Semiannual Report to Congress, April 1, 2023 – September 30, 2023 — SBA Office of Inspector General
Summary
This is the Semiannual Report to Congress of the U.S. Small Business Administration Office of Inspector General, covering April 1, 2023 through September 30, 2023. In the message from the Inspector General dated November 30, 2023, OIG issued 11 reports with 25 recommendations and questioned $3.8 billion in costs. The message also states that OIG investigations resulted in 251 indictments and 91 convictions, and that total dollar accomplishments were $4.2 billion. The report estimates SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans (Report 23-09). In Report 23-15, OIG questioned $3.5 billion disbursed from the Restaurant Revitalization Fund.
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Semiannual Report to Congress
April 1, 2023 – September 30, 2023
U.S. Small Business Administration | Office of Inspector General
Message from the Inspector General
November 30, 2023
I am pleased to present the U.S. Small Business Administration’s (SBA)
Office of Inspector General (OIG) Fall 2023 Semiannual Report to
Congress. This report summarizes OIG’s activities from April 1, 2023
through September 30, 2023, as required by law.
OIG has prioritized its oversight work to align with top management
and performance challenges facing the agency’s programs and
operations. The scope of fraud within the pandemic response
programs and the necessary oversight has strained OIG's investigative
and auditing capacity absent the total resources requested in the
Hannibal “Mike” Ware 2024 Budget. We have estimated that SBA disbursed over $200 billion
Inspector General
in potentially fraudulent COVID-19 Economic Injury Disaster Loans
(EIDL), EIDL Targeted Advances, Supplemental Targeted Advances, and Paycheck Protection
Program (PPP) loans. This illustrates that we need the resources to continue to bring wrongdoers
to justice and claw back fraudulently obtained public funds.
Our Work this Period
During this reporting period, OIG
continued to bring fraudsters to justice
and provide an exponential return on
investment to American taxpayers. During
the 6-month period from April through
September 2023, OIG issued 11 reports
with 25 recommendations to improve SBA
operations and reduce fraud and
unnecessary losses in agency programs.
We questioned $3.8 billion in costs as a result of our oversight reviews. In addition, OIG
investigations resulted in 251 indictments and 91 convictions. Overall, OIG’s investigations and
audit work achieved total dollar accomplishments of $4.2 billion during this semiannual period.
The following highlights a few significant reviews and investigation findings covered in this
report:
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• Notable investigations include the successful prosecution of a $20 million COVID-19 relief
fraud ring, which included a tax preparer and client charged with fraudulently obtaining
PPP funds.
• OIG issued the white paper COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape
(Report 23-09). This report estimated SBA disbursed over $200 billion in potentially
fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances,
and PPP loans out of the approximately $1.2 trillion SBA disbursed in pandemic economic
assistance.
• OIG issued a management advisory (Report 23-16) that recommended SBA not end
collections on EIDLs under $100,000 made to borrowers who received multiple loans,
which when combined, exceed $100,000. We also recommended SBA not end collections
on any loan that appears to be fraudulent.
• OIG questioned $3.5 billion disbursed from the Restaurant Revitalization Fund in Report
23-15, which recommended SBA develop processes and procedures to improve
oversight.
OIG Staff Dedication and Success
The nation can depend on OIG to provide independent, objective, and timely oversight of SBA.
OIG’s engaged workforce will continue to give taxpayers a significant return on investment,
rooting out fraud, waste, and abuse in SBA programs. Our resources will focus on systems and
processes that present serious management and performance challenges within SBA programs
to improve the integrity, accountability, and performance of those programs for the benefit of
the American people.
Hannibal “Mike” Ware
SBA Inspector General
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Contents
Pandemic Response Oversight............................................................................................................................................................... 1
Audits, Inspections, and Evaluations ............................................................................................................................................... 1
Notable Investigations...................................................................................................................................................................... 5
Small Business Access to Capital............................................................................................................................................................ 8
Advisory and Inspection ................................................................................................................................................................... 8
Investigation.................................................................................................................................................................................... 10
Disaster Assistance Program ................................................................................................................................................................ 11
Notable Investigations.................................................................................................................................................................... 11
Contracting and Counseling Programs ................................................................................................................................................ 13
Inspection........................................................................................................................................................................................ 13
Investigation.................................................................................................................................................................................... 14
Agency Management ........................................................................................................................................................................... 15
Audit and Evaluation ...................................................................................................................................................................... 15
Investigation.................................................................................................................................................................................... 16
Other Significant OIG Activities............................................................................................................................................................ 17
Background Investigations Ensure Integrity.................................................................................................................................. 17
Debarment and Other Administrative Enforcement Actions....................................................................................................... 17
Stakeholder Presentations on PPP and EIDL Fraud ...................................................................................................................... 17
Reviews of Proposed Agency Regulations, Operating Procedures, and Other Initiatives Lead to Improved Program Controls
......................................................................................................................................................................................................... 17
Approval of Small Business Development Center Surveys ........................................................................................................... 18
OIG Hotline............................................................................................................................................................................................ 19
Unprecedented Numbers .................................................................................................................................................................... 19
Organizational Overview ...................................................................................................................................................................... 20
U.S. Small Business Administration ............................................................................................................................................... 20
Office of Inspector General ............................................................................................................................................................ 21
Appendices............................................................................................................................................................................................ 24
Appendix A: Reporting Period Statistical Highlights ..................................................................................................................... 24
Appendix B: Full-Year Statistical Highlights, FY 2023 .................................................................................................................... 26
Appendix C: Reports, Recommendations, and Management Decisions ..................................................................................... 28
Appendix D: Investigations Reporting Statistics............................................................................................................................ 52
Appendix E: Legal Actions Summary.............................................................................................................................................. 53
Appendix F: Cosponsored and Other Activities ............................................................................................................................ 64
Appendix G: External Peer Reviews ............................................................................................................................................... 68
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Appendix H: Office of Inspector General Reporting Requirements............................................................................................. 69
Make a Difference .......................................................................................................................................................................... 70
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Summary of OIG Oversight Work
Pandemic Response Oversight
As a result of the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread economic effects
on the U.S. economy, Congress approved legislation to create the U.S. Small Business
Administration’s (SBA) Paycheck Protection Program (PPP), which was gradually increased to
$813.7 billion. Congress also increased funding to SBA’s disaster assistance program with a
$50 billion appropriation that made $367 billion available through the Economic Injury Disaster
Loan (EIDL) program and $20 billion for emergency grants for eligible entities, which was then
increased to $55 billion total in 2021.
Congress enacted the Shuttered Venue Operators Grant (SVOG) with $15 billion for SBA to
administer in grants to shuttered venues, which was then increased to $16.25 billion total in 2021.
Also in 2021, Congress established the Restaurant Revitalization Fund (RRF) program with
$28.6 billion to help small businesses in the food service industry adversely affected by the
pandemic.
Executive and legislative actions intended to expedite aid during the crisis led SBA to reduce or
eliminate key internal controls that could have helped to mitigate fraud and misuse of taxpayer
funds. In the EIDL program, the agency relied on a mandated self-certification of eligibility to
expedite aid. The unprecedented demand and stress on SBA systems were considerable challenges
for the agency, and fraudsters took advantage.
The following summarizes our pandemic oversight work this period.
Audits, Inspections, and Evaluations
Serious Concerns Regarding the Return of Paycheck
Protection Program Funds (Report 23-08)
In this management advisory, we express concerns that SBA ensure it has
processes and procedures in place to adequately accept, process, and account
for PPP funds returned by borrowers, lenders, and financial institutions. Expedited management
action should mitigate the risk of financial loss to taxpayers.
We recommended the agency provide detailed guidance to borrowers on returning PPP funds to
lenders if the loan was forgiven or guaranty purchased. This included providing detailed guidance
to lenders on their responsibilities for accepting PPP funds if the loan was forgiven, to include
documenting reasons for the return of funds, returning the funds to SBA, conducting a fraud
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review, reversing forgiveness when appropriate, and handling loans with only a partial return of
funds. We recommended SBA seek periodic assurance from lenders that all PPP funds returned to
lenders have been reported and returned to SBA. Finally, we recommend the agency provide
detailed guidance to financial institutions that receive PPP fund deposits for borrowers regarding
how to return PPP funds if there is suspected fraud or other issues that would warrant returning
funds.
Though a formal response was not required, SBA managers indicated they would continue to
formalize a PPP funds recovery process and will issue the guidance in late FY 2023, which we will
monitor in our follow-up process.
Access this management advisory on the SBA OIG Reports site.
COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape
(Report 23-09)
In this white paper we estimated SBA disbursed over $200 billion in potentially
fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted
Advances, and PPP loans out of the approximately $1.2 trillion allocated to SBA for pandemic
economic assistance. This means at least 17 percent of all COVID-19 EIDL and PPP funds were
disbursed to potentially fraudulent actors.
In the rush to swiftly disburse COVID-19 EIDL and PPP funds, SBA weakened or removed the
internal controls necessary to prevent fraudsters from easily gaining access to these programs.
Using investigative casework, prior OIG reporting, and advanced data analytics, we identified
multiple schemes used by fraudsters to steal from the American taxpayer and exploit programs
meant to help those in need. We believe loans identified as potentially fraudulent as part of our
review warrant investigation by OIG and its investigative partners. We anticipate the overall
potential fraud estimate could fluctuate as we continue to identify fraud schemes; therefore, we
may issue periodic updates to this report with additional datasets through partnerships with other
government agencies as well as through subpoenas of certain lenders and their third-party
processors. As we receive and analyze additional datasets, the fraud groups may be refined to
identify additional fraudulent loans.
Access this white paper on the SBA OIG Reports site.
2 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
SBA’s Administrative Process to Address Potentially
Fraudulent Restaurant Revitalization Fund Awards (Report
23-10)
We inspected SBA’s administrative process used to review potentially
fraudulent RRF applications and recover funds. We found 3,790 applications submitted through a
point-of-sale partner were processed without verifying gross sales, a key control designed to
prevent ineligible entities from receiving awards. As a result, SBA’s RRF application processing
system approved almost all 3,790 applications for awards, totaling $557 million, despite not having
gross sales verified. Once notified, SBA took quick action and prevented $278.4 million from being
disbursed to 1,618 of the 3,790 applicants, including 946 of the 1,056 potentially fraudulent
awards which had been reported to the OIG Hotline. However, SBA had not reviewed the
remaining 2,172 awards, totaling $278.6 million, which included the remaining 110 potentially
fraudulent awards reported to OIG, totaling $20.7 million.
We made a recommendation to prioritize and complete the review of 2,172 RRF awards, which
includes 110 RRF awards that were suspected of fraud and referred to the OIG Hotline. SBA
managers agreed with the recommendation and plan to review all 2,172 RRF awards during the
post-award process and resolve the recommendation.
Access this inspection report on the SBA OIG Reports site.
SBA’s Awards for Staffing Support for COVID-19 Economic
Relief Loan Programs (Report 23-11)
We reviewed the SBA’s purchase agreements with Highlight Technologies LLC
for loan support services. To meet the increased demand for COVID-19 loan
program support services, SBA issued labor hour contracts, e.g., call orders, using an existing
agreement. We found SBA contracting officials did not always perform adequate price analyses,
awarding contracts that were not the best use of taxpayer funds. SBA did not establish adequate
guidance to ensure contracting officials consistently followed federal regulations. Instead of using
the rates originally contracted for each loan center, officials approved that all labor rates could be
billed at the Washington, D.C. region rates, which were the highest rates of all regions proposed.
We also found that SBA did not actively monitor call orders to ensure compliance with the
Limitation on Subcontracting Rule, which resulted in Highlight assigning more than 50 percent of
its work on five orders to subcontractors who should not have received most of the work. As a
result, an excess of $1.2 million of contract costs went to businesses that did not meet eligibility
standards for the set-aside contracts meant to benefit the small business community.
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We made recommendations for the agency to update guidance to clarify price analysis
requirements, document discount requests, identify the additional amount paid for using higher
labor rates, and evaluate compliance with limitations on subcontracting. SBA management agreed
to clarify in the agency’s standard operating procedure that contracting officers are required to
seek price reductions at the establishment of certain agreements. However, SBA either disagreed
or proposed corrective actions that did not resolve the remaining three recommendations. OIG
will seek resolution in accordance with our audit follow-up policy.
