GAO-21-489: Small Business Administration: Use of Supplemental Funds for Administering COVID-19-Related Programs

Summary

GAO report GAO-21-489, "Small Business Administration: Use of Supplemental Funds for Administering COVID-19-Related Programs," a report to congressional committees dated June 2021. It states that in fiscal year 2020 Congress provided SBA about $3.4 billion in supplemental appropriations to administer assistance including the Paycheck Protection Program and Economic Injury Disaster Loans, an amount seven times greater than SBA's typical annual resources for salaries and expenses. As of January 31, 2021, SBA had obligated about 57 percent ($1.9 billion) and expended 49 percent ($1.6 billion) of these funds, using about three-quarters for contractual services and about one-fifth for personnel costs. It reports that SBA had obligated about $750 million for a contract for processing EIDL loan applications.

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United States Government Accountability Office
Report to Congressional Committees

SMALL BUSINESS
June 2021

ADMINISTRATION

Use of Supplemental
Funds for Administering
COVID-19-Related
Programs

GAO-21-489
June 2021

SMALL BUSINESS ADMINISTRATION
Use of Supplemental Funds for Administering COVID-
19-Related Programs
Highlights of GAO-21-489, a report to
congressional committees

Why GAO Did This Study What GAO Found
The COVID-19 pandemic disrupted In fiscal year 2020, Congress provided the Small Business Administration (SBA)
small businesses and generated an about $3.4 billion in supplemental appropriations to administer small business
immediate need for emergency funding assistance during the COVID-19 pandemic, including loan programs such as the
to keep businesses operating. In Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
response, Congress dramatically That amount is seven times greater than SBA’s typical annual resources for
increased the amount of loans, grants, salaries and expenses (a budget category encompassing many administrative
and other financial assistance available costs). SBA spending plans show that the agency planned to use the
from SBA. To help SBA manage the supplemental administrative funds primarily for contract and personnel costs.
large volume of assistance, Congress
provided the agency additional funds As of January 31, 2021, SBA had obligated about 57 percent ($1.9 billion) and
for administrative expenses. expended 49 percent ($1.6 billion) of the supplemental appropriations. SBA used
Congress included a provision in
about three-quarters of those funds for contractual services and about one-fifth
statute for GAO to report on SBA’s use for personnel (payroll, benefits, and overtime) costs (see figure).
of supplemental appropriations
provided in fiscal year 2020 for SBA’s Obligations and Outlays of Fiscal Year 2020 Supplemental Appropriations for
administrative expenses. This report Administrative Expenses as of January 31, 2021, by Use Category
discusses (1) the amount of
supplemental appropriations SBA
received in fiscal year 2020 for
administrative expenses and SBA’s
planned uses for these funds, and (2)
the extent to which SBA had obligated
and expended these funds as of
January 31, 2021, and for what
purposes.
To conduct this work, GAO reviewed
appropriations legislation, analyzed
SBA spending plans and financial data,
and interviewed SBA officials.

Note: Percentages may not sum to 100 because of rounding.

SBA has used the supplemental funds for a variety of contractual services,
including (1) loan processing and other loan administration services and (2)
information technology products and services. For example, as of January 31,
2021, SBA had obligated about $750 million in supplemental funds for a contract
for processing EIDL loan applications and providing recommendations on loan
decisions. As of that date, SBA also had obligated about $150 million for a
contract to enhance SBA’s technology for implementing PPP loan forgiveness
provisions. Regarding personnel costs, SBA determined that it needed large,
temporary staff increases to manage the greater volume of assistance during the
pandemic. According to SBA, the agency hired more than 6,000 temporary
employees—almost one-half of them for loan specialist positions—for the office
that administers the EIDL program. SBA also reported hiring close to 400
View GAO-21-489. For more information,
contact William B. Shear at (202) 512-8678 or
temporary employees—about two-thirds of them for loan specialist positions—for
shearw@gao.gov. other SBA components, including the office that administers PPP.

