U.S.

SMALL BUSINESS ADMINISTRATION

WASHINGTON, D.C. 20416

March 22, 2011

Response to House Oversight Committee on Oversight and Government Reform

RE: Inquiry on Financial Management dated March 8, 2011

The Small Business Administration respectfully submits the following responses at the
Committee’s request.

1. Identify and briefly describe each of your agency's business and accounting systems.
If separate divisions, bureaus, or offices of your agency use separate systems,
identify which divisions, bureaus, or offices use each system.

The Small Business Administration’s business and accounting systems include the following:
Joint Administrative Accounting Management System (JAAMS)
JAAMS is the accounting system used to manage SBA’s accounting and budgeting for
agency administrative costs. JAAMS is a commercial off-the-shelf software package
produced by Oracle, Inc., and is certified for use by federal agencies.
Loan Accounting System (LAS)
LAS is the primary system used to manage and account for loans and loan related activity
for all SBA loan programs. These activities include allotment of funds, loan origination,
servicing, liquidation, guaranty purchases, collections, and disbursements for loans. LAS
is comprised of a number of integrated modules on different platforms, including
mainframe programs built by SBA and commercial off-the-shelf packages. Loan
transactions are interfaced to a consolidated financial accounting and reporting
Disaster Credit Management System (DCMS)
The Office of Disaster Assistance uses DCMS, a commercial off-the-shelf (COTS)
system to support disaster loan origination functions. The DCMS system interfaces with
LAS on a daily basis to send loan application and accounting information.
Surety Bond Guaranty (SBG)
SBG generates daily payment files for refunds of Surety and Contractor fees resulting
from cancellation, decrease, or overpayment of fees.
Financial Management System (FMS)
FMS is comprised of a number of modules (including DCFS, FRIS and CGL) that
support consolidated financial accounting and reporting functions of the SBA.
Transaction data from JAAMS and LAS is interfaced to FMS for consolidated Agency-
wide financial activity. FMS modules are web-based systems built by SBA using a
commercial application development platform and database.

The SBA does not have any bureaus or sub components.

1
 2. Explain how the business and accounting systems identified in response to Request
No.1 interact with one another.

The following graphic presents the interactions of SBA’s business and accounting systems:

Loan Financial Joint

Loan Accounting Administrative Administrative
Management
Accounting System (LAS) and Accounting Accounting
System (FMS)
System (JAAMS)

Disaster
Loan Surety Bond
Origination Internal and Guaranty
DCMS External (SBG)
Reporting

Loan transactions are captured through DCMS for disaster recovery loans and through a module
of LMS for all other SBA loan programs. Loan originations are then processed through the
modules of LAS at the detailed loan level. Administrative accounting transactions are captured in
JAAMS. Information from both systems is posted daily to modules within the FMS. FMS is the
consolidated system of record for SBA financial and business information. Modules of FMS
provide management and financial reports, as well as interface information to government-wide
financial and business systems outside of SBA.

3. For each system identified in response to Request No.1, state whether Information is
found in that system is regularly or periodically submitted to any of the
government-wide accounting systems maintained by the Department of the
Treasury, e.g., GFRS, FACTS I, FACTS II, IFCS, etc., and explain how and at what
intervals those submissions occur, including descriptions of both manual and
automated processes.

The following table depicts the information regularly submitted to the Department of the
Treasury systems:

2
System Interface Target System Type of Data Type of Frequency
Department of Transfer
the Treasury
FMS FACTS I to Treasury/FACTS General Automated Annually
Treasury I Ledger generation and (End of
Balances submission. Fiscal
Year)
FMS FACTS II to Treasury/FACTS General Automated Quarterly
Treasury II Ledger generation and
Balances submission.
FMS Intergovernmental Treasury trial balance Automated Quarterly
balances (F-File) data generation and
submission.
FMS 224 Cash Treasury/GWA Cash receipts Automated Monthly
Reporting and generation and
disbursements submission.
FMS IFCS IFCS Confirmation Manual Quarterly
(intergovernmental of payables generation of
fiduciary and data and
Confirmation receivables manual
System) between submission to
agencies IFCS.
FMS GFRS Treasury/GFRS Financial Manual Annually
Statements generation of
data and
manual
submission to
GFRS.
FMS GFRS TROR – Treasury Loan Status , Automated Quarterly
Report of Delinquency submission
Receivables

