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GAO-25-107608: Disaster Loan Program: Enhanced Procedures and Data Needed to Address Duplication of Benefits

Summary

GAO-25-107608, Disaster Loan Program: Enhanced Procedures and Data Needed to Address Duplication of Benefits, a May 2025 Government Accountability Office report to congressional committees. It examines SBA policies for preventing, identifying and resolving cases in which disaster survivors receive compensation from multiple sources that exceeds their total eligible losses. GAO reports that SBA identified cases of duplicative disaster assistance but could not determine whether or how the duplication was resolved or how much over-disbursement was recovered. GAO recommends that SBA develop documented procedures for resolving such cases and enhance the collection and accessibility of its data. SBA partially agreed with the first recommendation and agreed with the second.

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“GAO-25-107608: Disaster Loan Program: Enhanced Procedures and Data Needed to Address Duplication of Benefits.” Original at www.gao.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/gao-25-107608-disaster-loan-program-enhanced-procedures-and-data-neede-96ee73f068/, SHA-256 6ab312ad55aac4edb4f27a5de04b62e95b2e5b3d24308959e9e5d4f50522fcdb.

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                United States Government Accountability Office
                Report to Congressional Committees




                DISASTER LOAN
May 2025




                PROGRAM

                Enhanced Procedures
                and Data Needed to
                Address Duplication
                of Benefits




GAO-25-107608
                                           May 2025

                                           DISASTER LOAN PROGRAM
                                           Enhanced Procedures and Data Needed to Address
                                           Duplication of Benefits
Highlights of GAO-25-107608, a report to
congressional committees




Why GAO Did This Study                     What GAO Found
Natural disasters cause billions of        Duplication of disaster benefits occurs when disaster survivors receive
dollars in damage to U.S.                  compensation from multiple sources—such as insurance and federal aid—that
communities each year. SBA’s               exceeds their total eligible losses. To prevent this, the Small Business
Disaster Loan Program helps                Administration (SBA) requires borrowers to self-report any additional assistance
borrowers, including homeowners            they have received when applying for an SBA disaster loan. SBA uses the
and businesses, rebuild or replace         information to determine the maximum loan amount needed to cover eligible
damaged property or continue               losses. SBA also contacts borrowers before each loan disbursement to check
business operations.                       whether they have received any other potentially duplicative compensation, such
The Joint Explanatory Statement            as insurance payments or grants. If duplication of benefits is identified, SBA
accompanying the Further                   notifies borrowers of corrective actions they may take to resolve the issue.
Consolidated Appropriations Act,
2024, includes a provision for GAO         SBA has identified cases of duplicative disaster assistance (see table), but SBA
to examine duplication of benefits         could not determine whether or how the duplication was resolved or how much
in SBA disaster assistance. This           over-disbursement was recovered in these cases. SBA is statutorily required to
report examines (1) SBA policies           recover any duplicative benefits that it has provided to disaster assistance
and procedures for preventing,             recipients when deemed in the government’s best interest. However, it does not
identifying, and resolving cases of        have documented procedures outlining how its staff should ensure borrowers
duplicative benefits, and (2) SBA          take corrective actions to fully resolve such cases. Establishing documented
data on such cases and SBA                 procedures could better ensure that SBA staff fully and appropriately resolve
efforts to resolve them.                   cases of duplication and identify recovered amounts.
GAO analyzed SBA disaster loan             SBA Disaster Loans with Identified Duplication by Date Identified, June 2020–Dec. 2023
data from June 2020 through                                                                                      Loans with duplication
December 2023—the latest                    Time period                                                                       identified
available data. GAO also reviewed            June 2020–Sept. 2020                                                                       59
related documentation from SBA               Oct. 2020–Sept. 2021                                                                      738
and other federal agencies, and              Oct. 2021–Sept. 2022                                                                      592
interviewed agency officials.                Oct. 2022–Sept. 2023                                                                      541
What GAO Recommends                          Oct. 2023–Dec. 2023                                                                        57
                                             No date provided                                                                             3
GAO recommends that SBA (1)
                                             Total                                                                                    1,990
develop documented procedures
for resolving cases of duplicative         Source: GAO analysis of Small Business Administration (SBA) data. | GAO-25-107608
disaster benefits and (2) enhance          Notes: SBA could not provide data before June 2020 or after December 2023 due to tracking system
the collection and accessibility of its    transitions. For more details, see table 3 in GAO-25-107608.
data on these cases. SBA partially         Additionally, SBA’s ability to track these duplications is limited. SBA relies on
agreed with the first                      borrower self-reporting and data-sharing with federal agencies to detect
recommendation and agreed with             duplications. However, its data management systems cannot automatically
the second. SBA stated that it             retrieve detailed case data. As a result, staff must manually review text fields in
would address both                         individual loan records to verify the status of duplicative benefits, repayment
recommendations.                           actions, or adjustments made, leading to inconsistencies and inefficiencies. By
                                           enhancing data collection and accessibility, SBA could better monitor and
                                           address duplication of benefits involving disaster assistance, and thereby
                                           improve efficiency and help ensure recovery of duplicate funds. Enhanced data
                                           collection would also strengthen its ability to evaluate the effectiveness of its
For more information, contact Courtney     procedures.
LaFountain at LaFountainC@gao.gov.



                                                                                               United States Government Accountability Office
Contents


Letter                                                                                     1
              Background                                                                   4
              SBA Does Not Have Procedures for Fully Resolving Identified
                Duplicative Benefits                                                     11
              SBA Identified Cases of Duplicative Benefits but Has Gaps in Its
                Ability to Track and Report Them                                         15
              Conclusions                                                                20
              Recommendations for Executive Action                                       21
              Agency Comments and Our Evaluation                                         21

Appendix I    Comments from the U.S. Small Business Administration                       23



Appendix II   GAO Contact and Staff Acknowledgments                                      25


Tables
              Table 1: Characteristics of SBA Disaster Loans                               5
              Table 2: Selected Disaster Assistance Programs Offered by SBA,
                      FEMA, and HUD                                                        7
              Table 3: SBA Disaster Loans with Identified Duplication by Date
                      Duplication Was Identified and Date of Initial
                      Disbursement, June 2020–Dec. 2023                                  15
              Table 4: Sources of Identified Duplication with SBA Disaster
                      Loans by Date Duplication Was Identified, June 2020–
                      Dec. 2023                                                          17

Figures
              Figure 1: Disaster Assistance Sequence of Delivery                         10
              Figure 2: Small Business Administration’s (SBA) Steps for
                       Identifying Duplication of Benefits in the Disaster Loan
                       Process                                                           11
              Figure 3: Reported Household Borrower Income for Disaster
                       Loans with Identified Duplicative Benefits Following Initial
                       Disbursement, June 2020–Dec. 2023                                 18




