Springboard Enterprises, an organization designed to encourage women entrepreneurs and financiers, is embroiled in a fray with the Small Business Administration, which has accused the group and two of its executives of misusing government money and violating a variety of rules.
Although Springboard is now a separate nonprofit entity, it was hatched at the National Women's Business Council, a federally funded advisory council to the president, Congress and the SBA on economic issues of interest to women business owners. The SBA began an audit of the council's work with Springboard in 2001, when the SBA inspector general's office received inquiries from the agency's general counsel office about "questionable" NWBC expenses and activities.
In an audit report filed in July 2003 and in a follow-up report in September, the agency says that Springboard executives acted improperly while they were government employees. The September report alleges that Springboard's leaders, Amy Millman, the former council executive director, and Debra Filtzer, the council's program manager, used "their positions as government employees to engage in matters related to Springboard venture capital forums for women after they developed a financial interest in Springboard." Some of the allegations against the two include violating contracting rules, giving out cash awards without authorization and violating travel rules.
The SBA says $195,470 is owed to the government, including $63,000 in proceeds from a venture capital fair that the agency says went to Springboard when it should have gone to the government, and $13,081 in what it says were inappropriate cash payments to Springboard employees for expenses or consulting fees. The rest is being sought from other groups related to Springboard's activities but not named in the report because of what Glenn Harris, acting counsel to the SBA inspector general, says are privacy concerns.
The September report says an additional $579,368 is in question. Harris said those funds may eventually need to be sought from Springboard and one other group or person not named in the report.
Millman said she disagrees strongly with SBA's allegations. "It's like revisionist history. I don't know where they got these numbers from," she said. She and Filtzer have filed a response challenging the agency's conclusions. In it, they say the July report "contains a number of findings and recommendations that are not supported by the facts and that rest on erroneous assumptions." The letter says that Millman believed her actions were proper, "a belief buttressed by the fact that transactions of all types were processed routinely and without question by various offices within the SBA."
Millman said in an interview that because the National Women's Business Council is an independent agency, she did not believe that she was bound by the same rules that governed SBA employees, even though she was paid by the federal government.
Filtzer could not be reached for comment yesterday.
The July audit report says Millman, who is president of Springboard, authorized six Springboard-connected trips unrelated to "the mission of the government," including travel to Paris and San Francisco accompanied by her daughter, and a weekend Springboard staff meeting in Las Vegas planned around the wedding of a staff member. About $1,400 was subtracted from Millman's final government paycheck for her daughter's travel expenses, according to the July report.
Millman said questions about the trips had to do with "paperwork and misunderstandings," adding, "There was no attempt to hide anything." She declined to discuss the matter further.
Millman said she doesn't know where Springboard would come up with the money the SBA says it is owed. The agency says it is now reviewing legal options for the recovery of funds.
A typical audit at the SBA is resolved within a year, according to the agency. However, said Marc Bickoff, an audit manager who worked on this case, the Springboard situation is much more complicated. The audit made 24 recommendations for changes in procedures, including changes in internal controls at the National Women's Business Council. So far 14 -- some of which include changes in supervision and ethics training at the council -- have been addressed by SBA managers, officials said.
Springboard was launched in Washington in 1999 to coach female business executives and introduce them to funding sources through a series of venture capital fairs. Local law firms, accounting firms and others became sponsors, all wanting to help bridge the gap between women and funding. America Online, the Morino Institute, Hale & Dorr, and Washington Techway, a now-defunct magazine then owned by The Washington Post Co., were among many who supported Springboard with their dollars and names.
As Springboard gained steam, Millman began organizing venture fairs around the country, and in 2000, with financial help from the Kansas City-based Ewing Marion Kauffman Foundation, spun Springboard off as a separate nonprofit group. Millman and Filtzer were still government employees when Springboard was incorporated and the two became officers of the new entity. They continued to receive government paychecks until they resigned from women's business council in 2001.
Upcoming Springboard fairs are planned for Silicon Valley, New England, Ottawa and Atlanta this year. The last time the group held a Washington fair was in July 2000. That gathering featured dozens of the area's top women entrepreneurs.
Springboard has helped women all over the country raise $1 billion in funding, according to Millman, and she's proud of that track record. John May, a local expert in private equity investing who worked with Springboard in its early days, said yesterday he was shocked to hear about the allegations. "It was a great niche that needed to be filled. I'm surprised, bewildered and saddened," May said.
Shannon Henry writes about Washington's technology culture every other Thursday. Her e-mail address is firstname.lastname@example.org.