Case Study: Small Business Community and Economic Development

Client(s)

The Community Economic Development program lies within the Office of Community Services (OCS), Administration for Children and Families (ACF), which is an Operating Division of the U.S. Department of Health and Human Services (HHS). The Division of Community Discretionary and Demonstration Programs (DCDDP), which is part of OCS, administers several discretionary grant programs including the Community Economic Development, Rural Community Development (RCD) and the Assets for Independence (AFI) programs. The CED program provides financial and technical assistance to Community Development Corporations, which are often CDFIs. The CED program encourages public-private partnerships that promote the development of business and employment opportunities for individuals and families whose income level does not exceed 125 percent of the federal poverty level and are residents of distressed communities.

  • Projects may include business start-ups, business expansions, small business loans, development of new products and services, and other newly undertaken physical and commercial activities.

  • Projects must result in the creation of new or expansion of businesses opportunities that will employ individuals with low-income. These opportunities aim to improve the quality of the economic and social environment of Temporary Assistance for Needy Families (TANF) recipients; residents with low-income, including displaced workers; individuals transitioning from the prison system into the community; at-risk youth; non-custodial parents, particularly those of children receiving TANF assistance; individuals residing in public housing; individuals who are homeless; and individuals with disabilities.

 

Challenge

 

The objective of this contract is to conduct on-site reviews, both programmatic and financial, of non-for-profit organizations that are Community Development Corporations and CDFIs which have received Community Economic Development funding. The on-site monitoring will observe program practices and review documents, both, programmatic and financial, to evaluate if procedures that grantees use in the creation and/or expansion of businesses and jobs that employ individuals with low-income, follow the Federal statute, regulations, and policies. Also assure that the program and financial integrity of the grantee during such monitoring, including internal controls and procedures for preventing, detecting, reporting, and resolving fraud, waste, and abuse.

 

During this review, BCT identifies material or significant weaknesses in programmatic and financial systems, including procurement and property management, which may hinder the intended outcome of the OCS project for which the grant is awarded. Outcomes may include decisions not to continue funding of existing grants in those instances where the grantee has not clearly and convincingly demonstrated satisfactory progress in accomplishing stated goals and objectives or deny funding of new requests for funding to organizations where reviews have shown significant organizational deficiencies.

 

Scope of Services

 

BCT’s current scope of work includes the following: conduct site visits and program monitoring reviews of grantees across the country; observe, document, and assess processes and procedures that should result in the creation of jobs for low-income individuals, or creation and/or expansion of a business; identify material or significant weaknesses in programmatic, financial, personnel, procurement, travel, budget, or property systems that might hinder the intended outcome of the OCS project for which the grant is awarded; assist OCS in establishing internal controls to provide assurances that grantees are effectively and efficiently in compliance with the applicable laws and regulations.

 

Results

 

BCT is responsible for collaborating with HHS throughout the fiscal year on which grantees require site visits, refining assessment tools, implementing the assessment, and summarizing the outcomes, and writing recommendations on how to address problems through training and technical assistance methods. Moreover, this project demonstrates BCT’s subject matter expertise providing training to small businesses – women-owned, minority-owned, veteran-owned, and other diverse-owned businesses across the country to promote community development, economic development, job creation, and business growth.

Additional Outcomes:

The following provides an overview of all 212 CED projects that were awarded, in progress, or completed:

  • New Grants Awarded: 38

  • Grants In Progress: 115

  • Businesses Created (Grants in Progress): 434

  • Jobs Created (Grants in Progress): 1,794

  • Funds Leveraged (Grants in Progress): $473,712,496

  • Completed Grants: 59

  • Businesses Created (Completed Grants): 324

  • Jobs Created (Completed Grants): 2,681

  • Funds Leverages (Completed Grants): $188,679,785

  • Total Number of Grants (Both): 212

  • Total Businesses Created (Both): 758

  • Total Jobs Created (Both): 4,475

  • Total Funds Leveraged (Both): $662,392,281

 

Overall, CED grants created or expanded 758 businesses, created 4,475 jobs, and leveraged over $662 million in non-CED funds for their projects. Ultimately, BCT’s work is helping ensure the building of assets for low-income families and individuals, such as increasing homeownership, capitalization of small businesses, and postsecondary educational attainment.  BCT’s work is helping improve the administration of the OCS portfolio of grants, thereby enhancing OCS’s stewardship of taxpayer money.  Moreover, the systematic findings during BCT’s monitoring process will assist DCDP and CED in establishing best practice data and systematic findings for use in the furtherance and administration of the CED program.