LAS Treasury Offset Treasury/TOP New TOP Automated Weekly

Program (TOP) Referrals generation and
referrals submission via
Connect:Direct
LAS TOP Referral Treasury/TOP Updates to Automated Weekly
Updates previously generation and
transmitted submission via
TOP referrals Connect:Direct
LAS FedDebt (Cross Treasury/FedDebt New FedDebt Automated Weekly
Servicing) Referrals generation and
Referrals submission via
Connect:Direct
LAS Report of Treasury/FedDebt Details of Automated Weekly
Voluntary voluntary generation and
Payments payments submission via
Received by SBA received after Connect:Direct
on FedDebt- a loan was

3
 referred cases referred to
FedDebt

FMS/DFCS Disbursement Treasury/FMS Payment files Automated Daily

processing generation and
submission via
Connect:Direct

4. For each system identified in response to Request No.1, state whether information
found in that system is regularly or periodically submitted to the Office of
Management and Budget's ("OMB") MAX Information System, and explain how
and at what intervals those submissions occur, including descriptions of both
automated and manual processes.

The following table depicts the information regularly submitted to the Office of Management and
Budget MAX Information System:
System Interface Target System Type of Data Type of Frequency
OMB/MAX Transfer

FMS/FRIS 132 Submission OMB/MAX Apportionment Semi- As needed

requests automated
generation,
automated
submission.
Presidents Budget OMB/MAX Expense and Manual Bi-annual
Submission budget data. submission to at the
MAX systems. beginning
of the FY
and at the
midyear
review
FMS/FRIS Outlays report OMB/MAX Cash Reporting Manual Quarterly
generation and and on
manual demand
submission.
FMS MAX OMB/MAX Financial Upload of Excel Quarterly
Statements file into MAX

LAS/FMS MAX OMB/MAX Agency Upload of Excel Annually

Financial file into MAX
Report (PAR
Pilot)

5. For each system identified in response to Request No.1, describe recent, current,
and planned migration or modernization projects.

4
The following modernization projects are being undertaken on the SBA’s business and
accounting systems:

Current - JAAMS system is being upgraded to the next vendor release (Oracle Federal Financials
Release 12)
Planned – The databases underlying FMS will be converted from Sybase to Oracle
Planned – LAS underlying programming code will be ported to a newer release of COBOL
Planned – Improvements to the LAS user interface

6. In addition to your agency's submissions to government-wide accounting systems

maintained by the Department of the Treasury and OMB, as described in response
to Requests Nos. 3 and 4, does your agency publish any of the same information
online for public viewing? If so, describe how and in what format that information
is published.

The SBA does not publish any of the same information online for public viewing.

7. Identify and briefly describe each system that your agency uses to manage grants,
direct loans, and/or loan guarantees. If separate divisions, bureaus, or offices of
your agency use separate systems, identify which divisions, bureaus, or offices use
each system.

Loans
Direct loans and loan guarantees are managed by the LAS and DCMS systems as described at
No. 1, above.

Grants

PRISM
Grant proposal and award activity is managed in the PRISM system. PRISM is a commercial off-
the-shelf product purchased from Compusearch that is used for grants and contracts management
at the SBA.

JAAMS
Grant expenditure activity is managed in the SBA’s administrative accounting system, JAAMS,
as described at No. 1, above.

All SBA divisions use the same systems for loans and grants.

8. For each system identified in response to Request No.7, explain how it interacts with
any business or accounting system identified in response to Request No.1.

Loan systems at SBA are business and accounting systems as described at No. 1, above. JAAMS,
also described at No. 1 above, is the primary administrative accounting system for the SBA and
grant expenditure activity is tracked in that system.

9. For each system identified in response to Request No.7, state whether information
found in that system is regularly or periodically submitted to the Catalogue of
Federal Domestic Assistance (CFDA), and describe how and at what intervals those
submissions occur, including descriptions of both automated and manual processes.

