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RBS is concerned about the quality of jobs created. While it is unable to measure job quality, it is giving funding priority to projects that support jobs with average wage rates that exceed Federal minimum wage rates.
RBS, as part of the FY 2001 Administrative Budget funding request, proposes to procure and distribute off-the-shelf software that provides credit and financial analysis, including the ability to develop spreadsheets of business transactions. Acquisition of this software will improve the quality of the portfolio through more informed and consistent credit analyses by field staff for loan origination and loan servicing activities.
Coordination with other Federal programs is not required but strongly encouraged for the delivery of the Business Programs. Funded businesses must meet the standards of OSHA or, if construction is involved, the Environmental Protection Agency in the same sense that they must meet the zoning and construction requirement of the state, county, or local government. These are issues of concern handled by the applicant’s engineer or staff. Other Federal agencies, such as the Economic Development Agency, or state agencies may be potential partners for joint funding if a specific project meets their requirements.
Verification and Validation: Data to measure the performance measures will come from the following automated accounting systems:
• Program Loan Accounting System (PLAS)
• Guaranteed Loan Accounting System (GLAS)
• Rural Community Facilities Tracking System (RCFTS)
These systems are used by agency managers in their management of the programs. PLAS and GLAS are accounting systems designed to manage the agency’s portfolio of direct and guaranteed loans. These systems contains a variety of data edits to minimize the risk of inaccurate data being placed in the systems. These two systems are audited annually by OIG as a part of their development of an audited financial statement.
RCFTS is a non-accounting management system which contains a variety of data related to Business Programs, such as the number of jobs created or saved. Data in RCFTS is input by the field staff and does not contain edits to verify the accuracy of the data. Manual reports from State Director will be used to obtain data regarding several of the performance measures. This information will be less reliable since it is obtained manually and its accuracy cannot be verified. However, confidence in this data is high enough to be acceptable for the purposes for which it is being used.
Jobs created or saved is an important indicator for the Business programs and an estimate of the jobs being created or saved is determined for each loan during processing. The exception to this is the IRP program. On the average, each $100,000 of IRP money loaned by the intermediary results in one ultimate recipient (business) loan. This loan provides jobs for approximately 20-25 people. The average loan to an ultimate recipient is 8.82 years. Based on an average term of 8.82 years per loan to ultimate recipients, the total loan funds available to the intermediary revolves 3.4 times over the 30-year life of the loan to the intermediary. Therefore, approximately 76.5 jobs are established per $100,000 over the 30-year life of the loans to the intermediaries (22.5 * 3.4 =76.5).
The economic impact of the Business programs is also an important indicator. The Department of Labor estimates an economic multiplier effect of $2.50 for every dollar of Business loans or grants provided.