COVID 19 Program Recipients on the Department of Treasury's Do Not Pay List

Summary

Small Business Administration Office of Inspector General advisory, Report 22-06, dated November 30, 2021 and sent by Inspector General Hannibal "Mike" Ware to Administrator Isabella Casillas Guzman, on COVID-19 Economic Injury Disaster Loan recipients found on the Department of Treasury's Do Not Pay list. Working with Treasury's Do Not Pay Business Center, which matched EIDL program transactions from March to November 2020 against federal data sources, the OIG found that over $3.1 billion in COVID-19 EIDLs and $550 million in emergency EIDL grants went to potentially ineligible recipients. It says SBA's lack of adequate front-end eligibility controls contributed, and that SBA did not use Do Not Pay data sources as a control during that period. The OIG recommends SBA use the portal's matching or continuous monitoring functions before disbursing funds.

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COVID-19 EIDL PROGRAM RECIPIENTS ON THE
DEPARTMENT OF TREASURY’S DO NOT PAY LIST
REPORT 22-06 | November 30, 2021
S B A   I N S P E C T O R   G E N E R A L       M A N A G E M E N T  A D V I S O R Y

1
Office of Inspector General
U.S. Small Business Administration
MEMORANDUM
DATE:
November 30, 2021

TO:

Isabella Casillas Guzman
Administrator

FROM:
Hannibal “Mike” Ware
Inspector General

SUBJECT:
COVID-19 Economic Injury Disaster Loan Program Recipients on the
Department of Treasury’s Do Not Pay List (Report 22-06)

The Office of Inspector General (OIG) is issuing this Management Advisory to notify Small
Business Administration (SBA) officials of serious concerns about potential improper
payments in SBA’s Coronavirus Disease 2019 (COVID-19) EIDL program.
We have reported that the agency must enhance controls in order to respond to the
unprecedented amount of fraud in SBA pandemic assistance programs and to ensure only
eligible recipients are gaining access to the programs.1 We again collaborated with the U.S.
Department of Treasury’s Do Not Pay Business Center, which used computer matching and
data analysis techniques to identify COVID-19 EIDL program transactions potentially at risk
for noncompliance with SBA eligibility requirements.
Our review of Treasury’s analysis of processed COVID-19 EIDL and emergency EIDL grants
from March to November 2020 revealed that over $3.1 billion in COVID-19 EIDL and $550
million in emergency EIDL grants were distributed to potentially ineligible recipients. SBA’s
lack of adequate front-end controls to determine eligibility contributed to the distribution of
COVID-19 EIDLs and emergency EIDL grants to potentially ineligible recipients.
A portion of these applications have been identified as potential fraud risks in previous OIG
reports. OIG noted a percentage of COVID-19 EIDLs and emergency EIDL grants that
Treasury found in federal data sources had also been identified in prior OIG audit reports
(see Appendix I). To prevent potential improper payments, we recommend SBA use the
batch match or continuous monitoring functions available in Treasury’s Do Not Pay portal to
identify potentially ineligible applicants before disbursing COVID-19 EIDL program funds.

1 OIG Report 21-02, Small Business Administration’s Initial Disaster Assistance Response to the Coronavirus Pandemic (October 28, 2020)

