circular 
published by OMB and other program changes that have taken place since 
the WBC Program was initially established. Additionally, the 
Association of Women's Business Centers has supported implementing 
regulations to streamline and standardize processes.
    Further, the SBA received eight comments to the ANPRM that was 
published on April 22, 2015. All of the comments relevant to the WBC 
Program regulations were considered in the drafting of this proposed 
rule.
2. What are the potential benefits and costs of this regulatory action?
    The WBC Program received $17 million in Federal funds which it 
provided to over 100 Women's Business Centers in fiscal year 2016. The 
Grantees are required to supply a 1-to-1 match of those funds, except 
in the first two initial years in the program for which the match is 2 
to 1 (Federal to match). The benefit of this requirement is that the 
Grantee is invested as much as the Federal government in making the WBC 
Program a success. The small businesses benefit from the no-cost or 
low-cost Counseling and Training. Specifically, in 2015, the WBC 
Program counseled 20,473 entrepreneurs; trained 120,030 entrepreneurs, 
created 771 new businesses and raised $87,630,000 in capital infusion. 
Further, as stated above, the potential benefits of this proposed rule 
are based on incorporating all the changes that have occurred with the 
publication of 2 CFR part 200 and a streamlining of both the Program 
Announcement and the Notice of Award. The new regulations will provide 
additional clarification for the Program Announcement(s) issued by the 
Office of Women's Business Ownership.
    The costs to the SBA in making this revision are minimal, as most 
of the requirements of this rule are currently being followed. The 
estimated annual cost to the Federal government for oversight of these 
WBCs is currently provided for in the existing SBA infrastructure. 
Similarly, the costs to the grantees is also minimal as they, too, are 
following the requirements in this NPRM, which are currently included 
in their annual Cooperative Agreement. No additional direct costs are 
projected to be incurred by WBCs for oversight and related functions in 
this proposed rule.
3. What alternatives have been considered?
    After publishing the ANPRM on April 22, 2015, and reviewing the 
comments submitted, the SBA believes that publishing regulations for 
the WBC Program would be the best way to create long-lasting 
consistency in the implementation of the WBC Program. Another 
alternative would be to do nothing and continue to rely on grant 
documents to implement the WBC Program. Furthermore, the statute 
requires SBA to publish regulations in general and specifically in 
regards to the Privacy Act Requirements of the WBC Program. The Privacy 
Act Requirements are included in this regulation to satisfy that 
requirement.

Executive Order 13563

    The ANPRM was published on April 22, 2015, (Docket Number 2015-
09391) and eight comments were received. The comments varied greatly 
from specific to general and covered a wide variety of topics, from 
providing clearer definitions to streamlining procedures and 
identifying actions requiring Prior Approval from the SBA. The SBA 
reviewed all the comments and took them under consideration when 
revising these proposed regulations. Further, SBA held monthly 
conference calls with the grantees, discussing various current topics 
which included the proposed regulations. Additionally, the Office of 
Women's Business Ownership staff attends the annual Women's Business 
Center training conferences that include discussions of policy, 
procedures and the proposed regulations. A summary and disposition of 
the comments includes, but is not limited to, the following: (1) 
Training should be ongoing for Women's Business Centers. The Office of 
Women's Business Ownership has initiated ongoing training for Women's 
Business Centers through its monthly conference calls and one-on-one 
teleconference calls, as requested; (2) The SBA should provide full 
funding to WBCs and not require fundraising. The funding levels and 
match requirements that are included are consistent with the statute, 
15 U.S.C. 656; (3) The SBA data collection system must be upgraded. SBA 
is currently working to improve the system; (4) The regulation should 
provide a definition for Distinct Population. A definition is included 
in the proposed regulations; (5) Develop a repository of information 
that could be used by all of the WBCs, including templates, program 
updates and training materials. While, the Office of Women's Business 
Ownership did not include the requirement for a repository in these 
draft regulations, the office will work with women's organizations to 
develop information that will be available to all WBCs; 6) Provide a 
definition for in-kind services and do not limit the amount a volunteer 
can provide as in-kind activity. The draft regulations references 2 CFR 
200.96 for the definition of in-kind. Also, the SBA does not limit the 
amount of In-kind Contributions from a service provider, but the amount 
of in-kind that can be used as match is limited and is consistent with 
the statute, 15 U.S.C. 656. Comments for the ANPRM can be located at: 
https://www.regulations.gov/docketBrowser?rpp=50&so=DESC&sb=postedDate&po=0&dct=PS&D=SBA-2015-0007.
    The SBA did not consult with any other agencies when drafting the 
proposed regulations as the Women's Business Center Program does not 
have any joint grants with other agencies.

Executive Order 12988

    For the purposes of Executive Order 12988, Civil Justice Reform, 
the SBA has determined that this proposed rule is drafted, to the 
extent practicable, in accordance with the standards set forth in Sec. 
3(a) and 3(b)(2), to minimize litigation, eliminate ambiguity and 
reduce burden. The proposed regulations would provide for rights of 
appeal to the SBA's WBC Program participants in the event they are 
aggrieved by an Agency decision, thereby limiting the possibility of 
litigation by these entities. This proposed rule would not have 
retroactive or pre-emptive effect.

Executive Order 13132

    For the purposes of Executive Order 13132, the SBA determined that 
this rule has no federalism implications warranting preparation of a 
federalism assessment.

[[Page 83725]]

Compliance With the Regulatory Flexibility Act, 5 U.S.C. 601-612

    When an agency promulgates a proposed rule, the Regulatory 
Flexibility Act requires the agency to prepare an initial regulatory 
flexibility analysis (IRFA), which describes the potential economic 
impact of the rule on small entities and alternatives that may minimize 
that impact. Section 605 of the RFA allows an agency to certify a rule, 
in lieu of preparing an IRFA, if the rulemaking is not expected to have 
a significant economic impact on a substantial number of small 
entities. This rule covers both the application process to become 
funded as a Women's Business Center and the on-going operations for 
currently funded WBCs. As the populations are different for the 
application process and the existing WBCs, the analysis is included for 
each.
    This proposed rule could theoretically affect all nonprofit 
entities as the statute requires that an entity be organized as a 
nonprofit in order to participate. According to the IRS, for tax year 
2010, there are over 269,000 entities that filed returns as a 
501(c)(3). The NAICs codes that are most relevant to participate in the 
program are 541611, Administrative Management and General Management 
Consulting Services and 541990, All Other Professional, Scientific and 
Technical Services. The size standard for both of these NAICs codes is 
$15 million in average annual receipts. According to the IRS, 92 
percent of all 501(c)(3) filers had total revenue greater than $10 
million. The majority of the 501(c)(3) entities would fall under the 
threshold as a small entity. In addition, as the application process is 
voluntary and does not require a nonprofit entity to apply, the vast 
majority of nonprofits would not be affected. Over the past 5 years, 
there were a total of 133 new applications submitted for the WBC 
Program--averaging 25-35 applications per year. The SF 424 (Application 
for Federal Assistance) on grants.gov does not include a field for 
revenue size. Based on the majority of the entities being small, SBA 
can presume that the majority of the Applicant Organizations are also 
small. It is projected that a grants writer would take approximately 20 
hours to complete and submit the required application forms through 
grants.gov. For a grants writer at an average of $30-per hour, this 
would cost approximately $600. These estimates are based on the burden 
statements associated with the grants.gov application forms and 
anecdotal information from Applicant Organizations to the WBC Program. 
Therefore, the SBA has determined that the application section of the 
proposed rule would not have a significant impact on a substantial 
number of small entities.
    There are currently 114 entities that participate in the WBC 
Program, all of which are small entities. However, the SBA has 
determined that the impact on these entities affected by the proposed 
rule will not be significant. The proposed rule codifies current 
policies and procedures that are already achieved through a Cooperative 
Agreement with the SBA. It does not include new reporting requirements. 
Rather it standardizes existing policies to ensure transparency and 
consistency which in theory will reduce the cost to both the WBC 
participants and SBA. A WBC participating in the WBC Program submits a 
Federal Financial Report and attachments twice a year. The estimated 
burden for these reports is 2 hours twice a year. The annual submission 
of a work plan is substantially less than the Application and is only 
to update any changes from the initial Application. The estimate for 
these forms on an annual basis is a total of 14 hours. For a grants 
writer at $30 per hour, the annual estimated cost would be $420. 
Accordingly, the Administrator of the SBA hereby certifies that this 
proposed rule will not have a significant impact on a substantial 
number of small entities.

Paperwork Reduction Act, 44 U.S.C. Ch. 35

    SBA has determined that this proposed rule would not impose 
additional reporting and recordkeeping requirements under the Paperwork 
Reduction Act (PRA), 44 U.S.C. Chapter 35. Currently, there are eight 
Paperwork Reduction Act submissions associated specifically with the 
WBC Program: (1) OMB control number 3245-0140 Notice of Award and 
Cooperative Agreement; (2) OMB control number 3245-0169, Federal Cash 
Transaction Report, Financial Status Report, Program Income Report, and 
Narrative Program Report; (3) OMB control number 3245-0324, EDMIS data 
collection (641 and 888 forms); (4) OMB control number 4040-0004, SF 
424, Application for Financial Assistance; (5) OMB control number 4040-
0006, SF 424A, Budget Summary for non-construction projects; (6) OMB 
control number 4040-0007, SF 424B, Assurances for non-construction 
projects; (7)OMB control number 4040-0013, SF-LLL, Disclosure of 
Lobbying Activities; and, (8) 4040-0014SF-425, Federal Financial 
Report. These reports will not change and no new reports are required 
in the proposed rule.

List of Subjects in 13 CFR Part 131

    Entrepreneurship, Grant programs--business, Minority businesses--
women, Reporting and recordkeeping requirements, Small businesses.

