[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR130]
[Page 466-478]
TITLE 13--BUSINESS CREDIT AND ASSISTANCE
CHAPTER I--SMALL BUSINESS ADMINISTRATION
PART 130_SMALL BUSINESS DEVELOPMENT CENTERS--Table of Contents
Sec.
130.100 Introduction.
130.110 Definitions.
130.200 Eligible entities.
130.300 Small Business Development Centers (SBDCs). [Reserved]
130.310 Area of service.
130.320 Location of lead centers and SBDC service providers.
130.330 Operating requirements.
130.340 SBDC services and restrictions on service.
130.350 Specific program responsibilities.
130.360 SBDC advisory boards.
130.400 Application procedure. [Reserved]
130.410 New applications.
130.420 Renewal applications.
130.430 Application decisions.
130.440 Maximum grant.
130.450 Matching funds.
130.460 Budget justification.
130.470 Fees.
130.480 Program income.
130.500 Funding.
130.600 Cooperative agreement. [Reserved]
130.610 General terms.
130.620 Revisions and amendments to cooperative agreement.
130.630 Dispute resolution procedures.
130.700 Suspension, termination and non-renewal.
130.800 Oversight of the SBDC program.
130.810 SBA review authority.
130.820 Reports and recordkeeping.
130.830 Audits and investigations.
Authority: Sections 5(b)(6) and 21 of the Small Business Act, as
amended, 15 U.S.C. 634(b)(6) and 648; Pub. L. 101-515, 101 Stat. 2101;
Pub. L. 101-574, 104 Stat. 2814; Pub. L. 102-366, 106 Stat. 986; and
Pub. L. 102-395, 106 Stat. 1828.
Source: 60 FR 31056, June 13, 1995, unless otherwise noted.
Sec. 130.100 Introduction.
(a) Objective. The SBDC Program creates a broad-based system of
assistance for the small business community by linking the resources of
Federal, State and local governments with the resources of the
educational community and the private sector. Although SBA is
responsible for the general management and oversight of the SBDC
Program, a partnership exists between SBA and the recipient organization
for the delivery of assistance to the small business community.
(b) Incorporation of amended references. All references in these
regulations to OMB Circulars, other SBA regulations, Standard Operating
Procedures, and other sources of SBA policy guidance incorporate all
ensuing changes or amendments to such sources.
Sec. 130.110 Definitions.
Applicant organization. An entity, described in Sec. 130.200(a),
which applies to establish and operate an SBDC network.
Application. The written submission by a new applicant organization
or an existing recipient organization explaining its projected SBDC
activities for the upcoming budget period and requesting SBA funding for
use in its operations.
Area of Service. The State or territory, or portion of a State or
territory (when there is more than one SBDC in a State or territory), or
the District of Columbia, in which an applicant organization proposes to
provide services or in which a recipient organization provides services.
Budget period. The 12-month period in which expenditure obligations
are incurred by an SBDC network, coinciding with either the calendar
year or the Federal fiscal year.
Cash Match. Non-Federal funds allocated specifically to the
operation of the SBDC network equalling no less than fifty percent of
the Federal funds. Cash Match includes direct costs committed by the
applicant or recipient organization and sponsoring SBDC organizations,
to the extent that such costs are committed as part of the verified,
specific, line item direct costs prior to funding. Cash Match does not
include
[[Page 467]]
indirect costs, overhead costs or in-kind contributions.
Cognizant Agency. The Federal agency, other than SBA, from which a
recipient organization or sponsoring SBDC organization receives its
largest grant or greatest amount of Federal funding, and from which it
obtains an indirect cost rate for budgetary and funding purposes,
applicable throughout the Federal government.
Cooperative Agreement. The written contract between SBA and a
recipient organization, describing the conditions under which SBA awards
Federal funds and recipient organizations provide services to the small
business community.
Cosponsorship. A ``Cosponsorship'' as defined in and governed by
Sec. 8(b)(1)(A) of the Act and SBA's Standard Operating Procedures.
Counseling. Individual advice, guidance or instruction given to a
small business person or entity.
Direct costs: ``Direct costs'' as defined in Office of Management
and Budget (OMB) Circulars A-21, A-87 and A-122. Recipient organizations
must allocate at least 80 percent of the Federal funds provided through
the Cooperative Agreement to the direct costs of program delivery.
Dispute. Dispute means a program or financial disagreement which the
recipient organization requests be handled with SBA in a formal manner.
Grants and Cooperative Agreement Appeals Committee. The SBA
committee, appointed by the SBA Administrator, which resolves appeals
arising from financial Disputes between a recipient organization and
SBA.
Grants Management Specialist. An SBA employee designated by the AA/
SBDCs who is responsible for the financial review, award, and
administration of one or more SBDC Cooperative Agreements.
In-kind contributions. Property, facilities, services or other non-
monetary contributions from non-federal sources. See OMB Circular A-87,
A-102, or A-110, as appropriate.
Indirect costs. ``Indirect costs'' as defined in Office of
Management and Budget (OMB) Circular A-21, A-87 or A-122.