1
Background
Treasury’s Do Not Pay Working System is the designated source of centralized data and
analytic services to help agencies verify eligibility and to identify and prevent fraud, waste,
and abuse of federal funds. Treasury’s system is designated by the Office of Management
and Budget (OMB) and mandated by the Payment Integrity Information Act of 2019 (PIIA).2
The Treasury database gives agencies a higher degree of certainty that a payee is legitimate
and eligible before making an award or payment.
We first reported on potential high-risk transactions related to the Paycheck Protection
Program.3 In the report, we found that SBA did not use certain federal databases to verify
eligibility of the payment before distributing awards to loan applicants.
The law requires agencies to conduct an evaluation of fraud risks and use a risk-based
approach to design and implement financial and administrative control activities to mitigate
identified fraud risks. The law reinforces the requirement for agencies to review
prepayment and preaward procedures.
Agencies are also required to review prepayment and preaward procedures and thoroughly
review available databases with relevant information to determine program or award
eligibility and prevent improper payments before the release of any federal funds. Before
issuing any payment or award, agencies shall review certain databases to verify eligibility of
the payment and award.
The law also requires agencies to review and identify programs susceptible to significant
improper payments, report on the amount and causes, and develop plans for reducing them.
An improper payment is any federal government payment made to an ineligible recipient or
for an ineligible good or service, duplicate payment, or payment for goods or services not
received (except for such payment authorized by law).
The Coronavirus Preparedness and Response Supplemental Appropriations Act deemed
COVID-19 as a disaster and determined that the EIDL program would be used to provide
economic relief to businesses that experienced a temporary loss of revenue due to the
pandemic. By March 21, 2020, all states, the District of Columbia, and U.S. territories had
been declared disaster areas.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Paycheck
Protection Program and Health Care Enhancement Act further provided $50 billion in
subsidy to support nearly $366 billion for COVID-19 EIDL and an additional $20 billion for
emergency EIDL grants. Eligible small businesses; small agricultural cooperatives; most
private, nonprofit organizations; businesses, cooperatives, Employee Stock Ownership
Plans, and tribal concerns with no more than 500 employees; sole proprietorships;
independent contractors; and agricultural enterprises that were adversely affected by the

2 The Payment Integrity Information Act of 2019 ((January 3, 2020) repealed the Improper Payments Elimination Recovery and Improvement Act of 2012 (January 10,
2013) which introduced the requirement for federal agencies to use the Do Not Pay system starting no later than June 1, 2013.
3 OIG Report 21-06, Paycheck Projection Program Loan Recipients on the Department of Treasury’s Do Not Pay List (January 11, 2021).

2
COVID-19 pandemic could apply for an EIDL and also request an emergency EIDL grant for
up to $10,000.
Eligible entities are required to use proceeds from COVID-19 EIDLs and emergency EIDL
grants for working capital, including salaries, payroll costs, sick leave, rent or mortgage
payments, material costs, and pre-existing debt during the pandemic. SBA asks each
applicant to self-certify under the penalty of perjury that they are eligible for the program.
Role of DNP in SBA’s Initial COVID-19 EIDL Program Response
PIIA requires agencies to establish preaward procedures to determine eligibility and
prevent improper payments before the release of any federal funds. The law further
specifies the use of DNP data sources as a control to determine program or award eligibility.
SBA did not implement DNP data sources as a control during the period of this analysis.
To identify potentially ineligible COVID-19 EIDL and emergency EIDL grant recipients,
Treasury’s DNP team compared EIDL program applicant information to data sources
available to DNP, and in the DNP portal (for federal data sources see Appendix III). That data
includes applicants’ names and Taxpayer Identification Numbers TINs are a Social Security
Number or Employer Identification Number. (For Treasury DNP’s methodology see
Appendix II.)
As of November 5, 2020, SBA had approved 3.6 million COVID-19 EIDLs totaling $190 billion
and 5.78 million emergency EIDL grants totaling $19.7 billion. To be eligible to receive
federal assistance such as an COVID-19 EIDL or emergency EIDL grant, a business must not
have any current federal debarments or suspensions. Additionally, applicants were required
to disclose any delinquent or defaulted federal loans or debts in the last seven years.
Treasury’s DNP portal identifies three types of match strength: conclusive, probable, and
possible. DNP defines conclusive as meaning that at least one exact TIN and name for an
applicant exactly match to a record(s) in the DNP data sources, indicating potential
ineligibility. There is a strong likelihood that awarding to an applicant that matched to a
data source using these criteria could result in an improper payment. Probable and possible
results have a lesser match confidence as they are matches based on single criteria (names
or TINs). This report focuses on applications with a conclusive match confidence.
SBA Awards $3.1 Billion in EIDL Program Funds to Potentially Ineligible
Recipients
SBA did not implement adequate preaward controls, resulting in COVID-19 EIDLs and
emergency EIDL grants being awarded to potentially ineligible recipients. For example,
applicants were required to certify whether they or the business had any current federal
debarments or suspensions from contracting with the federal government or receiving
federal grants or loans.
While a DNP match cannot definitively determine if an application is ineligible, there is a
strong likelihood that awarding to an applicant that matched to a DNP data source could
result in an improper payment. As stipulated by PIIA, the required match against DNP data
sources is a safeguard that minimizes the loss of taxpayer funds.

