Small Business 8(a) Certification Issues

Posted by Biz Central USA Marketing Team on July 8, 2010 under Small Biz and Entrepreneurship, Small Biz Certifications | 2 Comments to Read

Being 8(a) certified is a great resource for small businesses. Unfortunately many businesses have eligibility issues when their yearly review information makes them ineligible or they do not submit them at all.

In order to stay 8(a), certified small businesses must submit documents to be reviewed annually. The SBA is required to review each 8(a) firm’s program eligibility every year on the firm’s certification anniversary date. This office sends each participant a request for the required Annual Review documents and information shortly before the end of your program year which contains the date that your submission is due back to your Business Development Specialist (BDS). If it is not received by the due date, you will be sent a reminder and a second due date. If the information is not submitted by this second date, SBA’s rules & regulations require us to start program termination proceedings against your firm. The termination process may result in the loss of your 8(a) certification. Once it is lost you cannot be certified in the program again. Since annual reviews are done every year on your anniversary date, you should be prepared for it and comply on time.

Your year end financial statements must be signed, dated and their accuracy verified by an authorized officer, partner, or sole proprietor of the concern. 8(a) certified small businesses with annual receipts of less than $1 million may submit statements prepared in-house, in accordance with “generally accepted accounting procedures” or have a compilation statement prepared by a qualified CPA or independent public accountant. Those firms with sales of more than $1 million and less than $5 million must provide reviewed statements, prepared by a qualified CPA or independent public accountant. Statements are due within ninety (90) days after the close of the company fiscal year.

Those firms with total sales of $5 million and over are required to submit audited financial statements prepared by a CPA or independent public accountant. Those firms who will be submitting audited statements are allowed an additional 30 days due to the added complexity. The company’s sales figures on the Profit and Loss Statement must show the break-down of 8(a) and non-8(a) sales, if applicable. The submission of proper, year end financial statements, (Balance Sheet and Profit and Loss Statements) is mandatory as a condition of 8(a) certification program participation, as noted in your signed 8(a) Participation Agreement. Firms who are delinquent in submitting annual financial statements are ineligible to receive 8(a) contract awards. In addition program termination proceedings may be initiated if financial statements are not received in this office by the required due date. Most 8(a) small businesses have calendar fiscal year end date (December 31). While the financial statement due date might correspond with the time that your accountant is doing your business & personal tax returns, there is no provision for any extensions to the financial statement submission date. Make sure that your CPA is aware of this mandatory 8(a) compliance requirement.

Making sure that your small business submits your annual review each year and making sure that the information that you submit is accurate and in line with the SBA’s standards is extremely important to ensuring your small businesses ability to remain 8(a) certified.