    For the reasons set forth above, SBA proposes to add 13 CFR part 
131 as follows:

PART 131--WOMEN'S BUSINESS CENTER PROGRAM

Sec.
131.100 Introduction.
131.110 Definitions.
131.200 Eligible Entities.
131.300 Women's Business Centers (WBCs).
131.310 Operating Requirements.
131.320 Area of Service.
131.330 WBC Services and Restrictions on Service.
131.340 Specific WBC Program Responsibilities.
131.350 Selection and Retention of the WBC Program Director.
131.400 Application Procedures.
131.410 New Applications.
131.420 Renewal Applications.
131.430 Application Decisions.
131.500 Grant Administration and Cost Principles.
131.510 Maximum Grant.
131.520 Carryover of Federal Funds.
131.530 Matching Funds.
131.540 Program Income and Fees.
131.550 Budget Justification.
131.560 Restricted and Prohibited Costs.
131.570 Payments and Reimbursements.
131.600 Reports.
131.700 Oversight of the WBC Program.
131.710 SBA Review Authority.
131.720 Audits, Examinations and Investigations.
131.800 Cooperative Agreement and Contracts.
131.810 Other Federal Grants.
131.820 Revisions and Amendments to Cooperative Agreements.
131.830 Suspension, Termination and Non-renewal.
131.840 Dispute Procedures.
131.850 Closeout Procedures.
131.900 Ensuring Client Privacy.


    Authority:  15 U.S.C. 656.


Sec.  131.100   Introduction.

    The Women's Business Centers (WBC) program has grown and evolved to 
provide a variety of services to many entrepreneurs ranging from those 
interested in starting businesses to those looking to expand existing 
businesses.
    SBA, through the Office of Women's Business Ownership (OWBO) is 
responsible for the general management and oversight of the Women's 
Business Center Program (WBC program). SBA issues an annual cooperative 
agreement to recipient organizations for the delivery of assistance to 
individuals and small businesses. The WBC program acts as a catalyst 
for providing in-depth,

[[Page 83726]]

substantive outcome-oriented business services, including training, 
counseling, and other technical assistance, to women entrepreneurs, 
both nascent and established businesses, a representative number of 
whom are socially and economically disadvantaged. By providing a wide 
variety of training curriculum and counseling expertise through Women's 
Business Centers (WBCs), the SBA meets the needs of the individual 
client in the local marketplace.


Sec.  131.110  Definitions.

    Advisory board. A group established to confer with and provide 
recommendations to the Women's Business Center Program Director on 
matters pertaining to the operation of the WBC. The advisory board will 
also act as a catalyst to raise funds for the Women's Business Center.
    Applicant organization. An entity that applies for Federal 
financial assistance to establish, administer, and operate a WBC under 
a new or renewed cooperative agreement.
    Application (also known as the proposal). The written submission by 
a new applicant organization or an existing recipient organization 
describing its projected WBC activities for the upcoming budget period 
and requesting SBA funding for use in its operations.
    Annual work plan. See option year work plan and budget.
    Area of service. The State or Territory, or a regional portion of a 
State or U.S. Territory, in which SBA approves the WBC to provide 
services.
    Assistant Administrator of Office of Women's Business Ownership. 
(AA/OWBO) The AA/OWBO is statutorily responsible for management of the 
WBC program. The AA/OWBO may elect to designate staff to complete tasks 
assigned to the AA/OWBO position. When AA/OWBO is referenced, it 
includes the designee.
    Authorized official. A person who has the legal authority to sign 
for and/or speak on behalf of an organization.
    Budget period. The period of performance in which expenditures and 
obligations are incurred by a WBC, consistent with 2 CFR 200.77.
    Carryover funds (carryover). Unobligated Federal funds reallocated 
from one budget period to the next through an amendment to the current 
year's cooperative agreement.
    Cash match. Non-Federal funds specifically budgeted and expended by 
the recipient organization for the operation of a WBC project. Cash 
match must be in the form of cash and/or program income.
    Client. An entrepreneur or existing small business seeking services 
provided by the WBC.
    Conditional approval. May be granted when an application has been 
determined to meet eligibility requirements and has been recommended 
for funding, but may require special conditions, such as submitting 
required certifications, assurances or other documentation.
    Cognizant agency for audit. The Federal agency designated to carry 
out the responsibilities as described in 2 CFR 200.513(a) 
responsibilities.
    Cognizant agency for indirect costs. The Federal agency responsible 
for reviewing, negotiating, and approving cost allocation plans or 
indirect cost proposals developed under 2 CFR 200.19.
    Counseling record. A record that provides individual client contact 
information, demographics about the client/business and data on the 
counseling provided.
    Cooperative agreement (also known as notice of award). A legal 
instrument of financial assistance between the SBA and a recipient 
organization that is consistent with 31 U.S.C. 6302-6305 and provides 
for substantial involvement between SBA and the recipient organization 
in carrying out the proposed activities.
    Counseling. Services provided to an individual and/or small 
business owner that are substantive in nature and require assistance 
from a resource partner or SBA district office personnel in the 
formation, management, financing, and/or operation of a small business 
enterprise and are specific to the needs of the business or individual.
    Direct costs. Costs as defined in 2 CFR 200.413.
    Dispute. A programmatic or financial disagreement that the 
recipient organization requests be handled according to the dispute 
resolution procedures under Sec.  131.840.
    Distinct population. A specific targeted group. For the purpose of 
the WBC program, the targeted group is women entrepreneurs.
    District office. The local SBA office charged, in collaboration 
with the WBCs, with meeting the needs of women entrepreneurs in the 
community.
    District office technical representative. An SBA employee located 
within an SBA district office and designated by the SBA to provide 
local oversight and monitoring of a particular WBC or WBCs.
    Financial examiner. An SBA employee, or designee, charged with 
conducting financial examinations.
    Full-time. An employee all of whose time and effort (minimum of 30 
hours per week, as defined by the Internal Revenue Service, Sec.  
4980H(c)(4)) is allocated to the WBC project. An employee who is full-
time under the WBC should not engage in activities that do not pertain 
to the WBC project.
    Grants and Cooperative Agreement Appeals Committee. The SBA 
committee, appointed by the SBA Administrator that resolves appeals 
arising from disputes between a recipient organization and the SBA.
    Grants management specialist. An SBA employee within Office of 
Women's Business Ownership responsible for the budgetary review and 
financial oversight of WBC agreements.
    Indirect costs. Costs as defined in 2 CFR 200.56.
    In-kind contributions (third party). Costs incurred as described in 
2 CFR 200.96.
    Interim Program Director. An individual temporarily assigned by the 
recipient organization for no more than 60 days to fulfill the 
responsibilities of a vacant WBC Program Director position.
    Key personnel/key employee. For the purposes of the WBC program, 
the WBC Program Director is identified as the key employee.
    Loan packaging. Includes any activity done in support of a client 
or in preparation of the client's credit application to a lender for a 
loan, line of credit, or other financial instrument.
    Matching funds. For all Federal awards, any shared costs or 
matching funds and all contributions, as defined in 2 CFR 200.306.
    Microloan. A short-term, fixed-interest rate loan of not more than 
$50,000 made by an Intermediary to an eligible small business. The SBA 
manages a Microloan Program that focuses on reaching socially and 
economically disadvantaged entrepreneurs. See 13 CFR 120, Subpart G--
Microloan Program.
    Non-federal entity. An organization, as defined in 2 CFR 200.
    Nonprofit organization. Any corporation, trust, association, 
cooperative, or other organization as defined in 2 CFR 200.70.
    Notice of award. See cooperative agreement.
    Option year. Additional 12-month budget period awarded after the 
first budget year (base year) as determined by the period of 
performance identified in the cooperative agreement.
    Option year work plan and budget. The written submission by an 
existing WBC applying for an additional year of

[[Page 83727]]

grant funding. This submission is required to ensure the recipient 
organization's continued alignment with the WBC program and to update 
its description of projected WBC activities for the upcoming option 
year budget period.
    Overmatch. Any non-Federal contribution applied to the WBC award in 
excess of the minimum amount of match required. See Sec.  131.530 for 
specific details on match requirements.
    Office of Women's Business Ownership Grants Management Officer. An 
SBA employee within the Office of Women's Business Ownership with 
authority delegated by the AA/Office of Women's Business Ownership, who 
meets Office of Management and Budget standards and certifications to 
obligate Federal funds by signing the notice of award.
    Office of Women's Business Ownership Program Manager. An SBA 
employee designated by the AA/OWBO who oversees and monitors WBC 
operations.
    Period of performance. The period of time as specified in 2 CFR 
200.77.
    Principal investigator. The individual primarily responsible for 
achieving the technical success of the project, while also complying 
with the financial and administrative policies and regulations 
associated with the grant
    Prior approval. The written concurrence from the appropriate Office 
of Women's Business Ownership official for a proposed action or 
amendment to a WBC cooperative agreement. Specific guidelines governing 
the prior approval process, including the documentation required, are 
outlined in the cooperative agreement.
    Program announcement. The SBA's annual publication of requirements, 
to which an applicant organization must respond to in its new 5-year 
initial or 3-year renewal application.
    Program income. Gross income earned by the non-Federal entity, as 
described in 2 CFR 200.80.
    Project funds. All funds authorized under the cooperative agreement 
including, Federal funds and non-Federal cash, third-party in-kind 
contributions (third party) and program income, as well as the Federal 
funds and non-Federal match authorized or reported as carryover funds.
    Project period. The period of time specified in the notice of 
award, which identifies the start and end date of the recipient 
organization's 5-year or 3-year project.
    Recipient organization. The selected applicant organization that 
receives Federal funding to deliver WBC services under a cooperative 
agreement. By statute, only private, nonprofit organizations certified 
under Sec.  501c of the Internal Revenue Code of 1986 can be recipient 
organizations.
    Socially and economically disadvantaged women. Women who have been 
subjected to racial or ethnic prejudice or cultural bias within 
American society because of their identities as members of groups and 
without regard to their individual qualities. Also includes women whose 
ability to compete in the free enterprise system has been impaired due 
to diminished capital and credit opportunities as compared to others in 
the same or similar line of business.
    Specialized services. WBC services other than basic counseling and 
training. The services can include, but are not limited to: assistance 
with disaster readiness; home-based businesses; agribusinesses; and 
construction, child care, elder care, manufacturing or procurement 
businesses.
    State or U.S. Territory. For the purpose of these regulations, 
State or U.S. Territory will mean the 50 United States, and the U.S. 
Territories of Guam, the U.S. Virgin Islands, American Samoa, the 
Northern Mariana Islands, the Commonwealth of Puerto Rico and the 
District of Columbia.
    Training. A qualified activity or event presented or cosponsored by 
a WBC, that delivers a structured program of knowledge, information or 
experience on an entrepreneurial or business-related subject.
    Training record. A record that provides aggregate data about a 
training event to include training topic, date, attendance, program 
format and evaluation of the training.
    Women's Business Centers. Women's Business Centers represent a 
national network of educational centers throughout the United States 
and its territories that assist women in starting and growing small 
businesses.
    WBC Program Director. An individual whose time and effort is 
allocated solely to the WBC program. The WBC Program Director position 
is the only positon that requires approval from the Office of Women's 
Business Ownership prior to hiring.
    Women-owned businesses. Business concern that is not less than 51 
percent owned by 1 or more women and the management and daily 
operations are controlled by 1 or more women.