1
COVID-19 EIDL to Potentially Ineligible Recipients
Treasury’s DNP analysis of COVID-19 EIDLs found that of the $190 billion in COVID-19 EIDL
applications reviewed, 75,180 applications, totaling $3.1 billion, represent a high likelihood
of improper payments and payments that could have been disbursed to potentially
ineligible recipients.4
Of the 75,180 approved loans, 7,018 were found by an exact TIN and non-exact name match
in the DNP data sources. Searching the DNP data sources by exact TIN and non-exact name
match criteria resulted in applicants that represent a high likelihood of an improper
payment. Where the applicant’s name differs slightly from the name in the data source but
there is an exact match with the applicant’s TIN, there is also a high degree of match
confidence. For example, an applicant’s TIN exactly matches between the SBA data set
provided and the DNP source, however, the name spelling may differ. The SBA data set
name may be “John Doe,” but the DNP data source name might be “Jon Doe.” (See Table 1 for
a summary of match types found in DNP data sources.)
Table 1. How Loan Applicants’ Personal Identifiers Were Found in Federal Data
Sources
Match Type
Loans Likely to
Be Improper
Payments
Approved Loan
Amount (dollars)
Number of
Loans
(percent)
Approved
Loan
Amount
(percent)
Exact TIN and Exact Name
57,459
2,261,677,725
76.43
72.30
Exact TIN, Exact TIN and Exact
Name
6,354
349,815,798
8.45
11.18
Exact TIN and Exact Name, Exact
TIN and Non-Exact Name
3,768
129,748,745
5.01
4.15
Exact TIN, Exact TIN and Exact
Name, Exact TIN/Non-Exact Name
581
33,285,500
0.77
1.06
Total Exact Tin and Exact Name
68,162
2,774,527,768
90.67
88.70
Exact TIN and Non-Exact Name
5,865
282,575,651
7.80
9.03
Exact TIN, Exact TIN and Non-Exact
Name
1,153
70,984,200
1.53
2.2
Total Exact TIN and Non-Exact
Name
7,018
353,559,851
9.33
11.30
Total Applicants with a Higher
Likelihood of Resulting in an
Improper Payment
75,180
3,128,087,619
--
--

Of the total 75,180 approved loans that Treasury DNP’s analysis recognized as having a high
likelihood of an improper payment, 26,736 loans, or 35.6 percent, have been identified as
potential fraud risks in previous OIG reports. The loans had a value of about $1.2 billion. The
recommendation to review these loans for applicant eligibility was included in our previous
reports. We will not include these loans in our recommendation to SBA for further review.

4 COVID-19 EIDL universe included loans that were considered to be in the process of being evaluated by SBA, which includes loans with Current Stage Status of Funded,
Obligated, Obligating, and Approved.

1
Emergency EIDL Grants to Potentially Ineligible Recipients
Treasury’s DNP analysis of emergency EIDL grants found that $550 million, or 2 percent, of
the $19.7 billion in emergency EIDL grants were provided to applicants who were found in
the DNP data sources. That means 117,135 applications represent a high likelihood of an
improper payment and payments that could have been disbursed to potentially ineligible
recipients.
Of the 117,135 approved grants, 9,860 contained an exact TIN and non-exact name match to
a DNP data source. See Table 2 for a summary of match types found in DNP data sources.
Table 2. How Emergency EIDL Grant Applicants’ Personal Identifiers Were Found in
Federal Data Sources
Match Type
Grants Likely to
Be Improper
Payments
Approved Grant
Amount
(dollars)
Number of
Grants
(percent)
Approved
Grant
Amount
(percent)
Exact TIN and Exact Name
91,694
429,660,000
78.28
78.05
Exact TIN, Exact TIN and Exact
Name
6,953
28,289,000
5.94
5.14
Exact TIN and Exact Name, Exact
TIN and Non-exact Name
8,035
43,881,000
6.86
7.97
Exact TIN, Exact TIN and Exact
Name, Exact TIN and Non-Exact
Name
593
2,569,000
0.51
0.47
Total Exact TIN and Exact Name
107,275
504,399,000
91.58
91.63
Exact TIN and Non-exact Name
9,023
42,695,000
7.70
7.76
Exact TIN, Exact TIN and Non-exact
Name
837
3,404,000
0.71
0.62
Total Exact TIN and Non-exact
Name
9,860
46,099,000
8.42
8.37
Total Applicants with a Higher
Likelihood of Resulting in an
Improper Payment
117,135
550,498,000
--
--