United States Government Accountability Office
Contents

Letter 1
Background 3
SBA Received About $3.4 Billion in Supplemental Appropriations
for Administrative Expenses and Identified Several Planned
Uses 6
As of January 2021, SBA Had Obligated 57 Percent of the Funds
and Expended 49 Percent, Largely on Contractor Services 8
Agency Comments 13

Appendix I GAO Contact and Acknowledgments 15

Tables
Table 1: SBA Programs Created or Expanded by Congress in
Response to COVID-19 5
Table 2: Small Business Administration’s (SBA) Fiscal Year 2020
Supplemental Appropriations for Administrative Expenses 6
Table 3: Ten Largest SBA Contract Obligations Funded by Fiscal
Year 2020 Supplemental Administrative Appropriations,
as of January 31, 2021 12

Figures
Figure 1: SBA’s Obligations and Outlays of Fiscal Year 2020
Supplemental Appropriations for Administrative Expenses
as of January 31, 2021, by Appropriation 9
Figure 2: SBA’s Obligations and Outlays of Fiscal Year 2020
Supplemental Appropriations for Administrative
Expenses, as of January 31, 2021, by Program 10
Figure 3: SBA’s Obligations and Outlays of Fiscal Year 2020
Supplemental Appropriations for Administrative Expenses
as of January 31, 2021, by Use Category 11

Page i GAO-21-489 Small Business Administration
Abbreviations

COVID-19 Coronavirus Disease 2019
EIDL Economic Injury Disaster Loans
Enhancement Act Paycheck Protection Program and Health
Care Enhancement Act
JAAMS Joint Administrative Accounting Management
System
PPP Paycheck Protection Program
SBA Small Business Administration

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Page ii GAO-21-489 Small Business Administration
Letter

441 G St. N.W.
Washington, DC 20548

June 1, 2021

The Honorable Ben Cardin
Chair
The Honorable Rand Paul
Ranking Member
Committee on Small Business and Entrepreneurship
United States Senate

The Honorable Nydia Velázquez
Chairwoman
The Honorable Blaine Luetkemeyer
Ranking Member
Committee on Small Business
House of Representatives

The Coronavirus Disease 2019 (COVID-19) pandemic created a
widespread economic crisis that disrupted small businesses and
generated an immediate need for emergency funding to keep businesses
operating. In response, Congress substantially increased the volume of
loans and grants the Small Business Administration (SBA) could make or
guarantee. For example, in March 2020, Congress enacted the CARES
Act, which created the Paycheck Protection Program (PPP) and
temporarily expanded eligibility for the Economic Injury Disaster Loans
(EIDL) program. 1 As of March 7, 2021, SBA had provided about $910
billion through these programs to help small businesses adversely
affected by COVID-19.

In fiscal year 2020, Congress also provided SBA four supplemental
appropriations for administrative expenses to help the agency manage
the large volume of financial assistance. 2 Congress enacted these
appropriations in the Coronavirus Preparedness and Response

1Pub. L. No. 116-136, div. A, title I, §§1102(a), 1110, 134 Stat, 281, 286, 306 (2020). PPP
was authorized under SBA’s 7(a) small business lending program.
2Generally, administrative expenses can include funds used for payroll and benefits, rent,
communications, utilities, contractual services, and equipment. They do not include the
cost of grants or the net long-term costs to the federal government (known as subsidy
costs) of extending credit through direct loans and loan guarantees.

Page 1 GAO-21-489 Small Business Administration
Supplemental Appropriations Act, 2020; the CARES Act (two
appropriations); and the Paycheck Protection Program and Health Care
Enhancement Act (Enhancement Act). 3

The Consolidated Appropriations Act, 2021 includes a provision for GAO
to report on SBA’s use of supplemental appropriations provided in fiscal
year 2020 for administrative expenses. 4 This report discusses (1) the
amount of supplemental appropriations SBA received in fiscal year 2020
for administrative expenses and SBA’s planned uses for these funds and
(2) the extent to which SBA had obligated and expended these funds as
of January 31, 2021, and for what purposes. 5

To address the first objective, we reviewed fiscal year 2020
appropriations acts to determine the amount of supplemental
administrative funds SBA received and the purposes of and time limits on
each appropriation. We compared these supplemental funds to the total
amount of SBA’s annual budgetary resources for salaries and expenses
in fiscal years 2017 through 2019. The annual budgetary resources
include appropriations to SBA’s salaries and expenses account and
authorized transfers of funds from SBA’s business loan administration
account to the salaries and expenses account. We also compared the
total supplemental administrative funds to the total appropriations SBA
received in fiscal year 2020 for COVID-19-related small business
assistance. Additionally, we analyzed SBA’s spending plans for the
supplemental appropriations to identify its intended use of the funds.

