SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress (R44589, July 5, 2022)
Summary
This Congressional Research Service report, R44589, "SBA's Office of Inspector General: Overview, Impact, and Relationship with Congress," was updated July 5, 2022. It states the SBA OIG was created under the Inspector General Act of 1978 to audit and investigate SBA programs, recommend policies against fraud and abuse, and keep the SBA Administrator and Congress informed. It reports that during FY2021 the SBA OIG issued 19 audit reports containing 119 recommendations, and its investigations resulted in 272 indictments or informations and 137 convictions. The SBA OIG claimed its recommendations produced monetary savings and recoveries of $4.28 billion. The report gives OIG funding of $24.3 million in FY2022.
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“SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress (R44589, July 5, 2022).”
Original at www.congress.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/r44589-38-e08ae2b12b/
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SBA’s Office of Inspector General: Overview,
Impact, and Relationship with Congress
Updated July 5, 2022
Congressional Research Service
https://crsreports.congress.gov
R44589
SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
Summary
Congress created offices of inspector general (OIGs) to assist in its oversight of the executive
branch. OIGs provide independent, nonpartisan analysis, conducted in accordance with generally
accepted government auditing standards, to identify and recommend ways to limit waste, fraud,
and abuse in federal programs and enhance program and operational efficiency and effectiveness.
OIGs’ activities supplement and complement those of the Government Accountability Office
(GAO), which serves a similar, though not identical, role in assisting congressional oversight of
the executive branch. Together, OIGs and GAO provide Congress with information and analysis
needed to conduct effective oversight and, in the process, help Congress maintain its balance of
power with the presidency.
OIGs exist in more than 70 federal agencies, including all departments and larger agencies,
numerous boards and commissions, and other entities. The U.S. Small Business Administration’s
Office of Inspector General (SBA OIG) was created under authority of the Inspector General Act
of 1978 (P.L. 95-452, as amended). Its three primary statutory purposes are to
1. conduct and supervise audits and investigations of the SBA’s programs and
operations;
2. recommend policies designed to promote the economy, efficiency, and
effectiveness of the SBA’s programs and operations and to prevent and detect
fraud and abuse; and
3. keep both the SBA Administrator and Congress “fully and currently informed
about problems and deficiencies relating to the administration of such programs
and operations and the necessity for and progress of corrective action.”
During FY2021, the SBA OIG issued 19 audit reports containing 119 recommendations for
improving the SBA’s programs and operations, and its investigations resulted in 272 indictments
or informations and 137 convictions. The SBA OIG claimed that its recommendations resulted in
monetary savings and recoveries of $4.28 billion FY2021. In addition, the SBA OIG’s annual
Report on the Most Serious Management and Performance Challenges Facing the SBA focuses
attention “on areas that are particularly vulnerable to fraud, waste, error, and mismanagement, or
otherwise pose a significant risk and generally have been subject to one or more OIG or GAO
reports.”
This report examines the SBA OIG’s statutory authorities; reporting requirements; funding ($24.3
million in FY2022); staffing and organizational structure; and recent activities (audits,
investigations, etc.), including an examination of the SBA’s implementation of the Paycheck
Protection Program (PPP). PPP was created to assist small businesses adversely affected by the
Coronavirus Disease 2019 (COVID-19) pandemic.
This report also examines the SBA OIG’s impact on monetary savings, SBA programs and
operations, and legislation affecting the agency. The report concludes with observations
concerning the SBA OIG’s relationship with Congress.
Some areas of possible congressional interest, other than SBA OIG funding and staffing issues,
include exploring ways to more accurately quantify the SBA OIG’s claims of monetary savings
and to determine if the SBA OIG should undertake additional tracking and monitoring activities
to more accurately quantify the office’s impact on SBA programs, operations, and legislation.
Congressional Research Service
SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
Contents
Introduction ..................................................................................................................................... 1
SBA’s OIG ...................................................................................................................................... 4
Statutory Authorities........................................................................................................................ 5
Reporting Requirements .................................................................................................................. 6
Funding............................................................................................................................................ 8
Staffing and Organizational Structure ........................................................................................... 10
Recent Activities............................................................................................................................ 13
Audit Reports .......................................................................................................................... 13
Investigations, Debarment Referrals, and Training Activities ................................................ 15
Monetary Savings and Recoveries ................................................................................................ 17
Most Serious Management and Performance Challenges Facing the SBA ................................... 18
Impact on Program Efficiency and Effectiveness ......................................................................... 19
Recommendations Concerning the Impact of Legislation and Regulations ........................... 19
Facilitating the SBA’s Relationships with Other Governmental and Nongovernmental
Entities ................................................................................................................................. 22
Keeping the SBA Administrator and Congress Fully and Currently Informed ....................... 23
Relationship with Congress ........................................................................................................... 24
Figures
Figure 1. SBA OIG’s Organizational Chart, FY2022.................................................................... 12
Tables
Table 1. SBA OIG’s Appropriations, FY2010-FY2022 .................................................................. 9
Table 2. SBA OIG’s Full-Time Equivalent Employees, FY2010-FY2022 ................................... 10
Table 3. SBA OIG’s Audits, FY2010-FY2021 .............................................................................. 14
Table 4. SBA OIG’s Investigations, FY2010-FY2021 .................................................................. 16
Table 5. Legislation, Regulations, Standard Operating Procedures (SOPs), and Other
Issuances Reviewed and Comments Provided, FY2010-FY2021 .............................................. 20
Table 6. Outreach and Training Sessions, FY2010-FY2021 ......................................................... 22
Contacts
Author Information........................................................................................................................ 26
Congressional Research Service
SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
Introduction
Congress created offices of inspector general (OIGs) in 1978 (via P.L. 95-452, the Inspector
General Act of 1978, or the IG Act) to assist in its oversight of the executive branch. At that time,
Congress determined that there were serious deficiencies in the executive branch’s auditing and
investigative activities designed to curb waste, fraud, and abuse and promote agency operational
and program efficiency.1 For example, the House and Senate reports accompanying the bill that
became the IG Act argued that
auditing and investigative activities were scattered throughout the various federal
departments and were often conducted in response to a complaint as opposed to
having in place “affirmative programs to look for possible fraud or abuse”;
investigators in some agencies (including the Small Business Administration,
SBA) were not allowed to initiate investigations without clearance from officials
responsible for the programs involved;
many agency representatives engaged in auditing and investigative activities
(including those within the SBA) reported that their office lacked sufficient
budgets to do its job, many of the auditing and investigative offices (including
those at the SBA) often reported to those who were responsible for the program
being audited or investigated; and
some auditors and investigators were unable to devote full time to their audit or
investigative responsibilities.2
The House report concluded that independent OIGs “are urgently needed.”3 The Senate report
concluded that “with rare exceptions, the agencies have not adequately policed their own
operations and programs.”4
1 Definitions of program efficiency vary. For example, the German sociologist Max Weber argued that organizations
operate most efficiently when they are organized in a hierarchical fashion with established rules for making decisions
and dividing the labor of the organization accordingly. The Government Accountability Office (GAO) incorporates in
its definition of government efficiency how an agency spends money: a ratio of inputs (the cost of operating the
government agency or program) to outcomes (the desired results of the program, such as events, occurrences, or
changes in conditions, behaviors, or attitudes). See GAO, Streamlining Government: Opportunities Exist to Strengthen
OMB’s Approach to Improving Efficiency, GAO-10-394, May 7, 2010, p. 3, at http://www.gao.gov/assets/310/
304231.pdf. A congressional staff member (now-retired) suggested a hybrid of these definitions: “a government agency
is efficient if it is properly structured to produce accountable decisions and desired results ...[that] use the least amount
of federal tax dollars to achieve desired outcomes, i.e. are cost-effective in ensuring that performance objectives are
achieved.” See Barry Pineles, chief counsel, House Committee on Small Business, “Hearing Memorandum: Reducing
Duplication and Promoting Efficiency at the SBA: The Inspector General’s View,” June 3, 2013.
2 U.S. Congress, House Committee on Government Operations, Establishment of Offices of Inspector General in
Certain Executive Departments and Agencies, 95th Cong., 1st sess., August 5, 1977, H.Rept. 95-584 (Washington: GPO,
1977), pp. 5-7; and U.S. Congress, Senate Committee on Governmental Affairs, Establishment of Offices of Inspector
and Auditor General in Certain Executive Departments and Agencies, 95th Cong., 2nd sess., August 8, 1978, S.Rept. 95-
1071 (Washington: GPO, 1978), pp. 4-6.
3 U.S. Congress, House Committee on Government Operations, Establishment of Offices of Inspector General in
Certain Executive Departments and Agencies, 95th Cong., 1st sess., August 5, 1977, H.Rept. 95-584 (Washington: GPO,
1977), p. 11.
4 U.S. Congress, Senate Committee on Governmental Affairs, Establishment of Offices of Inspector and Auditor
General in Certain Executive Departments and Agencies, 95th Cong., 2nd sess., August 8, 1978, S.Rept. 95-1071
(Washington: GPO, 1978), p. 9.
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SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
OIGs were designed to provide Congress and federal agency heads independent, nonpartisan
analysis, conducted in accordance with generally accepted government auditing standards, to
identify and recommend ways to limit waste, fraud, and abuse in federal programs and enhance
operational and program efficiency and effectiveness.
OIGs’ activities were to supplement and complement those of the Government Accountability
Office (GAO), which serves a similar, though not identical, role in assisting Congress fulfill its
oversight function.5 Together, OIGs and GAO (along with the Congressional Research Service
[CRS] and the Congressional Budget Office [CBO]) provide Congress with information and
analysis needed to conduct effective oversight and, in the process, help Congress maintain its
balance of power with the presidency.
OIGs currently exist in more than 70 federal agencies, including all departments and larger
agencies, numerous boards and commissions, and other entities.6 They are predominantly located
in executive branch agencies, but several legislative branch entities—for example, the Library of
Congress (LOC), GAO, and the Government Publishing Office (GPO)—also have OIGs.