              Page i                                      GAO-25-107608 Disaster Loan Program
Abbreviations

CDBG-DR                  Community Development Block Grant Disaster
                         Recovery
FEMA                     Federal Emergency Management Agency
HUD                      Department of Housing and Urban Development
SBA                      Small Business Administration
Stafford Act             Robert T. Stafford Disaster Relief and Emergency
                         Assistance Act




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Page ii                                             GAO-25-107608 Disaster Loan Program
                       Letter




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




                       May 22, 2025

                       The Honorable Bill Hagerty
                       Chair
                       The Honorable Jack Reed
                       Ranking Member
                       Subcommittee on Financial Services and General Government
                       Committee on Appropriations
                       United States Senate

                       The Honorable Dave Joyce
                       Chairman
                       The Honorable Steny Hoyer
                       Ranking Member
                       Subcommittee on Financial Services and General Government
                       Committee on Appropriations
                       House of Representatives

                       From 2019 through 2024, the United States experienced 126 weather and
                       climate disasters causing $1 billion or more in damage, with cumulative
                       costs exceeding $679 billion. 1 Following a major disaster or emergency,
                       affected homeowners and businesses may have access to various
                       resources to aid response, recovery, and rebuilding. Among these, the
                       Small Business Administration’s (SBA) Disaster Loan Program plays a
                       critical role.

                       Although SBA’s primary mission is to support small businesses, its
                       Disaster Loan Program extends low-interest loans to homeowners,
                       renters, businesses and nonprofit organizations affected by declared
                       disasters. Most of these loans go to individuals and households to help
                       repair and replace homes and personal property. In fiscal year 2023, SBA
                       approved almost $3 billion in loans to disaster survivors nationwide. This
                       amount included over $670 million in loans to businesses and more than
                       $2.3 billion to homeowners and renters. 2



                       1National Centers for Environmental Information, “Billion-Dollar Weather and Climate
                       Disasters,” accessed January 8, 2025,
                       https://www.ncei.noaa.gov/access/billions/summary-stats/US/2019-2024.
                       2U.S. Small Business Administration, Disaster Summary Report, accessed May 14, 2025,
                       https://careports.sba.gov/views/DisasterSummary/Report.



                       Page 1                                             GAO-25-107608 Disaster Loan Program
We previously reported on challenges in the federal approach to disaster
recovery, which are partly due to fragmentation across multiple federal
entities. 3 The array of disaster recovery assistance available to
businesses and individuals can result in awarding funds that exceed the
replacement cost of losses suffered, known as duplication of benefits.
Under the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (Stafford Act), federal agencies must ensure that individuals,
businesses, and other entities do not receive more assistance than
necessary to cover their eligible disaster-related costs.

The Joint Explanatory Statement accompanying the Further Consolidated
Appropriations Act, 2024, includes a provision for GAO to review SBA’s
handling of duplicative benefits in its Disaster Loan Program. This report
examines (1) the extent to which SBA has policies and procedures for
preventing, identifying, and resolving cases of duplicative benefits in its
Disaster Loan Program, and (2) available data on cases of duplicative
benefits identified by SBA for fiscal years 2020–2024 and SBA’s efforts to
resolve them.

For the first objective, we reviewed SBA standard operating procedures
and training materials on managing disaster loans. These included
procedures for preventing and identifying duplication of benefits to
applicants and recipients and for resolving them through loan adjustments
or repayments. We also reviewed Federal Emergency Management
Agency (FEMA) documentation on the disaster assistance sequence of
delivery to understand how SBA and FEMA coordinate to prevent
duplication. Additionally, we reviewed memorandums of understanding
and data-sharing agreements between SBA and other federal agencies,
such as FEMA and the Department of Housing and Urban Development
(HUD). We compared SBA’s processes for preventing, identifying, and
resolving duplicative benefits against Stafford Act requirements, relevant




3GAO, Disaster Recovery: Actions Needed to Improve the Federal Approach,
GAO-23-104956 (Washington, D.C.: Nov. 15, 2022). The most recent update to our High-
Risk List added a new area needing attention by the executive branch and Congress on
improving the delivery of federal disaster assistance. See GAO, High-Risk Series:
Heightened Attention Could Save Billions More and Improve Government Efficiency and
Effectiveness, GAO-25-107743 (Washington, D.C.: Feb. 25, 2025).




Page 2                                           GAO-25-107608 Disaster Loan Program
internal control standards, and selected principles for managing improper
payments. 4

We interviewed SBA officials about their processes for managing
duplication of benefits for disaster loans and their coordination with FEMA
and HUD. We also interviewed FEMA and HUD officials to understand
their roles and interactions with SBA for preventing and resolving cases of
duplicative benefits.

For the second objective, we requested data from SBA on loans that had
begun disbursement and had at least one case of duplicative benefits
identified by SBA for fiscal years 2019 through 2024. 5 SBA provided
these data for June 2020 through December 2023, as this was the time
frame for which the agency had such data. 6 We calculated the total
number of loans that SBA identified with duplicative assistance. We also
analyzed available data on the status of these cases, including whether
they were resolved, and the timelines and costs for closing them. We
analyzed the data on borrowers required to repay duplicative benefits,
including the associated dollar amounts. 7

Additionally, we compared SBA’s collection and use of data against
relevant provisions of the Stafford Act as well as SBA’s most recent
strategic plan to assess its effectiveness in addressing cases of
duplicative disaster assistance. We also reviewed our prior work on key

4We determined that the control activities component of internal control was significant to
this objective, along with the underlying principles that management should implement
internal control activities through policies, such as the documentation of responsibilities.
See GAO, A Framework for Managing Improper Payments in Emergency Assistance
Programs, GAO-23-105876 (Washington, D.C.: July 13, 2023); and Standards for Internal
Control in the Federal Government, GAO-14-704G (Washington, D.C.: Sept. 10, 2014).
5The Joint Explanatory Statement to the Further Consolidated Appropriations Act, 2024,
includes a provision for us to submit a report that includes information on duplicative SBA
disaster loans over the last 5 fiscal years.
6SBA could not provide data before June 2020 or after December 2023 due to tracking
system transitions.
7To assess the reliability of the SBA disaster loan data, we reviewed related data
documentation, interviewed and obtained written responses from SBA officials, performed
electronic data tests, and reviewed the code SBA used to extract the data from its system.
We determined the data fields related to cases and sources of duplicative benefits, and
income of identified duplicative recipients were sufficiently reliable for reporting the
numbers that SBA identified in its system. We determined that other data fields we
requested were not sufficiently reliable for this report due to a large amount of missing
data.