Sec.  131.200  Eligible Entities.

    (a) Eligible Organizations. By statute, only a nonprofit 
organization with active 501c certification from the United States 
Department of Treasury/Internal Revenue Service is eligible to apply 
for Federal funding to operate a WBC project.
    (b) Ineligible Organizations. Organizations ineligible to receive 
Federal funds to manage a WBC project include, but are not limited to 
the following:
    (1) Any organization that owes an outstanding and unresolved 
financial obligation to the Federal government;
    (2) Any organization, employee or principal investigator of an 
organization that is currently suspended, debarred or otherwise 
prohibited from receiving awards, contracts or grants from the Federal 
government;
    (3) Any organization with an outstanding and unresolved material 
deficiency reported under the requirements of the Single Audit Act 
within the past three years, consistent with 2 CFR 200.501;
    (4) Any organization that has had a grant or cooperative agreement 
involuntarily terminated or non-renewed by the SBA for cause;
    (5) Any organization that has filed for bankruptcy within the past 
five years;
    (6) Any organization that does not propose to hire and employ a 
full-time WBC Program Director whose time is solely dedicated to 
managing the day-to-day operation of the WBC and staff;
    (7) Any organization that proposes to serve as a pass-through and 
permit another organization to manage the day-to-day operations of the 
project;
    (8) Any organization that had an officer or agent acting on its 
behalf convicted of a felony criminal violation under any Federal law 
within the preceding 24 months; and,
    (9) Any other organization the SBA reasonably determines to be 
ineligible to receive Federal funds to manage a WBC project.


Sec.  131.300  Women's Business Centers (WBCs).

    Women's Business Centers (WBCs) are established under the statutory 
authority of the SBA through cooperative agreements with nonprofit 
recipient organizations. WBC program announcements and requests for 
work plans and budgets establish the operating and performance 
parameters, initiatives, and strategies for each project period.
    (a) Program Announcements. (1) The SBA will issue an annual program 
announcement each fiscal year to fund those recipient organizations 
already operating successful WBC projects. This program announcement 
will detail the goals, objectives and other terms and conditions for 
renewable projects entering a three-year program. The

[[Page 83728]]

issuance of the program announcement is contingent upon SBA's approved 
budget and funding availability.
    (2) At any time during the current fiscal year, and based on the 
availability of funds, the SBA may, at its discretion, also issue a 
program announcement for the upcoming fiscal year, detailing the goals, 
objectives and other terms and conditions for new WBC projects. New WBC 
projects may be awarded a maximum of one base year and 4 additional 
option years of funding.
    (3) The SBA reserves the right to cancel a program announcement, in 
whole or in part, at the agency's discretion.
    (b) Option Year Work Plans and Budgets. (1) By April 30, of each 
year, the SBA will issue instructions for the submission of the option 
year work plan and budget for those WBCs currently in (and wishing to 
continue in) SBA's WBC program that will have successfully completed 
year 1, 2, 3, or 4 of an initial project, or year 1 or 2 of a renewal 
project by September 29th, In order to be considered for renewal, 
submissions for option year work plans and budget must be received in 
the Office of Women's Business Ownership by the timeline specified in 
the annual instructions for the submission of each work plan.
    (2) The SBA reserves the right to revise the submission 
requirements, in whole or in part, at the agency's discretion.
    (3) Awarding option year funding is at the sole discretion of the 
SBA and is subject to continuing program authority, the availability of 
funds and satisfactory performance by the recipient organization.
    (c) Cooperative Agreement. (1) The terms and conditions must 
include, but are not limited to, Office of Management and Budget 
guidelines for grant administration and cost principles, regulations 
and laws governing the WBC project and federally sponsored programs, 
and current-year guidelines from the program announcement.
    (2) The SBA will issue a notice of award annually to each eligible 
WBC participant, based on the acceptance of the annual proposal or work 
plan.
    (d) Negotiating the Cooperative Agreement. The WBC's participation 
in negotiations should include, but is not limited, to the following:
    (1) Collaborating with the local SBA district office to develop 
annual goals for the WBC project;
    (2) Receiving written concurrence from the SBA district office 
staff for inclusion in the application submission;
    (3) Developing data and analyses to design the WBC services needed 
by the small business community, with focus on women and women-owned 
businesses;
    (4) Proposing services and the appropriate structure to deliver 
those services to meet the needs of the small business community, 
specifically targeting women, including a representative number of 
women whom are socially and economically disadvantaged;
    (5) Ensuring that adequate technical and managerial resources are 
proposed for the WBC to achieve the performance goals and program 
objectives as set forth in the cooperative agreement.
    (e) Women's Business Center (WBC) Funds. Budgeted WBC funds 
(including match) must be used solely for the WBC project.


Sec.  131.310  Operating Requirements.

    (a) The recipient organization has the contractual responsibility 
for the duties of the WBC project, which must be a separate and 
distinct entity within the recipient organization, having its own 
budget, its own staff, and a full-time WBC Program Director.
    (b) The Women's Business Center must establish an advisory board 
that is representative of the community it will serve and that will 
confer with and provide recommendations to the WBC Program Director on 
matters pertaining to the operation of the WBC. The advisory board will 
also assist the WBC in meeting the match requirements of the program.
    (c) An employee who is full-time under the Women's Business Center 
program should not engage in activities that do not pertain to the WBC 
project. The WBC is not prohibited from operating other Federal 
programs that focus on women or other underserved small business 
concerns as long as doing so does not hinder the ability to deliver the 
services of the WBC program.
    (d) The WBC must have the facilities and administrative 
infrastructure sufficient to operate a center, including program 
development, program management, financial management, reports 
management, promotion and public relations, program assessment, program 
evaluation and internal quality control. The Women's Business Center 
must document annual financial and programmatic reviews and evaluations 
of its center(s) consistent with Sec.  131.600(a).
    (e) Any new WBC that is accepted into the WBC program after the 
effective date of this rule must include the specific identification 
``Women's Business Center'' as part of its official name. Any WBC that 
is applying for a renewal grant after the effective date of this rule 
must also include the specific identification ``WBC'' as part of its 
official name. Any existing WBC that does not include ``Women's 
Business Center'' in its name must include the following language 
prominently on their Web site and promotional documents: ``The Women's 
Business Center is funded in part by the U.S. Small Business 
Administration.''
    (f) The WBC must maintain adequate staff to operate the WBC, 
including the WBC Program Director and at least one other person, 
preferably a business counselor.
    (g) The WBC must use an enforceable conflict-of-interest policy 
that is consistent with the requirements of 2 CFR 2701.112 and which is 
signed annually by each WBC employee, contractor, consultant and 
volunteer. The policy must be uniform among all employees, contractors, 
consultants and volunteers working for or with the WBC program.
    (h) The WBC must be open to the public a minimum of 40 hours a week 
(which must include evening and weekend hours) and meet other 
requirements as specified in the program announcement. Emergency 
closures must be reported to the district office technical 
representative and OWBO Program Manager as soon as is feasible.
    (i) The WBC will comply with 13 CFR parts 112, 113, 117, and 136 
requiring that no person be excluded from participation in, be denied 
the benefits of, or otherwise be subjected to discrimination under any 
program or activity conducted by the WBC. However, all WBC marketing 
programs and services must target women.
    (j) The WBC project must not be listed in the organizational 
structure under any other federal grant.


Sec.  131.320  Area of Service.

    (a) Cooperative Agreement. The recipient organization will identify 
in its application the area of service for which it plans to provide 
assistance. Once approved, the AA/OWBO will define, in writing, the 
geographic area of service of each recipient organization. More than 
one recipient organization may be located in a State, Territory or 
other geographic area. Once the SBA has entered into a cooperative 
agreement with a recipient organization, the area of service cannot be 
changed without prior approval by the Office of Women's Business 
Ownership. A subsequent decision by the recipient organization to 
change the area of service in the cooperative agreement without prior 
approval by the SBA may constitute

[[Page 83729]]

grounds for suspension, non-renewal and/or termination as set forth in 
Sec.  131.830.
    (b) Location of WBC Projects. An organization responding to a 
program announcement within proximity of an existing WBC project shall 
provide in its written narrative a justification for placing another 
WBC in the proximity of an existing WBC, including the number of 
socially and economically disadvantaged persons within the proposed 
service area, census data, and population density. The information 
provided must clearly justify the necessity for an additional WBC 
project within the same area of service as the existing WBC project. 
SBA will take the narrative and any supporting documentation into 
consideration when reviewing, ranking and scoring the applicant 
organization's proposal.
    (c) Resources. An applicant organization's plan for the commitment 
and allocation of resources, including the site location where the WBC 
plans to provide services will be reviewed as part of the application 
review process for each budget period to ensure adequate coverage in 
the area of service.


Sec.  131.330  WBC Services and Restrictions on Services.

