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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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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