Page 3                                               GAO-25-107608 Disaster Loan Program
                      practices for performance management. 8 We did not independently verify
                      whether SBA’s identified cases of duplication met the Stafford Act’s
                      definition of duplicative benefits. Additionally, we did not assess whether
                      additional cases of duplicative benefits existed that were not identified by
                      SBA.

                      We conducted this performance audit from May 2024 to May 2025 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.

                      Federal agencies can respond to a disaster when effective response and
Background            recovery are beyond the capabilities of affected state and local
                      governments. The SBA Disaster Loan Program is activated through
                      federal disaster declarations. Declarations can be issued by the President
                      or the SBA Administrator if certain criteria are met. 9

SBA’s Disaster Loan   SBA’s Disaster Loan Program, administered by its Office of Capital
Program               Access with the support and assistance of its Office of Disaster Recovery
                      and Resilience, is designed to help homeowners, renters, businesses,
                      and nonprofit organizations recover from physical damage and economic
                      loss following a declared disaster. Eligibility is restricted to uninsured or
                      otherwise uncompensated disaster losses. Disaster loans are generally
                      categorized into three main types: home and personal property loans,
                      business physical disaster loans, and economic injury disaster loans (see
                      table 1).




                      8GAO, Evidence-Based Policymaking: Practices to Help Manage and Assess the Results
                      of Federal Efforts, GAO-23-105460 (Washington, D.C.: July 12, 2023).
                      9See 13 C.F.R. § 123.3. See also 42 U.S.C. § 5170 for further details on the criteria for
                      issuing a major disaster declaration.




                      Page 4                                               GAO-25-107608 Disaster Loan Program
Table 1: Characteristics of SBA Disaster Loans

Type of loan                       Eligible borrowers                          Lending limits                         Use of funds
Home and personal                  Homeowners and renters                      Up to $500,000                         Replace or repair damaged or
property loans                                                                                                        destroyed primary residences
                                                                               Up to $100,000                         Replace or repair damaged or
                                                                                                                      destroyed household and personal
                                                                                                                      effects, including clothing, furniture,
                                                                                                                      cars, and appliances
                                                                               Up to $500,000                         Eligible refinancing purposesa

                                                                               20 percent of the verified loss,       Post-disaster mitigation
                                                                               before deduction of compensation
                                                                               from other sources, up to
                                                                               $500,000

                                                                               Up to $500,000                         Eligible malfeasanceb
Business physical                  Most types of businesses and                Up to $2 million                       Repair or replace property owned by
disaster loans                     nonprofit organizations                                                            the business, including leasehold
                                   regardless of size                                                                 improvements, machinery, and fixtures;
                                                                                                                      refinance liens on damaged property; or
                                                                                                                      implement mitigation measures to
                                                                                                                      protect damaged or destroyed property
                                                                                                                      from future disasters.
Economic injury                    Small businesses, small         Up to $2 million of working capitalc Help meet financial obligations and
disaster loans                     agricultural cooperatives and                                        operating expenses that cannot be met
                                   similar entities, and most                                           as a result of the disaster
                                   private nonprofit organizations
Source: GAO summary of Small Business Administration (SBA) information. | GAO-25-107608
                                                             a
                                                              If the loan applicant’s primary residence is totally destroyed or substantially damaged, as defined by
                                                             regulation, and the applicant does not have credit elsewhere, SBA may allow that applicant to borrow
                                                             money to refinance recorded liens or encumbrances on the residence.
                                                             b
                                                              SBA may provide additional loan funds if the borrower suffered substantial economic damage or
                                                             health/safety risks as a result of malfeasance in connection with the repair or replacement of real
                                                             property. Malfeasance may include contractor malfeasance, such as nonperformance or substandard
                                                             work.
                                                             c
                                                               SBA regulations state that business disaster loans, including both physical and economic injury
                                                             loans to the same borrower, together with its affiliates, cannot exceed the lesser of the
                                                             uncompensated physical loss and economic injury or $2 million.


Other Federal Agencies                                       In addition to SBA, several other federal agencies provide disaster
Providing Disaster                                           assistance. FEMA is primarily responsible for coordinating disaster
                                                             response and recovery. Other agencies—such as HUD and the
Assistance
                                                             Departments of Transportation, Health and Human Services, and the
                                                             Interior—may also assist communities and individuals following a
                                                             disaster. Among these, FEMA’s Individuals and Households Program and
                                                             HUD’s Community Development Block Grant Disaster Recovery (CDBG-




                                                             Page 5                                                      GAO-25-107608 Disaster Loan Program
DR) offer financial assistance by providing disaster recovery funds similar
to SBA’s Disaster Loan Program. 10

FEMA’s Individuals and Households Program provides direct services
and financial assistance for housing to individuals and households with
uninsured or underinsured expenses and serious needs after a declared
disaster. It also covers other essential needs, such as the repair or
replacement of personal property and vehicles.

HUD’s CDBG-DR provides funds to communities for disaster relief, long-
term recovery, restoration of infrastructure and housing, economic
revitalization, and mitigation of unmet recovery needs. Eligible activities
include repairing, rehabilitating, or rebuilding homes; reimbursing out-of-
pocket expenses for home repairs; or constructing new homes for
affected homeowners. 11 Unlike SBA’s Disaster Loan Program, CDBG-DR
is not a permanently authorized program. Instead, Congress appropriates
CDBG-DR funds through supplemental appropriations that HUD allocates
to grantees. Additionally, rather than disbursing funds directly to
recipients, HUD awards CDBG-DR grant funds to Tribes, states, and local
governments, which then assist individuals, businesses, nonprofits, and
local governments in their communities. 12


10Unlike SBA and FEMA Individuals and Households Program funds, CDBG-DR funds are
not allocated directly to survivors but rather to CDBG-DR grantees, which may be Tribes,
states, or local governments.
11Grantees may use these funds to carry out activities authorized under Title I of the
Housing and Community Development Act of 1974, as amended, and HUD regulations, or
as authorized by a waiver and alternative requirement. See Community Development
Block Grant Disaster Recovery Universal Notice: Waivers and Additional Requirements.
90 Fed. Reg. 1754 (Jan. 8, 2025). See also 24 C.F.R. § 570.201. The Universal Notice
describes the waivers and alternative requirements that HUD intends to implement with
each allocation of CDBG-DR funding after a disaster declaration. Eligible activities include
but are not limited to housing, economic revitalization, infrastructure, and public services.
Housing may include but is not limited to new construction, reconstruction, rehabilitation,
buyouts, and assistance payments.
12HUD allocates CDBG-DR funding according to supplemental appropriations acts, which
typically provide funding for disaster relief, long-term recovery, restoration of infrastructure
and housing, economic revitalization, and mitigation in the most impacted and distressed
areas resulting from a qualifying major disaster. Generally, appropriations acts that
provide CDBG-DR funds allow HUD to waive requirements or specify alternative
requirements for any provision of any statute or regulation that HUD administers in
connection with obligation by HUD of the funding. Historically, the appropriations acts
specify that there are four types of requirements that HUD cannot waive under that
authority: fair housing, nondiscrimination, wage and labor standards, and environmental
protection.