    (a) Services. The WBC must provide prospective entrepreneurs and 
existing small businesses, known as clients, with training, counseling, 
and specialized services. The services provided must relate to the 
formation, financing, management and operation of small business 
enterprises. The WBC must create and update counseling records to 
document each time that counseling is provided to a client. The WBC 
must provide services that meet local needs as determined through 
periodic needs assessments and that must be adjusted accordingly to 
keep pace with changing small business needs. Any changes to the scope 
of services provided during the budget period must be in accordance 
with Sec.  131.820.
    (b) Access to Capital. (1) WBCs must provide training and 
counseling services that enhance a small business concern's ability to 
access capital, such as business plan development, financial statement 
preparation/analysis, and cash-flow preparation/analysis.
    (2) WBCs may provide loan packaging services and other services to 
WBC clients, and may charge a fee for such assistance. See Sec.  
131.540. Any fees so generated will constitute program income. The WBC 
must ensure that these services are not credited to both the WBC 
program and any other Federally-funded program, thereby double counting 
the efforts.
    (3) WBCs shall prepare their clients to represent themselves to 
lending institutions. WBC personnel may attend meetings with lenders to 
assist clients in preparing financial packages; however, neither WBC 
staff nor their agents may take a direct or indirect role in 
representing clients in any loan negotiations.
    (4) WBCs shall disclose to their clients that financial counseling 
assistance, including loan packaging, will not guarantee receipt or 
imply approval of a loan or loan guarantee.
    (5) WBCs must not intervene in loan decisions, service loans, make 
credit recommendations or influence decisions regarding the award of 
any loans or lines of credit on behalf of the WBC's clients unless the 
WBC operates as an SBA microlender and is awarding an individual or 
small business concern an SBA microloan.
    (6) When the recipient organization operates both a WBC and a 
separate loan program, the WBC must disclose to the client other 
financing options that may be available besides the one offered by the 
recipient organization to ensure that the client has the opportunity to 
seek financing outside of the recipient organization.
    (7) WBCs must disclose to loan packaging clients any financial 
relationships between the WBC and a lender or the sale of their credit 
products.
    (8) With respect to loan programs, allowable activities include: 
assisting clients in formulating a business plan, preparing financial 
statements, completing forms that are part of a loan application, and 
accompanying an applicant appearing before the SBA or other lenders. 
See paragraph (5) of this section for further limitations.
    (9) WBCs are to collaborate with state, local and federal 
government agencies to identify other resources that may be available 
to its clients and to facilitate interactions deriving from these 
collaborations.
    (c) Special Emphasis Initiatives. In addition to requiring WBCs to 
assist women entrepreneurs including a representative number of women 
who are socially and economically disadvantaged, the SBA may identify 
and include in the cooperative agreement other portions of the general 
population WBCs must target for assistance.


Sec.  131.340  Specific WBC Program Responsibilities.

    (a) Policy Development. The AA/OWBO will establish and modify WBC 
program policies and procedures to improve the delivery of services by 
WBCs to the small business community, and to enhance compliance with 
applicable laws, regulations, Office of Management and Budget 
guidelines and Executive Orders.
    (b) Program Administration. The AA/OWBO will recommend the annual 
program budget, establish appropriate funding levels in compliance with 
the statute and review the annual budgets submitted by each 
organization.
    (c) Responsibilities of WBC Program Director. (1) The WBC Program 
Director must be a full-time employee of the recipient organization and 
not a contractor, consultant or company. The WBC Program Director will 
direct and monitor all program activities and all financial affairs of 
the WBC to ensure effective delivery of services to the small business 
community and compliance with applicable laws, regulations, Office of 
Management and Budget circulars, Executive Orders, and the terms and 
conditions of the cooperative agreement.
    (2) The WBC Program Director must have the necessary authority from 
the recipient organization to control all WBC budgets and expenditures, 
as well as any hiring and staffing decisions required to meet the 
program objectives, under the cooperative agreement.
    (3) The WBC Program Director may not manage any other programs 
under the recipient organization.
    (4) The WBC Program Director will serve as the SBA's principal 
contact for all matters involving the WBC.
    (d) Principal Investigator. The principal investigator is primarily 
responsible for achieving the technical success of the project, while 
also complying with the financial and administrative policies and 
regulations associated with the grant. Although principal investigators 
may have administrative staff to assist them with the management of the 
project, the ultimate responsibility for the management of the project 
rests with the principal investigator. The principal investigator of a 
recipient organization could include the Executive Director, WBC 
Program Director, President/CEO, or other key position.


Sec.  131.350  Selection and Retention of the WBC Program Director.

    (a) General. (1) The WBC Program Director selected to manage the 
daily operations of the WBC shall possess core competencies in the 
areas of business and/or entrepreneurship training, project and/or 
small business management, effective communication, and collaboration 
skills.
    (2) The recipient organization must provide written notification to 
the local

[[Page 83730]]

SBA district office and AA/OWBO within 10 business days following a 
vacancy in a WBC Program Director position. This position may not be 
vacant more than 30 calendar days a new WBC Program Director should be 
in place within 90 days of the vacancy. Hiring a new WBC Program 
Director prior approval from the SBA. See 2 CFR 200.308.
    (3) Within 30 days of the position becoming vacant, the recipient 
organization must appoint an Interim Program Director to serve during 
the period of the vacancy. The recipient organization must document the 
appointment of the Interim Program Director in accordance with its 
policies and procedures and the cooperative agreement.
    (4) The recipient organization must provide the name, 
qualifications and contact information for the Interim WBC Program 
Director to the SBA district office and the AA/OWBO within 10 days of 
the appointment.
    (5) An Interim Program Director must allocate his/her time and 
effort solely to the WBC program until a permanent WBC Program Director 
is in position.
    (6) If it is anticipated that the Interim Program Director will be 
in the position for more than 60 days, the recipient organization must 
submit a key personnel change request to the district office and the 
AA/OWBO for prior approval.
    (7) The recipient organization must submit a request for a key 
personnel change (including the resume of the candidate) to the local 
SBA district office within the timeframe specified in the notice of 
award prior to hiring a new WBC Program Director. This should be 
completed within the 90 days allotted to fill the vacancy. Failure to 
comply with this section may subject the recipient organization to 
corrective actions, restrictions, disallowances, suspension, revocation 
or termination proceedings.
    (b) SBA Involvement. (1) SBA employees may not recruit or hire the 
WBC Program Director; however; the AA/Office of Women's Business 
Ownership will review the key personnel change request submitted by the 
recipient organization and recommendation provided by the SBA district 
office technical representative to ensure that the candidate has the 
qualifications necessary to manage the day-to-day operations of the 
WBC. Prior to hiring a new WBC Program Director, the recipient 
organization must notify and provide the district office technical 
representative with a complete key personnel change request, including 
the credentials of the preferred candidate. The district office 
technical representative will evaluate the request to determine whether 
that individual meets the requirements necessary for the position and 
will then forward the request to the AA/OWBO with his/her concurrence 
or objection to the selection. If the district office technical 
representative objects to the selection of the WBC Program Director 
candidate, he/she must provide a written copy of the objection to the 
recipient organization and also to the AA/OWBO and OWBO Program Manager 
within 10 business days of receipt of the key personnel change request. 
The objection must set forth the relevant selection criteria that the 
district office technical representative believes the candidate fails 
to meet.
    (2) If the AA/OWBO upholds the district office technical 
representative's objection, he/she must send written justification for 
the decision to the recipient organization, district office technical 
representative and OWBO Program Manager. The recipient organization 
must then proceed to the selection of another candidate. If the AA/OWBO 
denies the objection, then the AA/OWBO must send written justification 
for the denial to the recipient organization, district office technical 
representative and OWBO Program Manager.
    (c) Recruitment Activity and Associated Costs. Allocable personnel 
compensation and benefits costs as provided in 2 CFR 200.463.


Sec.  131.400  Application Procedures.

    (a) Each applicant organization seeking a new or renewal grant is 
required to submit its application electronically to the SBA, via 
grants.gov, as designated in the program announcement.
    (b) The selection criteria for new or renewal grants will include, 
but is not limited to the following:
    (1) Expertise of the applicant organization to provide long-term 
and short-term training and counseling programs, and, most 
specifically, experience in providing targeted business development 
services to a distinct population; and,
    (2) The ability of the applicant organization to commence the WBC 
project within 90 days from execution of the cooperative agreement. All 
other specific criteria will be published in each program announcement 
issued by the SBA.
    (c) As required by 2 CFR 200.205(b), applicant organizations 
receiving acceptable scores will be further evaluated by OWBO to assess 
the possible risks they may pose. An assessment of the possible risks 
posed by an applicant organization will include, but is not limited to, 
the applicant organization's financial stability, management systems 
and ability to effectively implement statutory, regulatory and other 
requirements, as determined by the SBA.
    (d) Each WBC within its final option year period is required to 
submit an application consistent with the date and instructions listed 
in the program announcement.


Sec.  131.410   New Applications.

    (a) An application for initial funding must follow the format and 
requirements outlined in the program announcement and set forth in 
these regulations for initial funding.
    (b) All new awards will be made using an open and competitive 
process. After completion of the review process, the AA/OWBO will make 
a determination and notify the applicant organization of the final 
decision.


Sec.  131.420  Renewal Applications.

    (a) Women's Business Centers must comply with the requirements in 
the annual program announcement and set forth in these regulations to 
receive consideration of their three year renewal applications. WBCs 
must have successfully completed an initial five year period or a three 
year renewal period in order to receive funding under the program 
announcement. Recipient organizations that have not been renewed and 
recipient organizations that have been terminated or suspended are not 
eligible to apply for renewal funds. The recipient organization must 
submit the complete renewal application to the SBA through the 
grants.gov or other authorized electronic submission process specified 
in the program announcement.
    (b) Significant factors considered in the renewal application 
review will include, but shall not be limited to:
    (1) The applicant organization's continued ability to contribute 
matching funds;
    (2) The quality of prior performance under the cooperative 
agreement as determined by compliance with projects goals, and outputs/
outcomes; and
    (3) The results of any examination conducted pursuant to Sec.  
131.710(b).
    (c) The SBA will review the renewal application for conformity with 
the program announcement. OWBO staff may request supplemental 
information and documentation prior to issuing the cooperative 
agreement.
    (d) If the SBA rejects renewal of an existing recipient 
organization (see due process procedures set forth in

[[Page 83731]]

Sec.  131.830) or the recipient organization elects not to reapply, the 
SBA may award the funds elsewhere, as the agency deems appropriate.