Of the total 117,135 emergency EIDL grants that Treasury DNP’s analysis recognized as
having a high likelihood of an improper payment, 44,920, or 38.3 percent, have been
identified as potential fraud risks in previous OIG reports. The grants had a value of about
$342 million. The recommendation to review these grants for applicant’s eligibility was
included in our previous reports. We will not include these grants in our recommendation to
SBA for further review.
Conclusion
SBA’s lack of adequate preaward controls during this period of review led to 75,180 COVID-
19 EIDLs totaling over $3.1 billion and 117,135 emergency EIDL grants totaling over $550
million being disbursed to potentially ineligible recipients. Our preliminary review of
Treasury’s DNP analytical summaries indicated SBA should reassess controls to ensure only
eligible recipients obtained COVID-19 EIDLs and emergency EIDL grants.

3
Treasury’s DNP analysis of potentially ineligible recipients demonstrates the importance of
front-end controls and careful review by SBA of COVID-19 EIDLs and Emergency EIDL
grants.
Recommendations
To prevent improper payments and strengthen oversight controls related to the COVID-19
EIDL program, we recommend that the Administrator direct the Associate Administrator for
the Office of Capital Access to:
1. Implement prepayment and preaward procedures and use the batch match or
continuous monitoring functions available in Treasury’s DNP system to identify
potentially ineligible applicants before disbursing COVID-19 EIDL program funds.
2. Use Treasury’s DNP analysis to systemically flag COVID-19 EIDL and Emergency
EIDL grant recipients who were found in Treasury’s DNP system and not previously
reported by OIG. Review the applications and determine whether they are deemed
ineligible. If the applicant is deemed ineligible, recover any disbursed funds, and flag
the application as ineligible.
3. For all COVID-19 EIDLs and Emergency EIDL grants identified and flagged as
potentially ineligible above, include those transactions in SBA’s 2021 improper
payments estimation process.

1
Analysis of Agency Response
SBA leadership provided formal comments to the draft report. We have included those
comments in their entirety in Appendix IV. In the comments, the agency agreed with
recommendations one and two and disagreed with recommendation three.
The following summary summarizes the necessary remediation actions to close our
recommendations:

1. Resolved. Management agreed with this recommendation stating that on April 6,
2021 SBA implemented preaward procedures which include Treasury DNP
monitoring and uses DNP batch matching functions against DNP data sources for all
COVID-19 relief programs. Management stated that the pre-award procedures are
currently required for COVID-19 EIDL and COVID EIDL Targeted
Advances/Supplemental Targeted Advances to identify potentially ineligible
applicants before disbursing funds.

Management‘s proposed actions satisfy the intent of the recommendation. This
recommendation can be closed when management provides evidence that
functioning controls are in place to compare EIDL and grant applicant data against
DNP data sources to prevent ineligible applicants from receiving federal assistance.

2. Resolved. Management agrees with this recommendation stating that SBA ran the
entire COVID EIDL portfolio through Treasury’s DNP analysis to systemically flag
EIDL and grant recipients who were found in the DNP System. The applications are
being reviewed by loan officers. If the applicant is deemed ineligible and funds were
previously disbursed, the application is flagged as ineligible in the Rapid System.
Management‘s proposed actions satisfy the intent of the recommendation.

This recommendation can be closed when management provides evidence that
COVID-19 EIDL and emergency EIDL grant recipients who were found in Treasury’s
DNP system have been reviewed and the agency has determined whether the
applicants where eligible for COVID-19 EIDL program funds.