Lead Center. The entity which administers and operates the SBDC
network.
Lobbying. Lobbying as described in OMB Circulars A-21, A-87 and A-
122, and Pub. L. 101-121, section 319.
Overmatched Amount. Non-Federal Contributions to SBDC project costs,
including cash, in-kind contributions and indirect costs, in excess of
the statutorily required amount.
Program Announcement. SBA's annual publication of requirements which
an applicant or recipient organization must address in its initial or
renewal application.
Program income. Income earned or received by the SBDC network from
any SBDC supported activity as defined in Attachment D of OMB Circular
A-110 and Attachment E of OMB Circular A-102.
Program manager. An SBA employee responsible for overseeing the
operations of one or more SBDCs.
Project officer. An SBA employee who negotiates the annual
Cooperative Agreement and monitors the ongoing operations of an SBDC.
Project period. The period of time, usually in twelve (12) month
increments, during which the SBDC network operates, beginning on the day
of award and continuing over a number of budget periods.
Recipient organization. The name given to an applicant organization
after funding is approved and the applicant organization enters into a
Cooperative Agreement. The recipient organization receives the Federal
funds and is responsible for establishing the Lead Center.
Recognized Organization. The organization whose members include a
majority of SBDCs and which is recognized as an SBDC representative by
SBA in accordance with Sec. 21(a)(3)(A) of the Small Business Act, 15
U.S.C. 648(a)(3)(A).
SBDC Director. The full-time senior manager designated by each
recipient organization and approved by SBA.
SBDC network. The Lead Center and SBDC service providers.
SBDC service providers. SBDC network participants, including the
Lead Center, subcenters (at times referred to as regional centers),
satellite locations, and any other entity authorized by the
[[Page 468]]
recipient organization to perform SBDC services.
Specialized Services. SBDC services other than Counseling and
Training.
Sponsoring SBDC organizations. Organizations or entities which
establish one or more SBDC service providers as part of the SBDC network
under a contract or agreement with the recipient organization.
Training. The provision of advice, guidance and instruction to
groups of prospective and existing small business persons and entities,
whether by in-person group sessions or by such communication modes as
teleconferences, videos, publications and electronic media.
Sec. 130.200 Eligible entities.
(a) Recipient Organization. The following entities are eligible to
operate an SBDC network:
(1) A public or private institution of higher education;
(2) A land-grant college or university;
(3) A college or school of business, engineering, commerce or
agriculture;
(4) A community or junior college;
(5) An entity formed by two or more of the above entities; or
(6) Any entity which was operating as a recipient organization as of
December 31, 1990.
(b) SBDC Service Providers. SBDC service providers are not required
to meet the eligibility requirements of a recipient organization.
Sec. 130.300 Small Business Development Centers (SBDCs). [Reserved]
Sec. 130.310 Area of service.
The AA/SBDC shall designate in writing the Area of Service of each
recipient organization, consistent with the State plan. More than one
recipient organization may be located in a State or Territory if the AA/
SBDC determines it is necessary or beneficial to implement the Program
effectively and to provide services to all interested small businesses.
Sec. 130.320 Location of lead centers and SBDC service providers.
(a) The recipient organization must locate its Lead Center and SBDC
service providers so that services are readily accessible to small
businesses in the Area of Service.
(b) The locations of the Lead Center and the SBDC service providers
will be reviewed by SBA as part of the application review process for
each budget period.
Sec. 130.330 Operating requirements.
(a) The Lead Center must be an independent entity within the
recipient organization, having its own staff, including a full-time SBDC
Director.
(b) A Lead Center must provide administrative services and
coordination for the SBDC network, including program development,
program management, financial management, reports management, promotion
and public relations, program assessment and evaluation, and internal
quality control.
(c) The Lead Center shall be open to the public throughout the year
during the normal business hours of the recipient organization.
Anticipated closures shall be included in the annual renewal
application. Emergency closures shall be reported to the SBA Project
Officer as soon as is feasible. Other SBDC service providers shall be
open during the normal business hours of their sponsoring SBDC
organizations.
(d) The Lead Center and other SBDC service providers must have a
conflict of interest policy applicable to their SBDC consultants,
employees, instructors and volunteers.
(e) The SBDC network shall comply with 13 CFR parts 112, 113 and
117, which require that no person shall be excluded on the grounds of
age, color, handicap, marital status, national origin, race, religion or
sex from participation in, be denied that benefits of, or otherwise be
subjected to discrimination under, any program or activity for which the
recipient organization received Federal financial assistance from SBA.
Sec. 130.340 SBDC services and restrictions on service.
(a) Services. The SBDC network must provide prospective and existing
small business persons and entities with Counseling, Training and
Specialized Services, concerning the formation, financing, management
and operation of
[[Page 469]]
small business enterprises, reflecting local needs. The recipient
organization shall primarily utilize institutions of higher education to
provide services to the small business community. To the extent
possible, SBDCs shall use other Federal, State, and local government
programs that assist small business. Services periodically should be
assessed and improved to keep pace with changing small business needs.