Access this evaluation report on the SBA OIG Reports site.
SBA’s Oversight of Restaurant Revitalization Fund
Recipients (Report 23-15)
We reviewed SBA’s oversight of the recipients who received $28.6 billion in
RRF funds meant to help eligible small businesses that primarily served food or
drinks that were adversely affected by the pandemic. We determined program officials developed
an oversight plan for monitoring RRF award recipients use of funds and recovering unused or
improperly awarded funds; however, program implementation was not executed in accordance
with this plan.
We made recommendations for SBA to develop processes and procedures to improve oversight of
RRF program recipients and recover unused or improperly awarded funds. SBA agreed to add
awards to the post-award sample for manual review that we found were marked in the PPP loan
data as potentially fraudulent or ineligible. SBA managers agreed to assess the post-award review
process and staff requirements to ensure the oversight is conducted in a prompt manner. The
agency also agreed to take immediate administrative actions to recover improper payments from
the 23 recipients we found to be ineligible, totaling $39 million in savings to taxpayers. SBA will
also prioritize an effort to establish and implement procedures to recover unused or ineligible
recipient funds.
We questioned costs of about $3.5 billion in awards made to over 20,000 recipients who did not
comply with requirements to file a report on how they used their award funds. SBA agreed and
plans to use a variety of contact methods to follow-up with recipients to ensure they all submit
their final annual report and take action to recover funds if necessary. We recommended SBA use
its authority to extend the record retention period for all RRF award recipients, but SBA disagreed
because management did not think that the authority applied to this program. We will work with
SBA managers on the unresolved recommendation in accordance with our audit follow-up policy.
Access this audit report on the SBA OIG Reports site.
4 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Ending Active Collections on Delinquent COVID-19
Economic Injury Disaster Loans (Report 23-16)
This management advisory expressed concerns regarding SBA’s decision to end
active collections on delinquent COVID-19 EIDLs with an outstanding balance
of $100,000 or less. SBA’s decision to cease collections risks violating the Debt Collection
Improvement Act of 1996, which prohibits ending collections on fraudulent, false, or
misrepresented claims, because SBA OIG and other oversight agencies are continuing to work on
identifying COVID-19 EIDL fraud that may not have been identified by the agency.
We recommended that SBA perform a cost-benefit analysis that includes periodic comparisons of
costs incurred and amounts collected on the loan portfolio to assess whether collection costs
exceed recovery amounts. We recommended that the agency amend as appropriate its decision to
end active collection contingent on the outcome of a more comprehensive cost-benefit analysis.
We also recommended that SBA not end collections on EIDLs under $100,000 made to borrowers
who received multiple loans, when combined, exceed $100,000 or end collections on any loan that
appears to be fraudulent. Finally, we recommended the agency evaluate the portfolio with the U.S.
Department of the Treasury to determine if selling the loans is in the best interest of the
government.
SBA management agreed with not ending collections on EIDLs under $100,000 made to borrowers
who received multiple loans. The agency contingently agreed to reevaluate its decision to end
active collections based on the outcome of performing a comprehensive cost-benefit analysis. SBA
managers agreed not to end collections on any EIDL that appears to be fraudulent. The agency
disagreed with our final recommendation to evaluate the portfolio with Treasury. We will work
with SBA managers on the unresolved recommendation in accordance with our audit follow-up
policy.
Access this management advisory on the SBA OIG Reports site.
Notable Investigations
Leader of $20 Million COVID-19 Relief Fraud Ring Convicted
A Texas man who led a multimillion-dollar COVID-19 relief fraud ring and six of his
co-conspirators was sentenced to 15 years in prison for fraudulently obtaining more
than $20 million in forgivable PPP loans. The man led the conspiracy, involving at
least 14 other people, to submit more than 75 fraudulent PPP loan applications in 2020. In the
applications, they falsified the number of employees and the average monthly payroll expenses of
the applicant businesses and submitted fraudulent bank records and/or fake federal tax forms.
Some were paid large kickbacks in exchange for their assistance with the fraudulent PPP loan
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U.S. Small Business Administration | Office of Inspector General
applications. Federal agents also executed 45 seizure warrants in conjunction with this case. They
seized real estate, a Porsche, and a Lamborghini purchased with illegally obtained funds. In
addition, six other people have pled guilty and were sentenced for their roles in this loan fraud
scheme.
Florida Real Estate Broker Agrees to Pay Over $4 Million to
Resolve False Claims Relating to COVID-19 Funds Claims
A Florida real estate broker and his companies agreed to settle allegations that they
violated the False Claims Act by providing false information in support of multiple PPP
loans and EIDLs. From April 2020 through June 2021 the broker prepared and submitted false and
fraudulent applications and documents to obtain 4 EIDLs and 14 PPP loans totaling $1.5 million.
The broker submitted false federal tax documents, state tax documents, and employee wage
reports. The broker used the EIDL and PPP funds to live a lavish lifestyle, purchasing and paying off
properties, including a vacation villa in Mexico and a red 1981 Ferrari. The broker submitted false
and fraudulent forgiveness applications certifying that the entire loan amounts were used to pay
eligible business costs. As part of the settlement, the broker agreed to pay $4 million in damages
and penalties under the Act.
Tax Preparer and Client Charged with $13 Million PPP Fraud
Scheme
Two New York men, one the owner of a tax preparation business, were charged with
major fraud against the United States and conspiracy to commit wire and bank fraud
for their participation in a scheme to fraudulently obtain over $13 million in government-backed
PPP loans designed to provide relief to small businesses during the pandemic. From at least April
2020 through June 2021, the tax preparer submitted more than 100 PPP applications containing
false information to about 7 financial institutions on behalf of his own companies as well as
reputed client companies. Bank records also show that instead of using the PPP loan proceeds for
allowable expenses, such as payroll costs, mortgage interest, rent, and utilities, the tax preparer
moved millions of dollars between his many accounts and used those proceeds to purchase
property, pay off personal loans, and expenses for other companies under his control. He recruited
the second man and others to open bank accounts for companies that did no business, created
fake invoices and other supporting documentation such as false Internal Revenue Service (IRS)
filings and submitted fraudulent applications for numerous PPP loans.
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Tallahassee Couple Sentenced for Wire Fraud Conspiracy,
Money Laundering Conspiracy, and Making False Statements
A Florida couple pled guilty to one count each of wire fraud conspiracy, money
laundering conspiracy, and making false statements in connection to COVID-19
pandemic relief. The couple was sentenced to 40 months and to 24 months in prison. Between
March 1, 2020 and September 1, 2021, the couple made false and fraudulent representations in
applications to SBA and financial institutions. They inflated average monthly payroll expenses and
used false tax forms as supporting documentation. The couple submitted a total of 166 false and
fraudulent EIDL applications, of which 50 were funded for businesses that they owned and other
business owners whom they recruited. The couple also submitted 20 fraudulent PPP loan
applications and 3 SVOG applications. Most of the applications were an elaborate kickback scheme
taking advantage of the crisis and taxpayer resources.
CEO of PPP Lender MBE Capital Sentenced to 54 Months for
Fraudulent Loan and Lender Applications
A New York man was sentenced to 54 months in prison for his role in a scheme to
submit fraudulent loan and lender applications related to the PPP. He previously had
pled guilty to one count of conspiracy to commit wire fraud. According to the court documents,
the CEO used false representations and documents to fraudulently obtain the approval of SBA for
his company to be a non-bank lender through the PPP to secure hundreds of millions in capital for
PPP loans and collect more than $71 million in lender fees. In addition, he engaged in a scheme to
obtain a PPP loan for his company for $283,764 using false information on the number of
employees and wages, forging the forged signature of the tax preparer.
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U.S. Small Business Administration | Office of Inspector General
Small Business Access to Capital
SBA provides small businesses with capital and financial assistance through several key programs.
The agency has a financial assistance portfolio of guaranteed and direct loans that totaled about
$173 billion as of December 2022, after the forgiveness of over $750 billion in Paycheck Protection
Program loans. Over the years, OIG has worked closely with the agency to identify potential points
of risk and improve SBA’s oversight and controls to ensure eligible participants most in need of
assistance benefit from these programs.
The Section 7(a) loan program is SBA’s principal vehicle for providing small businesses with access
to credit that cannot be obtained elsewhere. Proceeds from a 7(a) loan may be used to establish a
new business or to assist in acquiring, operating, or expanding an existing business. This program
relies on numerous outside parties (such as borrowers, loan agents, and lenders) to complete loan
transactions.
SBA has centralized several loan approval and servicing functions and reduced the number of staff
performing these functions, placing more responsibility on and giving greater independence to
lenders. Past OIG reviews have reported on these trends, and OIG continues to identify
weaknesses in SBA’s lender oversight processes.
Criminals use a wide array of techniques to fraudulently get — or induce others to obtain — SBA-
guaranteed loans. The techniques include submitting fraudulent documents, making fictitious
asset claims, manipulating listed property values, using loan proceeds contrary to the terms of the
loans, and failing to disclose debts or previous criminal records. Consequently, there is a greater
chance of financial loss to the agency and its lenders. OIG dedicates a significant portion of its
resources to identifying wrongdoers and, whenever possible, recovering taxpayer funds.
The following summarizes our audit and investigation work this period.
Advisory and Inspection
SBA’s Reporting of Loan Data to a Commercial Credit
Reporting Agency (Report 23-13)
This management advisory expresses concerns about SBA’s reporting of loan
data to a commercial credit reporting agency so that it can effectively
incorporate and analyze SBA-provided commercial loan data into its commercial credit database.
Commercial credit reporting agencies collect data on millions of businesses and combine the data
to create business credit reports and then calculate a credit rating. These business credit reports
are used when businesses apply for a business loan, establish payment terms with a new vendor,
8 | Fall 2023 Semiannual Report to Congress
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or obtain any type of business credit. SBA provided one commercial credit reporting agency its
commercial loan data but was unaware that the credit reporting agency had not analyzed or
incorporated this loan data into its commercial credit files from October 2018 to June 2023.
According to the commercial credit reporting agency, it could not use the data because, in 2018,
SBA did not submit it in a timely manner. The commercial credit reporting agency stated that SBA
needed to validate the integrity of the data before the credit report agency could resume using it.
The credit reporting agency made several attempts to apprise SBA of this issue; however, they
were unable to reach an SBA point of contact.
To ensure SBA provides this commercial credit reporting agency with complete, accurate, and
timely loan data sufficient for incorporation into its business credit files and establish an
applicant’s creditworthiness, we suggested SBA coordinate with the commercial credit reporting
agency to 1) ensure SBA commercial loan data is reported in a manner that can be included in its
credit files, 2) establish communication protocols with the credit reporting agency to address,
resolve, and monitor commercial credit reporting issues, and 3) establish a written agreement for
reporting loan data with the credit reporting agency and other major credit reporting agencies, as
applicable.
SBA stated that it reports commercial credit data to all three major commercial credit reporting
agencies either quarterly or monthly and also reports credit-relevant data to critical government
databases, including the Credit Alert Verification Reporting System and the U.S. Department of the
Treasury’s Do Not Pay system. SBA management stated that it uses credit scores and reports to
support the agency’s capital programs and that all these credit reporting systems help ensure that
lenders have the data needed to make informed decisions regarding creditworthiness. SBA
managers stated they have had preliminary meetings with this credit reporting agency and that
their Office of Performance and Systems Management would work with it to establish
communication protocols to address, resolve, and monitor commercial credit reporting issues.
Access this management advisory on the SBA OIG Reports site.
SBA’s Corrective Actions to Improve Controls Over 7(a)
Loans Sold on the Secondary Market (Report 23-14)
SBA is authorized under Section 7(a) of the Small Business Act to provide
financial assistance to small businesses in the form of government guaranteed
loans. The secondary market was established to provide greater liquidity to lenders, expanding the
availability of commercial credit for small businesses because lenders are allowed to sell the
guaranteed portions of their loans on the secondary market. The lender receives cash equal to the
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U.S. Small Business Administration | Office of Inspector General
amount of the guaranteed portion sold plus a market driven premium, while the investor gets an
interest earning security that is backed by the full faith and credit of the U.S. government.