Page 6                                                 GAO-25-107608 Disaster Loan Program
                                                             The SBA, FEMA, and HUD disaster assistance programs differ in key
                                                             ways (see table 2). SBA’s Disaster Loan Program provides low-interest
                                                             loans directly to individuals, nonprofit organizations, and businesses to
                                                             help them recover from physical and economic losses caused by
                                                             disasters. These loans are intended to cover losses not fully
                                                             compensated by insurance or other assistance. In contrast, FEMA’s
                                                             Individuals and Households Program focuses on providing immediate
                                                             financial relief for emergency needs, while HUD’s CDBG-DR funds are
                                                             distributed to communities for long-term recovery and rebuilding, often
                                                             months after a disaster.

Table 2: Selected Disaster Assistance Programs Offered by SBA, FEMA, and HUD

Program                                                  Purpose                                                             Application period
SBA’s Disaster Loan Program                              Provides low-interest loans for disaster recovery Applications generally due within 60 days
                                                         to individuals, nonprofit organizations, and      of a disaster declaration for physical
                                                         businesses                                        disaster loans and within 9 months for
                                                                                                           economic injury disaster loans
FEMA’s Individuals and Households                        Offers immediate assistance for individuals and                     Applications generally due within 60 days
Program                                                  households for emergency disaster recovery                          of a disaster declaration
                                                         needs
HUD’s Community Development Block                        Funds long-term recovery and rebuilding efforts HUD allocates funds to grantees after
Grant Disaster Recovery                                  for communities                                 Congress appropriates funding through
                                                                                                         supplemental appropriations acts, which
                                                                                                         may occur months or years after a
                                                                                                         disaster declaration
Source: GAO summary of information from the Small Business Administration (SBA), Federal Emergency Management Agency (FEMA), and Department of Housing and Urban Development (HUD). |
GAO-25-107608

                                                             Other federal agencies, such as the Departments of Transportation,
                                                             Health and Human Services, and the Interior, also play a role in disaster
                                                             recovery. Transportation assists in restoring transportation infrastructure,
                                                             Health and Human Services offers medical and public health services,
                                                             and Interior helps protect natural and cultural resources.

Duplication of Benefits                                      Duplication of benefits occurs when disaster survivors receive financial
                                                             compensation from multiple sources for the same recovery purpose and
                                                             the total amount received for that purpose exceeds the total eligible
                                                             losses. Under the Stafford Act, federal agencies must ensure that
                                                             individuals, businesses, and other entities do not receive more
                                                             compensation than necessary to cover their eligible disaster-related




                                                             Page 7                                                                 GAO-25-107608 Disaster Loan Program
costs. 13 Duplication of benefits can arise when different forms of financial
compensation—such as insurance payments, federal aid, or charitable
grants—are awarded for the same purpose. 14 Congress has allowed
prohibitions against duplication of benefits to be waived under limited
circumstances and for specific disasters. 15

SBA’s statute, regulations, and procedures generally limit disaster loan
eligibility to underinsured or uncompensated losses. Therefore, any
insurance payments or other financial compensation not deducted from
the total reported losses may be considered duplicative. However, SBA
treats only compensation directly related to actual loss or damage to an
eligible property as duplicative. For example, SBA does not consider
assistance in the form of food vouchers or clothing to duplicate financial
compensation addressing loss or damage to an eligible property.

SBA policies identify several types of financial compensation as
potentially duplicative and requiring action to remedy, including the
following:

•   FEMA housing assistance provides funds for repairs or the
    replacement of an eligible residence, including permanent housing
    construction.
•   FEMA Other Needs Assistance, a component of FEMA’s Individuals
    and Households Program, provides additional funds for nonhousing



13Specifically, the Stafford Act provides that the federal government must assure that no
person, business, or other entity suffering losses as a result of a disaster receives
assistance with respect to any part of such loss for which they received financial
assistance under any other program or from insurance. 42 U.S.C § 5155(a). Section 7(b)
of the Small Business Act provides that disaster loans are limited to loss, damage, or
injury that is not compensated for by insurance or otherwise. 15 U.S.C. § 636(b).
14A federal agency may provide assistance to a person entitled to benefits for the same
purposes from another source if the person has not yet received those benefits and if the
person agrees to repay all duplicative assistance to the federal agency. 42 U.S.C. §
5155(b)(1).
15The Disaster Recovery Reform Act of 2018 provided that the President may waive the
general prohibition on duplication of benefits if (1) the governor of a state requests a
waiver and (2) the President finds such a waiver is in the public interest and will not result
in waste, fraud, or abuse. Section 1210 of the Disaster Recovery Reform Act also
changed the treatment of loans under the Stafford Act, so that when certain conditions are
met, the loans are no longer a duplication of benefits. These provisions applied only to
disasters declared between January 1, 2016, and December 31, 2021. Pub. L. No. 115-
254, div. D, § 1210(a)(1), 132 Stat. 3186, 3442–43 (codified at 42 U.S.C. § 5155(b)(4)).




Page 8                                                GAO-25-107608 Disaster Loan Program
                           needs, such as transportation, childcare, and medical and dental
                           expenses.
                       •   Net insurance proceeds refer to any insurance settlements or
                           payments an individual receives to cover damages.
                       •   American Red Cross grants may provide funds for permanent
                           repairs to an eligible property.
                       •   Labor and materials from charitable third parties can include any
                           volunteer labor or donated materials used in property repairs.
                       To prevent duplication of benefits, federal disaster programs coordinate to
                       ensure that compensation from different sources does not overlap. For
                       instance, after homeowners receive FEMA grants for emergency needs,
                       SBA coordinates with FEMA to ensure that any disaster loans offered
                       cover only remaining, unmet financial needs.

                       Section 312 of the Stafford Act places the responsibility on federal
                       agencies to verify that no recipient is compensated more than once for
                       the same loss. If duplication is identified after funds have been disbursed,
                       recipients of duplicated federal benefits are liable to the United States for
                       the amount of duplicative benefits received.

Sequence of Disaster   To ensure compliance with the Stafford Act, FEMA established a
Assistance Delivery    sequence of delivery for disaster assistance provided by federal agencies
                       and organizations (see fig. 1). This sequence is intended to prevent
                       duplication of benefits by outlining the order in which assistance should
                       be provided. According to FEMA regulations, any agency or organization
                       later in the sequence should ensure its assistance does not duplicate
                       benefits already provided by earlier agencies. If this sequence is
                       disrupted, the agency responsible for the disruption should take corrective
                       action to resolve any duplication of benefits. SBA is responsible for
                       identifying and addressing duplicative benefits from sources that precede
                       it in the sequence.