(b) Access to Capital. (1) SBDCs are encouraged to provide
counseling services that increase a small business concern's access to
capital, such as business plan development, financial statement
preparation and analysis, and cash flow preparation and analysis.
(2) SBDCs should help prepare their clients to represent themselves
to lending institutions. While SBDCs may attend meetings with lenders to
assist clients in preparing financial packages, the SBDCs may not take a
direct role in representing clients in loan negotiations.
(3) SBDCs should inform their clients that financial packaging
assistance does not guarantee receipt of a loan.
(4) SBDCs may not make loans, service loans or make credit decisions
regarding the award of loans.
(5) With respect to SBA guaranty programs, SBDCs may assist clients
to formulate a business plan, prepare financial statements, complete
forms which are part of a loan application, and accompany an applicant
appearing before SBA. Unless authorized by the SBA Administrator with
respect to a specific program, an SBDC may not advocate, recommend
approval or otherwise attempt in any manner to influence SBA to provide
financial assistance to any of its clients. An SBDC cannot collect fees
for helping a client to prepare an application for SBA financial
assistance.
(c) Special emphasis initiatives. From time to time, SBA may
identify portions of the general population to be targeted for
assistance by SBDCs. Support of SBA special emphasis initiatives will be
negotiated each year as part of the application process and included in
the Cooperative Agreement when appropriate.
Sec. 130.350 Specific program responsibilities.
(a) Policy development. SBA will establish Program policies and
procedures to improve the delivery of services by SBDCs to the small
business community, and to enhance compliance with applicable laws,
regulations, OMB Circulars and Executive Orders. In doing so, SBA should
consult, to the extent practicable, with the Recognized Organization.
(b) Responsibilities of SBDC Directors. The SBDC Director shall
direct and monitor program activities and financial affairs of the SBDC
network to deliver effective services to the small business community,
comply with applicable laws, regulations, OMB Circulars and Executive
Orders, and implement the Cooperative Agreement. The SBDC Director has
authority to control expenditures under the Lead Center's budget. SBDC
Directors may manage other programs in addition to the SBDC Program if
the programs serve small businesses and do not duplicate the services
provided by the SBDC network. However, SBDC Directors may not receive
additional compensation for managing these programs. The SBDC Director
shall serve as the principal contact point for all matters involving the
SBDC network.
Sec. 130.360 SBDC advisory boards.
(a) State/Regional Advisory Boards. (1) The Lead Center must
establish an advisory board to advise, counsel, and confer with the SBDC
Director on matters pertaining to the operation of the SBDC network.
(2) The advisory board shall be referred to as a State SBDC Advisory
Board in an Area of Service having only one recipient organization, and
a Regional SBDC Advisory Board in an Area of Service having more than
one recipient organization.
(3) These advisory boards must include small business owners and
other representatives from the entire Area of Service.
(4) New Lead Centers must establish a State or Regional SBDC
Advisory Board no later than the second budget period.
(5) A State or Regional SBDC Advisory Board member may also be a
[[Page 470]]
member of the National SBDC Advisory Board.
(6) The reasonable cost of travel of any Board member for official
Board activities may be paid out of the SBDC's budgeted funds.
(b) National SBDC Advisory Board. (1) SBA shall establish a National
SBDC Advisory Board consisting of nine members who are not Federal
employees, appointed by the SBA Administrator. The Board shall elect a
Chair. Three members of the Board shall be from universities or their
affiliates and six shall be from small businesses or associations
representing small businesses. Board members shall serve staggered three
year terms, with three Board members appointed each year. The SBA
Administrator may appoint successors to fill unexpired terms.
(2) The National SBDC Advisory Board shall advise and confer with
SBA's AA/SBDCs on policy matters pertaining to the operation of the SBDC
program. The Board shall meet with the AA/SBDCs at least semiannually.
Sec. 130.400 Application procedure. [Reserved]
Sec. 130.410 New applications.
(a) If SBA declines to renew an existing recipient organization or
the recipient organization declines to reapply, SBA may accept
applications from other organizations interested in becoming a recipient
organization. An eligible entity may apply by submitting an application
to the SBA District Office in the Area of Service in which the applicant
proposes to provide services.
(b) An application for initial funding of a new SBDC network must
include a letter by the Governor, or his or her designee, of the Area of
Service in which the SBDC will operate, or other evidence, confirming
that the applicant's designation as an SBDC would be consistent with the
plan adopted by the State government and approved by SBA. No such
requirement is imposed on subsequent applications from existing
recipient organizations.
(c) The application must set forth the eligible entity or entities
proposing to operate the SBDC network; a list of the Lead Center and
other SBDC service providers by name, address and telephone number; the
geographic areas to be serviced; the resources to be used; the services
that will be provided; the method for delivering the services, including
a description of how and to what extent academic, private and public
resources will be used; a budget; a listing of the proposed members of
the State or Regional Advisory Board and other relevant information set
forth in the Program Announcement.
(d) SBA officials may request supplemental information or
documentation to revise or complete an application.