To address the second objective, we analyzed aggregated data SBA
provided from its Joint Administrative Accounting Management System
(JAAMS). Using the JAAMS data, we calculated the amount and
percentage of supplemental administrative funds SBA had obligated and

3See Pub. L. 116-123, div. A, title II, 134 Stat. 146, 147 (2020); Pub. L. 116-136, div. A,
title I, § 1107, 134 Stat. 281, 301 (2020); Pub. L. 116-136, division B, title V, 134 Stat. 281,
533 (2020); and Pub. L. 116-139, div. B, title II, 134 Stat.620, 628 (2020).
4Pub. L. No. 116-260, div. N, title III, § 347, 134 Stat. 1182, 2052 (2020). We regularly
issue government-wide reports on the federal response to COVID-19. For the latest
report, see GAO, COVID-19: Sustained Federal Action Is Crucial as Pandemic Enters Its
Second Year, GAO-21-387 (Washington, D.C.: Mar. 31, 2021). Our next government-wide
report will be issued in July 2021 and will be available on GAO’s website at
https://www.gao.gov/coronavirus.
5An obligation is a definite commitment that creates a legal liability of the government for
the payment of goods and services ordered or received. An expenditure—or outlay—is an
amount paid by federal agencies, by cash or cash equivalent, to liquidate government
obligations.

Page 2 GAO-21-489 Small Business Administration
expended as of January 31, 2021, in total and by specific appropriation.
We also calculated corresponding figures for specific programs (including
PPP, the Disaster Loans Program, and the Shuttered Venue Operators
Grant program) and use categories (including contractors, payroll and
benefits, overtime, and other). The use categories are based on budget
object classification codes from the Office of Management and Budget
that define standard categories of items or services purchased by the
federal government.

We supplemented this analysis with contract information from JAAMS.
Specifically, we reviewed information on the 10 contracts with the highest
obligations as of January 31, 2021, representing about 92 percent of all
contract obligations funded by the supplemental administrative
appropriations. We also reviewed summary information provided by SBA
on the number of personnel it hired with the supplemental administrative
appropriations during the COVID-19 pandemic. For both objectives, we
interviewed officials from SBA’s Office of Performance, Planning, and the
Chief Financial Officer.

To assess the reliability of the obligation and expenditure data we used in
our analysis, we performed electronic checks to identify any obvious
errors (for example, outliers and missing information). We also reviewed
an SBA reconciliation of the data with other official reporting on budget
execution, reviewed documentation on JAAMS, and discussed data
controls with cognizant SBA officials. We did not perform a financial audit
of SBA’s obligations and outlays of supplemental administrative funds.
We concluded that the data we used for our analysis were sufficiently
reliable for characterizing SBA’s use of the supplemental administrative
funds, as recorded in JAAMS.

We conducted this performance audit from January 2021 to June 2021 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.

In response to the COVID-19 pandemic, Congress created or expanded a
Background number of SBA programs. The largest of these is PPP, which provides
loans (made by private lenders) that are forgivable under certain
circumstances to small businesses and other organizations affected by

Page 3 GAO-21-489 Small Business Administration
COVID-19. 6 These loans have a 1 percent interest rate and terms of 2 or
5 years. Borrowers may have their loans fully forgiven if, among other
things, a certain percentage was spent for payroll or other eligible costs.
Through March 2021, Congress had appropriated a total of more than
$800 billion for the cost of PPP. 7 According to SBA, as of March 7, 2021,
lenders had made about 7.6 million loans totaling about $687 billion under
PPP.

Congress also expanded the EIDL program to address the effects of the
pandemic. 8 Through EIDL, which is part of SBA’s Disaster Loan Program,
SBA provides low-interest loans of up to $2 million for operating and other
expenses. The CARES Act expanded EIDL program eligibility to include
additional small business entities and relaxed some approval
requirements, such as that a business demonstrate that it could not
obtain credit elsewhere. The act also appropriated $10 billion to create a
program to provide small businesses up to $10,000 in advances toward
payroll, sick leave, and other business obligations. Borrowers do not have
to repay these advances, even if they are subsequently denied the EIDL
loan. Through March 2021, Congress had appropriated a total of $105
billion for the cost of the EIDL program in response to the pandemic. As
of March 2, 2021, SBA had approved about 3.8 million loans totaling
about $204 billion under EIDL. As of March 7, 2021, through PPP and the
EIDL program, SBA had made or guaranteed more than 17 million loans
and grants to help small businesses adversely affected by COVID-19.

