Report 2016-133 Recommendation Responses
Report 2016-133: SAFE-BIDCO: At Risk of Insolvency, It Needs Increased Oversight if It Is to Receive State Funding and Continue to Help Small Businesses in California Gain Financing (Release Date: April 2017)
Recommendation for Legislative Action
To track SAFE-BIDCO's performance in fulfilling its mission to provide assistance to California small businesses, the Legislature should require SAFE-BIDCO to report to the Legislature annually on its revenue and expenses and the success of its programs.
Description of Legislative Action
SAFE-BIDCO was seized by the California Department of Business Oversight (Business Oversight) in September 2017 and is no longer in operation. Business Oversight in July 2017 required SAFE-BIDCO to prepare plans to liquidate the business. On September 15, 2017, citing our April 2017 audit in part, Business Oversight issued an order taking possession of SAFE-BIDCO and appointing an agent to assist in liquidating the entity. Business Oversight noted in its order many of the same concerns we identified in our audit, including SAFE-BIDCO's operating losses, declining capital, and declining loan production. In particular, Business Oversight found that SAFE-BIDCO had no viable plan for improving its sustainability or protecting its creditors. Business Oversight's action to liquidate SAFE-BIDCO has effectively resolved the need for our recommendations.
- Legislative Action Current As-of: December 2017