(e) Upon written recommendation for approval by the SBA District
Director, the proposal shall be submitted to the AA/SBDCs for review.
Sec. 130.420 Renewal applications.
(a) SBDCs shall comply with the requirements in the annual Program
Announcement, including format and due dates, to receive consideration
of their renewal applications. The SBA Project Officer, with the
concurrence of the Program Manager, may grant an extension. The
recipient organization shall submit the renewal application to the SBA
office in the District in which the recipient organization is located.
The annual Program Announcement will include a timetable for SBA review.
(b) After review by the SBA Project Officer and written
recommendation for approval by the District Director, the Program
Manager and Grants Management Specialist shall review the renewal
application for conformity with the Program Announcement, OMB Circulars
and all other statutory, financial and regulatory requirements. SBA
officials may request supplemental information and documentation prior
to issuing the Cooperative Agreement.
Sec. 130.430 Application decisions.
(a) The AA/SBDCs may approve, conditionally approve, or reject any
application. In the event of a rejection, the AA/SBDCs shall communicate
the reasons for rejection to the applicant and the appropriate SBA field
office. If the approval is conditional, the conditions and applicable
remedies shall be specified as special terms and conditions in
[[Page 471]]
the Cooperative Agreement. Upon approval or conditional approval, the
Grants Management specialist may issue a Cooperative Agreement.
(b) In considering the application, significant factors shall
include:
(1) The applicant's ability to contribute Matching Funds;
(2) For renewal Proposals, the quality of prior performance;
(3) The results of any examination conducted pursuant to Sec.
130.810(b) of these regulations; and
(4) Any certification resulting from any certification program
developed by the Recognized Organization.
(c) In the event of a conditional approval, SBA may conditionally
fund a recipient organization for one or more specified periods of time
up to a maximum of one budget period. If the recipient organization
fails to resolve the specified matters to the AA/SBDCs' satisfaction
within the allotted time period, SBA has the right to discontinue
funding the SBDC, subject to the provisions of Sec. 130.700.
Sec. 130.440 Maximum grant.
No recipient shall receive an SBDC grant exceeding the greater of
the minimum statutory amount, or its pro rata share of all SBDC grants
as determined by the statutory formula set forth in section 21(a)(4) of
the Act.
Sec. 130.450 Matching funds.
(a) The recipient organization must provide total Matching Funds
equal to the total amount of SBA funding. At least 50% of the Matching
Funds must be Cash Match. The remaining 50% may be provided through any
allowable combination of additional cash, in-kind contributions, or
indirect costs.
(b) All sources of Matching Funds must be identified as specifically
as possible in the budget proposal. Cash sources shall be identified by
name and account. All applicants must submit a Certification of Cash
Match and Program Income executed by an authorized official of the
recipient organization or any sponsoring SBDC organization providing
Cash Match through a subcontract agreement. The account containing such
cash must be under the direct management of the SBDC Director, or, if
provided by a sponsoring SBDC organization, its subcenter Director. If a
political entity is providing such cash and the funds have not been
appropriated prior to issuance of the Cooperative Agreement, the
recipient organization must certify that sufficient funds will be
available from the political entity prior to the use of Federal dollars.
(c) The Grants Management Specialist is responsible for determining
whether Matching Funds or Cash Match meet the requirements of the Act
and appropriate OMB circulars.
(d) Overmatched Amounts. (1) SBDC are encouraged to furnish
Overmatched Amounts.
(2) An Overmatched Amount can be applied to additional Matching
Funds requirements necessitated by any supplemental funding increase
received by the SBDC during the budget period, as long as the total Cash
Match provided by the SBDC is 50% or more of the total SBA funds
provided during the budget period.
(3) If used in the manner described in paragraph (d)(2) of this
section, such Overmatched Amount is reclassified as committed Matching
Funds.
(4) Allowable Overmatched Amounts which have not been used in the
manner described in paragraph (d)(2) of this section may, with the
approval of the AA/SBDCs, be used as a credit to offset any confirmed
audit disallowances applicable only to the budget period in which the
Overmatched Amount exists and the two previous budget periods. Such
offsetting funds shall be considered Matching Funds.
(e) Impermissible sources of Matching Funds. Under no circumstances
may the following be used as sources of the Matching Funds of the
recipient organization:
(1) Uncompensated student labor;
(2) SCORE, ACE, or SBI volunteers;
(3) Program income or fees collected from small businesses receiving
assistance;
(4) Funds or indirect or in-kind contributions from any other
Federal source.
Sec. 130.460 Budget justification.
The SBDC Director, as a part of the renewal application, or the
applicant
[[Page 472]]
organization's authorized representative in the case of a new SBDC
application, shall prepare and submit to the SBA Project Officer the
budget justification for the upcoming budget period. The budget shall be
reviewed annually upon submission of a renewal application.
(a) Direct costs. Unless otherwise provided in applicable OMB
circulars, at least eighty percent (80%) of SBA funding must be
allocated to direct costs of Program delivery.