In addition to PPP and EIDL, Congress created or expanded other SBA
programs and forms of assistance, including the Shuttered Venue
Operators Grant program, the Restaurant Revitalization Fund Grant
program, and SBA debt relief (see table 1). These programs are smaller
than PPP and EIDL. For example, through March 2021, Congress had
appropriated $16.25 billion for the Shuttered Venue Operators Grant

6Pub. L. No. 116-136, div. A, title I, § 1102(a), 134 Stat. 281, 286 (2020). SBA pays
private lenders fees for processing PPP loans. These fees are not included in
administrative expenses.
7Congress appropriated a total of about $955 billion for PPP, but it also rescinded $146.5
billion in unobligated balances in SBA’s business loans program account, which included
PPP and debt relief funding. See Pub. L. 116-260, div. N, title III, § 323(c) (2020).
8Pub. L. No. 116-136, div. A, title I, § 1110, 134 Stat. 281, 306 (2020).

Page 4 GAO-21-489 Small Business Administration
program and $28.6 billion for the Restaurant Revitalization grant
program. 9

Table 1: SBA Programs Created or Expanded by Congress in Response to COVID-19

Program or assistance Purpose
Paycheck Protection Program (PPP) Provides loans made by private lenders to small businesses and other organizations
to help keep their workers on payroll during the Coronavirus Disease 2019 (COVID-
19) pandemic. These loans are 100 percent guaranteed by SBA and are fully
forgivable if certain conditions are met.
Economic Injury Disaster Loans program Provides loans and advances to small businesses and certain nonprofit
organizations experiencing a temporary loss of revenue because of COVID-19.
Shuttered Venue Operators Grant program Provides grants to assist entities such as theatrical producers, motion picture theater
operators, and museum operators in addressing economic losses due to COVID-19.
Restaurant Revitalization Fund Grant program Provides grants of up to $10 million per entity to restaurants and other food- and
beverage-related establishments that have experienced COVID-19-related revenue
loss.
SBA debt relief Provides debt relief to existing SBA borrowers by temporarily paying loan
installments (excluding PPP loans) and any associated fees on their behalf.
Source: GAO analysis of Small Business Administration (SBA) information. | GAO-21-489

We have previously reported on SBA’s progress and challenges in
operating PPP and the EIDL program. 10 Our prior work found that while
millions of small businesses have benefited from these programs, the
speed with which they were implemented left SBA with limited safeguards
to identify and respond to program risks, including susceptibility to
improper payments and fraud. In March 2021, we included these
programs as a new area on our High-Risk List because of their potential
for fraud, significant program integrity risks, and need for improved
management and oversight. 11

9Pub. L. 116-260, div. N, title III, § 323(d)(1)(H), 134 Stat. 1182, 2021 (2020); Pub. L. 117-
2, title V, sec. 5005, 135 Stat. 4, 91 (2021); Pub. L. 117-2, title V, sec. 5003(b)(2)(A), 135
Stat. 4, 89 (2021).
10For example, see GAO, SBA: Actions Needed to Improve COVID-19 Loans’ Internal
Controls and Reduce Their Susceptibility to Fraud, GAO-21-472T (Washington, D.C.: Mar.
24, 2021) and COVID-19: Opportunities to Improve Federal Response and Recovery
Efforts, GAO-20-625 (Washington, D.C.: June 25, 2020).
11GAO, High-Risk Series: Dedicated Leadership Needed to Address Limited Progress in
Most High-Risk Areas, GAO-21-119SP (Washington, D.C.: Mar. 2, 2021).

