Report is critical of SBA despite its efforts
The Small Business Administration says it has taken major steps since the hurricanes of August and September 2005 to improve the way it helps disaster victims rebuild their lives. But questions linger about whether the agency is prepared to handle storms on the scale of Katrina and Rita, which battered the Gulf Coast and caused nearly $118 billion in property damage.
The Small Business Administration says it has taken major steps since the hurricanes of August and September 2005 to improve the way it helps disaster victims rebuild their lives. But questions linger about whether the agency is prepared to handle storms on the scale of Katrina and Rita, which battered the Gulf Coast and caused nearly $118 billion in property damage.
James Rivera, deputy associate administrator of SBA's office of disaster assistance, bristles at suggestions that the agency is not prepared for another major disaster. He says the SBA has dramatically improved technology and streamlined the loan process to make it faster.
"It bothers me when I hear comments that we made it painful and chaotic, because we've really gone to extreme efforts to set up focus groups and to reengineer our whole process to make it more customer-friendly," he said.
Since 2005, the agency has been repeatedly criticized for its failures by Congress and government regulators.
In 2007, for example, Congress held hearings after several SBA loan officers said the agency's policies had resulted in the rejection or withdrawal of thousands of loans.
Former SBA loan officer Gale Martin and a group calling itself Second Wind - a coalition of business owners who had trouble landing SBA disaster loans after the hurricanes - urged Congress to force SBA to reconsider loans that were originally rejected or withdrawn.
After the hearings, Congress enacted the Small Business Disaster Response and Loan Improvement Act, which included 26 requirements to improve the agency, featuring three key goals:
Establish a program that would authorize private lenders to process disaster loans.
Create an expedited disaster-assistance business program.
Increase public awareness of SBA loans.
But a report issued just three months ago by the Government Accountability Office, which investigates for Congress, said the agency had fully implemented only 15 of the provisions. While the report said SBA had made progress, it noted that the agency stumbled in 2008 with flooding in the Midwest and in dealing with Hurricane Ike in Texas the same year. Loan applicants complained about "burdensome" amounts of paperwork and how long it took to get money - the same complaints raised repeatedly by Gulf Coast residents after the hurricanes of 2005.
Other problems remain, too.
"We found that while SBA conducts an annual customer-satisfaction survey, the agency does not appear to incorporate this feedback mechanism into its formal efforts to continually improve the application process. Furthermore, SBA does not appear to have a formal process for addressing identified problem areas and using information gained to improve the experience of future applicants," the GAO report said.
SBA officials say the agency is better, noting that it has reserve workers who join the agency's ranks after disasters.