The overwhelming majority of OIGs, including the U.S. Small Business Administration OIG
(SBA OIG), are governed by the IG Act. It structures inspector general (IG) appointments and
removals, powers and authorities, and duties and responsibilities. Other laws have established or
amended IG powers and authorities in specified agencies or programs. As a result, IG statutory
powers and authorities are not identical across the federal government and, in certain cases, these
differences are significant. Nonetheless, in general, statutory OIGs follow the IG Act’s standards,
guidelines, and directives.
5 Offices of Inspector General (OIGs) are independent entities focusing on the programs and activities of their federal
agency. GAO is a congressional agency whose work spans across all federal agencies and “is done at the request of
congressional committees or subcommittees ... is mandated by public laws or committee reports ... [or is undertaken]
under the authority of the Comptroller General.” GAO’s focus is on supporting “congressional oversight by auditing
agency operations to determine whether federal funds are being spent efficiently and effectively; investigating
allegations of illegal and improper activities; reporting on how well government programs and policies are meeting
their objectives; performing policy analyses and outlining options for congressional consideration; and issuing legal
decisions and opinions, such as bid protest rulings and reports on agency rules.” GAO advises “Congress and the heads
of executive agencies about ways to make government more efficient, effective, ethical, equitable and responsive.” See
GAO, “About GAO,” at http://www.gao.gov/about/index.html.
6 For additional information and analysis concerning OIGs see CRS Report R43814, Federal Inspectors General:
History, Characteristics, and Recent Congressional Actions, by Kathryn A. Francis and Michael Greene.
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For example, the IG Act provides IGs five statutory duties and responsibilities as follows:
1. Conduct, supervise, and coordinate audits and investigations of their agency’s
programs and operations.7
2. Review existing and proposed legislation and regulations relating to their agency
and make recommendations in mandated semiannual reports concerning the
impact of such legislation or regulations on their agency’s programs and
operations or on the prevention and detection of fraud and abuse in those
programs and operations.
3. Recommend policies to improve their agency’s administration of its programs
and operations and prevent and detect fraud and abuse in those programs and
operations.
4. Recommend policies to facilitate relationships between their agency and other
federal, state, and local government agencies and nongovernmental entities to
promote the economy and efficiency of their agency’s administration of its
programs and operations and prevent and detect fraud and abuse in those
programs and operations.
5. Keep both their agency head and Congress fully and currently informed
concerning fraud and other serious problems, abuses, and deficiencies relating to
their agency’s administration of its programs and operations and to report on the
progress made in implementing recommended corrective action.8
This report examines the SBA OIG’s statutory authorities; reporting requirements; funding;
staffing and organizational structure; and recent activities (audits, investigations, etc.), including
examinations of the SBA’s implementation of the Paycheck Protection Program (PPP), the recent
expansion of the Economic Injury Disaster Loan (EIDL) program, and implementation of several
7 OIG audits are conducted in accordance with federal audit standards established by the Comptroller General, and
other reviews generally are conducted in accordance with standards established by the Council of the Inspectors
General for Integrity and Efficiency (CIGIE). In addition, OIGs coordinate their activities with GAO to avoid
duplicating federal audits. See U.S. Congress, House Committee on Small Business, SBA Management and
Performance Challenges: The Inspector General’s Perspective, 114th Cong., 2nd sess., March 16, 2016, H. Hrg. 114-
049 (Washington: GPO, 2016), p. 22.
GAO-issued Generally Accepted Government Auditing Standards (GAGAS) require that audit organizations
performing audits and attestation engagements in accordance with GAGAS must have an external peer review
performed by reviewers independent of the audit organization being reviewed (another OIG or GAO) at least once
every three years.
In September 2014, the U.S. Department of Interior’s OIG reviewed the Small Business Administration OIG’s (SBA
OIG’s) Investigations Division. “The final report, dated November 13, 2014, found the system of internal safeguards
and management procedure for the investigative function of SBA OIG complied with CIGIE’s quality standards and
the applicable Attorney General Guidelines. (OIGs can be assessed as either ‘compliant’ or ‘noncompliant’.)” See U.S.
Small Business Administration (SBA), OIG, “Semiannual Report to Congress, Spring 2016,” p. 61, at
https://www.sba.gov/sites/default/files/oig/SBA_OIG_SAR_Spring_2016.pdf.
On December 10, 2015, the SBA OIG’s audit division received a peer review rating of pass (audit organizations can
receive a rating of pass, pass with deficiencies, or fail) from the Smithsonian Institution’s Office of Inspector General.
A sample of the SBA OIG’s audits were reviewed to determine if the SBA OIG’s “system of quality control” in effect
for the period of April 1, 2012, through March 31, 2015, met governmental auditing standards (“A system of quality
control encompasses SBA OIG’s organizational structure and the policies adopted and procedures established to
provide it with reasonable assurance of conforming to Government Auditing Standards.”) See Smithsonian Institution,
Office of Inspector General, “System Review Report,” at https://www.sba.gov/sites/default/files/oig/
SBA_OIG_Peer_Review_System_Report_FINAL_signed_508.pdf.
8 IG Act of 1978, Section 4(1)-(5); and 5 U.S.C. Appendix §4(1)-(5).
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new small business grant programs authorized by the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act, P.L. 116-136) and amending legislation.9
The SBA OIG’s impact on monetary savings, SBA programs and operations, and legislation
affecting the agency is also examined. The report concludes with some observations concerning
the SBA OIG’s relationship with Congress.
Some areas of possible congressional interest, other than SBA OIG funding and staffing issues,
include exploring ways to more accurately quantify the SBA OIG’s claims of monetary savings
and to determine if the SBA OIG should undertake additional tracking and monitoring activities
to more accurately quantify the office’s impact on SBA programs, operations, and legislation.
SBA’s OIG
The SBA OIG is a separate, independent office that provides “independent, objective oversight to
improve the integrity, accountability, and performance of the SBA.”10 The SBA IG (Hannibal
“Mike” Ware) directs the office and is “appointed by the President, by and with the advice and
consent of the Senate, without regard to political affiliation and solely on the basis of integrity
and demonstrated ability in accounting, auditing, financial analysis, law, management analysis,
public administration, or investigations.”11
The SBA is a Cabinet-level agency. Although the SBA is one of the smaller Cabinet-level
agencies (with an annual budget of about $1 billion, excluding supplemental funding for
addressing the Coronavirus Disease 2019 (COVID-19) pandemic’s adverse economic impact on
small businesses),12 it administers a relatively wide range of programs to support small
businesses, including loan guaranty and venture capital programs to enhance small business
access to capital; contracting programs to increase small business opportunities in federal
contracting; direct loan programs for businesses, homeowners, and renters to assist their recovery
from natural disasters; and small business management and technical assistance training programs
to assist business formation and expansion.13 The SBA OIG is responsible for examining these
programs and the various SBA offices that administer them.
9 For additional information and analysis of the small business provisions in the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act, P.L. 116-136) and amending legislation, see CRS Report R46284, COVID-19
Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean
Lowry.
10 SBA, “Office of Inspector General,” at https://www.sba.gov/office-of-inspector-general.
11 P.L. 95-452, the Inspector General Act of 1978 (IG Act of 1978), Section 3(a); and 5 U.S.C. Appendix §3(a). Peggy
Elizabeth Gustafson was sworn in as the SBA IG on October 2, 2009, and became the Department of Commerce’s IG
on January 9, 2017. Mike Ware, who had been the SBA Deputy Inspector General since April 2016, became SBA’s
acting IG on January 9, 2017, was nominated by President Trump to be SBA IG on October 16, 2017, was confirmed
by the Senate on April 26, 2018, and sworn in as SBA IG on May 24, 2018. He had served various roles within the
Department of Interior’s OIG for 26 years prior to joining the SBA OIG.
12 P.L. 116-260, the Consolidated Appropriations Act, 2021. The SBA has received $378.575 billion in supplemental
funding in FY2021 to address the adverse impact of the Coronavirus Disease 2019 (COVID-19) pandemic on small
businesses. See P.L. 116-260, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Division
N, Title III of the Consolidated Appropriations Act of 2021) and P.L. 117-2, the American Rescue Plan Act of 2021.
13 For additional information concerning these SBA programs, see CRS Report RL33243, Small Business
Administration: A Primer on Programs and Funding, by Robert Jay Dilger and Sean Lowry.
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SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
IGs report to the head of their agency or establishment, but are provided various powers and
protections that support their independence. For example, the SBA IG reports to the SBA
Administrator, but
may be removed from office only by the President, or through the impeachment
process in Congress.14
has the authority to hire staff.15
determines priorities and projects (e.g., audits, reviews and investigations)
without outside direction.16
cannot be prevented or prohibited “from initiating, carrying out, or completing
any audit or investigation, or from issuing any subpoena during the course of any
audit or investigation.”17
must be provided “access to all records, reports, audits, reviews, documents,
papers, recommendations, or other material available ... which relate to programs
and operations with respect to which [the SBA] Inspector General has
responsibilities under this Act.”18
must be provided “appropriate and adequate office space” and “such equipment,
office supplies, and communications facilities and services as may be necessary
for the operation of” the SBA OIG, including any “necessary maintenance
services for such offices and the equipment and facilities located therein.”19
Statutory Authorities
The IG Act provides all IGs nine statutory authorities:
1. Access to all records, reports, audits, reviews, documents, papers,
recommendations, or other material available relating to the IG’s responsibilities
under the IG Act.20
2. Make such investigations and reports relating to their agency’s administration of
its programs and operations as are, in the judgment of the IG, necessary or
desirable.
14 In addition, the President may transfer an inspector general (IG) to another position or location within the IG’s
agency. If an IG is removed from office or transferred to another position or location “the President shall communicate
in writing the reasons for any such removal or transfer to both Houses of Congress, not later than 30 days before the
removal or transfer.” See, IG Act of 1978, Section 3(b); and 5 U.S.C. Appendix §3(b).
15
IG Act of 1978, Section 6(a)(7); and 5 U.S.C. Appendix §6(a)(7).