Before a loan can be sold on the secondary market, the lender must submit it to the fiscal and
transfer agent for approval. The fiscal and transfer agent reviews loans submitted for sale approval
via the Secondary Participation Guaranty Agreement. SBA maintains a watch list for lenders under
regulatory, state, or federal orders. Lenders on this list may request to sell a loan on the secondary
market through the fiscal and transfer agent. However, due to the risk associated with these
lenders, SBA’s Office of Credit Risk Management conducts a detailed review of each loan to
determine whether it complies with SBA requirements and is eligible for sale.
We determined that the process SBA established to document secondary market loan sale denials
in the Centralized Loan Chron System was generally effective at communicating loan deficiencies
to the appropriate loan centers. SBA completed its process to document secondary market loan
sale denials in this centralized loan system; however, we noted that the required system notes on
two of eight denied applications were not made until after we announced this inspection and
requested applicable information. An SBA official stated they noted the error while compiling the
requested information and made the corrections in the system prior to sending us the
information.
Access this verification inspection report on the SBA OIG Reports site.
Investigation
Scammer Pleads Guilty in Straw Man Scheme
A California man pled guilty in a U.S. District Court, was sentenced to 2 years of
probation, and ordered to pay restitution of $262,000. The investigation revealed
that he and a co-defendant recruited a straw man to act as the owner of a
restaurant. He directed the straw man to apply for a $280,000 SBA loan to acquire and renovate a
restaurant. He directed the straw borrower to falsely claim he was the owner of the business and
that he had $117,000 in cash available for the loan to get approved. He instructed the straw
borrower to submit a fabricated gift letter and false bank statements to meet the cash injection
requirement for the loan. He then opened a fictious business account to deposit the loan
proceeds.
10 | Fall 2023 Semiannual Report to Congress
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Disaster Assistance Program
Disaster assistance has been part of the agency since its inception in 1953. SBA provides long-
term, low-interest financial assistance to businesses of all sizes, private nonprofits, homeowners,
and renters following a declared disaster. Each year, SBA approves hundreds of millions in disaster
assistance loans.
The disaster assistance loan program is the only form of SBA assistance not limited to small
businesses. The program’s disaster assistance loans are the primary form of federal assistance for
repairing and rebuilding nonfarm, private sector losses following a declared disaster.
The program includes four categories of loans for disaster-related losses: home disaster loans,
business disaster loans, economic injury disaster loans (includes pandemic relief loans), and
military reservist economic injury loans.
During this semiannual period, our audit work in this program area was focused on the pandemic
response programs. We have initiated three inspections on SBA’s initial response to hurricanes
Fiona, Ian, and Idalia and the Maui wildfires. We expect to issue these reports in the second
quarter of Fiscal Year 2024.
Notable Investigations
Georgia Man Sentenced in Scheme that Netted Over $4.5 Million
in EIDL and PPP Funds
A Georgia man was sentenced to 38 months, then 3 years supervised release, and
ordered to pay $4.5 million in restitution to SBA after pleading guilty to conspiracy to
commit wire fraud and money laundering. The man completed false and fraudulent EIDL
applications for himself and received hundreds of thousands in kickbacks in return for completing
and submitting fraudulent PPP and EIDL applications on behalf of others. To create those
applications, the man fabricated IRS forms and tax records.
SBA Employee Sentenced in $11 Million COVID-19 Relief Fraud
Scheme
A Mississippi man and employee of SBA was sentenced to 62 months, then 5 years of
supervised release, and ordered to pay $10 million in restitution to SBA for his role in
a scheme to defraud the agency of more than $11 million. According to court documents, he used
his position to assist borrowers in submitting fraudulent EIDL applications, which were intended by
Congress to help small businesses recover from the pandemic. In return for his assistance in
submitting fraudulent loan applications, those borrowers paid him and his co-defendant over
Semiannual Report to Congress, Fall 2023 | 11
U.S. Small Business Administration | Office of Inspector General
$2.3 million. In total, 21 of the 23 people charged in this case have entered guilty pleas and are
pending sentencing.
New York City Employees Sentenced to Federal Prison in $1.5
million Fraud Scheme
Between May and September 2023, nine New York City employees were sentenced
to a collective 54 months in prison, 12 years of probation, and ordered to pay
$1.9 million in restitution for their roles in obtaining fraudulent SBA loans. The defendants were
New York City public employees in the police department, human resources administration,
metropolitan transit authority, department of education, department of corrections, department
of transportation, and the administration for children’s services. One was employed by a New York
City nonprofit organization. Each conspired to submit fraudulent EIDL and PPP applications under
false claims of business ownership of hair and nail salons, claimed six-figure gross revenues, and
employees they did not have. Many of the defendants paid kickbacks to other members of the
scheme to defraud taxpayers. The defendants spent the proceeds on gambling, personal stock
investments, home furniture and electronics, and luxury clothing items.
12 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Contracting and Counseling Programs
The U.S. government is the largest single purchaser of goods and services in the world, awarding
over $550 billion in prime contracts annually. SBA works to maximize opportunities for small
businesses to receive these contract awards. As mandated by the Small Business Act, the
government-wide goal is to award at least 23 percent of contract dollars to small businesses.
SBA has specific programs that focus on strengthening particular types of small businesses, like
those owned by service-disabled veterans and women, as well as small businesses that are
disadvantaged or located in historically underutilized business zones (HUBZones).
The HUBZone program is intended to help small businesses stimulate their economically
challenged local economies. Similarly, to help small, disadvantaged businesses gain access to
federal and private procurement markets, SBA’s 8(a) Business Development Program helps small
businesses owned by socially and economically disadvantaged entrepreneurs gain business skills
and access to federal contracting opportunities so that they can better compete in the open
marketplace. The program offers free business development education, training workshops, and
match-making opportunities with federal buyers.
SBA also aids existing and prospective small businesses through a variety of counseling and training
services offered by partner organizations. Among these partners are Small Business Development
Centers, the SCORE mentoring network, Women’s Business Centers, and Veterans Business
Outreach Centers. SBA designed the Boots to Business program to provide transitioning military
service members entrepreneurial skills and technical assistance to start their own businesses. SBA
also started the Community Navigator Pilot Program, an American Rescue Plan initiative. This
program will provide funding to organizations working with local community groups to improve
access to government resources. These programs all require effective and efficient management,
outreach, and service delivery.
Inspection
SBA’s Corrective Actions to Improve Oversight of the SCORE
Association (Report 23-12)
We inspected SBA’s corrective actions for 8 of our 11 recommendations from
our Audit of SBA’s Oversight of the SCORE Association to determine whether
SBA continues to practice corrective actions. A verification inspection is a limited scope that
focuses on closed recommendations from prior OIG reports.
We determined seven of the eight recommendations we inspected from OIG Report 19-12 to be
fully implemented, including recommendations for SCORE to develop a centralized accounting
Semiannual Report to Congress, Fall 2023 | 13
U.S. Small Business Administration | Office of Inspector General
system, train all chapter treasurers, and issue monthly accounting bulletins highlighting chapters’
financial concerns. The association also acknowledge SBA’s support of SCORE’s publication
materials. SCORE chapters no longer act as fiscal agents for cosponsored events. The terms and
conditions of the grant included whistleblower protection information. SBA ensured the cost of the
leased space or related material and services that it donated to SCORE were accurately reported.
Program officials continued to report on statistics from business owners helped by the
organization. SBA program officials did not fully implement one recommendation to establish
procedures to ensure the data in the Entrepreneurial Development Management Information
System was accurate. Also, program officials did not ensure SCORE reported on its progress toward
all the performance goals in the quarterly performance reports. We will track management’s
implementation by reopening the recommendation and will work with SBA to establish a target
date for implementing corrective actions through the audit follow-up process.
Access this verification inspection on the SBA OIG Reports site.
Investigation
Military Contractors Sentenced for Bid Rigging in Texas
Two military contractors were sentenced for their roles in a bid-rigging scheme
involving the maintenance and repair of military tactical vehicles in Texas. The multi-
year scheme sought to obtain more than $17 million in taxpayer dollars. One of the
men was sentenced to 18 months in prison and ordered to pay a criminal fine of $50,000. Another
man was sentenced to 6 months in prison and ordered to pay $300,000 for involvement in seven
bids. According to the plea agreement, the co-conspirators rigged bids on certain government
contracts from May 2013 to January 2018 to give the false impression of competition and secure
government payments. They submitted coordinated higher-priced non-competitive bids to ensure
a designated company won each contract. The co-conspirators rigged six different contracts for
work performed for the Army Depot. The projects included heavy military equipment work like
refurbishing armor kits for military trucks and turrets for Humvees.
14 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Agency Management
OIG is responsible for ensuring that agency management appropriately safeguards SBA from fraud,
waste, and abuse, and that SBA activities directly further agency goals. As part of this work, OIG
coordinates with the offices of the Chief Financial Officer, the Chief Information Officer, and the
Chief Operating Officer to review financial reporting and performance management, human
resources, procurements and grants, space and facilities, and maintenance of SBA’s information
systems and related security controls.
Audit and Evaluation
SBA's Controls Over Cash Contributions and Gifts, Fiscal
Years 2023 and 2022 (Report 23-06)
We reviewed various management and financial records, applicable laws,
regulations, and policies to evaluate how SBA handled its cash contributions
and gifts. We found SBA complied with the Consolidated Appropriations Acts, 2023 and 2022 and
SBA regulations and policies regarding soliciting and accepting cash contributions for National
Small Business Week 2023. SBA’s Office of Communications and Public Liaison obtained proper
approval from the SBA Office of General Counsel for the Business Week cosponsored activity. SBA
certified the 10 entities that cosponsored Business Week were vetted through the program offices
to ensure no business relationship existed that would cause a conflict of interest.
Access this evaluation report on the SBA OIG Reports site.
Independent Auditors’ Report on SBA’s Fiscal Year 2022
Compliance with the Payment Integrity Information Act of
2019 (Report 23-07)
We contracted with the independent certified public accounting firm KPMG,
and it found SBA was not compliant with 9 of the 10 reporting requirements under the Payment
Integrity Information Act and Office of Management and Budget (OMB) guidance. SBA is not
compliant with the Act because the agency’s risk assessment methodology did not consider certain
identified risk factors to adequately conclude whether the Restaurant Revitalization Fund,
Shuttered Venue Operators Grant, and the payments for covered loans in the 7(a) and 504
Certified Development Company loan guaranty programs under the debt relief assistance program
were likely to include improper and unknown payments above or below the statutory threshold.
The auditors also found the sampling and estimation methodology plans were not appropriate for
SBA disaster assistance loans, COVID-19 EIDL, and EIDL Targeted Advance programs and activities.
In addition, for COVID-19 EIDLs, EIDL advances, and the Paycheck Protection Program, SBA did not
design and implement adequate sample review procedures to produce reliable sample results that
Semiannual Report to Congress, Fall 2023 | 15
U.S. Small Business Administration | Office of Inspector General
could be used to develop accurate improper and unknown payment estimates. SBA did not
demonstrate improvements to payment integrity for 7(a) loan guaranty purchases because the
improper payment estimate increased between fiscal years 2021 and 2022. Auditors found SBA
did not publish improper and unknown payment estimates, corrective action plans, and reduction
targets within the Agency Financial Report Fiscal Year 2022 and accompanying materials for PPP
loan guaranty purchases and forgiveness activities.
SBA concurred with the recommendations and indicated it is committed to reducing the dollar
amount of improper payments, ensuring program integrity, and continuing to implement effective
risk management procedures in accordance with improper payment legislation, as well as
guidance prescribed in OMB Memorandum M-21-19, Appendix C to OMB Circular A-123,
Requirements for Payment Integrity Improvement.
Access this financial management report on the SBA OIG Reports site.
