Iowa. Who we look to replace that man has to have the trust and confidence of the American People, and it has to be on matters spoken in public and in private. Private promises and public statements for the American People being the same, and it has to be for all our people. For our complete weekend schedule go to cspan. Org. Next the head of the Small Business administration, maria cron trer contrerassweet is questioned about problems at the sba. The government recently found management problems and recommended changes. The Small Business administration is chaired by steven shav its in ohio. I call this meeting to order, and i want to welcome back Maria Contrerassweet. I think everyone here wants the same thing, and thats to serve americas Small Businesses the best we can. Those of us up here on the dias have a stand. Our constituents let us know how theyre doing all the time and on an ongoing basis. As a head of an agency, i often worry too often you hear from your own folks and other washington bureaucrats. Thats the only explanation for why the 69 gao identified concerns and problems havent been addressed. Yesterday wasnt the first time these issues have been raised. Yesterday we heard some pretty serious concerns, both by members of this committee and from our gao witness who testified here yesterday about the management of the sba. Administrator contrerassweet, since you werent with us yesterday, ill recap those briefly with you, although im sure your staff has probably already given you a rundown. I told the gao witness yesterday that this kind of reminds me of being a parent. If your teenagers room is a mess and they have stuff thrown all over the place, lets say theres 70 items thrown on the floor, 69 to be exact, and they only pick up seven of those items, you dont look at the 62 remaining on the floor and raise their allowance for having made some progress. The ongoing problems that the sba as gao identified span the entire breadth of the agency, from Information Technology and security to staff management issues, from Disaster Response to fraud in lending and contract programs, its a safe bet that Small Businesses in our districts on both sides of the aisle are paying the price for your agencys failures. What we have here is a failure of confidence in the sba, and unfortunately, for good reason. Before this hearing is over, i hope to hear a commitment from you to resolve as many of these problems as possible by june 30. And i mean this year. I do appreciate how accessible you have always been to members of this committee, and i request that your office start providing monthly updates to our staff documenting your progress. If i were you, i would start with these i. T. And cybersecurity deficiencies. Thats what worries me the most, and ill tell you why. Weve seen the irs hit, the state department, opm and even the white house hacked. Small businesses trust the sba, your agency, with their information, oftentimes sensitive information. They dont want their neighbors or the u. S. Government to have access to. Yesterday the sba told us this information is not adequately secured, and that cannot continue. I want to make this simple. We are not asking you to defend the sba, we are asking you to do your best to fix it. And i would now yield to the Ranking Member for her opening statement. Thank you, mr. Chairman, and thank you for holding this important hearing. As the only agency in the federal government charged specifically with helping Small Businesses grow and succeed, the Small Business administration is critical to our nations Overall Economic health. All of its functions serve to strengthen and preserve the foundation of our economy. For Small Businesses to fully reap the benefit of sbas program, it is important for the agency to operate efficiently, effectively, using tax dollars wisely. One of the most important roles of this committee is conducting vigorous oversight of the sba and its activities so we know the agency is serving Small Businesses well while spending taxpayers dollars wisely. Yesterday the Committee Heard from the Government Accountability office as it described a management report requested by myself and former chairman. The gao testified about a wide range of frankly very troubling challenges, many that we have persisted for years. I do fully recognize that many of these problems took root before administrator contrerassweets tenure. And furthermore, she has demonstrated a commitment to addressing them. With that said, there is still much work that needs to be accomplished in terms of addressing gao accommodations. With only 15 out of the 63 recommendations closed, there needs to be more attention not just to check the box but to improve the agency. With that said, i understand that frequent changes in Political Leadership create real difficulties for management. That is not an excuse, but rather a reality of the environment sba functions. So here you are, miss contreras, in the hot seat. You are the administrator, and you will be asked to respond for 64 recommendations that have been made not only under your leadership but for previous administration. And i feel optimistic of your commitment to tackle those issues, and we are here to discuss with you how do you intend to execute those recommendations . First, the agencys complex organizational structure may be impeding its ability to perform its mission effectively. Yesterday it was raised time and time again that sbas operation, our silo, resulting in inefficiencies and duplication. There also continues to be significant Information Technology problems as well. The agency has yet to implement more than 30 recommendations made by the. This race has concerned about whether sba data insists them. Standard operating procedures are also in need of updating. 