(b) Indirect costs. If the applicant organization waives all
indirect costs to meet the Matching Funds requirement, one hundred
percent (100%) of SBA funding must be allocated to program delivery. If
some, but not all, indirect costs are waived to meet the Matching Funds
requirement, the lesser of the following may be allocated as indirect
costs of the Program and charged against the Federal contribution:
(1) Twenty percent (20%) of Federal contribution, or
(2) The amount remaining after the waived portion of indirect costs
is subtracted from the total indirect costs.
(c) Separate SBDC service provider budgets. (1) The applicant
organization shall include separate budgets for all subcontracted SBDC
service providers in conformity with OMB requirements. Applicable direct
cost categories and indirect cost base/rate agreements shall be included
for the Lead Center and all SBDC service providers, using a rate equal
to or less than the negotiated predetermined rate. If no such rate
exists, the sponsoring SBDC organization or SBDC service provider shall
negotiate a rate with its Cognizant Agency. In the event the sponsoring
SBDC organization or SBDC service provider does not have a Cognizant
Agency, the rate shall be negotiated with the SBA Project Officer in
accordance with OMB guidelines (see OMB Circular A-21).
(2) The amount of cash, in-kind contributions and indirect costs for
the Lead Center and all sub-contracted SBDC service providers shall be
indicated in accordance with OMB requirements.
(d) Cost principles. Principles for determining allowable costs are
contained in OMB Circulars A-21 (cost principles for grants, contracts,
and other agreements with educational institutions), A-87 (cost
principles for programs administered by State and local governments),
and A-122 (cost principles for nonprofit organizations).
(e) Costs associated with lobbying. No portion of the Federal
contribution received by an SBDC may be used for lobbying activities,
either directly by the SBDC or indirectly through outside organizations,
except those activities permitted by OMB. Restrictions on and reports of
lobbying activities by the SBDC shall be in accordance with OMB
requirements, Section 319 of Public Law No. 101-121, and the annual
Program Announcement.
(f) Salaries. (1) If a recipient organization is an educational
institution, the salaries of the SBDC Director and the subcenter
Directors must approximate the average annualized salary of a full
professor and an assistant professor, respectively, in the school or
department in which the SBDC is located. If a recipient organization is
not an educational institution, the salaries of the SBDC Director and
the subcenter Directors must approximate the average salaries of
parallel positions within the recipient organization. In both cases, the
recipient organization should consider the Director's longevity in the
Program, the number of subcenters and the individual's experience and
background.
(2) Salaries for all other positions within the SBDC should be based
upon level of responsibility, and be comparable to salaries for similar
positions in the area served by the SBDC.
(3) Recruitment and salary increases for SBDC Directors, subcenter
Directors and staff members should conform to the administrative policy
of the recipient organization.
(g) Travel. All travel must be separately identified in the proposed
budget as planned in-State, planned out-of-State, unplanned in-State or
unplanned out-of-State. All proposed travel must use coach class, apply
directly to specific work of the SBDC or be incurred in the normal
course of Program administration, and conform to the written travel
policies of the recipient organization or the sponsoring SBDC
organization. (Per diem rates, including
[[Page 473]]
lodging, shall not exceed those authorized by the recipient
organization.) Transportation costs must be justified in writing,
including the estimated cost, number of persons traveling, and the
benefit to be derived by the small business community from the proposed
travel. A specific projected amount, based on the SBDC's past
experience, where appropriate, must also be included in the budget for
unplanned travel. A more detailed justification must be given for
unplanned out-of-State travel. Any proposed unplanned out-of-State
travel exceeding the approved budgeted amount for travel must be
submitted to the Project Officer for approval on a case-by-case basis.
Travel outside the United States must have prior approval by the AA/
SBDCs on a case-by-case basis.
(h) Dues. Costs of memberships in business, technical, and
professional organizations shall be allowable expenses. The use of
Federal funds to pay dues for business, technical and professional
organizations shall be permitted, provided that the payments are
included in the budget proposal, are approved by the SBA and comply with
Sec. 130.460(e).
Sec. 130.470 Fees.
An SBDC may charge clients a reasonable fee to cover the costs of
Training sponsored or cosponsored by the SBDC, costs of services
provided by or obtained from third parties, or the costs of providing
Specialized Services. Fees may not be imposed for Counseling.
Sec. 130.480 Program income.
(a) Program income for recipient organizations or SBDC service
providers based in universities or nonprofit organizations shall be
subject to OMB requirements (see OMB Circular A-110). Program income for
recipient organizations or SBDC service providers based in State or
local governments shall be subject to OMB requirements (see the
provisions of Sec. 7.e and Attachment E of OMB Circular A-102) and 13
CFR 143.25.
(b) Program income, including any interest earned on Program income,
must be used to expand the quantity or quality of services, resources or
outreach provided by the SBDC network. It cannot be used to satisfy the
requirements for Matching Funds. The Project Officer shall monitor the
use of Program income. Any unused Program income will be carried over to
a subsequent budget period.
