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  • SBA Improves Without Funding Increases

    As reported in the Washington Post, a new survey shows that the Small Business Administration (SBA) has improved its employees’ morale without the cash infusion desired by the agency’s backers in Congress.

    Two years ago, the SBA was ranked as the worst place to work in the federal government. The agency also suffered from allegations of fraud, lax oversight, and failure to process thousands of disaster-relief loan applications in the wake of hurricanes Katrina and Rita. At least two lawmakers—Sens. John Kerry (D–Mass.) and Olympia Snowe (R–Maine)—have blamed the problem on budget cuts. Over the past six years, the Bush Administration has cut the agency’s budget by nearly 40 percent.

    Despite the downsizing and layoffs, however, the morale of SBA employees has improved drastically over the last year. The percentage of employees who say they think the SBA’s leadership is generating more motivation and commitment in the workforce rose from 25.5 percent in 2006 to 42.7 percent in 2007. The agency has also reduced its backlog of work. Much of the credit goes to SBA Administrator Steven C. Preston, who has taken steps to improve training, procedures, and employee–management relations.

    The SBA helps Americans start and build businesses. Whether such an agency is necessary is a separate argument. The point here is that more money isn’t always the answer. Management reforms can improve government services, and poor performance doesn’t automatically justify budget increases.

    Posted in Economics [slideshow_deploy]

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