3. Unresolved. Management disagreed with this recommendation stating that only two
percent of the COVID-19 EIDLs and EIDL Advances identified were a match in some
way on the various DNP lists. Management also stated that though a DNP match may
be an indicator of a potential improper payment, it is not a guarantee, rather it is an
identifying flag that alerts trained SBA staff to conduct additional reviews on the
flagged files. Management further stated that flagged files are not necessarily
ineligible, and it would be inaccurate to assume so without a proper review.

However, management’s response to recommendation three does not align with its
acknowledgement of the importance of implementing the DNP system to reduce
improper payments. If management agrees that utilizing the DNP list will reduce
improper payments and that a match is an indicator of a potential improper
payment, they should also agree that EIDLs and grants flagged as ineligible should be
included for review in the improper payment estimation process.

2
In addition, the requirements for conducting improper payment reviews under PIIA,
indicate the head of each executive agency should develop strategies for addressing
risks and establishing appropriate prepayment and postpayment internal controls.
PIIA also stipulates agencies should consider those risk factors that are likely to
contribute to a susceptibility to significant improper payments, such as those
potential improper payments identified by the Inspector General of the executive
agency and the Government Accountability Office.
Due to the magnitude of potential improper payments we have identified in this
report, it is critical for the agency to perform postpayment reviews on those EIDLs
and emergency grants flagged as potentially ineligible.
Management‘s proposed actions do not satisfy the intent of the recommendation, and
we will work with SBA management to reach resolution. This recommendation can
be closed when management takes appropriate action to include the potentially
ineligible EIDL and emergency grant recipients identified in recommendation two in
their annual improper payment reviews.
We prepared this Management Advisory in alignment with OIG’s quality control standards
and the Council of Inspectors General for Integrity and Efficiency’s (CIGIE) Quality Standards
for Federal Offices of Inspector General, which require that we conduct our work with
integrity, objectivity, and independence. In connection with this Management Advisory, we
reviewed Treasury’s results and related documentation and interviewed Treasury
representatives.
If you have any questions, please contact me or Andrea Deadwyler, Assistant Inspector
General for Audits, at (202) 205-6586.

cc:
Antwaun Griffin, Chief of Staff
Arthur Plews, Deputy Chief of Staff
Patrick Kelley, Associate Administrator, Office of Capital Access
John M iller, Deputy Associate Administrator, Office of Capital Access
James Rivera, Associate Administrator, Office of Disaster Assistance
Peggy Delinois Hamilton, General Counsel
Martin Conrey, Attorney Advisor, Office of General Counsel
Michael Simmons, Attorney Advisor, Office of General Counsel
Tonia Butler, Director, Office of Internal Controls

3
Appendix I. Analysis of Treasury’s DNP Overlap with Prior OIG
Reports
Prior OIG reports have identified billions of dollars of potential fraud in the COVID-19 EIDL
program.5 The tables below provide data on the portion of EIDLs and grants matched in the
Treasury’s DNP database that included additional fraud indicators previously reported by
OIG. While it is impossible to conclusively determine whether an application is fraudulent or
legitimate through data matching alone, the more fraud indicators an application contains,
the less likely it is to be legitimate.
Overall, OIG found that 35.6 percent of approved COVID-19 EIDL applications and 38.3
percent of applications with disbursed emergency EIDL grants matched in Treasury’s DNP
database were previously reported by OIG as being potentially fraudulent or being issued to
ineligible entities. Table 3 shows a comparison of Treasury’s DNP matches to the same
transactions previously reported as potential fraud by OIG.
Table 3. DNP Matched Applications Previously Reported by OIG
Risk Indicator
COVID-19
EIDL
Application
Type
COVID-19
EIDL
Application
IDs
Percent
of DNP
COVID-
19 EIDL
Overlap
Emergency
EIDL Grant
Application IDs
Percent of
DNP
Emergency
EIDL Grant
Overlap
Duplicate IP Addresses
Loans and
Grants
17,240
22.93
3,449
2.944
Duplicate Email Addresses
Loans and
Grants
3,664
4.87
493
0.421
Duplicate Business
Addresses
Loans and
Grants
3,729
4.96
686
0.586
Duplicate Bank Account
Numbers
Loans and
Grants
475
0.63
28
0.024
Bank Account Changed Mid-
Application
Loans and
Grants
6,984
9.29
106
0.090
Potential ID Theft
Loans and
Grants
3,168
4.21
3,277
2.798
Business EINs registered
after January 31, 2020
Loans and
Grants
987
1.31
1,771
1.512
Sole proprietorship and
independent contractor
with no EIN and multiple
employees
Grants
N/A
N/A
38,544
32.906