74 of these provisions require revision, and 31 is should be counselled while another nine still need to be. Yet we will not in her et a time frame as to when all of these will be accomplished. These are just some of the long standing issues raised in, where there is always room for improvement, i was heartened to hear that sba has accepted most of the gaos recommendations, and i look forward to learning how the administrator is instituting change. I recognize that as a political appointee, she is in a difficult position to often having to answer for her work with her predecessors as well as the korean officials that may drive decisions. With that i would like to thank the administrator for being here, i know your schedule is busy, so as always, we appreciate it. I yield back. If im rating this, we put down how much each of us talks. If we need a little leeway, ill give you a little more as long as we keep it in house. Well go back and forth between republicans and democrats, of course. Im not going to go into a long explanation of how the administrator is. Shes a 24yearold of the contreras business suite. We recognize you this morning, and youre recognized for five minutes or perhaps a little bit longer if you need it. Thank you. Let me just thank you and Ranking Member velasquez and all the members of the committee for engaging in the work and giving me this opportunity to testify before you today. Its nice to see you. Id like to open quickly with the fiscal year of 2015. It was one of the most successful years in our administrations history. Under our flagship guarantee program extending a whopping 23. 5 billion in gross approvals. This represents a 22 increase in the number of loan approvals to prior last year. A 23 increase in their dollar value compared to 2014. These gains matter because fda data shows that conventional Small Business lending has only returned to 84 of prerecess n prerecessionary levels. Filling those gaps in the marketplace was the very purpose for which sba was created. We made notable progress giving loans to businesses with the greatest accessible capital. The dollar value of our loans was up year on year, 23 to women, 23 to minorities and 103 to veterans. Our number of loan approvals was up by 29 again, i just said that. These successes would not be possible except for the swift work of your committee. Due to our recordbreaking year, sba rose up to our statutory lending cap 60 days before the end of our fiscal year. At the urging of our stake holders, in less than a week i want to repeat that in less than a week you passed a 4. 5 billion increase. Your leadership allowed entrepreneurs across the country to continue to access the recquisite capital they need to start repair and grow their businesses. Sba also shattered our record for Small Business investment under our sbic program. We grew our portfolio by 10 to a record 25 billion. In fy 16, the 7a, the 504 and the sbic Program Share an important, common thread, and i know youll appreciate this. All these programs are expected to operate at zero subsidy this fiscal year. Thanks to this committee for working across the aisle to include in the omnibus bill the permanent restatement of the 504 refinancing authority and an increase in sbics family of funds limit. Both of these policy changes will inject muchneeded capital into our Small Business ecosystem. Another priority for the sba is federal contracting. The u. S. Government awarded an alltime high of 24. 99 , well over our governor mandate of 23 , supplying 350,000 american jobs. We reached a precedent of Small Business jobs to aging and veterans. We earned a record Year Investment and a record year in contracting with no taxpayer subsidy needed to maintain this momentum. This is the context in which our hearing takes place today. Let me take this opportunity to acknowledge the Government Accountability office for helping to confirm the areas of shared concern and for offering constructive suggestions to address them. From my first days in office, i have prioritized the need to modernize sba operations enterprisewide to respond to the technological, the demographic and the globalization changes that are transforming our Small Business economy. To that end i agree with many of the recommendations and appreciate the opportunity to address them to fully bring m,. Chairman, the sba into the 21st century. My Banking Experience will be brought to bear to make sure you feel comfortable and the American People feel confidence in our systems. Whether it be the Enterprise Management board that ive established and all the other systems ive put in place. Weve implemented a number of litigation measures that ill get into later. But my background starting three businesses also impressed upon me the importance of optimizing roy, return on investment, when putting precious taxpayer dollars to use. We have to take every measure to use those dollars wisely based on the best available data. In july of 2014, i established an Impact Evaluation working group charged with initiating and Refining Program evaluations for Entrepreneurial Development programs. Ive held numerous meetings with key Resource Partners, our spdcs score, vets and so on, expressing the importance of collecting meaningful metrics. Were currently performing indepth Training Programs across the agency. This includes the most comprehensive assessment of the sbic program in our