Microenterprise Development Program Meets Statutory Objectives
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Proposed Final Report Joint Legislative Audit & Review Committee January 11, 2012 PowerPoint PPT Presentation


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Microenterprise Development Program Meets Statutory Objectives But Department of Commerce Oversight Is Inadequate. Proposed Final Report Joint Legislative Audit & Review Committee January 11, 2012 Fara Daun, JLARC Staff. Presentation Focuses on 3 Things.

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Proposed Final Report Joint Legislative Audit & Review Committee January 11, 2012

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Proposed final report joint legislative audit review committee january 11 2012

Microenterprise Development Program Meets Statutory Objectives But Department of Commerce Oversight Is Inadequate

Proposed Final Report

Joint Legislative Audit & Review Committee

January 11, 2012

Fara Daun, JLARC Staff


Presentation focuses on 3 things

Presentation Focuses on 3 Things

  • Brief review of the state program

  • Conclusions and recommendations

  • Agency responses

Microenterprise Development


Proposed final report joint legislative audit review committee january 11 2012

What Is a Microenterprise?

Three Characteristics

1

2

3

Employs 1–5 people, including owner

Requires no more than $35K–$50K in start-up capital

Lacks access toconventionalforms of financing

In 2009, employed 598K people in WA

  • Including 389K self-employed persons

Employ people in a broad range of industries from manufacturing to farming

Report Page 1

Microenterprise Development


How does washington s state program work

How Does Washington’s State Program Work?

  • WSMA

MDOs Assist

Receive Services

  • Assists MDOs

Microenterprises

From MDOs

  • Provides business development services to MDOs

  • Provides grants for:

    • Capacity building

    • Technology

    • Training & technical assistance

  • Provide business development services to entrepreneurs

  • Provide financial services, including some loans

  • Access non-state funds for microenterprise

  • Establish and operate businesses

  • May take out microloans

Report Page 3

Microenterprise Development


Program is consistent with statutory purpose

Program Is Consistent with Statutory Purpose

  • Is the program creating microenterprises?

  • Entrepreneurs who received assistance from MDOs related to state grants are operating businesses

  • Is the program improving microenterprise access to capital?

  • WSMA matched state funds at 45%

  • MDOs matched state grants at 86%

  • Is there leveraging of state funds?

  • MDOs reported leveraging $866,000 of leveraged non-state funds in addition to match

Microenterprise Development


Jlarc s extensive analysis allows conclusions about wsma

JLARC’s Extensive Analysis Allows Conclusions About WSMA

  • WSMA has fulfilled its contractual obligations

  • WSMA assists MDOs to help entrepreneurs establish and maintain microenterprises

  • WSMA’s actions are consistent with the purposes of the state program

Report Pages 11-12

Microenterprise Development


Commerce is not providing required organizational support

Commerce Is Not Providing Required Organizational Support

Statute requires Commerce to provide WSMA with “organizational support.”

Does Commerce have any program staff or management assigned to this program or otherwise engaged with this program?

Not since 2010

Does Commerce provide technical assistance to this program?

Not since 2010

Can WSMA staff readily reach Commerce staff with authority to answer questions?

No

Does the Commerce website link users interested in microenterprise to this program?

Unable to find program on website

Report Page 11

Microenterprise Development


Commerce is not providing required organizational support1

Commerce Is Not Providing Required Organizational Support

Department of Commerce Does Not Concur.

WSMA Concurs.

OFM had no comment.

Recommendation #1

The Department of Commerce should comply with the statute and provide organizational support to the Washington State Microenterprise Association.

Auditor’s Response is in Appendix 2A.

Report Page 11

Microenterprise Development


Commerce has inadequate reporting verification processes

Commerce Has Inadequate Reporting & Verification Processes

Are performance measures clear and defined?

No

Are there minimum performance thresholds for compliance?

No

Are progress reports required?

Yes

Is required documentation adequate to support progress statements made in progress report?

No

Report Page 12

Microenterprise Development


Commerce has inadequate reporting verification processes1

Commerce Has Inadequate Reporting & Verification Processes

Department of Commerce Partially Concurs.

WSMA Concurs.

OFM had no comment.

Recommendation #2

The Department of Commerce should develop measurable performance targets for its contract with WSMA and should establish a process to verify that the WSMA has met the requirements of the contract.

Auditor’s Response is in Appendix 2A.

Report Page 12

Microenterprise Development


Contact information

Contact Information

Contact Information:

Fara [email protected]

www.jlarc.leg.wa.gov

Microenterprise Development


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