5
The SBA submits its CFDA updates as outlined in the OMB guidance, Circular A-89. Currently,
that process is manual.

10. For each system identified in response to Request No.7, state whether information
found in that system is regularly or periodically submitted to any of the
government-wide grants management and reporting systems, e.g., F AADS, F AADS
PLUS, etc., and describe how and at what intervals those submissions occur,
including descriptions of both automated and manual processes.

For each grant awarded, PRISM creates an information file which is uploaded to
USASpending.gov. The data submitted includes the CFDA program number, recipient name,
DUNS number, type of recipient, funding amount, and other budget and accounting information
about the award.

11. For each system identified in response to Request No.7, describe recent, current,
and planned migration or modernization projects.

There are no modernization projects current or planned for PRISM at this time. Modernization
projects for the Loan systems and for the JAAMS administrative accounting system are described
at No. 5, above.

12. In addition to your agency's submissions to government-wide grants management

and reporting systems, described in response to Requests Nos. 9 and 10, does your
agency publish any of the same information online for public viewing? If so,
describe how and in what format that information is published.

The SBA does not publish any of the same information for grants online for public viewing.

SBA publishes several loan reports on a quarterly basis online (www.sba.gov/performance) for
public viewing. All reports are published in PDF. Reports #2 and #3 are also available in Excel.

Unpaid Principal Balance by Program: Reflects the outstanding principal balance at the end of
the fiscal year for the major loan programs and aggregate totals for the small direct, guarantied
and pre-credit reform (pre-1992) loan programs.

Gross Approval Amount by Program: Reflects the gross dollar amount of loans approved by
fiscal year for the major loan programs and aggregate totals for the small programs. Gross
approval includes loans that are cancelled in the current and subsequent years. PDF/Excel

Number of Approved Loans by Program: Reflects the number of loans approved by fiscal year
for the major programs and aggregate totals for the other direct and guarantied programs.
PDF/Excel

Purchase Amount by Program: Reflects purchase amounts by fiscal year for the four large
guarantied programs and an aggregate total for the small guarantied programs.

Charge off Amount by Program: Reflects amounts charged off by fiscal year for the major
loan programs and aggregate totals for the small direct and guarantied programs.

6
Total Recovery Amount for Guarantied Programs by Program: Reflects total recoveries for
the four large guarantied programs and an aggregate total for all of the small guarantied
programs.

Post-Charge Off Recovery Amount by Program: Reflects total post-charge off recovery
amounts by fiscal year for the major loan programs and aggregate totals for the small direct and
guarantied programs.

Purchase Rates as a Percent of Unpaid Principal Balance (UPB) Amount by Program:

Reflects purchase rates, as a percent of the UPB amounts, at the end of the fiscal year for the four
large guarantied programs and an aggregate total for the small guarantied programs.

Charge Off Rates as a Percent of Unpaid Principal Balance (UPB) Amount by Program:
Reflects charge off rates, as a percent of the UPB amounts, at the end of the fiscal year for the
major loan programs and aggregate totals for the small direct and guarantied programs.

Total Recovery Rates for Guarantied Programs by Program: Reflects total recovery rates, as
a percent of the purchase amounts by purchase year, for the four large guarantied programs and
an aggregate total for the small guarantied programs.

Post-Charge Off Recovery Rates by Program: Reflects total post-charge off recovery rates, as
a percent of the amounts charged off by charge off year, for the major loan programs and
aggregate totals by charge off year for the small direct and guarantied programs.

SBA also publishes three loan reports in HTML format that are available on our archive site. The
reports are:

Business Loan Detail report (archive.sba.gov/loans/businessdetail): This report is updated

monthly and provides detailed loan data by state for guaranteed loans approved from FY
2007 through FY 2011 YTD.

Business Loan Report (archive.sba.gov/loans/business): This report is updated monthly

and provides FY 2011 YTD summary loan data for SBA’s regions.

Disaster Loan Report (archive.sba.gov/loans/disaster): This report is updated monthly

and provides loan data by state for direct disaster loans approved from FY 2006 through
FY 2011 YTD.

13. Identify and briefly describe each system that your agency uses to manage
contracts. If separate divisions, bureaus, or offices of your agency use separate
systems, identify which divisions, bureaus, or offices use each system.