                       Page 9                                      GAO-25-107608 Disaster Loan Program
Figure 1: Disaster Assistance Sequence of Delivery




Notes: 44 C.F.R. § 206.191. Volunteer organizations may provide emergency assistance and insurers
may provide payouts for claims at any time during a disaster recovery. Federal Emergency
Management Agency programs include housing assistance and Other Needs Assistance for other
critical needs. The regulation revising the sequence of delivery became effective in March 2024.
Individual Assistance Program Equity, 89 Fed. Reg. 3990, 4049 (Jan. 22, 2024). Before that, Small
Business Administration assistance preceded some types of the Federal Emergency Management
Agency’s Other Needs Assistance.


SBA’s position in the sequence of delivery makes it responsible for
ensuring that its disaster loans do not overlap with compensation that
borrowers have already received from sources such as insurance or
FEMA. For example, if an individual has already received FEMA
Individual Assistance, an SBA disaster loan may be considered
duplicative if the total aid exceeds that individual’s uninsured losses.

Similarly, any disaster assistance provided after SBA loans in the delivery
sequence, such as CDBG-DR funding, would also be considered
duplicative if total assistance exceeds the recipient’s actual needs and
exclusions do not apply. 16 In accordance with the sequence of delivery,
CDBG-DR grantees are required to ensure that CDBG-DR funds do not
duplicate SBA assistance provided for the same purpose.




16FEMA regulations do not specifically mention HUD CDBG-DR. However, FEMA
considers CDBG-DR assistance as “other governmental assistance” that follows SBA
disaster loans in the delivery sequence. CDBG-DR appropriations acts generally require
that CDBG-DR grantees have policies and procedures in place to prevent any duplication
of benefits. The acts also generally specify that CDBG-DR funds may not be used for
activities that may duplicate assistance received from FEMA or other sources.




Page 10                                                 GAO-25-107608 Disaster Loan Program
SBA Does Not Have
Procedures for Fully
Resolving Identified
Duplicative Benefits
SBA Requires Disaster                    To prevent duplication of benefits, SBA loan officers review disaster loan
Loan Applicants to Self-                 applicants’ self-reported information and follow procedural steps to
                                         calculate an appropriate loan amount. Applicants are required to report all
Report Compensation
                                         disaster-related assistance or compensation they have received for a
from Other Sources                       given loss as part of their loan application. 17 SBA staff then review this
                                         information, along with applicants’ personal information and property
                                         damage assessments (see fig. 2).

Figure 2: Small Business Administration’s (SBA) Steps for Identifying Duplication of Benefits in the Disaster Loan Process




                                         SBA procedures state that SBA loss verifiers should then estimate the
                                         applicant’s cost to repair or replace damaged property and contents. Loan
                                         officers must deduct any compensation the applicant received for
                                         damages from the total loss amount to determine the eligible loan
                                         amount. 18 Loan officers can verify the applicant’s insurance information
                                         through documentation submitted with the application; verbal contact with
                                         the insurer or applicant; or written communication such as emails, claim

                                         17This reporting must include specific details about other disaster-related assistance or
                                         compensation, including homeowner’s or renter’s insurance policies and any flood, car,
                                         windstorm, or other insurance.
                                         18SBA training materials state that compensation from other sources of $1,000 or less is
                                         considered de minimis and is not immediately deducted as a duplication of benefits or
                                         addressed through a loan modification. However, if additional duplication of benefits is
                                         identified and the loan is modified, loan officers must include the de minimis amounts back
                                         in the recalculated duplicative total.




                                         Page 11                                              GAO-25-107608 Disaster Loan Program
                           summaries, or an adjuster’s proof of losses. If relevant documentation is
                           unavailable, loan officers are to rely on any amount disclosed by the
                           applicant and deduct it from the eligible loss amount. 19

                           After reviewing a loan application, SBA must inform the applicant of its
                           pending loan approval or denial decision. At this time, SBA provides the
                           proposed terms and conditions, including the requirement that borrowers
                           promptly notify SBA and repay any insurance proceeds or other
                           compensation that exceeds the approved loan amount and may
                           constitute a duplication of benefits. Loan decisions are not final until the
                           applicant receives written confirmation and agrees to the terms and
                           conditions.

                           According to standard operating procedures, SBA disburses most
                           disaster loans in stages after validating total losses and approving the
                           loan. Before each disbursement, case managers must verify whether the
                           borrower has received any additional insurance payouts, grants, or other
                           compensation. To do this, they contact the borrower and confirm whether
                           the borrower has received any new disaster-related compensation.
                           Borrowers must notify SBA of any additional benefits or insurance
                           proceeds that may constitute duplication. Additionally, if collateral is
                           required and damaged property is used as collateral, borrowers must
                           name SBA as mortgagee or loss payee on their insurance coverage.

SBA Has Data-Sharing       SBA has agreements with FEMA and HUD’s CDBG-DR grantees to share
Agreements with FEMA       data on disaster assistance recipients. SBA and FEMA have an
                           agreement that allows real-time access to each agency’s assistance
and HUD Grantees to
                           applicant data through a shared interface. These data include identifying
Help Prevent Duplication   information, financial benefits, and awards decisions. SBA officials said
of Benefits                loan officers use this interface to identify applicants who have already
                           received FEMA assistance and adjust eligible loan amounts before
                           approving loans or disbursing funds.

                           Additionally, both SBA and FEMA have mechanisms in place to share
                           relevant data—including applicants’ personally identifiable information—
                           with tribal, local, state, and territorial governments and voluntary

                           19Borrowers are required to agree to assign any insurance proceeds received for disaster
                           recovery to SBA. SBA training documents note that prior to February 17, 2023, borrowers
                           and insurers were required to execute an assignment of insurance proceeds form that
                           notified insurance companies that SBA should be the co-payee on recovery-related
                           checks. SBA officials said that this practice was discontinued because many insurance
                           companies refused to sign the agreement and SBA lacked a way to enforce it.




                           Page 12                                            GAO-25-107608 Disaster Loan Program
                           organizations. 20 These arrangements seek to further prevent duplication
                           of benefits and facilitate additional disaster assistance for applicants.

                           SBA also offers voluntary memorandums of understanding with CDBG-
                           DR grantees to share data on SBA disaster loan recipients. 21 Unlike the
                           computer-matching agreement with FEMA, each CDBG-DR grantee must
                           request such a memorandum to access SBA’s applicant-level disaster
                           loan data, according to SBA officials. Once approved, SBA and grantees
                           share reports based on an agreed upon time frame that meets grantees’
                           needs (e.g., weekly, biweekly, or monthly). SBA’s memorandums of
                           understanding are valid for 18 months (unless parties agree to terminate
                           sooner) and are renewable as needed.