Investigation
Former IT Contractor Pled Guilty to Trafficking Stolen Property
from SBA
A Maryland woman pled guilty in Superior Court to one count of trafficking in stolen
property for stealing and reselling at least $110,233 worth of laptop computers from
SBA. She was employed as a contractor who was assigned to work at the SBA IT service desk at SBA
headquarters in Washington, D.C. According to the government’s evidence, between November
20, 2017 and August 22, 2018, she stole and then resold at least 57 laptop computers paid for by
taxpayer money on an online customer-to-customer marketplace used to buy and sell products
and services. She did this while using the SBA guest wireless network.
16 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Other Significant OIG Activities
Background Investigations Ensure Integrity
During this reporting period, OIG initiated 73 background investigations and issued 3 security
clearances for OIG employees and contractors. OIG adjudicated 23 background investigative
reports, debarment, and other administrative enforcement actions.
Debarment and Other Administrative Enforcement Actions
OIG promotes program integrity by making present responsibility referrals to SBA and other
agencies. Present responsibility means the business ethics, integrity, honesty, and competence of
persons who participate in SBA programs or otherwise do business with the government. During
this reporting period, OIG prepared 11 present responsibility referrals.
Present responsibility referrals can result in suspensions, debarments, and similar administrative
enforcement actions. These actions protect taxpayer funds from program participants who are not
a good risk for the government.
A typical OIG referral contains a summary of allegations and criminal, civil, administrative, or other
evidence supporting the recommendation. Most OIG administrative referrals involve SBA’s loan
and contract programs. OIG ensures that a suspension and debarment official reviews all
appropriate allegations arising in other contexts, such as the investigation of False Claims Act
cases.
Stakeholder Presentations on PPP and EIDL Fraud
During this reporting period, SBA OIG held 77 presentations for internal and external stakeholders
to raise awareness of fraud, waste, and abuse related to SBA programs. More than 3,477
participants attended these events.
Reviews of Proposed Agency Regulations, Operating Procedures,
and Other Initiatives Lead to Improved Program Controls
OIG reviews changes SBA proposes to make to its program directives, such as regulations, internal
operating procedures, agency policy notices, and SBA forms completed by the public. OIG often
identifies material weaknesses in the proposals and works with the agency to promote more
effective controls to deter waste, fraud, and abuse. During the reporting period, OIG reviewed 136
proposed revisions of these program directives and submitted comments designed to improve 15
of these initiatives.
Semiannual Report to Congress, Fall 2023 | 17
U.S. Small Business Administration | Office of Inspector General
Approval of Small Business Development Center Surveys
According to 15 USC 648(a)(7) of the Small Business Act, when Small Business Development Center
information disclosure regulations are issued, the Inspector General must approve any related
client survey, as well as the use of any survey information. OIG must also include this approval in
the semiannual report. SBA did not submit any surveys to OIG review during this reporting period.
18 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
OIG Hotline
Offices of Inspector General have a hotline function that takes complaints from anyone who
suspects waste, fraud, abuse, or serious mismanagement within an agency or its programs by
employees, contractors, and the public. Hotline complaints may result in corrective actions, audits,
or administrative, civil, or criminal investigations.
Our OIG Hotline staff examines complaints and monitors the progress of matters referred to SBA
program offices for action to ensure the agency has promptly followed up, adequately resolved
allegations, and documented any corrective actions.
Unprecedented Numbers
Hotline work has changed dramatically
because of the COVID-19 pandemic. OIG’s
Hotline team has been diligently working
through a large backlog of complaints. The
staff is addressing each complaint received
through online submissions to the SBA OIG
website, telephone, e-mail, and posted mail,
as well as referrals from banks and other
agencies.
During this semiannual period, the OIG
Hotline received more than 25,000
complaints of loan fraud and abuse, identity
theft, and problems with SBA’s customer service.
In total, since the pandemic began in March 2020, OIG has received more than 260,000
complaints. By contrast, the OIG Hotline received 742 complaints in calendar year 2019.
Semiannual Report to Congress, Fall 2023 | 19
U.S. Small Business Administration | Office of Inspector General
Organizational Overview
U.S. Small Business Administration
The mission of the SBA under the Small Business Act, as amended, is to maintain and strengthen
the nation’s economy by enabling the establishment and vitality of small businesses and assisting
in the economic recovery of communities after disasters. The agency’s strategic plan for
FYs 2022–26 has three key goals:
1. Ensure equitable and customer-centric design and delivery of programs to support small
businesses and innovative startups.
2. Build resilient businesses and a sustainable economy.
3. Implement strong stewardship of resources for greater impact.
SBA is organized around the areas of financial, contracting, entrepreneurial development, and
disaster assistance. The agency also represents small businesses through an independent advocate
and an ombudsman.
SBA headquarters is in Washington, D.C. The agency has staff in 10 regional offices, 68 district
offices and corresponding branch offices, and 4 disaster field offices. SBA also has 6 government
contracting area offices and maintains a network of resource partners in all 50 states, the District
of Columbia, Puerto Rico, American Samoa, the U.S. Virgin Islands, and Guam.
20 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Office of Inspector General
OIG’s mission is to provide
independent, objective, and
timely oversight to improve the
integrity, accountability, and
performance of SBA and its
programs for the benefit of all
Americans.
Our strategic plan for FYs 2022–
2027 has four goals. In addition
to the Office of Counsel to the
Inspector General, four divisions
assist in carrying out the
statutory responsibilities of OIG:
the Audits Division,
Investigations Division, Technology Solutions Division, and the Management and Operations
Division.
Our vision is to be valued and engaged change agents who set the standard for oversight
excellence in support of America’s small businesses. We seek to demonstrate our values of
integrity, commitment, and excellence as we deliver products and services of the highest quality
defined by accuracy, timeliness, fairness, and usefulness.
The Office of Counsel provides legal and ethics advice to all OIG components; protects the OIG’s
interests 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 Act and Privacy Act requests, and reviews and comments on proposed
policies, regulations, legislation, and procedures.
The Audits Division performs and oversees audits and reviews to promote the economical,
efficient, and effective administration of SBA programs and operations. Key areas of emphasis are
SBA loan, disaster assistance, business development, and government contracting programs, as
well as mandatory and other statutory audit requirements involving information technology
security, financial reporting, and other SBA program areas.
The Investigations Division manages programs to detect and deter illegal and improper activities
involving SBA’s programs, operations, and personnel. The criminal investigations staff carries out a
full range of traditional law enforcement functions. Within the division, the Hotline reviews
Semiannual Report to Congress, Fall 2023 | 21
U.S. Small Business Administration | Office of Inspector General
allegations of waste, fraud, abuse, and severe mismanagement within SBA or its programs made
by employees, contractors, and the public.
A preliminary review of all complaints is conducted to determine the appropriate course of action.
As part of the review process, Hotline staff may coordinate reviews of allegations within OIG, SBA
program offices, or other government agencies.
The Technology Solutions Division provides data analytics and information technology support
across OIG, such as artificial intelligence and machine learning solutions. It expands the impact of
OIG’s oversight activities.
The Management and Operations Division provides business support (e. g., budget and financial
management, human resources, and procurement) for various OIG functions and activities. The
Security Operations Staff within the division conducts required employee and contractor
background investigations to achieve a high level of integrity in the agency's workforce. It makes
adjudications on OIG employees and contractors for issuance of PIV cards pursuant to HSPD-12
background investigations requirements.
OIG’s headquarters is in Washington, D.C. Our field offices are in Atlanta, Georgia; Boston,
Massachusetts; Chicago, Illinois; Columbus, Ohio; Dallas-Fort Worth, Texas; Detroit, Michigan;
Denver, Colorado; Federal Way, Washington; Herndon, Virginia; Houston, Texas; Kansas City,
Missouri; Los Angeles, California; Miami, Florida; New York, New York; Philadelphia, Pennsylvania;
Sacramento, California; San Francisco, California; Tampa, Florida; and Washington, D.C.
22 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Semiannual Report to Congress, Fall 2023 | 23
U.S. Small Business Administration | Office of Inspector General
Appendices
Appendix A: Reporting Period Statistical Highlights
Summary of OIG Dollar Accomplishments
Dollar Accomplishments as a Result of Investigations and Related Activities —
Potential Investigative Recoveries and Fines $140,627,422
Other Recoveries (e.g., administrative seizures with partner law enforcement $22,504,978
agencies)
Asset Forfeitures Attributed to OIG Investigations $45,517,862
Loans/Contracts Not Approved or Canceled as a Result of Investigations $1,345,891
Investigations Subtotal $209,996,153
Dollar Accomplishments as a Result of Audit Activities —
Disallowed Costs Agreed to by Management $3,807,280,585
Recommendations that Funds Be Put to Better Use Agreed to by 0
Management
Audit Subtotal $3,807,280,585
Total OIG Dollar Accomplishments $4,017,276,738
Efficiency and Effectiveness Activities Related to Audit, Other Reports, and
Follow-up Activities
Reports Issued 11
Recommendations Issued 25
Dollar Value of Costs Questioned $3,812,290,967
Dollar Value of Recommendations that Funds Be Put to Better Use 0
Recommendations with Management Decisions 25
Recommendations without a Management Decision 1
Collections as a Result of Questioned Costs 0
Indictments, Convictions, and Case Actions
Indictments from OIG Cases 251
Convictions from OIG Cases 91
Cases Opened 77
Cases Closed 99
SBA Personnel Actions Taken as a Result of Investigation
Dismissals 0
Resignations and Retirements 0
Suspensions 0
Reprimands 0
24 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Program Actions Taken During the Reporting Period as a Result of OIG
Action
Present Responsibility Referrals to the Agency 5
Pending at the Agency as of September 30, 2023 5
Suspensions Issued by the Agency 54
Proposed Debarments Issued by the Agency 54
Final Debarments Issued by the Agency 4
Proposed Debarments Declined by the Agency 0
Administrative Agreements Entered by the Agency in Lieu of Debarment 0
Present Responsibility Actions by Other Agencies 0
Agency Legislative and Regulatory Proposals Reviewed
Legislation, Regulations, Standard Operating Procedures, and Other Issuances Reviewed 32
Comments Provided by OIG to Improve Legislation, Regulations, Standard Operating Procedures, and 4
Other Issuances
Semiannual Report to Congress, Fall 2023 | 25
U.S. Small Business Administration | Office of Inspector General
Appendix B: Full-Year Statistical Highlights, FY 2023
Summary of OIG Dollar Accomplishments
Dollar Accomplishments as a Result of Investigations and Related —
Activities
Potential Investigative Recoveries and Fines $274,489,206
Other Recoveries (e.g., administrative seizures with partner law
enforcement agencies) $24,279,932
Asset Forfeitures Attributed to OIG Investigations $87,680,566
Loans and Contracts Not Approved or Canceled as a Result of
Investigations $1,410,540
Investigations Subtotal $387,860,244
Dollar Accomplishments as a Result of Audit Activities —
Disallowed Costs Agreed to by Management $3,807,280,585
Recommendations that Funds Be Put to Better Use Agreed to by
Management 0
Audit Subtotal $3,807,280,585
Total OIG Dollar Accomplishments $4,200,151,211
Efficiency and Effectiveness Activities Related to Audit, Other Reports, and
Follow-up Activities
Reports Issued 16
Recommendations Issued 75
Dollar Value of Costs Questioned $3,812,290,967
Dollar Value of Recommendations that Funds Be Put to Better Use 0
Recommendations with Management Decisions 75
Recommendations without Management Decisions 1
Collections as a Result of Questioned Costs $1,367,417
Indictments, Convictions, and Case Actions
Indictments from OIG Cases 445
Convictions from OIG Cases 216
Cases Opened 195
Cases Closed 249
SBA Personnel Actions Taken as a Result of Investigations
Dismissals 0
Resignations and Retirements 0
Suspensions 0
Reprimands 0
26 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Program Actions Taken During the Fiscal Year as a Result of OIG Action
Present Responsibility Referrals to the Agency 16
Pending at the Agency as of September 30, 2023 5
Suspension Issued by the Agency 59
Proposed Debarments Issued by the Agency 59
Final Debarments Issued by the Agency 11
Proposed Debarments Declined by the Agency 0
Administrative Agreements Entered by the Agency in Lieu of Debarment 1
Present Responsibility Actions by Other Agencies 0
Agency Legislative and Regulatory Proposals Reviewed
Legislation, Regulations, Standard Operating Procedures, and Other 136
Issuances Reviewed
Comment Memoranda Provided by OIG to Improve Legislation, Regulations, 15
Standard Operating Procedures, and Other Issuances
Semiannual Report to Congress, Fall 2023 | 27
U.S. Small Business Administration | Office of Inspector General
Appendix C: Reports, Recommendations, and Management
Decisions
Reports Issued
Agency Management
Title Report Issue Date Questioned Funds for
Number Costs Better Use
SBA’s Controls Over Cash Contributions and Gifts, FYs 2023 23-06 4/27/2023 — —
and 2022
Independent Auditors’ Report on SBA’s FY 2022 Compliance 23-07 5/15/2023 — —
with the PII Act of 2019
Program Subtotal 2 — 0 0
Credit/Capital Programs
Title Report Issue Date Questioned Funds for
Number Costs Better Use
Serious Concerns Regarding the Return of PPP Funds 23-08 5/31/2023 — —
COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape 23-09 6/27/2023 — —
SBA's Reporting of Loan Data to a Commercial Credit Reporting 23-13 9/21/2023 — —
Agency
SBA’s Corrective Actions to Improve Controls Over 7(a) Loans 23-14 9/27/2023 — —
Sold on the Secondary Market
Program Subtotal 4 — 0 0
Disaster Assistance
Title Report Issue Date Questioned Funds for
Number Costs Better Use
Ending Active Collections on Delinquent COVID-19 Economic 23-16 9/29/2023 — —
Injury Disaster Loans
Program Subtotal 1 — 0 0
Contracting and Counseling Programs
Title Report Issue Date Questioned Funds
Number Costs for
Better
Use
SBA's Administrative Process to Address Potentially Fraudulent 23-10 7/5/2023 $278,570,834 —
RRF Awards
SBA’s Awards for Staffing Support for COVID-19 Economic Relief 23-11 7/26/2023 $5,010,382 —
Loan Programs
SBA’s Corrective Actions to Improve Oversight of the SCORE 23-12 9/21/2023 — —
Association
SBA’s Oversight of Restaurant Revitalization Fund Recipients 23-15 9/29/2023 $3,528,709,751 —
28 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Program Subtotal 4 — $3,812,290,967 0
Reports with Questioned Costs
IG Act Reporting Requirement Reports Recommendations* Questioned Costs** Unsupported
Costs***
No management decision made by — — — —
March 31
Issued during this reporting period 3 5 $3,812,290,967 —
Management decisions made during 3 5 $3,812,290,967 —
this reporting period
(i) Disallowed costs 2 3 $3,807,280,585 —
(ii) Costs not disallowed 1 2 $5,010,382 —
No management decision made by 0 0 — —
September 30
* Reports may have more than one recommendation.