16 IG Act of 1978, Section 6(a)(2); and 5 U.S.C. Appendix §6(a)(2). The SBA Administrator, President, Members of
Congress, SBA employees, and members of the public may request that a project take place, but, unless otherwise
required by law, the SBA IG is not obligated to do so.
17 IG Act of 1978, Section 3(a); and 5 U.S.C. Appendix §3(a).
18 IG Act of 1978, Section 6(a)(1); and 5 U.S.C. Appendix §6(a)(1).
19 IG Act of 1978, Section 6(c); and 5 U.S.C. Appendix §6(c).
20 Access to records, reports, etc. may be limited under specified circumstances (e.g., if such access limits “the exercise
of law enforcement powers established under any other statutory authority, including United States Marshals Service
special deputation”). See IG Act of 1978, Section 6(e)(8); and 5 U.S.C. Appendix §6(e)(8). There have also been
instances where the executive branch has redacted information citing authority provided in other statutes. This practice
is often challenged by OIGs and Congress as circumventing the IG Act’s intent for access to all records, reports, etc.
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3. Request such information or assistance as may be necessary for carrying out the
duties and responsibilities provided by the IG Act from any federal, state, or local
governmental agency or unit thereof.
4. Require by subpoena the production of all information, documents, reports,
answers, records, accounts, papers, and other data in any medium necessary in
the performance of the functions assigned by the IG Act; provided that
procedures other than subpoenas shall be used by the IG to obtain documents and
information from federal agencies.
5. Administer to or take from any person an oath, affirmation, or affidavit,
whenever necessary in the performance of the functions assigned by the IG Act.
6. Have direct and prompt access to their agency head when necessary for any
purpose pertaining to the performance of functions and responsibilities under the
IG Act.
7. Select, appoint, and employ such officers and employees as may be necessary for
carrying out the functions, powers, and duties of the Office subject to the
provisions of title 5, United States Code, governing appointments in the
competitive service, and the provisions of chapter 51 and subchapter III of
chapter 53 of such title relating to classification and General Schedule pay rates.
8. Obtain services as authorized by Section 3109 of title 5, United States Code, at
daily rates not to exceed the equivalent rate prescribed for grade GS-18 of the
General Schedule by Section 5332 of title 5, United States Code.
9. To the extent and in such amounts as may be provided in advance by
appropriations acts, to enter into contracts and other arrangements for audits,
studies, analyses, and other services with public agencies and with private
persons, and to make such payments as may be necessary to carry out the
provisions of the IG Act.21
In addition, the IG Act provides 25 OIGs, including the SBA OIG, direct law enforcement
authority.22 It also authorizes the U.S. Attorney General to delegate law enforcement authority to
other OIGs under specified circumstances.23
Reporting Requirements
The IG Act requires IGs to prepare and transmit semiannual reports (two per year) to their
agency’s head, not later than April 30 and October 31 of each year, summarizing the OIG’s
activities during the immediately preceding six-month periods ending on March 31 and
September 30. Agency heads are to transmit these reports to the appropriate committees or
21 IG Act of 1978, Section 6(a); and 5 U.S.C. Appendix §6(a).
22 IG Act of 1978, Section 6(e)(3); and 5 U.S.C. Appendix §6(e)(3). Five other OIGs have been provided law
enforcement authority by other federal statutes.
23 See IG Act of 1978, Section 6(e)(1)-(2); and 5 U.S.C. Appendix §6(e)(1)-(2). Law enforcement authority is generally
defined as providing certain OIG employees the legal authority to carry a firearm while engaged in official duties,
make an arrest without a warrant while engaged in official duties, and seek and execute warrants for arrest, search of
premises, or seizure of evidence. See IG Act of 1978, Section 6(e)(1); and 5 U.S.C. Appendix §6(e)(1). The specified
circumstances are “(A) the affected OIG is significantly hampered in the performance of responsibilities established by
this Act as a result of the lack of such powers; (B) available assistance from other law enforcement agencies is
insufficient to meet the need for such powers; and (C) adequate internal safeguards and management procedures exist
to ensure proper exercise of such powers.” See IG Act of 1978, Section 6(e)(2); and 5 U.S.C. Appendix §6(e)(2).
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subcommittees of Congress in unaltered form within 30 days after receipt. Agency heads may
provide any additional comments deemed appropriate. Agency heads must also provide specified
information, such as statistical tables showing the total number of audit reports, inspection
reports, and evaluation reports for which final action had not been taken by the commencement of
the reporting period; on which management decisions were made during the reporting period; and
for which no final action had been taken by the end of the reporting period.24 Copies of the
semiannual reports must be made available to the public upon request and at a reasonable cost
within 60 days of their transmission to Congress.25
The OIG’s semiannual reports are required to include, but not limited to, 16 informational items.
For example, the SBA OIG’s report must include, among other items, the following:
A description of significant problems, abuses, and deficiencies relating to the
SBA’s administration of programs and operations identified during the reporting
period.
A description of the SBA OIG’s recommendations for corrective action.
An identification of each significant recommendation described in previous
semiannual reports on which corrective action has not been completed.
A summary of matters referred to prosecutive authorities and the prosecutions
and convictions that have resulted.
A summary of each report made to the SBA Administrator relating to instances
when information or assistance requested has, in the IG’s judgment, been
unreasonably refused or not provided during the reporting period.
A listing of each audit report, inspection report, and evaluation report issued
during the reporting period and for each report, where applicable, the total dollar
value of questioned costs (including a separate category for the dollar value of
unsupported costs) and the dollar value of recommendations that funds be put to
better use.
A summary of each audit report, inspection report, and evaluation report issued
before the commencement of the reporting period for which no management
decision has been made by the end of the reporting period (including the date and
title of each such report), an explanation of the reasons such management
decision has not been made, and a statement concerning the desired timetable for
achieving a management decision on each such report.
Information concerning any significant management decision with which the
SBA IG is in disagreement.26
IGs are also required to report suspected violations of federal criminal law directly and
expeditiously to the U.S. Attorney General, and any “particularly serious or flagrant problems,
abuses, or deficiencies” relating to their agency’s operations and administration of programs
immediately to the agency’s head.27
24 IG Act of 1978, Section 5(b); and 5 U.S.C. Appendix §5(b).
25 The SBA OIG’s semiannual reports can be accessed online at https://www.sba.gov/oig/category/oig-navigation-
structure/reading-room/semi-annual-reports-congress.
26 IG Act of 1978, Section 5(a); and 5 U.S.C. Appendix §5(a).
27 IG Act of 1978, Section 4(d) and 5(d); and 5 U.S.C. Appendix §4(d) and §5(d).
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In addition, pursuant to P.L. 106-531, the Records Consolidation Act of 2000,28 and the Office of
Management and Budget (OMB) Circular A-136,29 the SBA OIG issues an annual Report on the
Most Serious Management and Performance Challenges Facing the SBA. This report is, arguably,
the SBA OIG’s signature oversight document, focusing attention “on areas that are particularly
vulnerable to fraud, waste, error, and mismanagement, or otherwise pose a significant risk and
generally have been subject to one or more OIG or GAO reports.”30
Funding
The IG Act provides presidentially appointed IGs a separate appropriations account, known
colloquially as a “line item,” for their offices. This provision prevents federal administrators from
limiting, transferring, or otherwise reducing OIG funding once it has been specified in law.31
IGs are authorized to transmit a budget estimate and request to their respective agency head each
fiscal year. Each IG’s request must include amounts for operations, training, and for the support
of the Council of the Inspectors General on Integrity and Efficiency (CIGIE).32
The agency’s budget request to the President must include the OIG’s original budget request and
any comments the affected IG has regarding the proposal.33 The President must include in the
Administration’s budget submission to Congress the IG’s original request; the amount requested
by the President for the OIG’s operations, training, and support for CIGIE; and any comments the
affected IG has regarding the proposal if the IG concludes that the President’s budget would
substantially inhibit the IG from performing the duties of the office.34
Each year, the SBA OIG transmits a budget justification document to the SBA Administrator,
which is available online.35 That document includes the SBA OIG’s budget request, an overview
of the SBA OIG’s mission and authorities, a list of critical risks facing the SBA, an accounting of
the office’s oversight activities during the previous fiscal y ear, areas of emphasis for the coming
fiscal year, and a table of statistical highlights and accomplishments for the previous fiscal year
28 P.L. 106-531 authorizes federal agency heads to consolidate any statutorily required reports (including financial and
performance management reports) into an annual report and submit the consolidated report not later than 150 days after
the end of the agency’s fiscal year. Not all OIGs are required to author this report.
29 OMB Circular A-136, Financial Reporting Requirements-Revised (8/4/2015), at https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/circulars/A136/a136_revised_2015.pdf.
30 SBA, OIG, “FY2018 Congressional Budget Justification,” p. 20, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf.
31 For additional information and analysis concerning OIG budgeting, see CRS Report R43814, Federal Inspectors
General: History, Characteristics, and Recent Congressional Actions, by Michael Greene and Ben Wilhelm.
32 IG Act of 1978, Section 6(f)(1); and 5 U.S.C. Appendix §6(f)(1). The Council of the Inspectors General on Integrity
and Efficiency (CIGIE) is “an independent entity established within the executive branch to address integrity, economy
and effectiveness issues that transcend individual Government agencies and aid in the establishment of a professional,
well-trained and highly skilled workforce in the Offices of Inspectors General.” See CIGIE, “What is CIGIE?” at
https://www.ignet.gov/. CIGIE also oversees the conduct of high-ranking employees in the inspector general
community and investigates wrongdoing against those employees.
33 IG Act of 1978, Section 6(f)(2); and 5 U.S.C. Appendix §6(f)(2).
34 IG Act of 1978, Section 6(f)(3); and 5 U.S.C. Appendix §6(f)(3).
35 The SBA OIG’s budget justification documents for FY2010-FY2022 are available on the SBA’s website. See SBA,
“Congressional Budget Justification/Annual Performance Report,” at https://www.sba.gov/document/report-
congressional-budget-justification-annual-performance-report.
