Small Business Administration: Better Oversight of SBIC Programs Could
Reduce Federal Losses (Testimony, 09/28/95, GAO/T-RCED-95-285).

Pursuant to a congressional request, GAO reviewed the Small Business
Administration's (SBA) actions and initiatives to improve the recovery
of federal funds from the liquidation of small business investment
companies (SBIC) and specialized small business investment companies
(SSBIC), focusing on: (1) weaknesses in SBA oversight and management;
(2) SBA implementation of the stock repurchase program; and (3) the
placement of the examination function. GAO noted that: (1) recent SBA
actions and legislative changes may help reduce future program losses,
since licensed firms must demonstrate their experience in the area they
plan to invest, have more private capital, and have SBA as its main
creditor; (2) weaknesses in SBA oversight and management continue to
place federal funds at risk; (3) periodic examinations help identify
violations that often go uncorrected from one examination cycle to the
next; (4) SBA expects to lose $304.4 million from the 189 firms
currently in liquidation; (5) SBA does not have a strategy to target its
oversight efforts or ensure more accurate asset valuation; (6)
twenty-one SSBIC have completed a stock repurchase and SBA has received
$17.7 million from its initial investment of $50.3 million in the firms;
and (7) although there are no indications of efforts to restrict or
influence examinations, the organizational placement of the examination
function may impede SBA ability to pursue corrective actions.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-95-285
     TITLE:  Small Business Administration: Better Oversight of SBIC 
             Programs Could Reduce Federal Losses
      DATE:  09/28/95
   SUBJECT:  Small business assistance
             Small business loans
             Small business investment companies
             Investment planning
             Securities
             Federal funds
             Losses
             Assets
IDENTIFIER:  SBA Three Percent Preferred Stock Repurchase Program
             SBA Specialized Small Business Investment Companies Program
             
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