MBDA Programs Grow Businesses, Access Capital, Markets

GAO Reports

Published March 27th, 2026

Detected March 27th, 2026

Summary

A GAO report reviewed the Minority Business Development Agency's (MBDA) performance monitoring and program oversight of its business centers. The report found that most centers met performance goals, but some required improvement plans. The report also details the impact of early 2025 executive orders on MBDA's operations and data access, which were later partially rescinded by court orders.

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What changed

This GAO report examines the Minority Business Development Agency's (MBDA) programs designed to foster the growth of minority-owned businesses by improving their access to capital, markets, and contracting opportunities. The review found that MBDA annually rates its 39 business centers against performance goals, with 5 of 7 reviewed centers receiving the highest rating in 2023-2024. MBDA also monitors compliance, initiating improvement plans for five centers between 2021 and 2024 due to issues like incomplete reporting.

The report highlights significant operational disruptions in early 2025 following executive orders, which led to the termination of cooperative agreements and staff leave, though some actions were later overturned by preliminary injunctions. The ongoing legal challenges and appeals as of February 2026 underscore the volatile environment impacting MBDA's operations and its ability to support minority businesses. Compliance officers should note the agency's performance monitoring processes and the recent legal challenges affecting its operational capacity.

What to do next

Review MBDA's performance monitoring and oversight processes.
Assess the impact of recent executive orders and subsequent legal challenges on MBDA's operational capacity and data access.

Source document (simplified)

GAO-26-107718 Published: Mar 27, 2026. Publicly Released: Mar 27, 2026.

Fast Facts

The Minority Business Development Agency has programs to grow and develop businesses owned and operated by socially or economically disadvantaged people. The agency helps these businesses access capital, markets, and contracting opportunities through its network of 39 business centers (as of 2024).

This Q&A report reviews MBDA's performance monitoring and program oversight. We found that MBDA annually rates how centers meet performance goals. 5 of the 7 we reviewed received the highest rating in 2023–2024.

MBDA also monitors how centers comply with program requirements. 5 centers initiated improvement plans in 2021–2024.

Highlights

What GAO Found

The Minority Business Development Agency’s (MBDA) mission is to promote the growth and competitiveness of minority business enterprises. These enterprises are statutorily defined as being at least 51 percent owned, operated, and controlled by one or more socially or economically disadvantaged individuals. MBDA supports these enterprises through a network of business centers designed to expand their access to capital, contract opportunities, and markets. In 2024, there were 39 active business centers.

MBDA’s responsibilities include assessing business centers’ performance against annual program goals and monitoring their compliance with statutory and program requirements. GAO’s review of performance information for a sample of seven centers found that most reported exceeding annual goals in 2024. MBDA monitoring includes reviews of centers’ performance and financial reports and site visits by MBDA staff. In 2023, MBDA initiated performance improvement plans for five of the 39 centers for issues such as submitting incomplete reports.

MBDA’s Key Activities for Monitoring and Enforcing Compliance at Business Centers

Following executive orders issued in February and March 2025, MBDA and business centers lost access to the agency’s performance data platform, nearly all MBDA staff were placed on administrative leave, and cooperative agreements with business centers were terminated. In May 2025, staff reductions and some agreement terminations were rescinded by a preliminary injunction order issued by a federal district court. According to MBDA officials, the agency retained its performance data. In November 2025, the same court issued an order vacating agency actions under the March executive order and a permanent injunction prohibiting the federal government from implementing the executive order. However, in January 2026 the defendants, including MBDA, appealed the November 2025 decision. The appeal was pending as of February 27, 2026.

Why GAO Did This Study

The Minority Business Development Act of 2021 includes a provision for GAO to review MBDA’s programs, including business center compliance with program requirements. This report describes MBDA programs, its assessment and oversight of business centers, and the effects of executive orders issued in early 2025. GAO analyzed agency documents, notices of funding opportunity, and performance reports; reviewed laws, executive orders, and research literature; and interviewed MBDA officials, business center operators, and advocacy organizations. GAO also reviewed 2024 performance data for a nongeneralizable sample of seven business centers (selected in part for geographic diversity) and analyzed compliance and enforcement activity in 2021–2024.

For more information, contact Courtney LaFountain at LaFountainC@gao.gov.

Full Report

Full Report (18 pages)

GAO Contacts

Courtney LaFountain lafountainc@gao.gov

Media Inquiries

Sarah Kaczmarek Managing Director Office of Public Affairs media@gao.gov

Public Inquiries

Topics

Business Regulation and Consumer Protection Business centers Compliance oversight Business development Small business Law courts Economically disadvantaged Private sector Single audits Regulatory noncompliance Defendants