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(such as the number of reports and recommendations issued, estimated amounts saved or
recouped, number of indictments and convictions).
Table 1 shows the SBA OIG’s appropriations over the FY2010-FY2022 period. In FY2022, the
SBA OIG received an appropriation of $24.271 million (including a $1.6 million transfer from the
SBA Disaster Loan Program account for investigative costs related to SBA disaster loans). About
88% of this amount will be used for payroll, 6% for the annual audit of the SBA’s financial
statements by an independent public accountant, and 6% for other costs.36
Table 1. SBA OIG’s Appropriations, FY2010-FY2022
($ in millions)
Transfer from
the Disaster Loan
New Budget Program Other
Fiscal Year Authority Account Adjustments Total
2022 $22.671 $1.600 $0.000 $24.271
2021 $22.011 $1.600 $45.0000 $68.611
2020 $21.900 $1.600 $25.000a $48.500
2019 $21.900 $1.000 $0.000 $22.900
2018 $19.900 $0.000 $7.000b $26.900
2017 $19.900 $1.000 $0.000 $20.900
2016 $19.900 $1.000 $0.000 $20.900
2015 $19.400 $1.000 $0.000 $20.400
2014 $19.000 $1.000 $0.000 $20.000
2013 $16.267 $1.000 $5.000c $21.166
($1.101)
2012 $16.267 $1.000 $0.000 $17.267
2011 $16.300 $1.000 ($0.033)d $17.267
2010 $16.300 $1.000 $0.000 $17.300
Sources: P.L. 112-10, the Department of Defense and Full-Year Continuing Appropriations Act of 2011; P.L.
112-25, the Budget Control Act of 2011; P.L. 112-74, the Consolidated Appropriations Act, 2012; P.L. 112-175,
the Continuing Appropriations Resolution, 2013; P.L. 113-2, the Disaster Relief Appropriations Act, 2013; P.L.
113-6, the Consolidated and Further Continuing Appropriations Act, 2013; P.L. 113-76, the Consolidated
Appropriations Act, 2014; P.L. 113-235, the Consolidated and Further Continuing Appropriations Act, 2015; P.L.
114-113, the Consolidated Appropriations Act, 2016; P.L. 115-56, the Continuing Appropriations Act, 2018 and
Supplemental Appropriations for Disaster Relief Requirements Act, 2017; P.L. 115-123, the Bipartisan Budget
Act of 2018; P.L. 115-141, the Consolidated Appropriations Act, 2018; P.L. 116-6, the Consolidated
Appropriations Act, 2019; P.L. 116-93, the Consolidated Appropriations Act 2020; P.L. 116-136, the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act); P.L. 116-260, the Consolidated Appropriations
Act of 2021; the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Division N, Title III of
the Consolidated Appropriations Act of 2021); P.L. 117-2, the American Rescue Plan Act of 2021; and P.L. 117-
103, the Consolidated Appropriations Act, 2022.
Notes: In FY2021, P.L. 116-260, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
(Division N, Title III of the Consolidated Appropriations Act of 2021) provided the SBA OIG $20 million to
36 SBA, OIG, “FY2023 Congressional Budget Justification,” p. 9, at https://www.sba.gov/document/report-
congressional-budget-justification-annual-performance-report (hereinafter SBA, OIG, “FY2023 Congressional Budget
Justification”).
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oversee the Targeted EIDL Advance payments grant program; and P.L. 117-2, the American Rescue Plan Act of
2021, provided the SBA OIG $25 million for oversight.
a. In FY2020, P.L. 116-136 provided the SBA OIG $25 million for oversight of the CARES Act’s SBA lending
provisions. The funding is available through September 30, 2024.
b. In FY2018, P.L. 115-123 provided the SBA OIG $7.0 million for investigative costs related to supplemental
funding for SBA disaster loans
c. In FY2013, P.L. 113-2 provided the SBA OIG $5.0 million to remain available until expended for expenses
related to oversight of disaster loans following Hurricane Sandy. In addition, P.L. 112-25 and P.L. 113-6
imposed a federal government-wide sequestration process and a required 0.2% across-the-board rescission,
resulting in a $1.101 million reduction from the SBA OIG’s budget.
d. In FY2011, P.L. 112-10 imposed a 0.2% rescission on federal agencies, resulting in a reduction of $0.033
million from the SBA OIG’s budget.
Staffing and Organizational Structure
As shown in Table 2, the SBA OIG’s FTEs have increased recently, largely reflecting its
increased workload related to overseeing supplemental funding provided to the SBA to address
COVID-19’s adverse economic impact on small businesses.
Table 2. SBA OIG’s Full-Time Equivalent Employees, FY2010-FY2022
Fiscal Year Full-Time Equivalent Employees
2022 194 anticipated
2021 129
2020 118
2019 110
2018 110
2017 101
2016 96
2015 103
2014 93
2013 116
2012 110
2011 110
2010 110
Sources: U.S. Small Business Administration, Office of Inspector General, “Correspondence with the author,”
June 23, 2016, and February 1, 2017; U.S. Small Business Administration, Office of Inspector General, “FY2018
Congressional Budget Justification,” p. 3, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Small Business Administration, “FY2019 Congressional
Budget Justification and FY2017 Annual Performance Report,” p. 17, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/SBA_FY_2019_CBJ_APR_2_12_post.pdf; U.S. Small Business Administration, “SBA Plan for
Operating in the Event of a Lapse in Appropriations,” effective December 2018, p. 22; U.S. Small Business
Administration, Office of Inspector General, “FY2021 Congressional Budget Justification and FY2019 Annual
Performance Report,” pp. 15, 228, at https://www.sba.gov/document/report-congressional-budget-justification-
annual-performance-report; U.S. Small Business Administration, Office of Inspector General, “FY2022
Congressional Budget Justification,” p. 5, at https://www.sba.gov/document/report-congressional-budget-
justification-annual-performance-report; and U.S. Small Business Administration, Office of Inspector General,
“FY2023 Congressional Budget Justification,” p. 19, at https://www.sba.gov/document/report-congressional-
budget-justification-annual-performance-report.
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The SBA OIG’s staff is organized into three divisions and several support offices.
The Auditing Division performs and oversees audits and reviews of SBA
programs and operations, focusing on SBA business and disaster loans, business
development and government contracting programs, as well as mandatory and
other statutory audit requirements involving computer security, financial
reporting, and other work.
The Investigations Division manages a program to detect and deter illegal and
improper activities involving SBA’s programs, operations, and personnel. The
division has criminal investigations staff who carry out a full range of traditional
law enforcement functions and security operations staff who conduct name
checks and, where appropriate, fingerprint checks on program applicants to
prevent known criminals and wrongdoers from participating in SBA programs.
Security operations staff also conduct required employee background
investigations.
The Management and Administration Division provides business support (e.g.,
budget and financial management, human resources, IT, and procurement) for the
various OIG functions and activities.
The Office of Counsel provides legal and ethics advice to all OIG components;
represents the OIG in litigation arising out of or affecting OIG operations; assists
with the prosecution of criminal, civil, and administrative enforcement matters;
processes subpoenas; responds to Freedom of Information and Privacy Act
requests; and reviews and comments on proposed policies, regulations,
legislation, and procedures.
The OIG Hotline, under the purview of the Chief of Staff, reviews allegations
of waste, fraud, abuse, or serious mismanagement within the SBA or its programs
from employees, contractors, and the public.37
The SBA OIG’s headquarters is located in Washington, DC. The SBA OIG’s Investigations
Division has 11 field offices located across the United States.38
The SBA OIG’s structure is shown in its organizational chart (see Figure 1).
37 SBA, OIG, “FY2023 Congressional Budget Justification,” p. 46.
38 The SBA’s Investigations Division has 11 field offices: five in its eastern region: Atlanta, Georgia; Melville, New
York; Miami, Florida; Philadelphia, Pennsylvania; and Washington, DC; three in its central region: Lisle (Chicago),
Illinois; Detroit, Michigan; Houston, Texas; and Kansas City, Missouri; and three in its western region: Federal Way
(Seattle), Washington; Lakewood (Denver), Colorado; and Norwalk (Los Angeles), California. See SBA, “OIG
Directory,” at https://www.sba.gov/oig/oig-directory.
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Figure 1. SBA OIG’s Organizational Chart, FY2022
Source: U.S. Small Business Administration, Office of Inspector General, “FY2023 Congressional Budget
Justification,” p. 48, at https://www.sba.gov/document/report-congressional-budget-justification-annual-
performance-report.
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Recent Activities
As mentioned, the SBA OIG conducts and supervises audits and investigations of the SBA’s
programs and operations. As a complement to its criminal and civil fraud investigations, the SBA
OIG also recommends to the SBA suspensions, debarment, and other administrative enforcement
actions against SBA lenders, borrowers, contractors, and others who have engaged in fraud or
have otherwise exhibited a lack of business integrity. The SBA OIG also conducts, supervises,
and participates in various training activities to counter fraud in SBA programs.
Audit Reports
During FY2021, the SBA OIG issued 19 audit reports containing 119 recommendations for
improving the SBA’s operations. For example,
Serious Concerns About SBA’s Control Environment and the Tracking of
Performance Results in the Shuttered Venue Operators Grant Program
(Report 21-13). The OIG reported that the
SBA should take immediate action to reduce or eliminate risks [in the Shuttered Venue
Operators Grant Program] by strengthening existing controls and implementing
internal controls to address potential misuse of federal funds.... We suggested the
Administrator reassess the audit risk plan to identify vulnerabilities, commensurate
with the expected volume of applications and average award amount, to strengthen
internal controls and reduce risk of misuse of federal funds. We suggested SBA clearly
establish 2 CFR 200 criteria for the program to ensure compliance during the
implementation and oversight phases. We also suggested SBA implement required
performance measures to determine the impact of program funds and ensure sufficient
resources are available to implement and oversee the SVOG program.39
SBA’s Handling of Identity Theft in the COVID-19 Economic Injury
Disaster Loan Program (Report 21-15). The OIG reported that the
SBA had referred more than 845,000 COVID-19 EIDL applications to OIG for
suspected identity theft, while still disbursing $6.2 billion in loan funds and $468
million in advance grants to these applicants. Many of these loans had indications of
potential fraud. We found SBA officials were not tracking identity theft complaints at
the time of our review, nor did they have a process to cease collection actions, release
the identity theft victim from the loan liability, or charge-off the loan and related fees.