(c) SBDCs must report in detail on standard SBA forms receipts and
expenditures of program income, including any income received through
cosponsored activities. A narrative description of how Program income
was used to accomplish Program objectives shall be included.
Sec. 130.500 Funding.
The SBA funds Cooperative Agreements through its internal Letter of
Credit Replacement System (LORS), using SBA standard forms to establish
and modify letters of credit. SBDCs must use SBA standard forms to draw
down funds required to meet their estimated or actual expenses and to
submit quarterly cash transactions reports used by SBA to monitor the
frequency of drawdowns and the cash-on-hand balance. Repeated drawdowns
in excess of immediate cash needs may result in the cancellation of the
letter of credit. If interest results from the deposit of any drawdowns
in an interest-bearing account, SBDCs, other than State government
sponsored SBDCs, must report and return such interest annually to SBA.
Sec. 130.600 Cooperative agreement. [Reserved]
Sec. 130.610 General terms.
Upon approval of the initial or renewal application, SBA will enter
into a Cooperative Agreement with the recipient organization, setting
forth the programmatic and fiscal responsibilities of the recipient
organization and SBA, the scope of the project to be funded, and the
budget of the program year covered by the Cooperative Agreement.
Administrative requirements are contained in 13 CFR 143 and applicable
OMB Circulars.
Sec. 130.620 Revisions and amendments to cooperative agreement.
(a) Requests for revisions. The recipient organization may request
at any
[[Page 474]]
time one or more revisions to the Cooperative Agreement on an
appropriate SBA form signed by the recipient organization's authorized
representative (including a revised budget and budget narrative, if
applicable). Revisions will normally relate to changes in scope, work or
funding during the specified budget year.
(b) Revisions which require amendment to Cooperative Agreement. The
Cooperative Agreement shall list the revisions which require Project
Officer concurrence, review by the Program Manager and the Grants
Management Specialist, approval of the AA/SBDCs and amendment of the
Cooperative Agreement. No application for an amendment shall be
effective until it is approved and incorporated into the Cooperative
Agreement. Revisions which require amendments shall include:
(1) Any change in project scope or objectives;
(2) The addition or deletion of any subgrants or contracts;
(3) The addition of any new budget line items;
(4) Budget revisions and fund reallocations exceeding the limit
established by applicable administrative regulations or OMB Circulars,
either individually or in the aggregate (see paragraphs (c)(1) and
(c)(2) of this section);
(5) Any proposed sole-source or one-bid contracts exceeding the
limits established by applicable regulations or OMB Circulars; and
(6) The carryover from one budget period to the next budget period
of unobligated, unexpended SBA funds allocable under the Cooperative
Agreement to nonrecurring, nonseverable bona fide needs of the SBDC
network as provided in applicable OMB Circulars and the annual Program
Announcement.
(c) Revisions which do not require amendments to the Cooperative
Agreement--(1) Budget revisions. Any budget revision, except those which
are covered by paragraph (b)(4) of this section. Budget revisions
require approval of the SBA Project Officer and the AA/SBDCs as
prescribed by applicable OMB Circulars or 13 CFR 143.30.
(2) Reallocation of funds. Reallocation of funds must be conducted
in accordance with applicable OMB Circulars or 13 CFR 143.30. Additional
guidance on this matter may be included in the annual Program
Announcement.
Sec. 130.630 Dispute resolution procedures.
(a) Financial Disputes. (1) A recipient organization wishing to
resolve a financial Dispute formally must submit a written statement
describing the subject of the Dispute, together with any relevant
documents or other evidence bearing on the Dispute, to the Grants
Management Specialist, with copies to the Project Officer. The Grants
Management Specialist shall respond in writing to the recipient
organization within 30 calendar days of receipt of the descriptive
statement.
(2) If the recipient organization receives an unfavorable decision
from the Grants Management Specialist, it may file an appeal with the
AA/SBDCs within 30 calendar days of issuance of the unfavorable
decision. The AA/SBDCs shall respond in writing to the recipient
organization within 15 calendar days of receipt of the appeal.
(3) If the recipient organization receives an unfavorable decision
from the AA/SBDCs, it may make a final appeal to the SBA Grants and
Cooperative Agreements Appeals Committee (the ``Committee'') within 30
calendar days of the date of issuance of the AA/SBDCs' written decision.
Copies of the appeal shall also be sent to the Grants Management
Specialist and the Project Officer.
(4) Appeals must be in writing. Formal briefs and other technical
forms of pleading are not required. Requests for a hearing will not be
granted unless there are material facts substantially in dispute.
Appeals must contain at least the following:
(i) Name and address of the recipient organization;
(ii) The SBA field office;
(iii) The Cooperative Agreement;
(iv) A statement of the grounds for appeal, with reasons why the
appeal should be sustained;
(v) The specific relief desired on appeal; and
(vi) If a hearing is requested, a statement of the material facts
which are substantially in dispute.
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(5) The AA/SBDCs or the Committee may request from the SBDC or the
District Office additional information or documentation at any stage in
the proceedings.