** Questioned costs found to be improper.
*** Unsupported costs that may be proper but lack documentation. Unsupported costs are a subset of questioned costs.
Reports with Recommendations that Funds Be Put to Better Use
IG Act Reporting Requirement Reports Recommendations Recommended Funds for Better Use
No management decision made by — — —
March
Issued during this reporting period — — —
Subtotal — — —
Management decisions made — — —
during this reporting period
(i) Recommendations agreed to by — — —
SBA management
(ii) Recommendations not agreed — — —
to by SBA management
No management decision made by — — —
September
Reports from Prior Periods with Overdue Management Decisions
There are no reports from prior periods with overdue management decisions.
Semiannual Report to Congress, Fall 2023 | 29
U.S. Small Business Administration | Office of Inspector General
Reports from Prior Periods with Open Recommendations as of September
30, 2023
Report Title Date Issued Number of Open Aggregate
Number Recommendations Potential Cost
Savings
20-03 Audit of SBA's Oversight of High-Risk Lenders 11/12/2019 3 —
20-20 Audit of SBA’s Compliance with the Debt 9/30/2020 9 —
Collection Improvement Act, as Amended
21-02 Inspection of SBA’s Initial Disaster Assistance 10/28/2020 3 —
Response to the Coronavirus Pandemic
21-07 Inspection of SBA's Implementation of the 1/14/2021 1 —
Paycheck Protection Program
21-08 SBA’s Use of Vendors Without a Contract 2/3/2021 3 $10,800,476
21-09 Duplicate Loans Made Under the Paycheck 3/15/2021 1 —
Protection Program
21-14 Audit of SBA’s Oversight of Women’s Business 5/4/2021 8 $785,961
Centers’ Compliance with Cooperative
Agreement Financial Requirements
22-01 SBA's Emergency EIDL Grants to Sole 10/7/2021 1 $4,500,000,000
Proprietors and Independent Contractors
22-04 Independent Auditors’ Report on SBA’s 11/8/2021 1 —
Compliance with DATA Act Reporting
22-06 COVID-19 EIDL Program Recipients on the 11/30/2021 2 —
Department of Treasury's Do Not Pay List
22-07 SBA’s Oversight of the Grant Recipient’s 1/18/2022 3 —
Implementation of the CARES Act Resource
Partners Training Portal
22-08 SBA’s Business Development Assistance to 8(a) 2/14/2022 5 $24,317,629
Program Participants
22-11 FY 2021 FISMA Review 4/28/2022 1 —
22-13 SBA’s Handling of Potentially Fraudulent PPP 5/26/2022 2 —
Loans
22-15 Inspection of SBA's Award and Payment 7/5/2022 1 —
Practices in the Shuttered Venue Operators
Grant Program
22-17 Evaluation of COVID-19 EIDL Applications 9/12/2022 2 —
Submitted from Foreign IP Addresses
22-19 COVID-19 and Disaster Assistance Information 9/27/2022 8 —
Systems Security Controls
22-20 SBA’s Implementation of the Women-Owned 9/29/2022 1 —
Small Business Certification Program
22-21 Paycheck Protection Program Eligibility for 9/26/2022 1 —
Nonprofit Organizations
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U.S. Small Business Administration | Office of Inspector General
22-22 Follow-up Inspection of SBA’s Internal Controls 9/29/2022 2 $1,969,200
to Prevent COVID-19 EIDLs to Ineligible
Applicants
22-23 SBA’s Corrective Actions to Improve Monitoring 9/30/2022 1 —
District Offices’ Customer Service Activities
22-25 SBA's Guaranty Purchases for PPP Loans 9/30/2022 2 —
23-02 Independent Auditors’ Report on SBA’s Fiscal 11/15/2022 12 —
Year 2022 Financial Statements
23-03 FY 2022 FISMA Review 12/13/2022 4 —
— Total — 77 $4,537,873,266
Semiannual Report to Congress, Fall 2023 | 31
U.S. Small Business Administration | Office of Inspector General
Significant Recommendations from Prior Reporting Periods without Final
Action as of September 30, 2023
Report Date Issued Number Recommendation Date of Final Action Target Date
Number Management
Decision
20-03 11/12/2019 1 Develop and implement 11/15/2019 12/31/2023
policies and procedures to
document OCRM's justification
for not conducting planned
reviews and identifying and
prioritizing additional lenders
for review.
20-03 11/12/2019 2 Develop and implement a 11/15/2019 12/31/2023
comprehensive database to
manage its oversight of high-
risk lenders to ensure
performance of all planned
reviews, implementation of
risk mitigation actions, and
identification of noncompliant
lender and systemic material
loan deficiencies.
20-03 11/12/2019 5 Develop and implement 11/15/2019 12/31/2023
policies and procedures that
require OCRM to
communicate systemic lender
issues and material loan
deficiencies to the appropriate
SBA loan approval and
purchase centers to facilitate
proactive portfolio
management and to mitigate
the risk of improper guaranty
purchases in the event of
default.
32 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
20-20 09/30/2020 1 Review all loans assigned to 09/16/2020 08/15/2023
the resolution center that are
180 days or more delinquent
and classified with code 66
(Lien or Mortgage/Refer to
Treasury Offset Program Only)
and 00 (Clear Existing Status
Code) and transfer the loans
to Treasury Cross-Servicing,
unless verified as exempt
when the temporary
suspension of debt collection
activities because of the
pandemic is lifted.
20-20 09/30/2020 10 Perform a cost benefit analysis 09/16/2020 10/31/2023
to determine if SBA should
begin assessing fees to offset
the cost of processing and
handling delinquent disaster
loans.
20-20 09/30/2020 2 Revise SOP 50 52 to clearly 09/16/2020 10/31/2023
communicate that all loans
with collateral must be
evaluated for foreclosure and
placed in foreclosure status
before they are 180 days
delinquent.
20-20 09/30/2020 3 Revise SOP 50 52 2 to clearly 09/16/2020 10/31/2023
communicate that all debts
180 days delinquent must be
transferred to Treasury Cross-
Servicing unless the debt
meets a valid transfer
exemption.
20-20 09/30/2020 5 Ensure that information used 09/16/2020 10/31/2023
to monitor compliance with
the Debt Collection
Improvement Act includes all
loans assigned to the
resolution center as identified
in the Capital Access Financial
System.
Semiannual Report to Congress, Fall 2023 | 33
U.S. Small Business Administration | Office of Inspector General
20-20 09/30/2020 6 Review all loans currently 09/16/2020 10/31/2023
assigned to the Center and
designated exempt from
Treasury Offset Program and
verify that each of the obligors
is exempt from referral to
Treasury Offset Program, and
if not, refer the obligors to
Treasury Offset Program, as
required.
20-20 09/30/2020 7 Review all loans currently 09/16/2020 10/31/2023
assigned to the Center and
designated as exempt from
Treasury Cross-Servicing that
are 180 days or more
delinquent and verify that
each of the obligors is exempt
from transfer to Treasury
Cross-Servicing, and if not,
transfer the debt to Treasury
Cross-Servicing, as required
when the temporary
suspension of debt collection
activities due to COVID-19 is
lifted.
20-20 09/30/2020 8 Establish policies and 09/16/2020 10/06/2023
procedures to require routine
follow-up on delinquent loans
to ensure full compliance with
the Debt Collection
Improvement Act.
20-20 09/30/2020 9 Reiterate the requirements for 09/16/2020 10/31/2023
workout agreements to
responsible personnel to
ensure compliance with the
Debt Collection Improvement
Act.
21-02 10/28/2020 1 Review all loans that had a 12/8/2020 09/29/2023
bank account number
changed from that shown on
the original application to
determine if the changes were
legitimate or fraudulent. If not
legitimate, work to recover
the funds, deobligate any
undisbursed funds, and refer
to the OIG.
34 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
21-02 10/28/2020 3 Review duplicate loans to 12/8/2020 09/29/2023
Internet Protocol addresses,
email addresses, business
addresses, and bank accounts
to determine if there are
undisbursed funds that should
be suspended until the
duplicate loans are assessed
for eligibility.
21-02 10/28/2020 6 Strengthen data integrity to 08/10/2021 09/29/2023
make it possible to determine
if the inaccurate information
allowed loans to be made to
ineligible entities and to
strengthen SBA’s ability to
service loans appropriately.
21-07 01/14/2021 1 Review the loans identified as 01/14/2021 10/31/2023
potentially ineligible to
determine if the businesses
met eligibility requirements. If
not, take appropriate action
related to loan guaranty and
forgiveness.
21-08 02/03/2021 1 Require responsible personnel 02/01/2021 10/13/2023
to execute a contract for
foreclosure and real estate
services to ensure the
procurement of services are
obtained and authorized in
accordance with the Federal
Acquisition Regulation
requirements.
21-08 02/03/2021 2 Ensure that vendors used to 02/01/2021 10/13/2023
provide foreclosure and real
estate services are registered
in SAM, as required.
21-08 02/03/2021 3 Ratify the over $10.8 million in 02/02/2023 12/15/2023
payments in accordance with
the FAR and 48C.F.R. § 1.602-
3.
21-09 03/15/2021 1 Review the OIG identified 03/31/2021 09/29/2023
potential duplicate
disbursements for eligibility
and take action to recover any
improper payments as
applicable.