Sec.  131.430  Application Decisions.

    The AA/OWBO may approve, conditionally approve, or reject any 
initial or renewal Application.
    (a) Approval. Upon approval, the OWBO grants management specialist 
will issue a notice of award.
    (b) Conditional Approval. (1) If the AA/OWBO determines there is a 
reasonable basis to believe the applicant organization will take 
remedial action to correct any issues identified or respond to an 
enforcement action in a timely way, the AA/OWBO may conditionally 
approve an application. The conditions and applicable remedies will be 
specified as special terms and conditions in the cooperative agreement 
(notice of award). Upon conditional approval, the OWBO grants 
management specialist will issue a cooperative agreement.
    (2) In the event of a conditional approval, SBA may fund a 
recipient organization for one or more specified periods of time up to 
a maximum of 90 days.
    (c) Rejection. The AA/OWBO may reject any application for initial 
awards. For renewal awards, the AA/OWBO may reject any application 
after following due process procedures set forth in Sec.  131.830.


Sec.  131.500  Grant Administration and Cost Principles.

    Upon approval of the WBC's initial or renewal application, the SBA 
will enter into a cooperative agreement with the recipient 
organization, setting forth the programmatic and fiscal 
responsibilities of the recipient organization and SBA, the scope of 
the project to be funded, and the budget for the period covered by the 
cooperative agreement. The WBC program adopts and implements Office of 
Management and Budget regulations as published and amended in 2 CFR 
part 200. Additional qualifications or clarifications may be 
promulgated through the program announcement, a revised notice of award 
or the regulatory process.


Sec.  131.510  Maximum Grant.

    No individual WBC project will receive a WBC grant, in any fiscal 
year under a cooperative agreement, in excess of the amount authorized 
by statute. While an individual WBC project cannot exceed the statutory 
limit, a recipient organization is not limited from establishing 
multiple WBC projects as long as the projects are distinct from each 
other and are serving distinct populations that would not otherwise be 
served.


Sec.  131.520  Carryover of Federal funds.

    Only a WBC in the first or second year of an initial phase project 
may request permission to carry over any unexpended funds remaining 
under its award.
    (a) Such a recipient organization may request that the SBA 
reauthorize any remaining unexpended and unobligated Federal funds from 
their cooperative agreement for use in the subsequent program year/
period of performance. All carryover requests must be completed within 
90 days after the end of the budget period identified in block 5 of the 
notice of award or page 2 of the modification of the award. The request 
must be submitted in writing to OWBO with the final semi-annual 
financial report and reimbursement request package. If the carryover 
request is not submitted within this timeframe, OWBO may elect to de-
obligate all remaining Federal funds and the funds will no longer be 
available to the recipient organization.
    (b) The AA/OWBO will determine the funding priorities for the 
awarding of carryover funds. Notification of the approval of carryover 
funds will be provided in writing by modification to the award.
    (c) Carryover funds must be used in accordance with the approved 
option year work plan and budget. Furthermore, expenditures of 
carryover funds must not be commingled with current year WBC project 
funds or other non-WBC funds, and must be reported separately from the 
current year award.
    (d) Any organization that requests carryover funds for two 
consecutive budget periods will be subject to a reduction of the next 
budget period. The award amount for the next budget period available 
will be reduced by the average amount of the two consecutive carryover 
amounts.


Sec.  131.530  Matching Funds.

    (a) The recipient organization must provide matching funds equal to 
one-half of the Federal amount of SBA funding for the first two years 
of its initial award. For the remainder of the time the recipient 
organization is in the WBC program, it must provide matching funds of 
one dollar for every Federal dollar of their annual Federal award 
amount. The statutory match ratio is 2:1 (Federal to non-Federal) for 
the first and second years and 1:1 for the third, fourth, and fifth 
years. At least 50% of the matching funds must be in cash (the sum of 
cash and program income). The remaining 50 percent may be provided 
through allowable combinations of cash, In-kind contributions (third 
party), or authorized indirect costs.
    Once the cash match and total match requirements have been met, any 
additional matching funds are considered overmatch. WBCs may provide 
overmatch if they choose to do so; however, if they have used Federal 
funds to raise match above the required amount, these funds must only 
be used to meet the Federal objective of the WBC program and must be 
verifiable from the non-Federal entity's records. When applied to a WBC 
project through a budget proposal, all funds for use by the WBC for the 
budget period are subject to Federal rules and regulations, consistent 
with 2 CFR part 200. This does not prohibit WBC recipient organizations 
from raising funds separate and apart from the WBC program. Those funds 
that are not used as match and are not raised with WBC funds are not 
subject to the same recordkeeping requirements as they are not tied to 
the WBC Program.
    (b) If the recipient organization indicates difficultly in meeting 
the match requirement, it can request a reduction of the Federal award.
    (c) All sources of matching funds must be identified as 
specifically as possible with supporting documentation. Cash sources 
must be identified by name, amount, and account. Any additional 
requirements, specifications, or deliverables must be clearly 
identified in the budget narrative.
    (d) All applicant organizations must submit a certification of cash 
match and program income. This certification must be executed by an 
authorized official of the recipient organization and the WBC Program 
Director.
    (e) All matching funds, in addition to the Federal and program 
income funds, must be under the direct management of the WBC Program 
Director.
    (f) Program income generated by the WBC may be used as matching 
funds. All WBC program income must be accounted for within the WBC's 
semi-annual financial reports (unless otherwise specified in the 
cooperative agreement) and the WBC's general ledger as validation for 
the district office technical representative's mid-year and year-end 
review.
    (g) The Grants Management Specialist will determine whether 
matching funds and cash match set forth in the budget proposal are 
sufficient to recommend the proposal for funding.
    (h) When applied to a WBC project through a budget proposal, all 
funds for use by the WBC for the budget period

[[Page 83732]]

are subject to Federal rules and regulations and must be used solely 
for the WBC project.
    (i) The following will not be considered as sources of matching 
funds for the WBC:
    (1) Uncompensated student labor;
    (2) SCORE, SBA, or other SBA resource partners;
    (3) Federal funds other than Community Development Block Grant 
(CDBG) funds. CDBG funds may be used to match WBC grants where the WBC 
project activities are consistent with the authorized CDBG activities, 
and are identified either in the consolidated plan of the CDBG grantee 
or in the agreement between the CDBG grantee and the WBC recipient of 
the funds;
    (4) Funds, in-kind contributions (third party), or indirect costs 
used as match for other programs, not solely dedicated to the WBC 
program, or under its control; and
    (5) Funds or other resources provided for an agreed upon scope of 
work inconsistent with the authorized activities of the WBC program.


Sec.  131.540  Program Income and Fees.

    (a) Program income, including any interest earned on program 
income, may only be used for authorized purposes and in accordance with 
the cooperative agreement. Program income may be used as matching funds 
and, when expended, is counted towards the cash match requirement of 
the award. Program income must be used to expand the quantity or 
quality of services, and for resources or outreach provided by the WBC 
project.
    (b) Unused program income may be carried over to the subsequent 
budget period by the WBC. The WBC must report the consolidated program 
income sources and uses.
    (c) A WBC may charge clients a reasonable fee for services, 
including items such as the costs of training and counseling provided 
by the WBC (sponsored or cosponsored), the sale of books, and the 
rental of equipment or space. Any fees so generated will constitute 
program income, and such fees must not restrict access to any services 
for economically disadvantaged entrepreneurs.


Sec.  131.550   Budget Justification.

    (a) General. The WBC Program Director or non-federal entity finance 
person will prepare and submit the budget justification for the 
upcoming program/budget period for review by the SBA as part of its 
application package pursuant to the applicable program announcement. 
Worksheets are provided by the Office of Women's Business Ownership for 
this purpose.
    (b) Audit Expenses. Audit expenses may not be charged to the grant 
as a direct (Federal or non-Federal) expense. Audit expenses may only 
be charged as an indirect expense. See 2 CFR 200.425.
    (c) Indirect Costs. If the budget includes indirect costs and the 
recipient organization has never had an approved indirect rate 
agreement issued by the cognizant agency for indirect costs, the 
recipient organization may utilize a de minimis rate of 10 percent of 
modified total direct cost (to include Federal and non-Federal) 
indefinitely or until the recipient organization chooses to negotiate 
for a rate, which it may apply to do at any time through its cognizant 
agency for audit. This rule does not apply to organizations that have 
an expired indirect cost rate agreement. See 2 CFR 200.414. If the 
Applicant or recipient organization waives all indirect costs, then 100 
percent of the project funds must be allocated to program delivery. The 
recipient organization may then count any indirect costs to which it 
would otherwise have been entitled as matching contributions.
    (d) Option Year Work Plan and Budgets. (1) In Its proposal, the 
recipient organization will include its budget estimate of Federal 
funds needed for the balance of the project period using the SF-424A, 
Section E, as indicated by the specific program announcement.
    (e) Salaries. (1) Salaries for WBC Program Directors should be 
comparable with salaries paid to individuals in similar positions in 
other states or regions with similarly-sized programs, 
responsibilities, and authority.
    (2) Salaries for all other positions within the WBC should be based 
upon level of responsibility, and should be comparable to salaries for 
similar positions in the area served by the WBC.
    (f) Equipment. In accordance with SBA policy, expenditures for 
equipment are not a permitted expense under the WBC project. Equipment 
is defined as any item of valued at $5000 or more. See 2 CFR 200.33.
    (g) Travel. (1) All travel must be separately identified in the 
proposed budget under the following categories: planned travel within 
the area of service and planned travel outside of the area of service. 
Travel outside of the WBC area of service is considered a distance 
beyond 50 miles of the stated area of service proposed in the recipient 
organization's annual budget submission, as defined in 2 CFR 200.474.
    (2) Transportation costs must be justified in writing, including 
the estimated cost, purpose of travel, number of persons traveling, and 
the benefit to be derived by the small business community from the 
proposed travel.
    (3) A request to include any travel outside of the WBC's area of 
service that was not included in the approved budget must be submitted 
to SBA through the district office technical representative for OWBO 
prior approval on a case-by-case basis.