After accounting for all COVID-19 EIDLs previously reported by OIG as potentially
fraudulent, 48,444 DNP EIDL matches and 72,215 emergency EIDL grant matches remain
unique. These previously unreported populations represent approximately $1.9 billion in
approved loans and $208 million in disbursed emergency EIDL grants. Table 4 below

5 OIG Report 22-01, SBA’s Emergency Economic Injury Disaster Loan Grants to Sole Proprietors and Independent Contractors
(October 7, 2021), OIG Report 21-15, SBA’s Handling of Identity Theft in the COVID-19 Economic Injury Disaster Loan
Program (May 6, 2021), and OIG Report 21-02, Inspection of Small Business Administration's Initial Disaster Assistance
Response to the Coronavirus Pandemic (October 28, 2020).

4
provides a summary of both previously reported COVID-19 applications and those
applications unique to the DNP match analysis.
Table 4. Summary of Treasury DNP COVID-19 EIDL Program Matches in OIG Reports
Reporting Metric
Loans
Grants
Total Number of Matched Applications in DNP Analysis
75,180
117,135
Total Approved/Disbursed Amount Matched in DNP Analysis
(dollars)
3,128,087,619
550,498,000
Application IDs Overlapping with Previous OIG Reports
26,736
44,920
Approved/Disbursed Amount Overlapping with Previous OIG
Reports (dollars)
1,245,926,323
342,385,000
Application IDs Not Previously Reported by OIG and Unique to the
DNP Analysis
48,444
72,215
Net Approved/Disbursed Amount Not Previously Reported by OIG
and Unique to DNP Analysis (dollars)
1,882,161,296
208,113,000
Note: COVID-19 EIDL amounts were calculated by the approved loan amount at the time of analysis. EIDL grant amounts
were calculated on the disbursed amount at the time of analysis.

5
Appendix II. Data Sources Mandated by Law and Used in
Treasury DNP’s EIDL Program Analysis
Treasury DNP matched COVID-19 EIDL and Emergency EIDL grant applicant identifiers to
data maintained in the following data sources:
Treasury Offset Program (TOP Debt Check)
• TOP Debt Check is a data extract or subset of data contained in the TOP delinquent
debtor database. It was created for the Treasury DNP system to help agencies fulfill
the obligation to deny federal loans, loan insurance, and loan guarantees to people
who are delinquent on federal nontax debts and child support obligations (if allowed
by agency statute and regulations).
• DNP receives weekly TOP Debt Check updates.
Credit Advisory Interactive Verification Reporting System (CAIVRS)
• A shared database of defaulted federal debtors, CAIVRS enables processors of
applications for federal credit benefits to identify individuals who are in default or
have had claims paid on direct or guaranteed federal loans or are delinquent on
other debts owed to federal agencies.
• Treasury DNP receives CAIVRS data from the following agencies:
• U.S. Department of Justice
• U.S. Department of Agriculture
• U.S. Department of Veterans Affairs (database not open to states)
• U.S. Department of Housing and Urban Development
• Small Business Administration
• The entire CAIVRS database is refreshed each time any agency source forwards an
update. The agency sources update data at various times throughout the month.
System for Award Management (SAM Exclusion)
• SAM Exclusion records contain the data for all active exclusion records entered by
the federal government identifying those parties excluded from receiving federal
contracts, certain subcontracts, and federal financial and nonfinancial assistance and
benefits.
• Treasury DNP receives daily SAM updates.
Death Master File (DMF)
• The DMF from the Social Security Administration (SSA) is a data source that contains
more than 94 million records. The file is built from internal SSA records of deceased
persons possessing social security numbers and whose deaths were reported to the
SSA.