Semiannual Report to Congress, Fall 2023 | 35
U.S. Small Business Administration | Office of Inspector General
21-14 05/04/2021 1 Implement financial oversight 05/04/2021 01/10/2024
procedures for the Women’s
Business Center (WBC)
program that ensure the
program office enforces WBC
cooperative agreement
requirements. Program
officials should ensure WBCs
use federal funds only for
allowable, allocable, and
reasonable expenses, adhere
to contract award procedures,
and separate project costs by
funding source.
21-14 05/04/2021 2 Remedy $523,790 in 05/04/2021 09/29/2024
unsupported matching funds,
unsupported program income,
and the resulting portion of
the federal funds reimbursed
for the unmet match, and
$186,537 in unsupported
expenses.
21-14 05/04/2021 3 Recover $31,215 for 05/04/2021 09/29/2024
improperly awarded contracts
and $31,424 in unallowable or
unallocable expenses.
21-14 05/04/2021 4 Implement policies and 05/04/2021 01/10/2024
procedures for conducting
thorough financial compliance
reviews and coordinate with
the Office of Field Operations
to train field office personnel
responsible for semiannual
site visits
21-14 05/04/2021 5 Establish policies holding 05/04/2021 01/10/2024
program officials accountable
for promptly following up on
financial examination results
and enforcing cooperative
agreement requirements.
36 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
21-14 05/04/2021 6 Require higher-level reviewers 05/04/2021 01/10/2024
to clearly justify and document
approving or denying
disbursement of funds if the
decisions differ from the
recommendations of lower-
level reviewers; justification
documentation should be kept
in the official cooperative
agreement file.
21-14 05/04/2021 7 Review expenses for the 05/04/2021 09/29/2024
$28,089 reallocation of budget
expenses we detailed in this
report to ensure these costs
are allowable and document
the rationale for the
reallocation or recover costs
that are unallowable.
21-14 05/04/2021 8 Require program officials to 05/04/2021 01/10/2024
enforce the cooperative
agreement terms and
conditions and deobligate or
withhold payments if WBCs do
not submit accurate financial
reports on time.
22-01 10/07/2021 1 Review the applications of sole 10/04/2021 12/15/2023
proprietors and independent
contractors that included
numbers of employees but no
Employer Identification
Number; and remedy the $3.5
billion disbursed to sole
proprietors and $1 billion
disbursed to independent
contractors that exceeded the
amount allowed by SBA’s
policy.
22-04 11/8/2021 2 KPMG recommends the 09/01/2022 09/30/2023
Administrator coordinate with
the Associate Administrator
for Disaster Assistance to
enforce that documentation is
maintained to evidence
changes to a loan and ensure
that awarding actions are
entered into the source
systems in a timely manner.
Semiannual Report to Congress, Fall 2023 | 37
U.S. Small Business Administration | Office of Inspector General
22-06 11/30/2021 2 Use Treasury’s DNP analysis to 11/30/2021 10/30/2023
systemically flag COVID-19
EIDL and Emergency EIDL
grant recipients who were
found in Treasury’s DNP
system and not previously
reported by OIG. Review the
applications and determine
whether they are deemed
ineligible. If the applicant is
deemed ineligible, recover any
disbursed funds, and flag the
application as ineligible.
22-06 11/30/2021 3 For all COVID-19 EIDLs and 02/02/2023 12/29/2023
Emergency EIDL grants
identified and flagged as
potentially ineligible above,
include those transactions in
SBA’s 2021 improper
payments estimation process.
22-08 02/14/2022 1 Implement a standard process 11/10/2022 12/29/2023
to approve initial business
plans and monitor to ensure
that business plans are
reviewed annually, to include
appropriate updates for
specific targets, objectives,
and goals for the business
development of program
participants, in accordance
with 13 CFR 124.403(a) and
section 7(j)(10)(D) of the Small
Business Act.
22-08 02/14/2022 3 Establish outcome-based 12/14/2022 12/29/2023
performance goals and
measurements to assess
whether the program
achieved business
development objectives,
including the number of
graduated 8(a) firms in
accordance with the measure
of success in section 101(b)(2)
of the Business Opportunity
Development Reform Act of
1988.
38 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
22-08 02/14/2022 5 Implement a process to 11/10/2022 12/29/2023
ensure the systematic
collection of accurate and
complete data on program
results and operations to
make sure all program
reporting requirements are
met, in accordance with
section 7(j)(16)(A) of the Small
Business Act and Standards for
Internal Control in the Federal
Government Principles for
Information and
Communication.
22-08 02/14/2022 6 Implement requirements for 11/10/2022 12/29/2023
management to monitor that
Business Opportunity
Specialists consistently assess
program participant’s
development needs, counsel
participants, conduct annual
field visits, and maintain
required documentation, as
required by standard
operating procedures.
22-11 04/28/2022 2 Ensure the continuity of 04/29/2022 08/30/2024
operations plan is tested
annually, as required by
Federal Continuity Directive 1.
22-13 05/26/2022 1 Establish clearly defined and 06/03/2022 12/29/2023
detailed roles, responsibilities,
and processes for all SBA
offices and officials
responsible for managing and
handling potentially fraudulent
PPP loans to reduce the risk of
ineligible applicants receiving
PPP forgiveness and the risk of
fraud and financial loss in the
PPP and when implementing
similar future programs.
Semiannual Report to Congress, Fall 2023 | 39
U.S. Small Business Administration | Office of Inspector General
22-13 05/26/2022 2 Provide lenders formal 06/03/2022 12/29/2023
guidance to effectively and
consistently handle potentially
fraudulent PPP loans and
ensure lenders have sufficient
guidance when implementing
similar future programs.
22-17 09/12/2022 1 Thoroughly review each 10/06/2022 10/31/2023
COVID-19 EIDL, grant, and
advance application submitted
from foreign IP addresses that
were approved and funded
and verify eligibility. If
ineligibility or evidence of
potential fraud is found, SBA
should stop any further or
future disbursements, recover
any disbursed funds, and refer
fraudulent loans to OIG for
investigation.
22-17 09/12/2022 2 Examine controls related to 10/06/2022 10/31/2023
foreign IP addresses and
ensure these controls are
more effective in future
disaster processing systems.
22-21 09/26/2022 1 Review the 179 PPP loans, — —
totaling approximately $684
million, for compliance with
affiliation and size standards
to ensure eligibility
requirements were met and
seek remedy or repayment for
all loans deemed ineligible.
22-19 09/27/2022 1 Ensure the existing SBA 11/08/2022 06/03/2024
System Development
Methodology is updated to
include supply chain risk-
management practices as
required by OMB Circular A-
130 and high-value asset
system designation guidance.
Also, ensure high-value asset
system risks are incorporated
into the enterprise risk
management framework, as
recommended by OMB M-19-
03 and SBA SOP 90 47 6.
40 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
22-19 09/27/2022 10 Implement an automated 11/09/2022 07/31/2024
process to document and
monitor system changes as
recommended by NIST SP 800-
53 Rev. 5.
22-19 09/27/2022 2 Communicate and enforce the 11/08/2022 11/24/2023
SBA System Development
Methodology in which a
traceability matrix is used to
ensure that system
requirements can be tested
and demonstrated in the
operational system. Ensure all
requirements are aligned with
the contractual acceptance
criteria.
22-19 09/27/2022 3 Implement in updated agency 11/23/2022 06/03/2024
guidance, the requirements of
OMB Circular No. A-123 that
stipulate a SOC 1 Type 2
report is needed for all new
and existing financial systems.
This guidance should also
require confirmation at least
annually that the controls are
functioning as designed.
22-19 09/27/2022 5 In conjunction with the 11/08/2022 06/17/2024
Enterprise Risk Management
Board, implement enterprise-
wide privacy risk mitigation
practices that can be
assimilated into new and
existing system program
designs.
22-19 09/27/2022 6 Complete an initial assessment 11/08/2022 12/15/2023
and authorization for each
information system and all
agency-designated common
controls before operation.
Semiannual Report to Congress, Fall 2023 | 41
U.S. Small Business Administration | Office of Inspector General
22-19 09/27/2022 7 Transition information 11/10/2022 07/31/2024
systems and common controls
to an ongoing authorization
process (when eligible for such
a process) with the formal
approval of the respective
authorizing officials or
reauthorize information
systems and common controls
as needed, on a time or event-
driven basis in accordance
with agency risk tolerance, as
required by OMB Circular No.
A-130 and SOP 90 47 6.
22-19 09/27/2022 8 Review and update POA&Ms 11/09/2022 07/31/2024
at least quarterly as required
by SOP 90 47 6.
22-22 09/29/2022 1 Review the 20 loans identified 11/09/2022 09/30/2023
in this report as ineligible for
the COVID-19 EIDL that the
applicants received and
recover approximately $2
million improperly disbursed
to the applicants.
22-22 09/29/2022 2 Review the COVID-19 EIDL 11/09/2022 09/30/2023
disbursements with suspect
Taxpayer Identification
Numbers made after
December 27, 2020 to
determine if the loan file
contains conclusive evidence
that the applicant business
existed on January 31, 2020
and therefore, met the CARES
Act eligibility requirements. If
not, flag the borrower as
ineligible and recover the
funds.
22-20 09/29/2022 6 Develop standard operating 09/29/2022 06/30/2023
procedures to ensure program
officials assess third-party
certifications, establish a risk-
based sampling plan for
selecting files to review, and
document the results of the
compliance reviews.
42 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
22-25 09/30/2022 2 Explore alternative means of — —
collections for PPP loans with
an outstanding balance of
$100,000 or less.
22-25 09/30/2022 3 Conduct an initial and periodic 12/07/2022 10/31/2023
cost benefit analysis on PPP
purchase guarantees with
comprehensive estimates to
sufficiently assess whether the
cost of collecting loans of
$100,000 or less is more than
the recovery amount and
pursue collections based on
results of the analysis.
23-02 11/15/2022 10 Develop and document an 01/18/2023 12/15/2023
effective funds recovery plan
and controls to ensure funds
disbursed to ineligible
recipients as part of the
purchases review process are
recovered and reported
accurately in a timely manner.
23-02 11/15/2022 14 Develop and document an 12/16/2022 12/15/2023
effective funds recovery plan
and controls to ensure funds
disbursed to ineligible
recipients as part of the
COVID-19 EIDLs review
process are recovered and
reported accurately in a timely
manner.
23-02 11/15/2022 15 Assess the accounting 12/09/2022 09/29/2023
considerations, based on the
results of the review process
for COVID-19EIDLs, including
the impact on the
consolidated financial
statements, and record any
necessary adjustments for
transactions determined not
to be in conformance with the
CARES Act and related
legislation.
Semiannual Report to Congress, Fall 2023 | 43
U.S. Small Business Administration | Office of Inspector General
23-02 11/15/2022 29 Perform and document a 12/09/2022 09/01/2023
thorough risk assessment at
the financial statement
assertion level to identify
process level risks and
communicate the results to
relevant program offices.
23-02 11/15/2022 30 In conjunction with relevant 12/09/2022 090/1/2023
program offices, assess the
effectiveness of key process
level controls to respond to
the identified risks.
23-02 11/15/2022 31 In conjunction with relevant 12/09/2022 09/01/2023
program offices, develop and
implement processes to
ensure the timely completion
of the testing and monitoring
of the design, implementation,
and operating effectiveness of
key, relevant controls that
affect financial reporting and
compliance with relevant laws
and regulations.
23-02 11/15/2022 39 Update the risk assessment 12/09/2022 09/01/2023
regarding the evaluation of
internal controls to ensure it
includes all significant
programs, key processes, and
other material line items on
the consolidated financial
statements.
23-02 11/15/2022 40 In conjunction with relevant 12/09/2022 10/31/2023
program offices, perform and
document the internal control
evaluation over all programs.
This should include entity level
controls, manual controls,
general information
technology controls, and
system application controls
covering key financial
statement line items and risks.
44 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
23-02 11/15/2022 41 Update the existing policy and 12/09/2022 10/31/2023
implement adequate controls
to ensure that the statement
of assurances provided by the
program offices are
adequately documented and
reviewed for completeness
and accuracy to provide a
sufficient basis to support the
Administrator’s statement of
assurance.