Sec.  131.560  Restricted and Prohibited Costs.

    SBA prohibitions are consistent with those set forth in 2 CFR part 
200.
    (a) A WBC may not use project funds as collateral for a loan, 
assign an interest in them, or use them for any other such monetary 
purpose.
    Project funds found to be used in violation of these restrictions 
may be cause for termination, suspension, or non-renewal of the 
cooperative agreement.


Sec.  131.570  Payments and Reimbursements.

    (a) Advancement and reimbursement of Federal funds to WBCs from the 
SBA are accomplished electronically. Detailed instructions for the WBCs 
will be included in the annual cooperative agreement.
    (b) Advancement and reimbursement requests allow for quarterly draw 
down of funds required to meet the estimated or actual quarterly 
Federal share of WBC expenses.
    (c) For guidance regarding interest earned on advances of Federal 
funds, See 2 CFR 200.305 (b)(7) through (9).
    (d) If there is a determination that an overpayment of Federal 
funds to a WBC has been made, the overpayment amount will be due and 
payable to the agency within 30 days of written notice to the WBC.


Sec.  131.600  Reports.

    (a) General. The recipient organization will submit consolidated 
performance and financial reports for the WBC to the SBA for review. 
These reports will reflect actual WBC activity and accomplishments 
pertinent to the budget periods. Report formats and proper recipients 
will be specified in the annual program announcement and cooperative 
agreement.
    (b) Frequency.
    In each budget period and unless otherwise instructed in 
correspondence from the Office of Women's Business Ownership, the 
recipient organization of the WBC project must submit semi-annual 
programmatic and financial reports no later than 30 calendar days after 
each six-month reporting period, as specified in the program 
announcement.

[[Page 83733]]

    (c) Electronic Data Reports. Unless otherwise instructed in 
correspondence from the Office of Women's Business Ownership, and 
consistent with the notice of award, WBC Program Directors are 
responsible for reporting counseling and training records in the format 
and frequency designated in the program announcement. WBC Program 
Directors must ensure that the required data is submitted to SBA within 
the timeframe stipulated by the cooperative agreement and that the data 
is accurate and complete.
    (d) Performance Reports. (1) The semi-annual performance report 
shall address, in a brief narrative, the WBC's major activities and 
objectives achieved during the six-month period. The reports must 
include a discussion on the progress toward achieving those objectives 
submitted in its proposal.
    (2) The final performance report must also include a brief overall 
summary of effort expended to deliver the core services in the 
cooperative agreement for the full budget period. A discussion of 
performance measurements achieved as well as an explanation of those 
objectives or measurements not met should be included. The performance 
report should include a brief summary of the activities, events or 
achievements by reportable category with an accompanying management 
analysis.
    (e) Financial Reports. The recipient organization must provide all 
semi-annual financial reports to SBA as required by the program 
announcement, the cooperative agreement and in accordance with 2 CFR 
part 200. These reports must have the signatures of both the WBC 
Program Director and the recipient organization's financial 
representative. To ensure that expenditures are proper and in 
accordance with the terms and conditions of the notice of award and 
approved project budgets, final fiscal reports or requests for payment 
under the cooperative agreement must include the certification required 
by 2 CFR 200.415.


Sec.  131.700  Oversight of the WBC Program.

    (a) The AA/Office of Women's Business Ownership will monitor the 
WBC's performance and its ongoing operations under the cooperative 
agreement to determine if the WBC is making effective and efficient use 
of program funds, in compliance with applicable law and other 
requirements, for the benefit of the small business community.
    (b) The AA/Office of Women's Business Ownership may revoke 
delegated authority of oversight responsibilities at any time it is 
deemed necessary and will notify the recipient organization of such a 
change in a timely manner.


Sec.  131.710  SBA Review Authority.

    Site Reviews/Visits. The SBA district office, or a contractor on 
its behalf, will coordinate with, and provide written notice to the WBC 
Program Director that biannual periodic programmatic and financial 
reviews/visits to the recipient organization will be conducted. The 
SBA's district office personnel will inspect WBC records and client 
files to analyze and assess WBC activities, and, if necessary, to make 
recommendations for improved service delivery. In addition, the SBA 
Office of Women's Business Ownership, or a contractor on its behalf, 
may conduct periodic site reviews.


Sec.  131.720  Audits, Examinations and Investigations.

    (a) General Audits. The SBA may conduct WBC audits. (1) Audits of a 
recipient organization will be conducted pursuant to the Single Audit 
Act of 1984 (if applicable) and applicable Office of Management and 
Budget circulars.
    (2) The SBA Office of Inspector General or its agents may inspect, 
audit, investigate or otherwise review the WBC as the Inspector General 
deems appropriate.''
    (b) Financial Examinations. The WBC will have periodic financial 
examinations conducted by either the SBA or an independent contracted 
firm. WBCs, in accordance with the program announcement and the 
cooperative agreement, must comply with all requirements set forth for 
such purposes. (1) Post-Award Examination. Applicant organizations 
proposing to enter the WBC program for the first time shall be subject 
to a post-award examination or sufficiency review conducted by or 
coordinated with the SBA Financial Examination Unit or designee. As 
part of the financial examination, the financial examiner will verify 
the adequacy of the accounting system, the suitability of proposed 
costs and the nature and sources of proposed matching funds.
    (2) The examinations by the SBA will not serve as a substitute for 
audits required of Federal recipients under the Single Audit Act of 
1984, 31 U.S.C Chapter 75 or applicable Office of Management and Budget 
guidelines (see 2 CFR part 200), nor will such internal reviews serve 
as a substitute for audits to be conducted by the SBA Office of the 
Inspector General under authority of the Inspector General Act of 1978, 
as amended.
    (c) Investigations. SBA may conduct investigations to determine 
whether any person or entity has engaged in acts or practices 
constituting a violation of the Small Business Act, 15 U.S.C. 656, any 
rule, order or regulation, or any other applicable Federal law.
    (d) Audited Financial Statements. Audited financial statements 
shall be required of all WBCs in a new initial phase period of 
performance. Thereafter, the SBA reserves the right to require a 
recipient organization to submit audited financial statements as a 
condition of a cooperative agreement when the results of a financial or 
programmatic examination demonstrate significant financial issues or 
significant internal control issues.


Sec.  131.800  Cooperative Agreement and Contracts.

    (a) General. A recipient organization will incorporate into its WBC 
the applicable provisions of the cooperative agreement.
    (b) Goals and Milestones. (1) The SBA district office and the WBC 
Program Director will negotiate the goals, milestones, and activities 
for the cooperative agreement annually. Agency loan goals may not be 
negotiated or incorporated into the cooperative agreement without the 
prior written approval of the SBA Administrator.
    (2) Failing to meet the goals and milestones of the cooperative 
agreement may result in suspension, termination, non-renewal in 
accordance with Sec.  131.830.
    (c) Procurement Policies and Procedures. (1) The WBC may contract 
out for certain functions as permitted by the terms and conditions of 
the cooperative agreement, but may not expend more than 49 percent of 
the total project funds on contractors and consultants in conducting 
the project.
    (2) The SBA may direct or otherwise approve any obligations or 
expenditures by recipient organizations, including those related to 
vendors or contractors, as deemed appropriate by the agency.


Sec.  131.810  Other Federal Grants.

    (a) Grants from Other Agencies. A recipient organization may enter 
into a contract or grant with another Federal department or agency to 
provide specific assistance to small business concerns in accordance 
with the following conditions:
    (1) Any additional contract or grant funds obtained from a Federal 
source may not be used as matching funds for the WBC project, with the 
exception of Community Development Block Grant funds.
    (2) Federal funds from the SBA and match expenditures reported to 
the SBA

[[Page 83734]]

under the cooperative agreement may not be used or reported as match 
for another Federal program.
    (3) The SBA does not impose any requirements for additional 
matching funds for those recipient organizations managing other Federal 
contracts.
    (4) The WBC must report these other Federal funds and any 
associated matching funds separately to the SBA.
    (b) RISE After Disaster Grants. In accordance with 15 U.S.C. 
636(b)(12), SBA may provide financial assistance to a Women's Business 
Center, Small Business Development Center under 13 CFR part 130, SCORE, 
or any proposed consortium of such individuals or entities to spur 
disaster recovery and growth of small business concerns located in an 
area for which the President has declared a major disaster. (1) The 
Administrator, in cooperation with the recipients of financial 
assistance under this paragraph shall establish metrics and goals for 
performance of grants, contracts, and cooperative agreements under this 
paragraph, which shall include recovery of sales, recovery of 
employment, reestablishment of business premises and establishment of 
new small-business concerns.
    (2) Matching funds are not required for any grant, contract or 
cooperative agreement under this paragraph. (See section 7(b) of the 
Small Business Act 15 U.S.C. 636 (b)).


Sec.  131.820  Revisions and Amendments to Cooperative Agreements.

    Requests for Revisions. During a project period, the WBC may 
request, in writing, one or more revisions to the cooperative 
agreement. The request must be submitted by the recipient 
organization's authorized official. Revisions will normally relate to 
changes in scope, work or funding during the specified budget period. 
No proposed revision will be implemented without the prior approval 
from the Office of Women's Business Ownership Grants Management 
Officer. Revisions that require an amendment include the prior approval 
items listed in 2 CFR 200.308 and 200.407.


Sec.  131.830  Suspension, Termination, and Non-renewal.