SBA Does Not Have          SBA generally has procedures for identifying and responding to
Written Procedures to      duplicative benefits, but it does not have procedures for ensuring that
                           borrowers take corrective actions to fully resolve identified duplication.
Resolve Cases of
                           Specifically, SBA’s procedures do not specify how staff should ensure
Identified Duplicative     that borrowers repay over-disbursed amounts or take alternative actions
Benefits After Notifying   to address duplications (such as demonstrating additional eligible losses).
Borrowers
                           SBA’s standard operating procedures describe the steps SBA loan
                           officers should take if they identify a duplication of benefits after a loan
                           has been approved. A borrower may report receiving additional
                           compensation after approval, or SBA may learn of it through one of its
                           data-sharing agreements. If duplicative benefits are confirmed before
                           disbursement begins, the borrower’s eligible loss amount decreases, and
                           SBA must modify the loan amount.


                           20According to FEMA regulations, voluntary organizations are tax-exempt organizations or
                           groups which have provided or may provide needed services to the states, local
                           governments or individuals in coping with an emergency or major disaster. FEMA notes
                           that these organizations commonly offer shelter, food, clothing, childcare, financial
                           assistance, and financial counseling, and conduct or coordinate debris removal, disaster
                           cleanup, home repair, and reconstruction.
                           21Because CDBG-DR grants are another form of agency assistance provided later in the
                           sequence of delivery, CDBG-DR grantees are responsible under the Stafford Act for
                           preventing and remediating duplicative benefits with assistance from agencies or
                           organizations such as SBA and FEMA. 42 U.S.C. § 5155(a). HUD requires CDBG-DR
                           grantees to use the best, most recent available data from FEMA, SBA, insurers, and any
                           other local, state, and federal sources of funding to prevent duplication of benefits prior to
                           an award of CDBG-DR assistance. To support this effort, SBA offers the memorandums of
                           understanding on data sharing to help CDBG-DR grantees manage potential duplication.
                           Additionally, HUD and FEMA have a computer-matching agreement that permits grantees
                           access to data on FEMA assistance recipients.




                           Page 13                                               GAO-25-107608 Disaster Loan Program
If SBA has already disbursed funds to the borrower, it must determine the
actions necessary to resolve the duplication. SBA officials told us that
following an identified duplication SBA notifies the borrower of options for
resolution, including (1) reducing the loan amount if funds remain
undisbursed, (2) requesting reimbursement from the borrower’s disbursed
funds for the amount of duplicated benefits, or (3) both. SBA officials
noted that in cases of over-disbursement, the agency must send the
borrower a letter requiring them to either repay the excess amount or
submit documentation of additional disaster damages for SBA review.
However, the procedures do not specify how staff should ensure that
repayments are made or that alternative actions are taken to resolve the
duplication.

SBA requires borrowers to take corrective actions to resolve a duplication
of benefits in other circumstances as well. For example, if FEMA awards
out-of-sequence Other Needs Assistance to an applicant who has already
received SBA disaster disbursements, SBA procedures require the
borrower to use loan proceeds to repay the duplicated amount to FEMA. 22
However, SBA does not have procedures for ensuring whether
repayments occur or tracking other actions borrowers may take to
address the duplication. 23

We found that SBA documentation included examples of identified but
unresolved cases of duplicative benefits. Disaster loan files undergo
internal reviews to ensure compliance with procedures, according to SBA
officials. SBA documentation of its reviews indicated that loan files did not
consistently demonstrate that over-disbursements caused by duplication
of benefits had been resolved. For instance, one review finding stated
that a borrower reported a duplication of benefits, but no corrective action
was recorded.

As discussed later in this report, SBA identified 1,990 loans with
duplication of benefits from June 2020 through December 2023. SBA was

22SBA officials noted that FEMA may award Other Needs Assistance out of sequence in
certain situations prior to SBA approval.
23As discussed earlier, HUD and its CDBG-DR grantees are primarily responsible for
preventing and resolving duplication of benefits from those agencies earlier in the
sequence of delivery, per FEMA regulations, because CDBG-DR grants are considered a
form of other agency assistance delivered later in the sequence. However, SBA officials
told us that if SBA learns of a duplication with CDBG-DR assistance, it may modify the
loan amount to resolve the duplication. For example, SBA may reverify the borrower’s
disaster losses to determine if they warrant a higher loan amount.




Page 14                                            GAO-25-107608 Disaster Loan Program
                                          unable to confirm the resolution of identified cases of duplication in part
                                          because it does not have procedures that specify what steps staff should
                                          take to record whether duplications were resolved.

                                          The Stafford Act calls for federal agencies to recover any duplicative
                                          benefits that have been provided to disaster assistance recipients.
                                          Additionally, federal internal control standards state that management
                                          should implement control activities through policies. Such control
                                          activities can include documented procedures for achieving the agency’s
                                          objectives. By establishing documented procedures for staff to follow after
                                          notifying borrowers of a duplication of benefits––including recording any
                                          actions taken by the borrower––SBA could better ensure appropriate and
                                          consistent resolution of these cases.


SBA Identified Cases
of Duplicative
Benefits but Has
Gaps in Its Ability to
Track and Report
Them
SBA Found Some                            From June 2020 through December 2023, SBA identified 1,990 disaster
Duplication of Benefits,                  loans with at least one instance of duplicative benefits (see table 3). 24
Primarily from Private                    These cases involved borrowers who received financial assistance from
                                          other sources, such as private insurance or FEMA grants, that duplicated
Insurance and FEMA                        SBA loan funds. SBA identified these cases after initial loan disbursement
                                          using self-reported borrower information and data shared by other federal
                                          agencies, according to officials.

Table 3: SBA Disaster Loans with Identified Duplication by Date Duplication Was Identified and Date of Initial Disbursement,
June 2020–Dec. 2023

                                                                        Loans initially disbursed during time period
                                 Loans with duplication
                                  identified during time                                                   Number of loans with
 Time period                                     perioda                    Number of loans                duplication identified
 June 2020–Sept. 2020                                 59                                  985                                   70


                                          24SBA did not have data for loans with identified duplication prior to June 2020 or after
                                          December 2023 due to tracking systems transitions.