23-02 11/15/2022 42 Address the control 12/09/2022 10/31/2023
deficiencies over transactions
arising from the
implementation of the CARES
Act and related legislation by
working with the Office of
Capital Access and the Office
of Disaster Assistance to
implement the
recommendations in Appendix
I – Material Weaknesses.
23-02 11/15/2022 5 Develop and enforce a policy 12/16/2022 09/29/2023
and controls that require the
adequate review, validation,
and monitoring of the outputs
of the case management
system and maintenance of
documentation evidencing the
review.
23-02 11/15/2022 8 Develop and document an 1/18/2023 12/15/2023
effective funds recovery plan
and controls to ensure funds
disbursed to ineligible
recipients as part of the
forgiveness review process are
recovered and reported
accurately in a timely manner.
23-03 12/13/2022 1 Design and implement a 12/16/2022 07/01/2024
quality assurance program to
ensure that SBA system
hardware inventory is
maintained as required by the
National Institute of Standards
and Technology (NIST) Special
Publication 800-53.
Semiannual Report to Congress, Fall 2023 | 45
U.S. Small Business Administration | Office of Inspector General
23-03 12/13/2022 2 Implement a process to 12/16/2022 04/01/2024
ensure SBA reviews its
external service providers for
supply chain risks and ensure
all assessments of supply chain
risks are documented as
outlined in NIST 800-53.
23-03 12/13/2022 3 Communicate and reinforce to 12/16/2022 07/31/2024
program offices the
requirement to review and
remove system and user
accounts in accordance with
SOP 90 47 6.
23-03 12/13/2022 5 Develop, document, and 12/16/2022 07/31/2024
implement a process that
requires management review
of information security data
and report information
security threats.
46 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Significant Recommendations from this Reporting Period
Report Date Issued Title Recommendation Recommendation
Number Number
23-07 5/15/2023 Independent Auditors’ 1 Enhance existing procedures using
Report on SBA’s FY the framework in GAO’s Green Book
2022 Compliance with to design and implement robust
the PII Act of 2019 internal and quality control processes
to ensure complete and accurate
reporting of annual improper
payment results and formalized risk
assessment processes to ensure all
programs/activities and the related
risk factors are appropriately
considered to meet PIIA reporting
objectives.
23-07 5/15/2023 Independent Auditors’ 2 Provide training to responsible staff
Report on SBA’s FY involved in the payment integrity
2022 Compliance with reporting process regarding the
the PII Act of 2019 updates to existing procedures.
23-07 5/15/2023 Independent Auditors’ 3 Communicate with OMB to ensure
Report on SBA’s FY accurate input of improper payment
2022 Compliance with data and documentation in the
the PII Act of 2019 accompanying materials related to
the payment integrity data call
process.
23-07 5/15/2023 Independent Auditors’ 5 Collaborate with the responsible staff
Report on SBA’s FY involved in the payment integrity
2022 Compliance with reporting process to ensure timely
the PII Act of 2019 and complete reconciliations are
performed on the populations subject
to sampling for improper payment
reviews.
23-07 5/15/2023 Independent Auditors’ 6 Formally document and implement
Report on SBA’s FY appropriate preventative and
2022 Compliance with monitoring controls prior to approval
the PII Act of 2019 of 7(a) loan guaranty purchases.
23-07 5/15/2023 Independent Auditors’ 7 Exercise effective management
Report on SBA’s FY review controls over the statistician’s
2022 Compliance with work by verifying that the
the PII Act of 2019 documentation of the sampling and
estimation methodology plans
comprehensively outlines the details
of the implemented sampling and
extrapolation methodology, while
maintaining statistical validity.
Semiannual Report to Congress, Fall 2023 | 47
U.S. Small Business Administration | Office of Inspector General
23-07 5/15/2023 Independent Auditors’ 8 Design and document adequate
Report on SBA’s FY review procedures to ensure that the
2022 Compliance with results of the sample meet the PIIA
the PII Act of 2019 objectives.
23-10 7/5/2023 SBA's Administrative 1 Prioritize and complete the review of
Process to Address the 2,172 awards that were flagged
Potentially Fraudulent by the point-of-sale partner as having
RRF Awards unsupported gross sales and take
appropriate administrative actions to
recover improper payments, which
includes 110 awards that were
suspected of fraud.
23-11 7/26/2023 SBA’s Awards for 1 Establish and implement policies and
Staffing Support for procedures on how to use
COVID-19 Economic appropriate analysis techniques when
Relief Loan Programs determining prices are fair and
reasonable when GSA scheduled list
prices and rates are adjusted, in
accordance with FAR Part 8.
23-11 7/26/2023 SBA’s Awards for 2 Establish and implement policies and
Staffing Support for procedures to document discount
COVID-19 Economic requests for applicable call orders to
Relief Loan Programs ensure all possible volume order
discounts and changing market
conditions are considered at the time
of each order, in accordance with FAR
8.405.
23-11 7/26/2023 SBA’s Awards for 3 Determine the total additional
Staffing Support for amount paid to Highlight
COVID-19 Economic Technologies LLC due to using
Relief Loan Programs Washington, D.C. labor rates and
pursue any applicable remedies to
recover costs.
23-11 7/26/2023 SBA’s Awards for 4 Evaluate all call orders issued under
Staffing Support for the Highlight blanket purchase
COVID-19 Economic agreement for compliance with the
Relief Loan Programs Limitation on Subcontracting Rule per
13 CFR § 125.6 and pursue any
applicable remedies.
23-15 9/29/2023 SBA’s Oversight of 1 Follow-up with recipients who did not
Restaurant submit their final annual report as
Revitalization Fund required by April 30, 2023 and take
(RRF) Recipients action to recover funds.
48 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
23-15 9/29/2023 SBA’s Oversight of 2 Review the 210 RRF award recipients
Restaurant currently marked in the PPP loan data
Revitalization Fund as potentially fraudulent or ineligible
Recipients that were not selected for post-award
review.
23-15 9/29/2023 SBA’s Oversight of 3 Extend the record retention period
Restaurant and notify all RRF award recipients in
Revitalization Fund writing in accordance with 2 CFR
Recipients 200.334.
23-15 9/29/2023 SBA’s Oversight of 4 Assess the post-award review process
Restaurant and manpower requirements to
Revitalization Fund ensure post-award reviews are
Recipients conducted in a prompt manner. Use
the results of the assessment to
improve processing times to ensure
reviews are completed before the
statute of limitations expire.
23-15 9/29/2023 SBA’s Oversight of 5 Take immediate administrative
Restaurant actions to recover improper
Revitalization Fund payments from the 5 hotels and 18
Recipients recipients found to be ineligible, for a
total of 23 ineligible award recipients
identified totaling $39 million.
23-16 9/29/2023 Ending Active 1 Perform a comprehensive cost-
Collections on benefit analysis, consistent with
Delinquent COVID-19 federal regulations, to include
Economic Injury periodic comparisons of costs
Disaster Loans incurred and amounts collected on
the portfolio of COVID-19 EIDLs of
$100,000 or less to assess whether
collection costs exceed recovery
amounts.
23-16 9/29/2023 Ending Active 2 Reevaluate and amend as appropriate
Collections on the April 27, 2022 decision to end
Delinquent COVID-19 active collections contingent on the
Economic Injury outcome of the more comprehensive
Disaster Loans cost-benefit analysis.
23-16 9/29/2023 Ending Active 3 Ensure SBA does not end active
Collections on collections pursuant to the April 27,
Delinquent COVID-19 2022 decision on any COVID-19 EIDL
Economic Injury of $100,000 or less made to
Disaster Loans borrowers who received multiple
COVID-19 EIDLs that, when
combined, exceed $100,000.
Semiannual Report to Congress, Fall 2023 | 49
U.S. Small Business Administration | Office of Inspector General
23-16 9/29/2023 Ending Active 4 Ensure SBA does not end active
Collections on collections on any COVID-19 EIDL that
Delinquent COVID-19 appears to be fraudulent, false, or
Economic Injury misrepresented, including loans
Disaster Loans identified as such by OIG or other
federal oversight entities, without 1)
reviewing the loan application for
fraud and 2) attempting active
collection, at a minimum, regardless
of the outcome of a comprehensive
cost-benefit analysis.
23-16 9/29/2023 Ending Active 5 Evaluate the COVID-19 EIDL portfolio,
Collections on in collaboration with Treasury, to
Delinquent COVID-19 determine if selling the portfolio,
Economic Injury including delinquent loans of
Disaster Loans $100,000 or less, is in the best
interest of the government.
Significant Management Decisions with which OIG Disagrees
There were two significant management decisions OIG disagreed with during this reporting period
regarding SBA’s Implementation of the Women-Owned Small Business Certification Program
(Report 22-20), September 29, 2022.
Summary: SBA's Audit Follow Up Official determined management would not implement OIG’s
recommendations 1 and 2. For recommendation 1, the agency would update and implement
standard operating procedures to ensure consistent eligibility reviews comply with program
requirements in 13 CFR 127.300. For recommendation 2, the agency would update application
instructions and require applicants to submit documentation for program officials to verify that
the business meets small business standards. SBA disagreed with OIG’s interpretation that the
2015 National Defense Authorization Act required SBA to verify that the business was small in
addition to the requirement that the business be owned and controlled by a woman.
The Audit Follow-Up Official decided the agency would continue to allow applicants to self-certify
that the business met size standards. While OIG believes that removing self-certification from the
WOSB program is essential to reducing the risk, OIG will not take further action and has closed the
recommendation.
Significant Revised Management Decisions
There were no significant revised management decisions during this reporting period.
Federal Financial Management Improvement Act of 1996
Our independent auditors, KPMG, reported that the results of the 2022 financial statement audit
found that based on identified control weaknesses SBA’s financial systems did not enable accurate
50 | Fall 2023 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
financial reporting and budgetary resources to be adequately safeguarded. Moreover, KPMG
found SBA’s financial systems were found to be noncompliant with applicable federal accounting
standards, specifically in the RRF and the SVOG program areas.
Instances of Interference
There were no attempts by SBA officials to interfere with OIG independence during the reporting
period.
Semiannual Report to Congress, Fall 2023 | 51
U.S. Small Business Administration | Office of Inspector General
Appendix D: Investigations Reporting Statistics
Investigative Reports Issued
Report Type Number of Reports
Report of Investigation 135
Preliminary Case Closing Reports of Investigation 2
Total 137
Persons Referred for Prosecution
Referred to Number of Persons
Department of Justice 66
State Attorney 1
Local Attorney 1
Total 68
Number includes persons and entities referred for prosecution
Pandemic-Related Investigative Statistics
SBA OIG Investigations Indict/Complaint Arrests Convictions
PPP/EIDL/SV/RFF* 115 230 199 88
Investment Fraud 15 21 18 13
Total 130 251 217 91
*PPP stands for Paycheck Protection Program. EIDL stands for Economic Injury Disaster Loan. RFF stands for Restaurant
Revitalization Fund
Whistleblower Retaliation Cases
There were no OIG investigations involving whistleblower retaliation during the reporting period.
Investigations Involving a Senior Government Employee Where
Misconduct Was Substantiated
There were no OIG investigations where misconduct was substantiated that involved a senior
government employee during this reporting period.
Investigations Involving a Senior Government Employee that are Closed
and Not Disclosed to the Public
There were no OIG investigations that are closed and not disclosed to the public involving a senior
government employee during this reporting period.
52 | Fall 2023 Semiannual Report to Congress
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Appendix E: Legal Actions Summary
April 1, 2023 – September 30, 2023
State Program Jointly With Alleged Violation(s) Legal Action
Prosecuted
NM BL FBI Subjects submitted Individual 1 was
multiple fraudulent sentenced to 41
PPP loan applications, months incarceration
including falsified and 2 years of
supporting supervised release.
documentation, for Individual 2 was
companies they owned sentenced to 12
and/or controlled months incarceration
totaling over $1.5 and 3 years supervised
million in PPP funds. release. They were
ordered to pay $1.4
million in restitution.