    (a) General. After entering into a cooperative agreement with a 
recipient organization, the SBA may take, as it deems appropriate, any 
of the following enforcement actions based upon one or more of the 
circumstances listed in (b) below:
    (1) Suspension. The SBA may suspend a cooperative agreement with a 
recipient organization at any point. A decision to suspend a 
cooperative agreement with a recipient organization is effective 
immediately as of the date of the notice of suspension. The period of 
suspension will begin on the date of the notice of suspension and will 
last no longer than 6 months. At the end of the period of suspension, 
or at any point during that period, the SBA will either reinstate the 
cooperative agreement or commence an action for termination or non-
renewal.
    The notice of suspension will recommend that the recipient 
organization cease work on the project immediately. The SBA is under no 
obligation to reimburse any expenses incurred by a recipient 
organization while its cooperative agreement is under suspension. Where 
the SBA decides to lift a suspension and reinstate a recipient 
organization's cooperative agreement, the agency may, at its 
discretion, choose to make funds available to reimburse a recipient 
organization for some or all of the expenses it incurred in furtherance 
of project objectives during the period of suspension. However, there 
is no guarantee that the agency will elect to accept such expenses and 
recipient organizations incurring expenses while under suspension do so 
at their own risk.
    (2) Termination. The SBA may terminate a cooperative agreement with 
a recipient organization at any point. A decision to terminate a 
cooperative agreement is effective immediately as of the date of the 
notice of termination. A recipient organization may not incur further 
obligations under the cooperative agreement after the date of 
termination unless it has been expressly authorized to do so in the 
notice of termination.
    Funds remaining under the cooperative agreement may be made 
available by the SBA to satisfy financial obligations properly incurred 
by the recipient organization prior to the date of termination. Award 
funds will not be available for obligations incurred subsequent to the 
effective date of termination unless expressly authorized under the 
notice of termination. A recipient organization that has had its 
cooperative agreement terminated will have 90 days to submit final 
closeout documents as instructed by the SBA.
    (3) Non-Renewal. The SBA may elect not to renew a cooperative 
agreement with a recipient organization at any point. In undertaking a 
non-renewal action, the SBA may either decline to accept or consider 
any application for renewal the organization submits, or the agency may 
decline to exercise any option years remaining under the cooperative 
agreement. A recipient organization that has had its cooperative 
agreement non-renewed may continue to conduct project activities and 
incur allowable expenses until the end of the current budget period.
    Funds remaining under a non-renewed cooperative agreement may be 
utilized to satisfy financial obligations the recipient organization 
properly incurred prior to the end of the budget period. Award funds 
will not be available for obligations incurred subsequent to the end of 
the current budget period. A recipient organization that has had its 
cooperative agreement non-renewed will have until the end of the 
current budget period or 120 days, whichever is longer, to conclude its 
operations and submit close-out documents as instructed by the SBA.
    (b) Causes. The SBA may suspend, terminate, or not renew a 
cooperative agreement with a recipient organization for cause. Cause 
may include, but is not limited to, the following:
    (1) Non-performance;
    (2) Poor performance;
    (3) Unwillingness or inability to implement changes to improve 
performance;
    (4) Willful or material failure to comply with the terms of the 
cooperative agreement, including relevant OMB circulars;
    (5) Conduct reflecting a lack of business integrity or honesty on 
the part of the recipient organization, the WBC Program Director, or 
other significant employee(s), which has not been properly addressed;
    (6) A conflict of interest on the part of the recipient 
organization, the WBC Program Director, or other significant employees 
causing real or perceived detriment to a small business concern, a 
contractor, the WBC or the SBA;
    (7) Improper use of federal funds;
    (8) Failure of a WBC to consent to audits, examinations, or to 
maintain required documents or records;
    (9) Failure to implement recommendations from the audits or 
examinations within 30 days of their receipt;
    (10) Failure of the WBC Program Director to work at the WBC on a 
100 percent full-time basis on the WBC project;
    (11) Failure to promptly suspend or terminate the employment of a 
WBC Program Director, or other significant employee upon receipt of 
knowledge or written information by the recipient organization and/or 
the SBA indicating that such individual has engaged in conduct which 
may result or has resulted in a criminal conviction or civil judgment 
which would cause the public

[[Page 83735]]

to question the WBC's integrity. In making the decision to suspend or 
terminate such an employee, the recipient organization must consider 
such factors as the magnitude and repetitiveness of the harm caused and 
the remoteness in time of the behavior underlying any conviction or 
judgment;
    (12) Failure to maintain adequate client service facilities or 
service hours;
    (13) Any other action that the SBA believes materially and 
adversely affects the operation or integrity of a WBC or the WBC 
program.
    (c) Procedures. The same procedures will apply regardless of 
whether a cooperative agreement with a recipient organization is being 
suspended, terminated or non-renewed by the SBA. (1) Taking Action. 
When the Office of Women's Business Ownership has reason to believe 
there is cause to suspend, terminate or non-renew a cooperative 
agreement with a recipient organization (either based on its own 
knowledge or upon information provided to it by other parties), the AA/
Office of Women's Business Ownership may undertake such an enforcement 
action by issuing a written notice of suspension, termination, or non-
renewal to the recipient organization.
    (2) Notice Requirements. Each notice of suspension, termination, or 
non-renewal will set forth the specific facts and reasons for the AA/
Office of Women's Business Ownership's decision and will include 
reference to the appropriate legal authority. The notice will also 
advise the recipient organization that it has the right to request an 
administrative review of the decision to suspend, terminate or non-
renew its cooperative agreement in accordance with the procedures set 
forth in 131.830 (d). The notice will be transmitted to the recipient 
organization on the same date it is issued by both U.S. Mail and 
facsimile or as an email attachment.
    (3) Relationship to Government-Wide Suspension and Debarment. A 
decision by the SBA to suspend, terminate or not renew a WBC 
cooperative agreement does not constitute a nonprocurement suspension 
or debarment of a recipient organization under E. O. 12549 and SBA's 
implementing regulations (2 CFR part 2700). However, a decision by the 
SBA to undertake a suspension, termination, or non-renewal enforcement 
action with regard to a particular WBC cooperative agreement does not 
preclude or preempt the agency from also taking action to suspend or 
debar a recipient organization for purposes of all Federal procurement 
and/or nonprocurement opportunities.
    (d) Administrative Review. Any recipient organization that has had 
its cooperative agreement suspended, terminated, or non-renewed has the 
right to request an administrative review of the SBA enforcement 
action. Administrative review of WBC enforcement actions will be 
conducted by the Associate Administrator for the Office of 
Entrepreneurial Development (AA/OED). (1) Format. There is no 
prescribed format for a request for administrative review of an SBA 
enforcement action. While a recipient organization has the right to 
retain legal counsel to represent its interests in connection with an 
administrative review, it is under no obligation to do so. Formal 
briefs and other technical forms of pleading are not required. However, 
a request for administrative review of an SBA enforcement action must 
be in writing, should be concise and logically arranged, and must at a 
minimum include the following information:
    (i) Name and address of the recipient organization;
    (ii) Identification of the relevant SBA office/program (i.e., 
Office of Women's Business Ownership/Women's Business Center Program);
    (iii) Cooperative agreement number;
    (iv) Copy of the notice of suspension, termination, or non-renewal;
    (v) Statement regarding why the recipient organization believes the 
SBA's actions were arbitrary, capricious, an abuse of discretion, and/
or otherwise not in accordance with the law;
    (vi) Identification of the specific relief being sought (e.g., 
lifting of the suspension);
    (vii) Statement as to whether the recipient organization is 
requesting a hearing and, if so, the reasons why it believes a hearing 
is necessary; and
    (viii) Copies of any documents or other evidence the recipient 
organization believes support its position.
    (2) Service. Any recipient organization requesting administrative 
review of an SBA enforcement action must submit copies of its request 
(including any attachments) to all of the following parties:

    Associate Administrator for the Office of Entrepreneurial 
Development, U.S. Small Business Administration, 409 Third St. SW., 
6th Floor, Washington, DC 20416. Email: [email protected].
    Assistant Administrator for the Office of Women's Business 
Ownership, U.S. Small Business Administration, 409 Third St. SW., 
6th Floor, Washington, DC 20416. Email: [email protected].
    Associate General Counsel for Procurement Law, U.S. Small 
Business Administration, 409 Third St. SW., 5th Floor, Washington, 
DC 20416. Facsimile number: 202-205-6846.

    (e) Timeliness. In order to be considered timely, the AA/OED must 
receive a recipient organization's request for administrative review 
within 30 days of the date of the notice of suspension, termination, or 
non-renewal. Any request for administrative review received by the AA/
OED more than 30 days after the date of the notice of suspension, 
termination, or non-renewal will be considered untimely and will 
automatically be rejected without being considered.
    In addition, if the AA/OED does not receive a request for 
administrative review within the 30-day deadline, then the decision by 
the AA/Office of Women's Business Ownership to suspend, terminate, or 
non-renew a recipient organization's cooperative agreement will 
automatically become the final agency decision on the matter.
    (f) Standard of Review. In order to have the suspension, 
termination, or non-renewal of a cooperative agreement reversed on 
administrative review, a recipient organization must successfully 
demonstrate that the SBA enforcement action was arbitrary, capricious, 
an abuse of discretion, and/or otherwise not in accordance with the 
law.
    (g) Conduct of the Proceeding. Each party must serve the opposing 
party with copies of all requests, arguments, evidence, and any other 
filings it submits pursuant to the administrative review. Within 30 
days of the AA/OED receiving a request for administrative review, the 
AA/OED must also receive the SBA's arguments and evidence in defense of 
its decision to suspend, terminate, or non-renew a recipient 
organization's cooperative agreement. If the SBA fails to provide its 
arguments and evidence in a timely manner, the administrative review 
will be conducted solely on the basis of the information provided by 
the recipient organization.
    After receiving the SBA's response to the request for 
administrative review or the passage of the 30-day deadline for filing 
such a response, the AA/OED will take one or more of the following 
actions, as applicable:
    (i) Notify the parties whether she/he has decided to grant a 
request for a hearing;
    (ii) direct the parties to submit further arguments and/or evidence 
on any issues which she/he believes require clarification;
    (iii) notify the parties that she/he has declared the record to be 
closed and therefore she/he will refuse to admit any further evidence 
or argument.