Page 5 GAO-21-489 Small Business Administration
SBA Received About
$3.4 Billion in
Supplemental
Appropriations for
Administrative
Expenses and
Identified Several
Planned Uses
In Fiscal Year 2020, SBA In fiscal year 2020, Congress provided SBA four supplemental
Received Four appropriations for administrative expenses—totaling roughly $3.4 billion—
in the Coronavirus Preparedness and Response Supplemental
Supplemental
Appropriations Act, 2020; the CARES Act; and the Enhancement Act.
Appropriations for Table 2 provides a breakdown of the appropriated amounts and shows
Administrative Expenses the purpose of and time limits on each appropriation. The entire amount is
available to fund salaries and expenses because Congress authorized
SBA to transfer and merge the two appropriations for Disaster Loans
Program administrative expenses with SBA’s salaries and expenses
account.

Table 2: Small Business Administration’s (SBA) Fiscal Year 2020 Supplemental Appropriations for Administrative Expenses
Amounts in dollars

Law appropriating supplemental funds Appropriation Purpose and time limits
Coronavirus Preparedness and Response 20,000,000 For administrative expenses to carry out the Disaster Loans
Supplemental Appropriations Act, 2020 Program, to remain available until expended. Funds may be
(Pub. L. 116-123) transferred to and merged with SBA’s salaries and expenses
account.
CARES Act (Pub. L. 116-136) 562,000,000 For administrative expenses to carry out the Disaster Loans
Program, to remain available until expended. Funds may be
transferred to and merged with SBA’s salaries and expenses
account.
CARES Act (Pub. L. 116-136) 675,000,000 For salaries and expenses, to remain available until
September 30, 2021.
Paycheck Protection Program and Health 2,100,000,000 For salaries and expenses, to remain available until
Care Enhancement Act (Pub. L. 116-139) September 30, 2021.
Total 3,357,000,000
Source: GAO analysis of legislation. | GAO-21-489

Page 6 GAO-21-489 Small Business Administration
The supplemental appropriations were seven times greater than SBA’s
regular annual funding for salaries and expenses. From fiscal years 2017
through 2019, SBA’s annual budgetary resources for salaries and
expenses were generally about $450 million.

The Planned Uses SBA As noted above, Congress appropriated about $1.2 billion ($562 million
Identified for the Funds plus $675 million) in the CARES Act for SBA to administer PPP and other
related COVID-19 programs. The act required SBA to produce a detailed
Included Contractors,
expenditure plan showing how SBA intended to use the funds. The plan
Personnel, and SBA prepared in response breaks down the planned spending by “budget
Technology object classification codes.” These Office of Management and Budget
codes define standard categories of items or services purchased by the
federal government. At a high level, the plan indicates that contractors
and personnel were the primary intended uses of the funds. According to
the plan, SBA intended to spend about 78 percent of the funds on
contractors (services from nongovernment sources) and about 15 percent
on personnel (for example, payroll, benefits, and overtime). 12

Congress did not require SBA to develop similar plans for the
supplemental administrative appropriations provided in other acts. In
February 2021, SBA provided us with what SBA officials described as a
tentative spending plan for the unobligated portion of the supplemental
administrative funds provided in fiscal year 2020. The tentative plan uses
two general spending categories—payroll and operating—that are less
detailed than the budget object classification codes SBA used in the
CARES Act plan.

SBA indicated that it planned to use about 40 percent of the unobligated
funds for personnel costs and about 60 percent for operating expenses.

Personnel costs. According to SBA, planned personnel costs include
payroll and benefits for staff in term positions (time-limited positions
varying from 6 months to 1 year) to serve as loan officers, attorneys,
application reviewers, and loan reviewers, and to review work performed
by contractor staff. The planned costs also include overtime expenses for
SBA permanent and term staff for excess hours related to COVID-19-
related programs.

12As of January 31, 2021, contractors and personnel accounted for about 93 percent and
6 percent of the obligations, respectively, but about one-quarter of the $1.2 billion in
CARES Act funds remained unobligated.

Page 7 GAO-21-489 Small Business Administration
Operating costs. According to SBA, planned operating costs include
those for building and operating technology systems to originate direct
loans and to accept and process loan forgiveness applications. They also
include costs for contracted call center staff to support borrowers, review
loans, review forgiveness applications, and conduct forensic reviews;
equipment and software licenses for term staff and contractors; and staff
training on processes and review procedures.

