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State advocacy board fails small business owners, Auditor Galloway says

Audit finds Small Business Regulatory Fairness Board does not meet obligations due to vacancies, inadequate support

Missouri State Auditor Nicole Galloway today released her audit of the Small Business

“The Small Business Regulatory Fairness Board has not received necessary support to fulfill its role as the voice of small business owners, leaving many citizens in the dark about a regulatory process that directly impacts their livelihoods,” Auditor Galloway said. “The board is, by design, led by private citizens who help make the regulatory process less burdensome on business owners, but without resources or state support, the board’s volunteer members are not meeting this critical mission.”

Associated Industries of Missouri president/CEO Ray McCarty echoed Auditor Galloway’s comments. “This Board is supposed to help small businesses by reducing red tape and preventing huge costs from being levied through state regulations, but it is ineffective in its current state and must be revived,” said McCarty.

In January the board issued a report describing its own “sub-par” operations. Auditors reviewed board procedures and functions and found inadequate staffing, along with long-term board vacancies and lapsed terms, which are due to be filled by the governor and legislative leaders.

The audit found that over a two-year period, members did not review relevant proposed regulatory changes that could have impacted small businesses and did not receive input from small business owners about potential effects on their companies. The audit also raised concerns regarding the board’s interaction with the Department of Economic Development. Board members said the department failed to offer essential staffing support and did not renew a contract for an online service that notified board members and small business owners of proposed regulatory changes. In its response, the department described the purposes of the board as redundant with duties performed by a legislative committee.

“The board is intended to bring a small business owner perspective to the regulatory process and help eliminate unnecessary red tape,” Auditor Galloway said. “My team has made a series of recommendations, and I’m calling on the legislature and the Department of Economic Development to take action to ensure business owners can weigh in on policies that affect them.”

The board received an overall performance rating of “poor,” the lowest rating available. Auditors will return next year to conduct a follow-up review to determine whether recommendations have been implemented.

The complete audit report for the Small Business Regulatory Fairness Board is online at auditor.mo.gov.

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