[[Page 83736]]



The AA/OED will only grant a request for a hearing if she/he concludes 
that there is a genuine dispute as to a material fact that cannot be 
resolved except by the taking of testimony and the confrontation of 
witnesses. If the AA/OED grants a request for a hearing, she/he will 
set the time and place for the hearing, determine whether the hearing 
will be conducted in person or via telephone, and identify which 
witnesses will be permitted to give testimony.
    Within 10 calendar days of declaring the record to be closed, the 
AA/OED will provide all parties with a copy of her/his written decision 
on the merits of the administrative review.
    (h) Evidence. The recipient organization and the SBA each have the 
right to submit whatever evidence they believe is relevant to the 
matter in dispute. No form of discovery will be permitted unless a 
party has made a substantial showing, based upon credible evidence and 
not mere allegation that the other party has acted in bad faith or 
engaged in improper behavior.
    (i) Decision. The decision of the AA/Office of Entrepreneurial 
Development will be effective immediately as of the date it is issued. 
The decision of the AA/OED will represent the final agency decision on 
all matters in dispute on administrative review. No further relief may 
be sought from or granted by the agency. If the AA/OED determines that 
the SBA's decision to suspend, terminate, or non-renew a cooperative 
agreement was arbitrary, capricious, an abuse of discretion, and/or 
otherwise not in accordance with the law, she/he will reverse the 
agency's enforcement action and direct the SBA to reinstate the 
recipient organization's cooperative agreement.
    Where an enforcement action has been reversed on administrative 
review, the SBA will have no more than 10 calendar days to implement 
the AA/OED's decision. However, to the extent permitted under the 
applicable OMB circulars, the SBA reserves the right to impose such 
special conditions in the recipient organization's cooperative 
agreement as it deems necessary to protect the government's interests.


Sec.  131.840  Dispute Procedures.

    (a) Financial and Programmatic Disputes. (1) A recipient 
organization wishing to resolve a dispute regarding a financial or 
programmatic matter other than suspension, termination, or non-renewal 
of its award must submit a written statement describing the subject of 
the dispute, along with any relevant documentation, to the Chairman of 
the Grants Appeal Committee.
    (2) If the recipient organization receives an unfavorable decision 
from the SBA, it may file an appeal with the AA/OED within 30 calendar 
days from receipt of the decision.
    (3) The AA/Office of Entrepreneurial Development may request 
additional information or documentation from the recipient organization 
at any stage of the proceedings. The response to the request for 
additional information must be provided, in writing, to the AA/OED 
within 15 calendar days of receipt of the request. The AA/OED will 
transmit a written decision to the recipient organization within 15 
calendar days of receipt of the appeal, or within 15 calendar days of 
receipt of additional information requested.
    (4) If the recipient organization receives an unfavorable decision 
from the AA/OED, it may make a final appeal to the SBA Grants and 
Cooperative Agreements Appeals Committee (the ``committee''). The final 
appeal to the committee must be filed within 30 calendar days of the 
date of receipt of the AA/Office of Entrepreneurial Development's 
written decision. Copies of the appeal must also be sent to the AA/
Office of Women's Business Ownership and the OWBO grants management 
specialist. If the recipient organization elects not to file an appeal 
with the committee, the decision of the AA/Office of Entrepreneurial 
Development becomes the final decision. (See paragraph (a)(3) of this 
section).
    (5) Requests for an appeal before the committee will not be granted 
unless the agency determines there are substantial material facts in 
dispute. Legal briefs and other technical forms of pleading are not 
required. Final appeals must be in writing and contain all of the 
following:
    (i) Name and address of the recipient organization;
    (ii) Name and address of the appropriate SBA district office(s);
    (iii) The cooperative agreement number, including amendments;
    (iv) A statement of the grounds for appeal, with reasons why the 
appeal should be sustained;
    (v) The specific relief desired on appeal; and
    (vi) If an appeal is requested, a statement of the material facts 
that are substantially in dispute.
    (6) The committee may request additional information or 
documentation from the recipient organization at any stage in the 
proceedings. The recipient organization's response to the committee's 
request for additional information or documentation must be submitted, 
in writing, to the committee within 15 calendar days of receipt of the 
request. In the event that the recipient organization fails to follow 
the procedures specified in paragraph (a)(5) of this section, the 
committee may dismiss the appeal by a written order.
    (7) If a request for an appeal is granted, the committee will 
provide the recipient organization with written instructions, and will 
afford the parties an opportunity to present their positions to the 
committee in writing.
    (8) The chairperson of the committee, with advice from the SBA 
Office of General Counsel, will issue a final written decision within 
30 calendar days of receipt of all information or inform the recipient 
organization that additional time to issue a decision is necessary. A 
copy of the decision will be transmitted to the recipient organization, 
with copies to the AA/Office of Women's Business Ownership, the grants 
management specialist, and the SBA district office.
    (9) At any time within 120 days of the end of the budget period, 
the recipient organization may submit a written request to use an 
expedited dispute appeal process. The committee, by an affirmative vote 
of a majority of its total membership, may expedite the appeals process 
to attain final resolution of a dispute before the issuance date of a 
new cooperative agreement.


Sec.  131.850   Closeout procedures.

    (a) General. Closeout procedures are used to ensure that the WBC 
program funds and property acquired or developed under the WBC 
cooperative agreement are fully reconciled and transferred seamlessly 
between the recipient organization and other Federal programs. The 
responsibility of conducting closeout procedures is vested with the 
recipient organization whose cooperative agreement is being 
relinquished, terminated, non-renewed or suspended.
    (b) Responsibilities. (1) Recipient Organizations. When a WBC 
cooperative agreement is not being renewed or a WBC is terminated, 
regardless of cause, the recipient organization will address the 
following in their closeout process and perform the necessary 
inventories and reconciliations prior to submitting the final annual 
financial report.
    (i) An inventory of WBC property must be compiled, evaluated, and 
all property and the aggregate of usable supplies and materials 
accounted for in this inventory.

[[Page 83737]]

    (ii) Program income balances will be reconciled and unused WBC 
program income which is not used as match or cannot otherwise be used 
to offset legitimate expenditures of the WBC, must be returned to SBA.
    (iii) Client counseling and training records, paper and electronic, 
will be compiled to facilitate an SBA program closeout review.
    (iv) Financial records will be compiled to facilitate a closeout of 
the SBA financial examination.
    (2) SBA. Upon receipt of the final annual financial report from a 
non-renewing or terminated recipient organization, the AA/OWBO will 
issue disposition instructions to the former recipient organization.
    (c) Final disposition. (1) The final financial status report from 
the recipient organization must include the information identified in 
the inventory process and identify any WBC program income collected for 
services provided.
    (2) The AA/OWBO will issue written disposition instructions to the 
recipient organization providing:
    (i) The name and address of the entity or agency to which property 
and program income must be transferred;
    (ii) A date by which the transfer must be completed;
    (iii) Actions to be taken regarding property and WBC program 
income;
    (iv) Actions to be taken regarding WBC program records such as 
client and training files; and
    (v) Authorization to incur costs for accomplishing the transfer. 
Such costs may, when authorized, be applied to residual WBC program 
income, or Federal or matching funds.


Sec.  131.900  Ensuring Client Privacy.

    (a) Women's Business Centers, including their contractors and other 
agents, are not permitted to disclose the name, address, or telephone 
number of individuals or small businesses that obtain any type of 
assistance from the program, hereafter referred to as ``client contact 
data,'' to any person or entity other than the WBC, without the consent 
of the Client, except in instances where:
    (1) Court orders require the Administrator to do so in any civil or 
criminal enforcement action initiated by a Federal or State agency;
    (2) the Administrator considers such a disclosure to be necessary 
for the purpose of conducting a financial audit of a center, not 
including those required under section 130.830, as determined on a 
case-by-case basis when formal requests are made by a Federal or State 
agency. Such formal requests must justify and document the need for 
individual client contact and/or program activity data to the 
satisfaction of the Administrator;
    (3) the agency requires client contact data to directly survey WBC 
clients.
    (b) Women's Business Centers must provide an opportunity for a 
client to opt-in to allow the SBA to obtain client contact data. The 
SBA may use the permitted client contact data only to conduct surveys 
and studies that help stakeholders better understand how the services 
the client received affect their business outcomes over time. These 
studies would include, but not be limited to:
    (1) Program evaluation and performance management studies;
    (2) Measuring the effect and economic or other impact of agency 
programs;
    (3) Assessing public and WBC partner needs;
    (4) Measuring customer satisfaction;
    (5) Guiding program policy development;
    (6) Improving grant-making processes; and
    (7) Other areas the SBA determines would be valuable to strengthen 
the WBC program and/or enhance support for WBC clients.
    (c) Women's Business Centers may not deny access to services to 
clients solely based on their refusal to provide consent as referenced 
in this section.
    (d) All data collections will adhere to 5 CFR 1320. The collection 
standards and oversight will be coordinated with SBA Office of General 
Counsel and approved by OMB in compliance with the Paperwork Reduction 
Act. That process is designed to reduce, minimize and control burdens 
and maximize the practical utility and public benefit of the 
information created, collected, disclosed, maintained, used, shared and 
disseminated.
    (e) Any reports or studies on program activity produced by the 
Administrator and/or a WBC, including its contractors and other agents, 
may not disseminate client contact data and must only report data in 
the aggregate. Individual client contact data will not be disclosed in 
any way that could individually identify a client.
    (f) The Administrator and the WBC, including its contractors and 
other agents, must obtain consent from the client prior to publishing 
media or reports that identify an individual client.
    (g) This section does not restrict the agency in any way from 
access and use of program performance data.

Maria Contreras-Sweet,
Administrator.
[FR Doc. 2016-27376 Filed 11-21-16; 8:45 am]
 BILLING CODE 8025-01-P