- House Committee on Small Business addresses report from the Small Business Administration’s Office of the Inspector
- OIG identifies fraud concerns with SBA loan programs as a key concern
- Committee chair says significant progress has been made to tighten internal controls and address other issues
Summary by Dirk Langeveld
The leader of the House Committee on Small Business is vowing to address issues highlighted in a recent report by the Small Business Administration’s Office of the Inspector General, including concerns about the potential for an increase in fraud.
The SBA OIG is a nonpartisan official providing oversight into the agency’s operation, and issues a report each year on the challenges the SBA is likely to face in the year ahead. SBA Inspector General Mike Ware issued the latest report to Congress at the end of November, addressing issues from the period between April 1 and Sept. 30, 2021.
The report’s key concern was the increased susceptibility of fraud in newly launched programs such as the Paycheck Protection Program and COVID Economic Injury Disaster Loan program. It also addressed issues in areas such as small business contracting, information technology security, access to capital, and disaster assistance.
“It is vital that we address the systemic challenges at SBA and work together to ensure that internal controls are put in place,” said Rep. Nydia M. Valezquez, chairman of the committee, on Wednesday. “Doing so, will make the agency stronger, nimbler, and better able to handle disasters in the future.”
- Fraud affecting PPP and COVID EIDL was most rampant at the outset of the programs, when they were newly established and experiencing high demand; the priority at this point was also to roll out assistance quickly to businesses suffering severe revenue losses
- Valezquez says the SBA has closed out 70 OIG recommendations in the past year, including the implementation of a master review plan for PPP loan and forgiveness applications, allowing the agency to hold funds at any time in the EIDL program, and ensuring that any borrowers are not on the Treasury Department’s “Do Not Pay” list.
- The OIG issued seven reports between April and September 2021 with 38 recommendations to improve SBA operations and reduce fraud and other losses; it says its audit efforts also recovered or saved $4 billion during the period