As of January 2021,
SBA Had Obligated
57 Percent of the
Funds and Expended
49 Percent, Largely
on Contractor
Services
SBA’s Obligations and SBA data showed that of the approximately $3.4 billion SBA received in
Outlays of Administrative supplemental appropriations for administrative expenses, it had obligated
about $1.9 billion (57 percent) and expended $1.6 billion (49 percent) as
Funds Differed by
of January 31, 2021 (see fig. 1). SBA’s obligations and outlays for
Appropriation and administrative expenses do not include fees SBA pays to lenders to
Program process PPP loans. 13 The corresponding percentages for the four
individual appropriations varied, as follows:

• SBA obligated and expended the large majority of the two
appropriations made for Disaster Loans Program administrative
expenses. 14 SBA obligated about $19.5 million (98 percent) of the $20
million appropriation from the Coronavirus Preparedness and
Response Supplemental Appropriations Act, 2020, and about $457
million (81 percent) of the $562 million appropriation from the CARES
Act.
• SBA obligated and expended smaller percentages of the two larger
appropriations it received for salaries and expenses. SBA obligated
about $462 million (68 percent) of the $675 million CARES Act

13Lender fees are paid out of the appropriation for the subsidy cost of PPP.

14As previously noted, the appropriations provisions allow SBA to transfer and merge the
funds with funds for SBA’s salaries and expenses.

Page 8 GAO-21-489 Small Business Administration
appropriation and about $984 million (47 percent) of the $2.1 billion
Enhancement Act appropriation.

Figure 1: SBA’s Obligations and Outlays of Fiscal Year 2020 Supplemental
Appropriations for Administrative Expenses as of January 31, 2021, by
Appropriation

SBA’s data as of January 31, 2021, also show the distribution of
obligations and outlays across programs. About 66 percent of the funds
SBA obligated were for Disaster Loans Program (primarily for making and
servicing EIDL loans), while 10 percent were for PPP (see fig. 2). 15 About

15The fees SBA pays private lenders for processing PPP loans are not administrative
costs and are therefore not included in the amounts contained in figure 2.

Page 9 GAO-21-489 Small Business Administration
24 percent of the obligations supported salaries and expenses for
COVID-19-related programs generally, including PPP. The corresponding
percentages for outlays were similar.

Figure 2: SBA’s Obligations and Outlays of Fiscal Year 2020 Supplemental Appropriations for Administrative Expenses, as of
January 31, 2021, by Program

a
The obligations and outlays for the Shuttered Venue Operators Grant program were less than $1
million dollars ($103,000 and $0, respectively).

SBA Primarily Used Funds As of January 31, 2021, SBA had primarily used the supplemental
for Contractors and Payroll appropriations for contracts and payroll and benefits (see fig. 3). Of the
approximately $1.9 billion in obligations as of that date, about 77 percent
and Benefits
(almost $1.5 billion) was for contractual services, about 14 percent ($277
million) was for payroll and benefits, and about 6 percent ($119 million)
was for overtime pay. The remaining 2 percent of obligations went toward
equipment, interagency agreements, operations, supplies, training, and
travel. The corresponding percentages for the approximately $1.6 billion
in outlays were similar.

Page 10 GAO-21-489 Small Business Administration
Figure 3: SBA’s Obligations and Outlays of Fiscal Year 2020 Supplemental Appropriations for Administrative Expenses as of
January 31, 2021, by Use Category

Note: Percentages may not sum to 100 because of rounding.

Contractual Services SBA has used a variety of contractors to support the expansion of small
business assistance programs during the pandemic. Table 3 shows the
10 contracts with the highest obligations as of January 31, 2021,
representing about 92 percent of all contract obligations funded by the
supplemental administrative appropriations. Two major services provided
by contractors include (1) loan processing and other loan administration
services and (2) information technology products and services. For P,
SBA’s largest obligation was $750 million for a contract with RER
Solutions, Inc., for processing EIDL loan applications and providing

Page 11 GAO-21-489 Small Business Administration
recommendations on loan decisions. 16 The second largest obligation was
$149 million for a contract with Goldschmitt-CRI, LLC, to develop
information technology to enhance SBA’s capacity to implement PPP loan
forgiveness provisions. 17 Besides loan processing and information
technology services, SBA also made large contract obligations for legal,
financial administrative support, and call center staffing services.