(6) If a request for a hearing is granted, the Committee will
provide the recipient organization with written instructions, and will
afford the parties an opportunity to present their positions to the
Committee.
(7) The Committee will reach a decision on the merits of the appeal
within 30 days of the hearing date.
(8) The Chairperson, with advice from the Office of General Counsel,
shall prepare and transmit a written final decision to the recipient
organization with copies to the Grants Management Specialist and the
Project Officer.
(9) Expedited Dispute appeal process. By an affirmative vote
constituting a majority of its total membership, the Committee may
shorten response times to attain final resolution of a Dispute before
the issuance date of a new Cooperative Agreement. At any time within 120
days of the end of the budget period, the recipient organization may
submit a written request to use an expedited process. If a Dispute
affects refunding, the Committee must meet to consider the matter prior
to the end of the budget period, provided that the recipient
organization has supplied the Committee with all requested
documentation.
(b) Programmatic (non-financial) Disputes. (1) If a programmatic
Dispute is not resolved at the SBA District Office level, the recipient
organization may request its submission to the next SBA administrative
level having authority to review such matter. The Project Officer shall
refer the Dispute in writing, including comments of the SBDC Director,
within 15 calendar days of receipt of the request.
(2) If the programmatic Dispute is not resolved at an intermediate
SBA administrative level within 15 calendar days of receipt thereof, it
shall be forwarded, in writing, to the AA/SBDCs for final resolution.
All comments of the SBDC Director must be included in any package
forwarded to the AA/SBDCs.
(3) The AA/SBDCs shall transmit a final, written decision to the
recipient organization, the SBDC Director, the SBA Project Officer and
other appropriate SBA field office personnel within 30 calendar days of
receipt of such documentation, unless an extension of time is mutually
agreed upon by the recipient organization and the AA/SBDCs.
Sec. 130.700 Suspension, termination and non-renewal.
(a) General. After SBA has entered into a Cooperative Agreement with
a recipient organization, it shall not suspend, terminate or fail to
renew the agreement unless SBA gives the recipient organization written
notice setting forth the reasons and affording the recipient
organization an opportunity for a hearing. Subject to this requirement
and the provisions of Sec. 130.700(c) regarding non-renewal procedures
for non-performance, the applicable general procedures for suspension
and termination are contained in 13 CFR 143.43 and 143.44, and in OMB
Circular A-110, Attachment L.
(b) Causes. Causes which may lead to suspension, termination, or
failure to renew include non-performance, poor performance,
unwillingness to implement changes to improve performance, or any of the
following reasons:
(1) Disregard or material violation of these regulations;
(2) A willful or material failure to perform under the Cooperative
Agreement or under these regulations;
(3) Conduct reflecting a lack of business integrity or honesty;
(4) A conflict of interest causing real or perceived detriment to a
small business concern, a contractor, the SBDC or SBA;
(5) Improper use of Federal funds;
(6) Failure of a Lead Center or its subcenters to consent to audits
or examination or to maintain required documents or records;
(7) Failure of the SBDC Director to work at the SBDC Lead Center on
a full-time basis;
(8) Failure promptly to suspend or terminate the employment of an
SBDC Director, subcenter Director or other key employee upon receipt of
knowledge by the recipient organization and/
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or SBA that such individual is engaging in or has engaged in conduct
resulting in a criminal conviction or civil judgment which would cause
the public to question the SBDC's business integrity, taking into
consideration such factors as the magnitude, repetitiveness, harm caused
and remoteness in time of the activity or activities underlying the
conviction or judgment.
(9) Violation of the SBDC's standards of conduct as specified in
these rules and as established by the SBDC pursuant to these rules; or
(10) Any other cause not otherwise specified which materially and
adversely affects the operation or integrity of an SBDC or the SBDC
program.
(c) Non-Renewal Procedure. (1) Subject to Sec. 130.700(a), when an
SBA District Director believes there is sufficient evidence of SBDC
nonperformance, poor performance or unwillingness to implement changes
to improve performance, under the terms of the Cooperative Agreement or
these regulations, the District Director shall notify the SBDC Director
and any other appropriate official of the recipient organization of an
intention not to approve its renewal application.
(2) Notice can be submitted at any time during the budget period,
but normally should be sent no later than 3 months prior to the due date
for renewal applications at the District Office.
(3) The notice shall specifically cite the reasons for the intention
not to renew. It must allow the recipient organization 60 days within
which to change its operations to correct the problems cited in the
notice, and to report to the Project Officer, in writing, regarding the
results of such changes.
(4) If the recipient organization is unwilling or unable to address
the specific problem areas to the satisfaction of the SBA District
Office within the 60-day period, the SBA Project Officer shall have ten
(10) calendar days after expiration of the 60 days to submit to the AA/
SBDCs a written description of the unresolved issues, a summary of the
positions of the District Office on the issues, and any supportive
documentation.
(5) The AA/SBDCs shall transmit a written, final decision to the
recipient organization, the SBDC Director, the SBA Project Officer and
other appropriate SBA field office personnel within 30 calendar days of
receipt of such documentation, unless an extension of time is mutually
agreed upon by the recipient organization and the AA/SBDCs.