We recommended the Administrator direct the development of a process to maintain
and track all identity theft complaints and develop a process to provide status updates
to each complainant alleging identity theft. We also recommended SBA complete and
formalize a process to restore identity theft victims to their condition prior to the
fraud.... Additionally, we recommended SBA review over 150,000 returned billing
statements and resolve any that involve identity theft and then refer fraudulent loans
to OIG.40
Table 3 provides the number of OIG audit reports and recommendations in FY2010 through
FY2021, as well as the reported dollar amount in accomplishments, the value of costs questioned,
and the value of recommendations that funds be put to better use.
39 SBA, OIG, “Semiannual Report to Congress: April 1, 2021-September 30, 2021,” pp. 1-2, at https://www.sba.gov/
document/report-semiannual-report-congress (hereinafter SBA, OIG, “Semiannual Report to Congress: April 1, 2021-
September 30, 2021”).
40 SBA, OIG, “Semiannual Report to Congress: April 1, 2021-September 30, 2021,” p. 2.
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Table 3. SBA OIG’s Audits, FY2010-FY2021
($ in millions)
Number of Value of
Number Recommendations Value of Recommendations
Fiscal of Audit Issued/Acted Dollar Amount in Costs That Funds Be Put
Year Reports Upona Accomplishmentsb Questioned to Better Use
2021 19 119/108 $0.8 $21.7 $0.0
2020 20 91/88 $142.5 $64.8 $0.0
2019 23 94/91 $111.0 $687.6 $0.0
2018 26 111/119 $145.4 $186.6 $0.0
2017 19 72/72 $2.1 $138.6 $0.0
2016 23 81/84 $3.2 $8.0 $1.3
2015 17 80/84 $15.0 $2.4 $9.1
2014 20 100/137 $93.7 $4.4 $4.8
2013 19 129/109 $42.8 $45.9 $40.7
2012 22 126/113 $8.8 $172.1 $50.7
2011 24 136/168 $60.2 $12.3 $0.0
2010 34 176/106 $1.1 $1.0 $34.5
Sources: U.S. Small Business Administration, Office of Inspector General, “Congressional Budget Justification,
FY2012,” pp. 1, 12, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf; U.S. Small Business Administration, Office of
Inspector General, “Congressional Budget Justification, FY2013,” p. 11, at https://www.sba.gov/sites/default/files/
files/4-508%20Compliant%20FY%202013%20Office%20of%20Inspector%20General%20CBJ2(1).pdf; U.S. Small
Business Administration, Office of Inspector General, “FY2014 Congressional Budget Justification,” p. 16, at
https://www.sba.gov/sites/default/files/files/4-508%20Compliant%20OIG%20FY%202014%20CBJ.PDF; U.S. Small
Business Administration, Office of Inspector General, “FY2015 Congressional Budget Justification,” pp. 1, 17, at
https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” pp. 1, 22, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” pp. 1,
21, at https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY2018 Congressional Budget Justification,” p. 23, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY2019 Congressional Budget Justification,” p. 220, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY 2020 Congressional Budget Submission,” p. 227, at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report; U.S. Small Business Administration, Office
of Inspector General, “FY2021 Congressional Budget Justification,” p. 247, at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report; U.S. Small Business Administration, Office
of Inspector General, “Semiannual Report to Congress: April 1, 2020 – September 30, 2020,” October 30, 2020,
p. 22, at https://www.sba.gov/document/report-semiannual-report-congress; and U.S. Small Business
Administration, Office of Inspector General, “FY2023 Congressional Budget Justification,” p. 38, at
https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report.
a. The number of the SBA OIG’s recommendations acted upon by the SBA in a fiscal year may exceed the
number of recommendations issued by the SBA OIG because the number acted upon may include
recommendations issued in previous fiscal years.
b. Sum of disallowed costs agreed to by management and recommendations that funds be put to better use
agreed to by management.
Congressional Research Service 14
SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
Investigations, Debarment Referrals, and Training Activities
In FY2021, the SBA OIG’s investigations resulted in 272 indictments or informations and 137
convictions.41 For example
An Oregon man
pled guilty to bank fraud, money laundering, and aggravated identity theft for stealing
CARES Act funding. The man submitted nine PPP loan applications, six of which
were accepted, securing over $3.4 million. He also applied for numerous EIDLs,
funded for an additional $160,000. The man then purchased real estate and invested in
securities, transferring more than $1.8 million of PPP loan funds to his E-Trade
securities brokerage account. Agents seized the man’s brokerage account, including
15,740 shares of Tesla Inc. Also, agents seized another account containing more than
$660,000 in securities and cash. The securities and cash-seized accounts were valued
at more than $11 million, not including the value of the 23 properties seized as fraud
proceeds.42
Two California brothers, their wives, and their associates
were each found guilty of 1 count of conspiracy to commit bank fraud and wire fraud,
11 counts of wire fraud, 8 counts of bank fraud, and 1 count of conspiracy to commit
money laundering. One brother was also found guilty of two counts of aggravated
identity theft, while his brother was found guilty of one count of aggravated identity
theft. All were found guilty of submitting fraudulent loan applications to obtain
COVID-19 relief funds used as down payments on luxury homes in Tarzana, Glendale,
and Palm Desert and to purchase jewelry [and] other high-end items. The total loss
was more than $18 million in COVID-19 relief funds.43
The SBA OIG also sent 19 present responsibility actions (suspension and debarment referrals) to
the SBA in FY2021. Acting on these and previously submitted responsibility actions (43 in total),
the SBA issued 4 suspensions and 8 final debarments in FY2021.44
Table 4 provides the number of cases opened, the number of indictments and informations, and
the number of convictions resulting from OIG investigations from FY2010 through FY2021. The
table also presents the reported dollar amount in recoveries and management avoidances and the
number of suspensions and debarments recommended by the OIG and issued by the SBA for each
of these fiscal years. Of note, the significant increase in the reported dollar amount for recoveries
and management avoidances in FY2021 results primarily from investigations of COVID-19 small
41 SBA, OIG, “FY2023 Congressional Budget Justification,” p. 38.
An information is a sworn written statement that charges that a particular individual has done a criminal act or is guilty
of a criminal omission. Because the Fifth Amendment to the U.S. Constitution expressly creates a constitutional right to
be indicted by a grand jury, an information is used in federal criminal procedure only when a defendant voluntarily
pleads guilty (often as part of a plea bargain) and waives the right to an indictment. See The Free Dictionary,
“Information,” at http://legal-dictionary.thefreedictionary.com/Information; and The Law Dictionary, “Information,” at
http://thelawdictionary.org/information/.
42 SBA, OIG, “Semiannual Report to Congress: April 1, 2021-September 30, 2021,” p. 3.
43 SBA, OIG, “Semiannual Report to Congress: April 1, 2021-September 30, 2021,” p. 4.
44 SBA, OIG, “FY2023 Congressional Budget Justification,” p. 39.
Debarred contractors, lenders, and borrowers are generally ineligible for new federal contracts or SBA loans for a fixed
period of time, whereas suspended contractors, lenders, and borrowers are generally ineligible for the duration of any
investigation or litigation involving their conduct. See U.S. Congress, House Committee on Small Business, SBA
Management and Performance Challenges: The Inspector General’s Perspective, 114th Cong., 2nd sess., March 16,
2016, H. Hrg. 114-049 (Washington: GPO, 2016), p. 29.
Congressional Research Service 15
SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
business relief borrowers (e.g., Paycheck Protection Program and Economic Injury Disaster Loan
program).
Table 4. SBA OIG’s Investigations, FY2010-FY2021
($ in millions)
Number of
Suspensions and
Number of Recoveries and Debarments
Fiscal Number of Indictments and Number of Management Recommended/
Year Cases Opened Informations Convictionsa Avoidancesb Issuedc
2021 398 272 137 $4,280.6 19/12
2020 295 63 32 $51.4 47/24
2019 59 49 36 $77.4 38/33
2018 73 62 43 $79.0 84/17
2017 86 35 25 $79.9 106/33
2016 104 45 41 $141.5 75/32
2015 78 52 57 $118.8 74/46
2014 51 103 67 $76.2 50/42
2013 50 64 51 $348.2 65/26
2012 65 59 59 $81.8 45/31
2011 85 69 47 $60.7 41/30
2010 80 81 41 $71.3 31/16
Sources: U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress,
Spring 2010,” p. 24, at https://www.sba.gov/sites/default/files/oig/oig%20spring%202010%20sar.pdf; U.S. Small
Business Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2010,” p. 24, at
https://www.sba.gov/sites/default/files/oig/Semiannual%20Report%20to%20Congress%20-%20Fall%202010_0.pdf;
U.S. Small Business Administration, Office of Inspector General, “Congressional Budget Justification FY2012,” pp.
1, 12, 13, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf; U.S. Small Business Administration, Office of
Inspector General, “Congressional Budget Justification, FY2013,” pp. 11-12, at https://www.sba.gov/sites/default/
files/files/4-508%20Compliant%20FY%202013%20Office%20of%20Inspector%20General%20CBJ2(1).pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2014 Congressional Budget Justification,” pp. 2,
16, 17, at https://www.sba.gov/sites/default/files/files/4-508%20Compliant%20OIG%20FY%202014%20CBJ.PDF;
U.S. Small Business Administration, Office of Inspector General, “FY2015 Congressional Budget Justification,” pp.
1, 15, 17, 18, at https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” pp. 1, 22, 23, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” pp. 1,
22, 23, at https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY2018 Congressional Budget Justification,” pp. 23, 24, at https://www.sba.gov/sites/default/
files/aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Small Business Administration,
Office of Inspector General, “FY2019 Congressional Budget Justification,” pp. 220, 221, at https://www.sba.gov/
sites/default/files/aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY 2020 Congressional Budget Submission,” pp. 227, 228, at
https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report; U.S. Small
Business Administration, Office of Inspector General, “FY2021 Congressional Budget Justification,” pp. 247, 248,
at https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report; U.S.
