GAO-22-105442 — Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight (July 2022, Highlights)

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The one-page Highlights of GAO-22-105442, a U.S. Government Accountability Office report to congressional committees dated July 2022 on the Small Business Administration's Restaurant Revitalization Fund. GAO reports that just over 100,000 businesses received funding, 40 percent of eligible applicants, with a median award of about $126,000. It finds that SBA emphasized pre-award controls but has not assessed their effectiveness, and that over 4,000 recipients who applied through external vendors have been flagged for suspected fraud or ineligibility. It also reports that 32 percent of required annual reports were overdue as of June 2022. GAO makes seven recommendations; SBA agreed or partially agreed with two and disagreed with five.

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United States Government Accountability Office 
 
  
Highlights of GAO-22-105442, a report to 
congressional committees 
 
July 2022 
RESTAURANT REVITALIZATION FUND 
Opportunities Exist to Improve Oversight 
What GAO Found  
The Restaurant Revitalization Fund was established in March 2021 to support 
eligible entities suffering revenue losses from the COVID-19 pandemic. The 
Small Business Administration (SBA) began accepting applications and awarding 
funds in May 2021. SBA stopped accepting applications in July 2021 with the 
program oversubscribed and almost all its funds disbursed.   
Restaurant Revitalization Fund Award Disbursements, May 3–July 1, 2021 
 
Just over 100,000 businesses received funding (40 percent of eligible 
applicants). The median award was about $126,000. Most recipients (72 percent) 
reported they were owned by women, veterans, or members of socially and 
economically disadvantaged groups. About 43 percent had 2019 revenue of 
$500,000 or less.  
SBA emphasized pre-award controls to detect fraudulent or ineligible applications 
but has not assessed their effectiveness. While SBA prevented over 30,000 
suspicious applications from receiving awards, GAO identified systemic control 
weaknesses. For example, SBA considered applications made through external 
vendors to be low-risk, but over 4,000 recipients who applied through such a 
channel have been flagged for suspected fraud or ineligibility, including an 
alleged fraudster who received $8 million. Assessing controls and addressing 
deficiencies would help SBA better ensure program integrity. 
SBA requires recipients to report annually on fund use, but has taken limited 
steps to enforce reporting requirements and identify fraudulent or ineligible 
awards. The first reports were due in December 2021, but 32 percent were 
overdue as of June 2022. And SBA has not proactively used data analytics or 
information from enforcement entities to identify potentially fraudulent award 
recipients. SBA does not immediately investigate all potentially fraudulent 
awards, and instead waits for recipients to submit final reports (which might not 
be until April 30, 2023). Taking additional steps to identify and address potentially 
fraudulent awards in a timely manner could help SBA recover funds.   
View GAO-22-105442. For more information, 
contact William B. Shear at (202) 512-8678 or 
ShearW@gao.gov 
Why GAO Did This Study 
In 2020 and 2021, restaurants, bars, 
and other food service businesses 
experienced substantial revenue loss 
and unemployment resulting from the 
COVID-19 pandemic. In March 2021, 
Congress appropriated $28.6 billion to 
SBA for a Restaurant Revitalization 
Fund to assist the industry.  
The CARES Act includes a provision 
for GAO to monitor federal efforts to 
respond to the COVID-19 pandemic. 
Among its objectives, this report 
examines recipient characteristics, 
SBA’s internal controls and fraud risk 
management practices, and SBA’s 
efforts to monitor recipients. 
GAO reviewed SBA documentation, 
analyzed SBA data on the program’s 
applicants and recipients, and 
interviewed SBA officials and 
representatives of industry 
associations.  
What GAO Recommends 
GAO makes seven recommendations 
to SBA, including to assess pre-award 
controls and address deficiencies, 
strengthen post-award reporting, take 
additional steps to identify fraudulent or 
ineligible awards, and develop and 
implement a plan to address potentially 
fraudulent award recipients in a timely 
manner. SBA agreed or partially 
agreed with two recommendations. 
SBA disagreed with five 
recommendations, including to assess 
pre-award controls and implement a 
plan to address fraudulent or ineligible 
awards. GAO maintains that all of the 
recommendations are valid, as 
discussed in this report.

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