Table 3: Ten Largest SBA Contract Obligations Funded by Fiscal Year 2020 Supplemental Administrative Appropriations, as
of January 31, 2021
Amounts in dollars

Contractor Obligations Purpose of contract award
RER Solutions, Inc. 750,000,000 For processing Economic Injury Disaster Loan (EIDL) applications and providing
recommendations on loan decisions.
Goldschmitt-CRI, LLC 149,525,700 For developing information technology infrastructure for loan forgiveness
processes under the Paycheck Protection Program (PPP).
Highlight Technologies, 91,848,205 For loan processing services.
LLC
Innovative Emergency 90,107,417 For attorneys and other legal services to assist with the review of loans and
Management, Inc. advances for the EIDL program.
Highlight Technologies, 72,740,296 For loan processing services.
LLC
Brillient Corporation 71,062,169 For financial administrative support services.
Liveops Agent Services, 53,980,000 For call center staffing services for SBA’s Office of Disaster Assistance.
LLC
Guidehouse, LLP 44,800,000 For loan forgiveness and other support services for PPP.
Guidehouse, LLP 20,200,000 For financial services.
Highlight Technologies, 19,012,391 For loan processing services.
Inc.
Total 1,363,276,178
Source: GAO analysis of Small Business Administration (SBA) data. | GAO-21-489

16As of March 2021, SBA’s Office of Inspector General was evaluating the RER Solutions,
Inc., contract award to determine whether SBA (1) procured services for data analysis and
loan recommendation services in accordance with Federal Acquisition Regulation and
SBA acquisition standards and (2) effectively monitored the contractor’s compliance with
small business set-aside subcontracting limitations.
17PPP loan recipients may qualify to have their PPP loans forgiven if they use a certain
percentage of the loan amount for payroll or other eligible costs.

Page 12 GAO-21-489 Small Business Administration
Payroll and Benefits Costs According to SBA, managing the greater volume of small business
assistance during the pandemic has necessitated large, temporary staff
increases, particularly for the Office of Disaster Assistance, which
administers the EIDL program, and the Office of Capital Access, which
administers PPP. Following a disaster, SBA may hire what the agency
calls “surge” employees to be able to implement relief programs
expeditiously. According to SBA, in fiscal year 2020, the agency hired
more than 6,000 temporary surge employees for the Office of Disaster
Assistance—almost one-half of them for loan specialist positions and
roughly one-third for general business and industry positions. 18 SBA
officials indicated that the Office of Disaster Assistance also filled legal,
information technology management, and human resources management
positions (among others) with the temporary surge employees.

According to SBA, as of January 31, 2021, SBA also had hired close to
400 temporary surge employees for other SBA components, primarily the
Office of Capital Access, but also for the Offices of Human Resource
Solutions, Field Operations, and the Chief Information Officer. 19 SBA
officials indicated that loan specialists accounted for about two-thirds of
these employees and that another 25 percent filled general business and
industry positions. The other types of temporary positions SBA added
were generally similar to those added to the Office of Disaster Assistance.

We provided a draft of this report to SBA for review and comment. SBA
Agency Comments provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional
committees, the Administrator of the Small Business Administration, and
other interested parties. In addition, the report will be available at no
charge on the GAO website at http://www.gao.gov.

18According to SBA, the agency made these hires between March 15, 2020, and October
10, 2020.
19According to SBA, the positions include temporary appointments (not to exceed 1 year)
and term appointments (more than 1 year, but not more than 4 years).

Page 13 GAO-21-489 Small Business Administration
If you or your staff have any questions about this report, please contact
me at (202) 512-8678 or shearw@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made major contributions to this report
are listed in appendix I.

William B. Shear
Director, Financial Markets and Community Investment

Page 14 GAO-21-489 Small Business Administration
Appendix I: GAO Contact and
Appendix I: GAO Contact and
Acknowledgments

Acknowledgments

William B. Shear, (202) 512-8678 or shearw@gao.gov
GAO Contact
In addition to the contact named above, Steven Westley (Assistant
Staff Director), Aku Shika Pappoe (Analyst in Charge), Meghana Acharya,
Acknowledgments Hiwotte Amare, Marcia Carlsen, John McGrail, Jennifer Schwartz, and
Jena Sinkfield made key contributions to this report.

(104733)
Page 15 GAO-21-489 Small Business Administration
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