Report Finds Flaws in Small Business Advocacy Office
by Katie Weatherford, 7/28/2014
According to a recent report by the Government Accountability Office (GAO), the Small Business Administration's Office of Advocacy has failed to develop and implement procedures necessary to ensure the office is effectively carrying out its mission of representing small businesses before federal agencies.
GAO’s findings highlight many of the concerns the Center for Effective Government addressed in a report last year, entitled Small Businesses, Public Health, and Scientific Integrity: Whose Interests Does the Office of Advocacy at the Small Business Administration Serve?. That report examined the Office of Advocacy’s involvement in the non-regulatory, scientific assessments of formaldehyde, styrene, and hexavalent chromium and concluded that the office's involvement was a significant and unwarranted expansion of its authority.
Consequently, we called on Congress to perform more rigorous oversight of the Office of Advocacy, starting with a request for GAO to conduct an investigation of the office’s activities.
GAO’s new report summarizes the findings of its investigation, which focused on three major areas of responsibility – the Office of Advocacy’s research, regulatory activities, and workforce planning practices. A more detailed discussion of these three findings follows:
1. Advocacy Does Not Have Controls in Place to Ensure the Quality of Its Research
GAO found three ways in which the Office of Advocacy does not currently have sufficient peer review policies in place to ensure the quality of the research products it distributes to the public.
GAO found three ways in which the Office of Advocacy does not currently have sufficient peer review policies in place to ensure the quality of the research products it distributes to the public. First, the Office of Advocacy has no written guidance on identifying peer reviewers, and thus does not comply with the Office of Management and Budget’s (OMB) recommendations that agencies select peer reviewers with necessary expertise and without conflicts of interest.
Second, the Office of Advocacy has not documented whether many of its recent research products have actually undergone peer review. In fact, GAO found that for 16 out of 20 research products it reviewed, “the Advocacy officials were unable to produce any documentation that peer reviews occurred.”
Third, for three influential studies conducted on behalf of the Office of Advocacy, the office failed to maintain records of the underlying data needed to verify the findings. For two of the studies, the Office of Advocacy also did nothing to “substantiate the quality of the regulatory cost estimates” provided. Notably, outside researchers have confirmed that the latest edition of one of the studies significantly and inaccurately inflate the costs of regulations. The Office of Advocacy has also previously criticized the flawed study, which industry think tanks and lobbyists repeatedly use to bash public protections on the national stage and pressure Congress to put forward dangerous anti-regulatory legislation.
2. Advocacy Fails to Document Its Regulatory Activities and Make Roundtable Information Publicly Available
GAO also found that the Office of Advocacy inconsistently documents its regulatory activities. The report points to a lack of any record retention policy that would require staff to document small business or related entities that the office consulted in preparing its comment letters. “[W]hen we asked Advocacy staff for documentation on the sources of the small business input referred to in a non- representative sample of 11 comment letters, they were unable to provide specific emails or notes of conversations,” GAO highlighted.
While we hope that the Office of Advocacy will fully implement the GAO’s recommendations to improve its operations, additional oversight will be necessary to ensure that the office is focused on actually representing small business interests in the federal rulemaking process.
As the Center for Effective Government emphasized in its 2013 report, GAO reiterated that Advocacy fails to document activities surrounding its roundtables: “Information gathered from the roundtables is used to inform Advocacy’s positions on issues related to small businesses and in comment letters, but Advocacy’s guidance contains no policies to document roundtable discussions.” Furthermore, the Office of Advocacy fails to publicize the agendas or presentations from the roundtables on its website. GAO concluded, “As a result Advocacy cannot demonstrate that it is always fully meeting its mission to foster two-way communication between small businesses and federal policymakers.”
3. Advocacy Lacks Workforce Planning Procedures
A third finding and recommendation in the report relates to the Office of Advocacy’s lack of workforce and succession planning activities. The report notes that the Office of Advocacy has not developed goals or objectives related to staff development and has not made efforts to plan for staff turnover. GAO’s major concern with Advocacy’s lax planning efforts is that “Advocacy is not in the best position to ensure that it has qualified staff to fill leadership and other key positions and a skilled workforce able to meet the demands of its mission on behalf of small businesses.”
A Way Forward: Greater Oversight and Accountability
According to the GAO report, the Office of Advocacy is already taking steps to make needed improvements in all three areas of concern. While we hope that the Office of Advocacy will fully implement the GAO’s recommendations to improve its operations, additional oversight will be necessary to ensure that the office is focused on actually representing small business interests in the federal rulemaking process.