(6) The AA/SBDCs shall consider written documentation of the issues
to be resolved, including all relevant correspondence between the
Project Officer, District Director and any other SBA personnel and the
affected recipient organization. At a minimum, such documentation shall
commence with the first written notice of issues invoking the non-
renewal procedure. In addition, the AA/SBDCs also may communicate with
the recipient organization and appropriate SBA personnel.
(7) If the AA/SBDCs determines that the evidence submitted
establishes nonperformance, ineffective performance or an unwillingness
to implement suggested changes to improve performance, the AA/SBDCs
shall have full discretion to order non-renewal of the SBDC. The SBA
District Office shall then pursue proposals from other organizations
interested in applying for SBDC designation. The incumbent SBDC shall
have until the end of the budget period or 120 days, whichever is
longer, to conclude operations and to submit close-out documents to the
SBA District Office. Close-out procedures shall conform with applicable
OMB Circulars.
(d) Effect of action on subcenter. If competing applications are
being accepted, a subcenter of the previously funded recipient
organization may apply for designation as the recipient organization, so
long as the subcenter was not involved in the conduct leading to non-
renewal or termination of the former recipient organization.
Sec. 130.800 Oversight of the SBDC program.
SBA shall monitor and oversee the Cooperative Agreement and ongoing
operations of the SBDC network to ensure the effective and efficient use
of Federal funds for the benefit of the small business community.
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Sec. 130.810 SBA review authority.
(a) Site visits. The AA/SBDCs, or a representative, on notice to the
SBDC Director, is authorized to make programmatic and financial review
visits to SBDC service providers to inspect records and client files,
and to analyze and assess SBDC activities.
(b) SBA examinations. SBA examiners shall perform a biannual
programmatic and financial examination of each SBDC.
(c) Certification program. SBA may provide financial support to the
Recognized Organization to develop and implement an SBDC certification
program.
(d) Audits. The examinations by SBA examiners shall not substitute
for audits required of Federal grantees under the Single Audit Act of
1984 or applicable OMB guidelines (see Circulars A-110, A-128 and A-
133), nor shall such internal review substitute for audits to be
conducted by the SBA Office of Inspector General under authority of the
Inspector General Act of 1978, as amended (see Sec. 130.830(b)).
Sec. 130.820 Reports and recordkeeping.
(a) Records. The recipient organization shall maintain the records
required for a Lead Center audit and SBA reports. Lead Centers and other
SBDC service providers shall maintain detailed, complete and accurate
client activity files, specifying counseling, training and other
assistance provided.
(b) Reports. The recipient organization shall submit client service
evaluations and performance and financial reports for SBA review to
determine the quality of services provided by the SBDC, the completeness
and accuracy of SBDC records, and actual SBDC network accomplishments
compared to performance objectives.
(c) Performance reports. For recipient organizations in the Program
for more than three years, interim reports shall be due 30 days after
completion of six months of operation each year; for those recipient
organizations in the Program three years or less, reports shall be due
30 days after completion of each of the first three quarters. The annual
report shall include the second semiannual or the fourth quarter report
and shall be due December 30 for fiscal year and March 30 for calendar
year SBDCs. These reports shall reflect accurately the activities,
accomplishments and deficiencies of the SBDC network.
(d) Financial reports. The recipient organization shall provide
three quarterly and one annual financial report to the SBA Project
Officer as set forth in the Program Announcement and the Cooperative
Agreement, in compliance with OMB Circulars.
(e) Availability of records. As required by OMB (see Circular A-
133), all SBDC service provider records shall be made available to SBA
for review upon request.
Sec. 130.830 Audits and investigations.
(a) Access to records. Applicable OMB Circulars set forth the
requirements concerning record access and retention.
(b) Audits--(1) Pre-award audit. Applicant organizations that
propose to enter the Program for the first time may be subject to a pre-
award audit conducted by or coordinated with the SBA Office of Inspector
General. The purpose of a pre-award audit is to verify the adequacy of
the accounting system, the suitability of posed costs and the nature and
source of proposed Matching Funds.
(2) Interim or final audits. The recipient organization or SBA may
conduct SBDC network audits. All audits will be conducted according to
Government Auditing Standards, promulgated by the Comptroller General of
the United States.
(i) The recipient organization will conduct its audits as a single
audit of a recipient organization pursuant to OMB Circulars A-102, A-
110, A-128, and A-133, as applicable.
(ii) The SBA Office of Inspector General or its agents will conduct,
supervise, or coordinate SBA's audits, which may, at SBA's discretion,
be audits of the SBDC network, even though single audits may have been
performed. In such instances, SBA will conduct such audits in compliance
with Government Auditing Standards and all applicable OMB Circulars.
(c) Investigations. SBA may conduct investigations as it deems
necessary to
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determine whether any person or entity has engaged in acts or practices
constituting a violation of the Act, any rule, regulation or order
issued under that Act, or any other applicable Federal law.