Small Business Administration, Office of Inspector General, “Semiannual Report to Congress: April 1, 2020 –
September 30, 2020,” October 30, 2020, pp. 22-23, at https://www.sba.gov/document/report-semiannual-report-,
congress; and U.S. Small Business Administration, Office of Inspector General, “FY2023 Congressional Budget
Congressional Research Service 16
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Justification,” p. 38, at https://www.sba.gov/document/report-congressional-budget-justification-annual-
performance-report.
Notes:
a. The number of convictions may exceed the number of indictments and informations in a fiscal year because
a conviction in any fiscal year could result from an indictment or information issued in that fiscal year or a
previous fiscal year.
b. Sum of potential investigative recoveries and fines, asset forfeitures attributed to OIG investigations, other
recoveries (e.g., administrative seizures with partner law enforcement agencies), loans or contracts not
approved or canceled as a result of investigations, and loans not made as a result of name checks.
c. The number of suspensions and debarments issued by the SBA in response to a recommendation from the
SBA OIG does not include the number of recommended suspensions and debarments pending at the end of
the fiscal year.
Monetary Savings and Recoveries
As indicated in Table 3 and Table 4, the SBA OIG reports that its audits and investigations
resulted in monetary savings and recoveries of about $4.28 billion in FY2021. This figure
included $137.0 million from potential investigative recoveries and fines, $23.5 million from
asset forfeitures, $4.1 billion in other recoveries (administrative seizures with partner law
enforcement agencies), $25.1 million for loans or contracts not approved or canceled, and
$785,961 in disallowed costs agreed to by management.45
Most OIGs, including the SBA OIG, quantify their monetary savings by identifying and reporting
amounts affected by their activities. This methodological approach, arguably, provides a fairly
good overview of the OIG’s activities’ scope, nature, and impact. However, this approach has
limitations. For example, precise data concerning monetary savings are not always readily
available. In addition, from a budgetary perspective, the monetary savings identified is sometimes
less than the actual monetary savings realized. For example,
Savings from potential recoveries and fines ($137.0 million in FY2021) is
derived from the actual amount imposed by courts in criminal sentencings
(including fines and restitution), criminal settlements, and civil settlements.
These recoveries are deemed “potential” because the court ordered them in
FY2021 but they may not have been collected yet. The SBA OIG does not track
collections resulting from these orders. As a result, the SBA OIG is not able to
report the final amount of money actually recovered.46
Savings from loans or contracts not approved or canceled ($25.1 million in
FY2021) is “comprised of the sum of the amounts that would have been
borrowed as loans or awarded via contracts had there been no involvement by the
OIG Investigations Division.”47 From a budgetary perspective, the actual
monetary savings generated by these actions is less than the amount cited.48
When a SBA loan is not approved, no funds are returned to the SBA because the
loan amount has not been issued yet. When an SBA business loan is canceled, the
loan amount is ultimately returned to the lender, not to the SBA, because the
SBA did not make the loan, it guaranteed a portion of it. When a small business
45 SBA, OIG, “FY2023 Congressional Budget Justification,” p. 38.
46 SBA, OIG, “Correspondence with the author,” June 23, 2016.
47 SBA, OIG, “Correspondence with the author.”
48 By promoting program efficiency, it could be argued that these actions cumulatively result in administrative cost
savings. However, it is difficult to quantify these savings.
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contract is not approved, no funds are returned to the agency sponsoring the
contract because the contracted amount has not been awarded yet. When a small
business contract is canceled, the contracted amount is typically made available
to other contractors.
Savings from disallowed costs agreed to by management ($785,961 in FY2021)
could result in actual budgetary savings, but the recovery process typically takes
time. As a result, the final savings for disallowed costs often is not known during
the fiscal year in which it is reported.
Finally, estimating the monetary savings from the SBA OIG’s activities is challenging because it
is difficult, if not impossible, to determine what changes the SBA might have made to its
programs and operations if the SBA OIG did not exist.
Perhaps indicative of these methodological challenges, the SBA OIG’s semiannual reports and
annual congressional budget justification document’s statistical highlights sections refer to these
figures as “dollar accomplishments” as opposed to monetary savings.49
Most Serious Management and Performance
Challenges Facing the SBA
Pursuant to P.L. 106-531, the Records Consolidation Act of 2000, and OMB Circular A-136, the
SBA OIG issues an annual Report on the Most Serious Management and Performance
Challenges Facing the SBA. This report is, arguably, the SBA OIG’s signature oversight
document, focusing attention “on areas that are particularly vulnerable to fraud, waste, error, and
mismanagement, or otherwise pose a significant risk and generally have been subject to one or
more OIG or GAO reports.”50
The FY2022 Report on the Most Serious Management and Performance Challenges Facing the
SBA lists the following eight challenges:
1. SBA’s COVID-19-related economic relief programs are susceptible to significant
fraud risks and vulnerabilities.
2. Inaccurate procurement data and eligibility concerns in the small business
contracting programs undermine the reliability of contracting goal achievements.
3. SBA faces significant challenges in IT investment, system development, and
security controls.
4. SBA risk management and oversight practices need improvement to ensure the
integrity of loan programs.
5. SBA’s management and monitoring of the 8(a) business development program
needs improvement.
6. Identification of improper payments in SBA’s loan programs remains a
challenge.
7. SBA’s disaster assistance program must balance competing priorities to deliver
prompt assistance but prevent fraud.
49 For example, see SBA, OIG, “FY2023 Congressional Budget Justification,” p. 38.
50 SBA, OIG, “FY2019 Congressional Budget Justification,” p. 207.
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8. SBA needs robust grants management oversight.51
The SBA OIG provides a series of recommended actions within each of the reported challenges to
enhance the effectiveness of the SBA’s programs and operations. The management challenges are
“driven by SBA’s current needs” and based on the SBA OIG’s understanding of the SBA’s
programs and operations, as well as challenges presented in other agency reports, principally
GAO reports. Accordingly, the challenges presented each year may change based on the SBA’s
actions or inactions “to remedy past weaknesses.”52
Impact on Program Efficiency and Effectiveness
OIGs are, arguably, best known for investigations addressing waste, fraud, and abuse and for
audits containing recommendations to enhance programmatic and operational efficiencies.
However, a full and complete assessment of an OIG’s impact should address all of the office’s
statutory responsibilities, including its efforts to
assist Congress and the OIG’s agency by making recommendations concerning
the impact of legislation and regulations on programmatic and operational
efficiencies and waste, fraud, and abuse;
assist the OIG’s agency by making recommendations to facilitate the agency’s
relationships with other governmental and nongovernmental entities; and
keep the OIG’s agency head and Congress fully and currently informed of its
findings and the agency’s progress in implementing recommended corrective
actions.
Recommendations Concerning the Impact of Legislation and
Regulations
The SBA OIG reports that it routinely reviews and comments on proposed changes to the SBA’s
program directives, such as regulations, internal operating procedures, policy notices, and SBA
forms that are completed by lenders and the public.53
The SBA OIG also tracks, reviews, and comments on legislation affecting the SBA and
participates in OMB’s Legislative Referral Memoranda (LRM) process for reviewing and
coordinating agency recommendations on proposed, pending, and enrolled legislation.54 The SBA
OIG also “receives, through the SBA Office of Congressional and Legislative Affairs, congress-
related documents being circulated by OMB, including pending legislation for consideration of
Administration views and perspectives.”55
51 SBA, OIG, Report on the Most Serious Management and Performance Challenges in Fiscal Year 2022, Report
Number 22-02, October 15, 2021, at https://www.sba.gov/document/report-report-most-serious-management-
performance-challenges-office-inspector-general.
52 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, 114th Cong., 2nd sess., March 16, 2016, H. Hrg. 114-049 (Washington: GPO, 2016), pp. 23-24.
53 SBA, OIG, “FY2023 Congressional Budget Justification,” p. 28.
54 See U.S. Office of Management and Budget, “Circular No. A-19, Legislative Coordination and Clearance
(9/20/1979),” at https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-019.pdf.
55 SBA, OIG, “Correspondence with the author,” July 5, 2016.
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The SBA OIG provides the SBA with both formal and informal comments. Formal comments are
provided “through the Agency’s internal document control process, the Correspondence
Management System (CMS),56 and as a reviewing party in the Agency’s Paperwork Reduction
Act (PRA) process.”57 Informal comments “occur in the context of program officials seeking
SBA OIG guidance when preparing new guidance.”58
In terms of legislation, the SBA OIG provides comments and suggestions “directly with
congressional stakeholders” and shares its views with SBA officials and OMB if the legislation is
being “circulated for solicited views by OMB through its LRM process, or if determined by the
OIG to be a necessary course of action.”59
As shown in Table 5, in FY2021, the SBA OIG conducted 148 reviews of legislation, regulations,
standard operating procedures, and other issuances and submitted comments on 13 of these
initiatives.
Table 5. Legislation, Regulations, Standard Operating Procedures (SOPs), and Other
Issuances Reviewed and Comments Provided, FY2010-FY2021
Fiscal Legislation, Regulations, SOPs, and Number of Initiatives for Which Comments
Year Other Issuances Reviewed Were Provided
2021 148 13
2020 140 28
2019 112 37
2018 114 43
2017 101 36
2016 119 52
2015 129 72
2014 93 46
2013 115 60
2012 136 79
56 The SBA’s CRM-Correspondence Management (CRM-CM) system “will efficiently manage, organize, search, track,
and report on correspondence and action plans... The CRM-CM will store and manage correspondence from the
members of the U.S. House of Representatives and the U.S. Senate, the President, and SBA’s Administrator or Deputy
Administrator.” See SBA, “Privacy Impact Assessment: Name of System/Application: CRM-Correspondence
Management Program Office: Office of the Executive Secretariat,” at https://www.sba.gov/sites/default/files/files/
CRM_Correspondence_Management.pdf.