                                          Page 15                                               GAO-25-107608 Disaster Loan Program
                                                                                               Loans initially disbursed during time period
                                                 Loans with duplication
                                                  identified during time                                                               Number of loans with
  Time period                                                    perioda                            Number of loans                    duplication identified
  Oct. 2020–Sept. 2021                                                       738                                 25,143                                       766
  Oct. 2021–Sept. 2022                                                       592                                 30,621                                       593
  Oct. 2022–Sept. 2023                                                       541                                 27,675                                       524
  Oct. 2023–Dec. 2023                                                          57                                 5,293                                        33
  No date provided                                                                  3                               N/A                                       N/A
  Total                                                                   1,990b                                 89,717                                   1,986c
Source: GAO analysis of Small Business Administration (SBA) data. | GAO-25-107608

                                                              Note: SBA data were not available before June 2020 or after December 2023 due to tracking system
                                                              transitions.
                                                              a
                                                               Represents cases where SBA identified a duplication of benefits after initial disbursement and
                                                              modified the loan accordingly. Loans are represented by the date duplication was initially identified.
                                                              b
                                                               Twenty-eight loans with duplications spanning multiple fiscal years are represented only in the fiscal
                                                              year of initial identification. Three cases did not have recorded identification dates.
                                                              c
                                                                Four loans with duplication identified between June 2020 and December 2023 started disbursement
                                                              before June 2020.
                                                              As previously discussed, if a case of duplication is identified after
                                                              disbursement, SBA must determine the actions necessary to resolve the
                                                              issue. According to SBA officials, this typically involves either reducing
                                                              the loan amount or issuing an over-disbursement letter to the borrower.
                                                              Each modification is assigned a unique tracking number to maintain a
                                                              record of changes over time, according to officials. One borrower may
                                                              have several modifications associated with their loan, which may
                                                              correspond to one or more cases of duplication. As a result, the number
                                                              of duplication-related modifications exceeds the number of affected loans.
                                                              Specifically, SBA recorded 2,293 loan modifications across 1,990 loans
                                                              with identified duplicative benefits.

                                                              SBA data indicate that private insurance and FEMA grants are the
                                                              primary sources of duplication with SBA assistance (see table 4). Private
                                                              insurance alone accounted for about 80 percent of identified cases, while
                                                              FEMA grants alone accounted for about 6 percent. The remaining cases
                                                              involved multiple sources, such as a combination of insurance, FEMA
                                                              grants, local grants, and sales of damaged property and local grants.
                                                              However, SBA could not provide the specific dollar amounts attributed to
                                                              each source without manual reviews of individual electronic records,
                                                              according to officials. Additionally, SBA officials said that other sources of
                                                              duplication, such as CDBG-DR grants, may be recorded in loan files if
                                                              recipients disclose them, but SBA could not determine the number of




                                                              Page 16                                                     GAO-25-107608 Disaster Loan Program
such cases without manually reviewing individual electronic records for
this information.

Table 4: Sources of Identified Duplication with SBA Disaster Loans by Date
Duplication Was Identified, June 2020–Dec. 2023

                                           Federal Emergency                             Private              Other
    Time period                           Management Agency                           insurance            sourcesa
    June 2020–Sept. 2020                                               31                        46              0
    Oct. 2020–Sept. 2021                                             127                        851              0
    Oct. 2021–Sept. 2022                                             131                        621              2
    Oct. 2022–Sept. 2023                                             133                        581             10
    Oct. 2023–Dec. 2023                                                16                        46              3
    No date provided                                                     1                         3             0
    Total                                                            439                     2,148              15
Source: GAO analysis of information provided by the Small Business Administration (SBA). | GAO-25-107608

Note: Duplication sources are represented by the date duplication was initially identified. SBA data
were not available before June 2020 or after December 2023 due to tracking system transitions. The
total number of duplication sources exceeds the number of cases SBA identified because some loans
had duplications from a combination of multiple sources.
“Other sources” include sales of damaged property, special assessments, and Department of
a

Housing and Urban Development Community Development Block Grant Disaster Recovery grants.


For disaster loans with identified duplication, borrower incomes exhibited
a broad range (see fig. 3). SBA provided borrower income data for 1,952
home loans with identified duplicative benefits in fiscal years 2020–2024
but not for the 38 business loans during that period. According to the
data, the median annual income of these borrowers was about $86,000. 25
SBA did not provide a breakdown of borrower income by category, such
as tax filing status or household size.




25Incomes in the top 25 percent were above $125,000 and incomes in the bottom 25
percent were below $58,000.




Page 17                                                                  GAO-25-107608 Disaster Loan Program
                          Figure 3: Reported Household Borrower Income for Disaster Loans with Identified
                          Duplicative Benefits Following Initial Disbursement, June 2020–Dec. 2023




                          Note: The data apply to home loans only; borrower income information was not available for the 38
                          business disaster loans during this period.


Data Tracking and         SBA has significant limitations in its ability to track and report on
Reporting Limitations     duplicative benefits. SBA does not capture certain critical information in
                          its data systems and captures other critical information only in narrative
Affect SBA’s Ability to
                          text fields, including some information on the resolution of duplication
Address Duplicative       cases. According to SBA officials, information in these fields cannot be
Benefits                  automatically queried, which requires staff to manually review the text
                          fields in individual electronic records.

                          •    Method of identifying duplications. SBA does not capture how
                               each duplication case was identified in its data systems, such as
                               through borrower self-reporting or data shared by other agencies.
                          •    Status of identified cases. SBA does not know whether or how
                               cases of duplication were resolved without manually reviewing
                               individual electronic records for this information. For example, SBA
                               does not have data on the number of cases requiring borrower
                               repayments, the number of completed repayments, or the number of
                               cases resolved by increasing the eligible loan amount to reflect
                               additional disaster losses. Additionally, SBA does not have
                               information available on cases where it applied a de minimis
                               exception (for duplication of $1,000 or less) without conducting a
                               manual review of text fields in individual records.


                          Page 18                                                  GAO-25-107608 Disaster Loan Program
•   Amount of assistance identified as duplicative. SBA collects the
    total reported amounts borrowers received from other sources but
    does not have information on the specific dollar amounts of
    assistance borrowers received that caused a duplication of benefits.
    SBA officials said that determining the specific duplicative portion
    would require manual file reviews.
•   Source of duplication. SBA does not have information available on
    sources of duplication other than FEMA grants and private insurance
    without manual review of text fields in individual electronic records.
    For example, SBA does not know which duplication cases resulted
    from CDBG-DR grants without manual file reviews, according to
    officials.
Further, SBA cannot track duplication cases identified before June 2020,
when it added a field to its data system to identify such cases. In fiscal
year 2024, SBA implemented a new loan data system, but as of
December 2024, officials stated the system had limited reporting
capabilities and restricted data access.