6
• Treasury DNP uses the public DMF but does not have access to the full DMF.
Legislation such as the Social Security Act precludes the sharing of the full DMF with
agencies that do not pay benefits.
• Treasury DNP receives a weekly update to the public DMF and full refresh every
quarter.
American InfoSource (AIS Obituary and AIS Probate)
• AIS is a commercial global financial services company that provides obituary and
probate death data. AIS death data includes information about deceased individuals
from all 50 states. AIS gathers information from probate court records and published
obituaries. Obituaries are gathered by AIS from more than 3,000 funeral homes and
thousands of newspapers. Probate records are collected from county courts.
• Treasury DNP receives weekly updates of all AIS data.
Department of Defense (DOD)
• DOD death data provides information about confirmed or presumed deaths of United
States military members while abroad and at home.
• Treasury DNP receives an update to DOD data the first week of every month.
Department of State (DOS)
• DOS death data provides information about confirmed or presumed deaths of United
States citizens while abroad. Data is provided by DOS’s Bureau of Consular Affairs
and originates from the American Citizen Services System.
• Treasury DNP receives an update to DOS data on the 11th of each month.
Table 5 reflects below the number of COVID-19 EIDL and Emergency EIDL Grant
applications and approved or disbursed amount categorized by the matched DNP data
source.
Table 5. Summary of Treasury DNP COVID-19 EIDL Program Matches by Data Source
DNP Data Source
Matched
Loan
Application
Count
Approved Loan
Amount
(dollars)
Matched
Grant
Application
Count
Disbursed
Grant
Amount
(dollars)
TOP Debt Check
72,015
2,955,329,019
115,254
543,421,000
CAIVRS (TIN Only)
21,628
1,304,730,198
28,041
105,914,000
SAM Exclusion
1,128
53,819,500
1,624
5,592,000
AIS Obituary
1,910
113,527,300
540
2,343,000
DMF
624
30,488,800
62
321,000
AIS Probate
106
6,683,000
17
84,000
Dept. of State
15
700,300
4
22,000
Dept. of Defense
--
0
1
10,000
Note: The count of matched applications will not equal the total values in tables 1 and 2 because of application matches to
multiple data sources.

7
Appendix III. Treasury DNP’s Analytics Methodology
Scope Period
OIG extracted emergency EIDL grant data from the Office of Disaster Assistance Data
Warehouse on November 5, 2020. The Office of Capital Access provided COVID-19 EIDL data
as of October 31, 2020. On November 6, 2020, the OIG provided these data files to Treasury
DNP for their analysis. DNP initiated this project in February 2021 and the OIG subsequently
summarized previously reported EIDL high-risk transactions.
Data Evaluation
The following COVID-19 EIDL program applications were matched against DNP data
sources:
• COVID-19 EIDL universe included loans that were considered to be in the process of
being evaluated by SBA, which includes loans with Current Stage Status of Funded,
Obligated, Obligating, and Approved. Excluded from this analysis are loans with a
current stage status of declined, duplicate, credit pulled, not interested, C - Offer
Accepted - Awaiting Compl Apps, submitted deal, repriced, or unqualified.
• Emergency EIDL grants were evaluated if the grant matched to an active DNP data
source at the time of the grant's disbursement and if there was information in the
grant payment date and value data fields, regardless of the application’s status. This
captures those applicants who received grants and did not receive funds from a loan.
The results also include applicants that have received grants, but the funds were
returned later.
DNP’s Analysis identified potentially ineligible applicants by screening the information
provided on their COVID-19 EIDL and Emergency EIDL grant applications (Taxpayer
Identification Number/name of the borrower, borrower’s business, and/or principals’
information) against the DNP debt, exclusions, and death data sources. Based on guidance
from OIG, DNP adjusted the analysis of the EIDL program to align with the eligibility
provision established by the program. Filters were applied by DNP to limit the identification
of applicants to records that matched to:
• Treasury Offset Program Debt Check and/or the Credit Alert Verification Reporting
System data sources. Matches to these data sources were limited to only records with
non-tax federal debts or state child support debts. Further filtering identified only
those EIDL applicants who had a delinquent debt within seven years of the EIDL
applicant date or emergency advance EIDL grant applicants with delinquent debt at
the time of the EIDL application date.
• System of Award Management (SAM) Exclusions data source. Additional filtering
uncovered only those records that were active in the data source at the time of the
EIDL application date.
• Any of the death data sources utilized by DNP (American InfoSource - Obituary,
American InfoSource – Probate, Death Master File- Public, Department of Defense
Death Data – Public, and/or Department of State Death Data – Public).
Supplementary filters were applied to identify applicants that died within one year of
the application date.