history in collaboration with yes, i wanted to make sure you had confidence so we went to the library of congress to do this work. Our report is due out this spring. Weve also made significant strides in addressing the Information Technology challenges included in the ga report. In fact, were well under way with a major upgrade of our i. T. Systems. It starts with the comprehensive structure of the modernization to give our systems greater capacity, transparency and reliability. Were in the final stages now of moving our entire e mail system into the cloud for more security, reliability and capacity. Were investing in mobile technology recognize that go our sba field staff must go beyond the walls of the federal offices and go to consumers and to Small Businesses where they are. We also watch projects to modernize our lending and contract systems to reengineer our disaster Credit Management system, something i care deeply about. This entire modernization agenda complements our work for platforms, bringing advancement of things such as modernization, digital signatures yes, i said esignatures and online management to the customers we serve. These are talents that have encouraged bankers to come back to sba in many instances or to expand their lending. Weve taken important steps on our Human Capital management efforts. Im proud to work alongside the thousands of hardworking, dedicated Public Servants at sba and our Resource Partners. Im committed to ensuring that the agency has the talent required to effectively Service Americas entrepreneurs. Were currently crafting a comprehensive work plan which will include both a skill cap assessment and a gap enclosure plan. Weve taken steps to address the sbas aging work force not just unique to sba but across the federal government a challenge. As a launch of the veteran sba program, i understood we wanted to offer employees to make decisions, create openings so we could begin to fill those competency gaps. Sba is organizing our president ial Management Fellows Program to increase our impact. Were working with our veterans, were attracting more peace corps to our programs, and i know youre going to love this we installed the first ever chief learning officer at sba. I have been on the job for 20 months and im proud of the progress at this time, but the truth is that i couldnt have done this without your commitment, and im grateful for your support. As a result of your leadership and the daily efforts of our dedicated staff, i inherited an agency highly leveraged, operating effectively and focused on advancing and fulfilling our statutory mission. Again, the proof of the pudding is in the tasting, in the eating, and i think the record of our historic achievements speak to that. There is always room to improve, and thats what were here to talk about today. So yes, i am committed to working with you to improve the services and give Small Businesses the agency that they deserve and that taxpayers expect. Thank you. Thank you very much, and ill yield to myself five minutes to begin the questioning. Madam administrator, as i mentioned in my opening statement, the gao witness yesterday testified that sbas i. T. Security, the i. T. Security, leaves the Central Information of Small Businesses and their owners vulnerable to hackers, to theft, to fraud. Yet the sba has failed to implement more than 30 of the office of the inspector generals recommendations leading to i. T. Security, leaving Small Businesses and individuals exposed. Whats being done to address these problems . I think thats a fair question. Technology drives more and more of our lives, from our microwave to our cell phone, so it has to be a central part of our strategy at sba. Just as an example, to show you the progress ive made since i arrived, and the last time i was here, you asked me about the Loan Management system. That is the main body with which we interact with our Lending Partners, an important function and working its way through. I committed to you that i would get that done and that is to say that we are now off the main tram and we have a come pat sfibl. Its a wonderful achievement that even many fortune 500 companies dont achieve and many in government. Im proud that sba has achieved that. Id like your commitment to resolving the outstanding gao recommendations by june 30 and having our staff believed on that progress on a monthly basis. Do i have that commitment . I commit to you on a regular basis and well work with godspeed to make your deadline. Lets get it done. Mr. Chairman, i was able to touch the pope while he was here, so im hoping it infused me with the ability to you got closer than i did, then. Let me move on to another question. When the gao interviewed your district personnel so they could do their review, your folks insisted on having a lawyer present. Now, when this came up yesterday, when the gao was here, trent kelly, a member of this committee who happens to be a former prosecutor and District Attorney himself made, i think, like people speak up like your folks did, it often means they have something to hide. What made the decision th that at the request of the former chairman and the Ranking Member. So this was a bipartisan request. Again, i did not know that was happening, i wasnt briefed. If you ever met our district staff, i got to tell you, nothing sbintimidates these people. We go out, theres lawyers in the room, and they still tell me of the problems and challenges. Shouldnt you know who in your agency gave an order like this that interrupted with the gaos effort to conduct an investigation. We all get a paychec