57 SBA, OIG, “Correspondence with the author,” July 5, 2016. “OIRA [the Office of Information and Regulatory
Affairs] was created within OMB [the Office of Management and Budget] by Section 3503 of the Paperwork
Reduction Act (PRA) of 1980 (44 U.S.C. Chapter 35) ...With regard to paperwork reduction, the act generally
prohibited agencies from conducting or sponsoring a collection of information until they had submitted their proposed
information collection requests to OIRA and the office had approved those requests. The PRA’s requirements cover
rules issued by virtually all agencies, including Cabinet departments, independent agencies, and independent regulatory
agencies and commissions. Although the PRA gave OIRA substantive responsibilities in many areas, the bulk of the
office’s day-to-day activities under the act were initially focused on reviewing and approving agencies’ proposed
information collection requests.” For additional information and analysis concerning the PRA see CRS Report
RL32397, Federal Rulemaking: The Role of the Office of Information and Regulatory Affairs, coordinated by Maeve P.
Carey, and CRS Report RL32240, The Federal Rulemaking Process: An Overview, coordinated by Maeve P. Carey.
58 SBA, OIG, “Correspondence with the author,” July 5, 2016.
59 SBA, OIG, “Correspondence with the author,” July 5, 2016.
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Fiscal Legislation, Regulations, SOPs, and Number of Initiatives for Which Comments
Year Other Issuances Reviewed Were Provided
2011 133 80
2010 95 47
Sources: U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress,
Spring 2010,” p. 22, at https://www.sba.gov/sites/default/files/oig/oig%20spring%202010%20sar.pdf; U.S. Small
Business Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2010,” p. 21, at
https://www.sba.gov/sites/default/files/oig/Semiannual%20Report%20to%20Congress%20-%20Fall%202010_0.pdf;
U.S. Small Business Administration, Office of Inspector General, “Congressional Budget Justification FY2012,” p.
12, at https://www.sba.gov/sites/default/files/aboutsbaarticle/
FINAL%20FY%202012%20CBJ%20FY%202010%20APR_0.pdf; U.S. Small Business Administration, Office of
Inspector General, “Semiannual Report to Congress, Spring 2011,” p. 17, at https://www.sba.gov/sites/default/
files/oig/Semi-Annual%20Report%20to%20Congress%20-%20Spring%202011.pdf; U.S. Small Business
Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2011,” p. 17, at
https://www.sba.gov/sites/default/files/oig/Fall%202011%20SBA%20OIG%20SAR.pdf; U.S. Small Business
Administration, Office of Inspector General, “Congressional Budget Justification, FY2013,” p. 11, at
https://www.sba.gov/sites/default/files/files/4-
508%20Compliant%20FY%202013%20Office%20of%20Inspector%20General%20CBJ2(1).pdf; U.S. Small Business
Administration, Office of Inspector General, “Semiannual Report to Congress, Spring 2012,” p. 20, at
https://www.sba.gov/sites/default/files/oig/SBA%20OIG%20SAR%20Spring%202012%20.pdf; U.S. Small Business
Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2012,” p. 20, at
https://www.sba.gov/sites/default/files/oig/FINAL_FALL%202012_SAR.pdf; U.S. Small Business Administration,
Office of Inspector General, “FY2014 Congressional Budget Justification,” p. 17, at https://www.sba.gov/sites/
default/files/files/4-508%20Compliant%20OIG%20FY%202014%20CBJ.PDF; U.S. Small Business Administration,
Office of Inspector General, “Semiannual Report to Congress, Spring 2013,” p. 19, at https://www.sba.gov/sites/
default/files/oig/SBA%20OIG%20_Spring_%202013_SAR.pdf; U.S. Small Business Administration, Office of
Inspector General, “Semiannual Report to Congress, Fall 2013,” p. 18, at https://www.sba.gov/sites/default/files/
oig/Fall_2013_-_SBA_OIG_SAR_0.pdf; U.S. Small Business Administration, Office of Inspector General, “FY2015
Congressional Budget Justification,” p. 15, at https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” p. 23, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” p. 22, at
https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of Inspector
General, “FY2018 Congressional Budget Justification,” p. 24, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/Office_of_Inspector_General_-_FY_2018_CBJ.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY2019 Congressional Budget Justification,” p. 221, at https://www.sba.gov/sites/default/files/
aboutsbaarticle/FY_2019_CBJ_Office_of_Inspector_General.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY 2020 Congressional Budget Justification,” p. 228, at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report; U.S. Small Business Administration, Office
of Inspector General, “FY2021 Congressional Budget Justification,” p. 248, at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report; U.S. Small Business Administration, Office
of Inspector General, “Semiannual Report to Congress: April 1, 2020 – September 30, 2020,” October 30, 2020,
p. 23, at https://www.sba.gov/document/report-semiannual-report-congress; and U.S. Small Business
Administration, Office of Inspector General, “FY2023 Congressional Budget Justification,” p. 39, at
https://www.sba.gov/document/report-congressional-budget-justification-annual-performance-report.
Note: Other issuances include policy notices, procedural notices, the SBA Administrator’s action memoranda,
and other SBA initiatives, which frequently involve the implementation of new programs or policies.
The data in Table 5 suggest that the SBA OIG actively reviews and comments on legislation and
SBA program directives. However, it is difficult to determine the impact of these reviews and
comments because the SBA OIG does not track or report data concerning the SBA’s response to
these comments. The SBA OIG indicated that
neither the dynamic nature of the informal comment process nor the collaborative follow-
up procedures from formal comments are conducive to quantification.... Our sense of these
comments is that the Agency will generally act upon SBA OIG comments. Typically, the
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SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
Agency modifies clearances and PRA packages in response to material SBA OIG concerns.
An accurate tracking and quantification of these clearances, however, is unlikely to yield
particularly useful data relative to the resource expenditure necessary for that collection. 60
Facilitating the SBA’s Relationships with Other Governmental and
Nongovernmental Entities
The SBA OIG provides training and outreach sessions on topics related to fraud in government
lending and contracting programs. These training and outreach sessions are designed to facilitate
the SBA’s relationships with other governmental and nongovernmental entities in identifying and
ameliorating fraud.
The SBA OIG’s outreach and training sessions are attended by SBA and other government
employees, lending officials, and law enforcement representatives.61 Topics include “types of
fraud, fraud indicators and trends; how to report suspicious activity that may be fraudulent;
suspension and debarment, the Program Fraud Civil Remedies Act, and other topics related to
deterring and detecting fraud in government lending and contracting programs.”62
As shown in Table 6, the SBA OIG provided 165 outreach and training sessions to 6,451
attendees in FY2021.
Table 6. Outreach and Training Sessions, FY2010-FY2021
Fiscal
Year Number of Sessions Number of Attendees
2021 165 6,451
2020 194 4,964
2019 165 1,482
2018 184 1,933
2017 220 3,556
2016 74 1,717
2015 28 1,067
2014 25 1,370
2013 19 900
2012 24 1,100
2011 24 1,130
2010 11 505
Sources: U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress,
Spring 2010,” p. 22, at https://www.sba.gov/sites/default/files/oig/oig%20spring%202010%20sar.pdf; U.S. Small
Business Administration, Office of Inspector General, “Semiannual Report to Congress, Fall 2010,” p. 21, at
https://www.sba.gov/sites/default/files/oig/Semiannual%20Report%20to%20Congress%20-%20Fall%202010_0.pdf;
U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to Congress, Spring 2011,”
p. 17, at https://www.sba.gov/sites/default/files/oig/Semi-Annual%20Report%20to%20Congress%20-
60 SBA, OIG, “Correspondence with the author,” July 5, 2016.
61 SBA, OIG, “FY2017 Congressional Budget Justification,” p. 19, at https://www.sba.gov/sites/default/files/FY17-
CBJ-oig.pdf (hereinafter SBA, OIG, “FY2017 Congressional Budget Justification”).
62 SBA, OIG, “FY2017 Congressional Budget Justification,” p. 19.
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%20Spring%202011.pdf; U.S. Small Business Administration, Office of Inspector General, “Semiannual Report to
Congress, Fall 2011,” p. 16, at https://www.sba.gov/sites/default/files/oig/
Fall%202011%20SBA%20OIG%20SAR.pdf; U.S. Small Business Administration, Office of Inspector General,
“Semiannual Report to Congress, Spring 2012,” p. 21, at https://www.sba.gov/sites/default/files/oig/
SBA%20OIG%20SAR%20Spring%202012%20.pdf; U.S. Small Business Administration, Office of Inspector General,
“Semiannual Report to Congress, Fall 2012,” p. 17, at https://www.sba.gov/sites/default/files/oig/
FINAL_FALL%202012_SAR.pdf; U.S. Small Business Administration, Office of Inspector General, “FY2014
Congressional Budget Justification,” p. 15, at https://www.sba.gov/sites/default/files/files/4-
508%20Compliant%20OIG%20FY%202014%20CBJ.PDF; U.S. Small Business Administration, Office of Inspector
General, “FY2015 Congressional Budget Justification,” p. 16, at https://www.sba.gov/sites/default/files/files/
SBA%20OIG%20FY%202015%20Congressional%20Submission%20508%20FINAL%20post.pdf; U.S. Small Business
Administration, Office of Inspector General, “FY2016 Congressional Budget Justification,” pp. 3, 20, at
https://www.sba.gov/sites/default/files/files/4-Office_of_the_Inspector_General_FY_2016_CBJ_508.pdf; U.S.
Small Business Administration, Office of Inspector General, “FY2017 Congressional Budget Justification,” pp. 2,
19, at https://www.sba.gov/sites/default/files/FY17-CBJ-oig.pdf; U.S. Small Business Administration, Office of
Inspector General, “FY 2020 Congressional Budget Submission,” p. 207, at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report; U.S. Small Business Administration, Office
of Inspector General, “FY2021 Congressional Budget Justification,” p. 227, at https://www.sba.gov/document/
report-congressional-budget-justification-annual-performance-report; SBA, Office of Inspector General, “FY2022
Congressional Budget Justification,” p. 9, at https://www.sba.gov/document/report-congressional-budget-
justification-annual-performance-report; and U.S. Small Business Administration, Office of Inspector General,
“FY2023 Congressional Budget Justification,” p. 8, at https://www.sba.gov/document/report-congressional-
budget-justification-annual-performance-report.