[1]

Date:

November 22, 2021

To:

Jeff Brindle

Director, IT & Financial Management

Office of Inspector General

From:
Steve Kucharski
Director - SK
Office of Capital Access

Subject:
OIG Discussion Draft Memo – COVID-19 EIDL Program Recipients on the Department of
Treasury’s Do Not Pay List
(Project No. 20021B)

The SBA team reviewed the OIG Discussion Memo. SBA acknowledges the importance of
implementing the Do Not Pay (DNP) system to reduce improper payments. SBA complies with the
Office of Management and Budget (OMB’s) Payment Integrity Information Act of 2019 (PIIA) for the
EIDL loan and grant programs. This memo details SBA’s response to the OIG recommendations.

OIG Recommendations and Agency Response

1) Implement review pre-payment and pre-award procedures and use the batch match or continuous
monitoring functions available in Treasury’s DNP system to identify potentially ineligible applicants
before disbursing COVID-19 EIDL program funds.

SBA Response: SBA agrees; SBA implemented pre-award procedures which include Treasury Do Not
Pay monitoring on April 6, 2021. The pre-award procedures are currently required for all COVID relief
programs, including COVID-19 EIDL.

The COVID EIDL Targeted Advances/Supplemental Targeted Advances use the DNP Batch Matching
functions against the following data sources to identify potentially ineligible applicants before
disbursing funds. (See Table 1)

The COVID EIDL loans use the DNP APIs against the following data sources to identify potentially
ineligible applicants before disbursing COVID EIDL funds. (See Table 1)

2) Use Treasury’s DNP analysis to systemically flag EIDL and grant recipients who were found in Treasury’s
DNP system and not previously reported by OIG. Review the applications and determine whether they are
deemed ineligible. If the applicant is deemed ineligible, recover any disbursed funds, and flag the
application as ineligible.

U.S. SMALL BUSINESS ADMINISTRATION

WASHINGTON, DC 20416

[2]

SBA Response: SBA agrees; SBA ran the entire COVID EIDL portfolio through Treasury’s DNP analysis to
flag EIDL and grant recipients who were found in the DNP System. The applications are reviewed by
loan officers. If the applicant is deemed ineligible and funds were previously disbursed, the
application is flagged as ineligible in the Rapid System.

3) For all EIDLs and grants identified and flagged as ineligible above, include those transactions in SBA’s
2021 improper payments estimation process.

SBA Response: SBA disagrees with this recommendation for the following reasons. The Draft Memo
findings state that only two percent of the COVID-19 EIDLs and EIDL Advances identified were a match
in some way on the various DNP lists. Though a DNP match may be an indicator of a potential
improper payment, it is not a guarantee, rather it is an identifying flag that alerts trained SBA staff to
conduct additional reviews on the flagged files. Furthermore, flagged files are not necessarily
ineligible and it would be inaccurate to assume so without a proper review. SBA’s internal control
process does a statistically valid sampling to determine the COVID EIDL Improper Payment (IP) rates.
Incorporating the DNP rates on top of our current IP rates would erroneously inflate our IP rate by 2
percent.

Table 1
Code
List Name
DMF
Death Master File (DMF) - Public (SSA)
DOS
Department of State Death Records - Public
DOD
Department of Defense Death Records - Public
AIS-OBIT
American InfoSource Death Data - Commercial
AIS-PROB
American InfoSource Death Data - Commercial
OFAC
Office of Foreign Assets Control (OFAC) - Public (Treasury)
SAM-EXCL-RES
SAM Exclusion Records – Restricted - (GSA)

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