SBA is required to report annual estimates of improper payments—
including those due to duplication of benefits—for risk-susceptible
programs under the Payment Integrity Information Act of 2019. 26
However, SBA’s Office of the Inspector General found that SBA’s fiscal
year 2023 estimates of improper payments in the disaster loan program
did not implement adequate sampling and estimation methodology plans
to produce accurate estimates. 27



26An improper payment is defined by law as any payment that should not have been made
or that was made in an incorrect amount (including overpayments and underpayments)
under statutory, contractual, administrative, or other legally applicable requirements. It
includes any payment to an ineligible recipient, any payment for an ineligible good or
service, any duplicate payment, any payment for a good or service not received (except
for such payments where authorized by law), and any payment that does not account for
credit for applicable discounts. Under the Payment Integrity Information Act of 2019, each
executive agency is charged with conducting improper payment risk assessments for each
of their programs at least once every 3 fiscal years. The agency is to identify all programs
with outlays exceeding $10 million that may be susceptible to significant improper
payments. Significant improper payments are those that may have exceeded $10 million
and 1.5 percent of program outlays; or $100 million. Pub. L. No. 116-117, 134 Stat. 113,
114–115 (2020) (codified at 31 U.S.C. § 3352(a)).
27Small Business Administration, Office of Inspector General, Independent Auditors’
Report on SBA’s Fiscal Year 2023 Compliance with the Payment Integrity Information Act
of 2019, Report 24-16 (Washington, D.C.: May 15, 2024). GAO has ongoing work on SBA
improper payments and recoveries.




Page 19                                              GAO-25-107608 Disaster Loan Program
              SBA also has limited information on the length of time and costs
              associated with resolving duplication cases. The available data SBA
              provided indicate that it took an average of about 12 days to issue a letter
              notifying borrowers of an over-disbursement. However, SBA could not
              identify when borrowers completed repayment or when loan amounts
              were increased to reflect additional disaster losses. While SBA did not
              provide actual cost data for resolving duplication cases, it estimated that
              each loan modification incurred about $85 in administrative and
              operational costs (based on prorated staff salary costs for loan
              processing and review).

              SBA’s strategic plan includes a strategic goal to implement strong
              resource stewardship, with an accompanying strategy to integrate robust
              data into its resource management and build and use quality data. 28 In
              addition, our prior work has identified that collecting information to
              measure progress and understand results can help federal officials
              manage and assess the effectiveness of their efforts. 29 For example,
              collecting and making data accessible for analysis can help determine
              whether goals are being met, such as information on instances of
              duplication that are occurring and if they are being effectively resolved.

              Without readily accessible data on key factors such as repayment details
              and resolution status, SBA cannot ensure duplication cases are being
              resolved consistently and accurately, nor can it adequately assess the
              effectiveness of its procedures. By enhancing the collection and
              accessibility of its data on duplications of benefits, SBA would be better
              positioned to monitor and address this issue, thereby improving efficiency
              and helping to ensure recovery of duplicative funds. Additionally,
              enhanced data collection would strengthen SBA’s ability to evaluate the
              effectiveness of its procedures.

              SBA’s Disaster Loan Program has played a key role in helping
Conclusions   homeowners and businesses recover from disaster-related losses. SBA
              has taken some meaningful steps to manage cases of duplicative
              benefits, such as data-sharing with other federal agencies. However, it
              does not have documented procedures for how staff should resolve and
              record these cases following borrower contact. Developing such



              28SBA, Strategic Plan: Fiscal Years 2022–2026 (Washington, D.C.).

              29GAO-23-105460.




              Page 20                                           GAO-25-107608 Disaster Loan Program
                      procedures would allow SBA to better ensure that cases of duplicative
                      benefits are resolved appropriately and consistently.

                      Further, SBA tracks some loan and borrower data, but it lacks readily
                      accessible information on several key factors, including whether identified
                      duplications were repaid or otherwise resolved. SBA is unable to describe
                      key information on its portfolio of disaster loans with duplicative benefits,
                      such as how instances of duplication were identified and what actions
                      loan officers have taken to resolve cases. SBA is also unable to describe
                      other key information, such as the number of cases that have been fully
                      resolved and the amount of duplicative benefits that borrowers have
                      repaid, without labor-intensive manual file reviews. Without such
                      information, SBA is constrained in its ability to monitor and address
                      duplication of benefits. Enhanced data collection would also facilitate
                      SBA’s ability to evaluate and improve its procedures for addressing these
                      duplications.

                      We are making the following two recommendations to SBA:
Recommendations for
Executive Action      The Administrator of SBA should ensure that the Associate Administrator
                      for the Office of Capital Access develops documented procedures for
                      resolving cases of duplicative benefits after a disaster loan has begun
                      disbursement. (Recommendation 1)

                      The Administrator of SBA should ensure that the Associate Administrator
                      for the Office of Capital Access enhances the collection and accessibility
                      of data on cases of duplication of benefits in disaster loans and their
                      resolution. (Recommendation 2)

                      We provided a draft of this report to SBA, the Department of Homeland
Agency Comments       Security, and HUD for review and comment. They each provided
and Our Evaluation    technical comments, which we incorporated as appropriate.

                      In its written comments, reproduced in appendix I, SBA agreed with our
                      recommendation to enhance the collection and accessibility of data on
                      cases of duplication of benefits and their resolution. SBA partially agreed
                      with our recommendation to develop documented procedures for
                      resolving cases of duplicative benefits after a disaster loan has begun
                      disbursement. SBA stated that it has documented procedures to identify
                      and prevent duplication of benefits prior to fully disbursing a disaster loan,
                      as well as procedures to address cases that occur after a loan has been
                      fully disbursed. SBA agreed to enhance its procedures to include steps to
                      ensure borrowers take corrective actions to fully resolve cases by


                      Page 21                                      GAO-25-107608 Disaster Loan Program
returning funds or establishing additional eligibility for disaster losses. As
stated in our report, while SBA has general procedures for identifying and
responding to duplicative benefits, it does not have procedures to ensure
that borrowers have taken corrective actions.

We are sending copies of this report to the appropriate congressional
committees, the Administrator of the Small Business Administration, and
the Secretaries of Homeland Security and Housing and Urban
Development. In addition, this report will be available at no charge on
GAO’s website at https://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at LaFountainC@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 key contributions to this report are
listed in appendix II.




Courtney LaFountain
Acting Director, Financial Markets and Community Investment




Page 22                                      GAO-25-107608 Disaster Loan Program
Appendix I: Comments from the U.S. Small
Business Administration




             Page 23          GAO-25-107608 Disaster Loan Program
Page 24   GAO-25-107608 Disaster Loan Program
Appendix II: GAO Contact and Staff
Acknowledgments

                  Courtney LaFountain, LaFountainC@gao.gov
GAO Contact
                  In addition to the contact named above, Kevin Averyt (Assistant Director),
Staff             Jordan Anderson (Analyst in Charge), Garrett Hillyer, Daniel Horowitz, Jill
Acknowledgments   Lacey, Marc Molino, Jared Smith, and Aida Woldu made key
                  contributions to this report.




                  Page 25                                    GAO-25-107608 Disaster Loan Program
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