Small Business Administration

Inadequate Oversight of Capital Management Services, Inc.-an SSBIC Gao ID: T-OSI-95-19 August 7, 1995

This testimony discusses GAO's March 1994 (GAO/OSI-94-23) on Capital Management Services, Inc., a specialized small business investment company in Little Rock, Arkansas, that was licensed by the Small Business Administration (SBA). GAO examines (1) whether SBA properly regulated and oversaw the operations of Capital Management; (2) whether Capital Management adhered to SBA regulations in determining the eligibility of firms it financed; and (3) whether it operated in a businesslike manner in providing financing. GAO also analyzes the financing that Capital Management provided to Susan McDougal, Castle Sewer and Water Corporation, and Southloop Construction Corporation, Castle's wholly owned subsidiary.



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