The SBA uses the PRISM system for contract management. PRISM is a commercial off-the-
shelf package purchased from Compusearch that is used to manage contracts and grants at the
SBA. All SBA divisions use the same contract management system.

7
 14. For each system identified in response to Request No. 13, explain how it interacts
with any business or accounting system identified in response to Request No. 1.

Purchase requests are entered and approved in the SBA’s JAAMS administrative accounting
system to provide for the commitment of funds for an acquisition. Purchase requests approved in
JAAMS are interfaced to PRISM daily. PRISM is used to manage and report on status of the
acquisition through the solicitation and award processes. Once a final award is approved, the
amount of the award is manually entered back to the JAAMS system where funds are fully
obligated and expended.

15. For each system identified in response to Request No. 13, state whether information
found in that system is regularly or periodically submitted to any of the
government-wide contract management and reporting systems, e.g., FPDS, FPDS-
NG, F APIIS, etc., and describe how and at what intervals those submissions occur,
including descriptions of both automated and manual processes.

For each completed award greater than $3,000 released in PRISM, a web service is used to
upload data about the award to FPDS-NG. Because PRISM does not contain all of the data
required by FPDS-NG, some manual entry to FPDS-NG is required to complete the information
requirement.

16. For each system identified in response to Request No. 13, describe recent, current,
and planned migration or modernization projects.

There are no major modernization projects current or planned for PRISM at this time.

17. In addition to your agency's submissions to government-wide contract management

and reporting systems, described in response to Request No. 15, does your agency
publish any of the same information online for public viewing? If so, describe how
and in what format that information is published.

The SBA does not publish any of the same information online for public viewing.

18. Briefly describe your agency's efforts to comply with OMB's memorandum on the
Open Government Directive - Federal Spending Transparency, dated April 6, 2010.
In particular, describe whether and how your agency has begun to collect and
report sub-award data, as required by the memorandum, and describe how your
agency's reports on OMB's data quality metrics, as required by the memorandum,
are generated.

The SBA has completed and updated its data quality plan and continues to define data quality
metrics, in coordination with OMB. The largest volume of SBA spending information submitted
to USASpending.gov is on loan information, which is currently exempt from the sub-award
reporting requirements.

19. If your agency interacts directly with USASpending.gov, in addition to submitting

information to the systems that feed USASpending.gov, describe the nature,
frequency, and purposes of that interaction.

8
As described at No. 10 above, grants information is directly submitted to USASpending.gov as
each award is made.

Loan approval and adjustment data is automatically generated from the LAS system and
submitted to USASpending.gov on a monthly basis.

20. Describe the data quality controls and procedures that your agency has
implemented for information that is submitted to USASpending.gov, including
information submitted directly and information submitted to one of the systems that
feeds USASpending.gov.

The SBA has developed a Data Quality Plan for the Open Government Directive, which is in the
process of implementation. The plan addresses the information required for grants, loans,
contracts, and Surety Bond Guarantees data. A copy of the complete plan is available upon
request.

21. State whether all of your agency's current grants, contracts, and loans are
accurately reflected on USASpending.gov, and, if not estimate the percentage of
current grants, contracts, and loans that are not accurately reflected, using both the
number of transactions and dollar figures.

The SBA is aware that the accuracy of the information on USASpending.gov needs improvement.
It has identified the ways in which it seeks to improve this in its data quality plan, and the agency
is working to implement those improvements, including a means to correctly identify the current
gap in data accuracy.

22. State whether your agency incurs any reporting burdens or costs as a result of its
obligations under the Federal Financial Assistance Transparency Act ("FF ATA")
that it does not incur as a result of other reporting obligations, and estimate those
burdens and costs in worker-hours and dollars.

The SBA has not identified a specific dollar amount related to the reporting burden, but it
recognizes that there are many manual and duplicative reporting processes in addition to FFATA.

23. Identify the individual(s) who serve(s) as Senior Accountable Official(s) ("SAO")
over federal spending data quality for your agency, as defined by OMB.

The Chief Financial Officer serves as the Senior Accountable Official(s) ("SAO") over federal
spending data quality for your agency, as defined by OMB.