The data presented in Table 6 suggest that the SBA OIG actively provides training and outreach
sessions related to identifying and addressing fraud. The office also participates in a number of
activities involving federal agencies and others with an interest in fraud prevention activities. It is
difficult to measure the impact of these training and outreach activities on the SBA’s interaction
with other federal agencies. The SBA OIG reports that these sessions are well-attended, and
receive high ratings from attendees.
Keeping the SBA Administrator and Congress Fully and
Currently Informed
As mentioned, the IG Act requires IGs to keep their agency’s administrator and Congress fully
and currently informed concerning fraud and other serious problems, abuses, and deficiencies
relating to the agency’s administration of its programs and operations and to report on the
progress made in implementing recommended corrective action. The SBA OIG’s informational
role is conducted through both formal and informal communication.
Formal communication occurs through (1) the publication of audits, investigations, semiannual
reports, and the annual Report on the Most Serious Management and Performance Challenges
Facing the SBA; (2) correspondence with SBA officials, congressional staff, and Members of
Congress; (3) briefings with SBA officials, congressional staff, and Members of Congress (as
needed or as requested); (4) press releases; and occasionally (5) congressional testimony.63
Informal communication occurs primarily through telephone consultation or by email with SBA
63 The SBA IG testified before Congress six times in 2011, once in 2012, three times in 2013, three times in 2014, none
in 2015, once in 2016, four times in 2017, once in 2018, twice in 2019, once in 2020, three times in 2021, and once in
2022 (to date). See SBA, “Congressional Testimony,” at https://www.sba.gov/oig/category/oig-navigation-structure/
reading-room/congressional-testimony.
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officials, congressional staff, and Members of Congress (often facilitated by the SBA OIG’s chief
of staff).64
In terms of communication with Congress, the SBA OIG reports that it “has regular
communications and meetings (as needed or requested) to keep the Congress apprised of
significant findings or issues identified during our oversight of SBA” and that the “OIG has a
staff member that is responsible for congressional relations.”65 In addition, because its semiannual
reports to Congress are published every six months, the SBA OIG finds that those reports’ “utility
as a viable means to make a recommendation for legislation advancing through the legislative
process is limited in the context of current legislative affairs.”66 As a result, because “the
legislative process is very dynamic,” the SBA OIG often relies on “frequent and informal”
communication with congressional staff and Members of Congress to provide its input on
legislation and other matters affecting the SBA, often by telephone and email.67
The SBA OIG reports frequent and, in its view, meaningful consultation with both the SBA and
Congress in an attempt to keep them fully informed of its activities and recommendations. It is
difficult to determine the impact and/or extent of the SBA OIG’s communication with SBA
officials, congressional staff, and Members of Congress because much of that communication
occurs through informal means, is not tracked, and data concerning the SBA’s or congressional
response to the provided comments and recommendations are not compiled or reported. However,
at the aforementioned March 2016 congressional hearing on the SBA’s management and
performance challenges, Representative Steve Chabot stated that
By clarifying the specific areas in which improvement is needed and highlighting possible
paths forward for the agency, the insights offered by the Inspector General are invaluable
as the Committee continues to work with the SBA to develop meaningful solutions to its
management and performance challenges.68
Relationship with Congress
Generally, OIGs’ relationships with Congress tend to ebb and flow over time, varying with the
personalities, interests, needs, and actions of the principals involved. One constant has been a
genuine interest from Members of Congress of both political parties in OIGs’ efforts to identify
and reduce waste, fraud, and abuse and enhance program efficiency and effectiveness. The
congressional interest in these issues can take on a partisan, contentious tone, especially during
periods of divided government. The House and Senate Committees on Small Business, however,
have traditionally tried to avoid partisanship. For example, at a potentially contentious Senate
Committee on Small Business and Entrepreneurship hearing in 2007, then-Senate Committee
Chair John Kerry stated, “Senator Snowe [then-ranking Member] and I and all Members of this
Committee manage a Committee that works in a very bipartisan way and try very hard to keep the
politics off the table.”69 More recently, Representative Steve Chabot stated the following during
64 SBA, OIG, “Correspondence with the author,” June 23, 2016.
65 SBA, OIG, “Correspondence with the author,” June 23, 2016.
66 SBA, OIG, “Correspondence with the author,” July 5, 2016.
67 SBA, OIG, “Correspondence with the author,” July 5, 2016.
68 U.S. Congress, House Committee on Small Business, SBA Management and Performance Challenges: The Inspector
General’s Perspective, 114th Cong., 2nd sess., March 16, 2016 (Washington: GPO, 2016), p. 2.
69 U.S. Congress, Senate Committee on Small Business and Entrepreneurship, SBA Lender Oversight: Preventing Loan
Fraud and Improving Regulation of Lenders, 110th Cong., 1st sess., November 13, 2007, S.Hrg. 110-504 (Washington:
GPO, 2008), p. 1.
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House floor consideration of, the Recovery Improvements for Small Entities After Disaster Act of
2015:
I want to offer a special thanks to our committee’s ranking member, Ms. Velazquez, for
her insight and leadership on this issue and for working in a bipartisan, bicameral manner,
as she does. I have seen that as chair of the Small Business Committee that I chair now,
but I have also been the ranking member under her when she was chair, and it was always
bipartisan. We have worked together in a very collegial manner, and I thank her for that. 70
The extent to which the small business committees have been able to avoid partisan conflict has
varied somewhat over time, reflecting the personalities of committee leaders and the nature of the
issues that have presented themselves at any given time. Nonetheless, the small business
committees’ tradition of valuing bipartisanship has served to reduce the potential for conflict with
the SBA OIG, primarily because committee members generally do not feel a need to question the
SBA OIG’s motives when its investigations and audits find perceived weaknesses in the
Administration’s implementation of the SBA’s programs or in the Administration’s efforts to
identify and address waste, fraud, and abuse. The expectation that both committee members and
the SBA IG do not, and should not, pursue a political agenda may help to explain why small
business committee members rarely ask the SBA OIG to undertake specific studies.71 In their
view, the SBA IG is expected to aggressively pursue perceived weaknesses in the SBA’s
programs and operations regardless of potential political consequences. Requesting specific
studies could be seen as suggesting that the SBA OIG is not doing its job well, or as a partisan
effort to embarrass the Administration.
The SBA OIG’s relationship with Congress has not always been without controversy. For
example, in October 2008, then-Senator John Kerry, chair of the Senate Committee on Small
Business and Entrepreneurship, criticized the SBA OIG on the Senate floor for issuing what he
described as “a heavily redacted report” concerning the SBA’s oversight of one of the agency’s
largest 7(a) lenders. Speaking on behalf of himself and then-Ranking Member Senator Olympia
Snowe, he accused the SBA OIG of not exercising “independent authority on what was redacted
and instead let the agency it was investigating dictate that large sections of the report be redacted
... contrary to the usual process that occurs with SBA OIG reports.”72 He argued that the SBA
OIG’s action had “the potential to render the OIG useless,” and “prevented accountability in
Government by keeping from the public information about the oversight capabilities of an agency
that, though comparatively small, can have a huge impact on our economy.”73
70 Rep. Steve Chabot, “H.R. 208, Superstorm Sandy Relief and Disaster Loan Program Improvement Act of 2015,”
House debate, Congressional Record, vol. 161, part 168 (November 16, 2015), p. H8226.
71 In FY2014, none of the 20 reports issued by the SBA OIG were undertaken due to a request from a Member of
Congress or congressional staff, or a member of the public. One report was undertaken in response to a hotline
complaint from SBA program officials. In FY2015, none of the 17 reports issued by the SBA OIG were undertaken due
to a request from a Member of Congress or congressional staff, an SBA employee, or a member of the public. SBA,
OIG, “Correspondence with the author,” June 23, 2016.
72 Sen. John Kerry, “Report of the SBA Inspector General,” remarks in the Senate, Congressional Record, vol. 154,
part 160 (October 2, 2008), pp. S10468-S10470. Also, see U.S. Congress, Senate Committee on Small Business and
Entrepreneurship, SBA Lender Oversight: Preventing Loan Fraud and Improving Regulation of Lenders, 110th Cong.,
1st sess., November 13, 2007, S.Hrg. 110-504 (Washington: GPO, 2008), pp. 1-6, 31-45, 109-112.
73 Sen. John Kerry, “Report of the SBA Inspector General,” remarks in the Senate, Congressional Record, vol. 154,
part 160 (October 2, 2008), p. S10469.
Congressional Research Service 25
SBA’s Office of Inspector General: Overview, Impact, and Relationship with Congress
Senator Kerry’s comments illustrate how quickly an OIG’s relationship with Congress can
change. Prior to the publication of that redacted report, the SBA OIG was generally praised by
Members of both political parties for its efforts concerning the oversight of the SBA’s response to
the 2005 Gulf Coast hurricanes, audits of the SBA’s oversight of lenders, and investigations
leading to numerous indictments and convictions of fraudulent SBA lenders and borrowers.
In sum, comments by House and Senate small business committee leaders seem to suggest that
they view the SBA OIG and GAO as two valuable assets that can assist and enhance the
committees’ oversight role. However, history has shown that an apparent harmonious relationship
between an OIG and congressional committees can change quickly as circumstances change.
Some areas of possible congressional interest concerning the SBA OIG, other than funding and
staffing issues, include exploring ways to more accurately quantify the SBA OIG’s claims of
monetary savings and determining if the SBA OIG should undertake additional tracking and
monitoring activities to more accurately quantify the office’s impact on SBA programs and
operations and legislation.
Author Information
Robert Jay Dilger Ben Wilhelm
Senior Specialist in American National Government Analyst in Government Organization and
Management
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