MO DL FBI, SSA/OIG Subjects defrauded Individual 1 was
SBA and financial sentenced to 65
institutions for over months incarceration
$1.7 million in EIDLs. and 5 years of
They misused supervised release.
proceeds for personal Individual 2 was
use, such as gambling sentenced to 3 years
and vacations. supervised release.
They were ordered to
pay $742,000 in
restitution.
MO DL FRB, FDIC/OIG As part of the scheme, Individual 1 was
subject submitted sentenced to 1 year of
multiple fraudulent supervised release.
PPP and EIDL loan Individual 2 was
applications. Subject sentenced to 2 years
successfully obtained supervised release.
over $50,000 in They were ordered to
fraudulent funds. pay $20,000 in
Subject submitted restitution.
falsified bank records
and fake employee
information.
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U.S. Small Business Administration | Office of Inspector General
TX BL FBI Individual made Individual was
material sentenced to 78
misrepresentations to months incarceration,
a financial institution 3 years of supervised
to gain approval for release, and ordered
PPP loans and to pay $3 million in
obtained over $3.3 restitution.
million by using false
business operations
and providing
materially false
information on loan
applications.
LA BL/DL IRS/CI Individual defrauded Individual was
and conspired to sentenced to 120
submitted PPP loans months incarceration,
and EIDLs securing 3 years of supervised
over $1.1 million by release, and ordered
using false business to pay $1.1 million in
operations and restitution.
providing materially
false information on
loan applications.
TX BL TIGTA Subject made false Individual was
statement in the sentenced to 5 years
attempt to obtain over of supervised release
$200,000. Subject and ordered to pay
made several false $200,000 in
statements and restitution.
manipulated bank
statements within the
application.
MI BL/DL FBI, IRS/CI, TIGTA Individual submitted Individual was
more than 15 sentenced to 21
fraudulent PPP and 26 months incarceration,
EIDL applications 2 years supervised
resulting in over $15 release, and ordered
million, obtaining to pay $90,000 in
$90,000. restitution.
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TX DL FBI, TIGTA Subjects defrauded the Individual 1 was
SBA and financial sentenced to 62
institutions for over months incarceration
$12.3 million in EIDLs. and 5 years of
supervised release.
Individual 2 was
sentenced to 24
months incarceration
and 3 years supervised
release. Individual 3
was sentenced to 12
months incarceration
and 5 years of
supervised release.
They were ordered to
pay $12.5 million in
restitution.
OH DL/BL FBI, IRS/CI, TIGTA Subject devised a Individual was
scheme and applied sentenced to 33
for over $7.7 million in months incarceration,
PPP and EIDLs, 3 years supervised
misrepresenting the release, and ordered
number of employees to pay $7.7 million in
and payroll expenses. restitution.
OK DL FRB Individual made Individual was
multiple false sentenced to 6 months
statements and in home confinement
obtained over and ordered to pay
$195,000 in EIDLs. $225,000 in
restitution.
MI BL FBI, TIGTA Subject submitted a Subject was sentenced
PPP application to 1 month
seeking over $150,000 incarceration and 5
in COVID-19 relief years supervised
funds. release. Individual was
ordered to pay
$126,000 in
restitution.
WI DL FBI, IRS/CI Subject devised a Subject was sentenced
scheme and applied to 3 months
for fraudulent EIDLs incarceration, 3 years
which resulted in over supervised release,
$100,000 in loss to and was ordered to
SBA. pay $109,733 in
restitution.
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U.S. Small Business Administration | Office of Inspector General
TX GC FBI, Army CID Subjects falsified Individual 1 was
information provided sentenced to 24
to SBA during a protest months incarceration
of an Army contract. and 2 years of
They misrepresented supervised release.
information provided Individual 2 was
to the SBA’s HUBZone sentenced to months
Program, which incarceration and 2
allowed them to years supervised
remain qualified as a release. They were
HUBZone business for ordered to pay
awarding the contract. $350,000 in
The company was paid restitution.
a total of $15 million in
performance of eight
military contracts.
IL BL FBI Individual made Individual was
material sentenced to 66
misrepresentations to months incarceration,
a financial institution 4 years of supervised
and filed eight release, and ordered
fraudulent loan to pay $1.5 million in
applications seeking restitution.
more than $1.5 million
in PPP loans.
AR BL FRB, TIGTA Subject submitted a Subject was sentenced
PPP application to 6 months of
seeking over $20,790 incarceration, 36
in COVID-19 relief months of supervised
funds. release, and was
ordered to pay
$20,790 in restitution.
FL DL FBI, USSS Individual made Subject was sentenced
multiple false to 78 months
statements and incarceration and 3
obtained over years of supervised
$750,000 in EIDLs. release and was
ordered to pay
$734,500 in
restitution.
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FL BL FBI, FDIC/OIG Subjects submitted Individual 1 was
false and fraudulent sentenced to 36
PPP applications and months incarceration
received over $1.2 and 5 years of
million. They made supervised release.
lavish personal Individual 2 was
purchases on vacation sentenced to 48
rentals. months incarceration
and 3 years supervised
release. Individual 3
was sentenced to 15
months incarceration
and 5 years of
supervised release.
They were ordered to
pay $6.8 million in
restitution.
FL BL FBI, DHS/ OIG, IRS/CI, Individual submitted Individual was
USSS false and fraudulent sentenced to 50
PPP applications and months incarceration,
received over $3.8 3 years of supervised
million. release, and ordered
to pay $3.8 million in
restitution.
GA BL FBI, IRS/CI, US PIS Individual made false Individual was
assertions and sentenced to 38
certifications months incarceration,
concerning EIDL 3 years of supervised
benefits and obtained release, and ordered
over $4.4 million to pay $4.4 million in
fraudulently. restitution.
FL BL FDIC/OIG, FBI Subject conspired with Subject was sentenced
others and submitted to 48 months
false statement and incarceration, 3 years
fraudulently applied of supervised release,
for 80 PPP loans and ordered to pay
resulting in over $1.3 $1.3 million in
million in restitution.
disbursements.
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U.S. Small Business Administration | Office of Inspector General
AL BL FBI Subjects conspired Individual 1 was
with others and sentenced to 1 month
submitted false incarceration and 5
statement and years of supervised
fraudulently applied release. Individual 2
for PPP resulting in was sentenced to 1
over $123,000 in month incarceration
disbursements. and 5 years supervised
release. Individual 3
was sentenced to 18
months incarceration
and 5 years of
supervised release.
They were ordered to
pay $123,799 in
restitution.
FL DL IRS/CI, USSS Subject submitted a Subject was sentenced
PPP application to 12 months
seeking over $800,000 incarceration, 3 years
in COVID-19 relief supervised release and
funds. ordered to pay
$840,827 in
restitution.
TX GC GSA/OIG, VA/OIG, Subjects participated Subject 1 was
Army/CID in a fraud scheme and sentenced to 27
conspired to operate months of
companies with straw incarceration, 5 years
owners who qualified supervised release.
as socially and Subject 2 was
economically sentenced 2 years of
disadvantaged service- probation. They were
disabled veterans who ordered to pay $1.7
did not actually control million in restitution
the companies.
CA DL FBI, FDIC/OIG As part of the scheme, Subject was sentenced
subject submitted to 15 months
multiple fraudulent incarceration, 3 years
PPP and EIDL of supervised release
applications. Subject and ordered to pay
successfully obtained $327,594 in
over $327,000 in restitution.
fraudulent funds.
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CA BL FBI, FDIC/OIG, TIGTA Subject submitted Subject was sentenced
false and fraudulent to 135 months
PPP applications and incarceration, 5 years
received over $3 of supervised release,
million dollars in loan and ordered to pay $3
proceeds. million in restitution.
CA GC FBI Individual directed the Individual was
straw borrower to sentenced to 2 years
apply for an SBA loan of probation and
in the amount of ordered to pay
$280,000 for the $262,000 in
acquisition. restitution.
CA BL FBI Individual made false Individual was
statements and sentenced to 48
fraudulently applied months incarceration,
for eight PPP loans for 3 years of supervised
more than $3.8 release, and ordered
million. to pay $3.4 million in
restitution.
FL BL USSS Subject submitted Subject was sentenced
false and fraudulent to 30 months
PPP applications and incarceration, 5 years
received over $2.8 of supervised release,
million in loan and ordered to pay
proceeds. $2.8 million in
restitution.
NY DL/BL FBI Subject made multiple Subject 1 was
false statements and sentenced to 24
attempted to obtain months incarceration,
multiple PPP and EIDLs 2 years of supervised
over $2.2 million. release. Subject 2 was
sentenced to 6 months
incarceration, 1 years
of supervised release.
Subjects 3-9 sentenced
to 2 years of
supervised release.
They were ordered to
pay $2 million in
restitution.
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U.S. Small Business Administration | Office of Inspector General
GA BL FBI, FDIC/OIG Subject conspired with Subject was sentenced
TIGTA others and submitted to 87 months
false statement and incarceration, 5 years
fraudulently applied of supervised release,
for 80 PPP loans and and ordered to pay
resulting in over $4.4 $4.4 million in
million in restitution.
disbursements.
GA DL/BL FBI Individual submitted Individual was
false and fraudulent sentenced to 24
PPP applications and months incarceration,
received over 3 years of supervised
$120,000 in loan release, and ordered
proceeds. to pay $122,300 in
restitution.
NY BL FRB, IRS/CI Individual attempted Individual was
to defraud the sentenced to 54
government of over months incarceration,
$71 million. Individual 3 years of supervised
misused proceeds for release, and ordered
personal use, to pay $71 million in
purchasing a villa in restitution.
the Dominican
Republic, a mansion in
New Jersey, and
several luxury vehicles.
OR DL FBI Individual created Subject was sentenced
fraudulent documents, to 33 months
businesses, and false incarceration, 3 years
identities to receive of supervised release,
over $523,000 in loans. and ordered to pay
$523,000 in
restitution.
CA BL DHS/OIG Subject conspired with Subject was sentenced
others and submitted to 63 months
false statements and incarceration, 3 years
fraudulently applied of supervised release,
for multiple PPP loans and ordered to pay
resulting in over $2.2 $2.8 million in
million in restitution.
disbursements.
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U.S. Small Business Administration | Office of Inspector General
CA BL/DL FBI Subject made multiple Subject was sentenced
false statements and to 49 months
attempted to obtain incarceration, 5 years
multiple PPP and EIDLs of supervised release,
over $1.7 million and ordered to pay
dollars. $1.7 million in
restitution.
CA DL FBI, TIGTA Subject made multiple Subject was sentenced
false statements and to 100 months
attempted to obtain an incarceration, 60 years
EIDLs over $1 million. of supervised release,
Subject used the and ordered to pay $1
proceeds to purchase million in restitution.
jewelry, watches,
precious metals and
stones.
CO DL FBI Subject submitted Subject was sentenced
fraudulent EIDL to 240 months
applications and incarceration, 2 years
obtained over $2.3 of supervised release,
million. and ordered to pay
$2.3 million in
restitution.
NV BL FBI, IRS/CI Subject submitted Subject was sentenced
fraudulent EIDL to 3 months
applications and incarceration, 3 years
obtained over $45,000 of supervised release,
in CARES Act funds. and ordered to pay
$46,900 in restitution.
OR DL FBI, TIGTA Individual provided Individual was
false information to sentenced to 8 months
the banks about his incarceration, 3 years
businesses and supervised release,
personal income. and ordered to pay
$23,900 in restitution.
CA BL/DL FRB, IRS/CI Individual attempted Individual was
to defraud the sentenced to 40
government with months incarceration,
multiple PPP and EIDL 3 years of supervised
loans over $600,000. release, and ordered
to pay $643,776 in
restitution.
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U.S. Small Business Administration | Office of Inspector General
CA BL FBI Subject submitted Individual was
false information sentenced to 15
about his employment months of
as an independent incarceration, 36
contractor and months of supervised
revenue. release, and was
ordered to pay
$337,267 in
restitution.
FL DL IRS/CI Subject submitted a Subject was sentenced
PPP application to 12 months
seeking over $593,000 incarceration, 5 years
in COVID-19 relief of supervised release,
funds. and ordered to pay
$593,151 in
restitution.
OR DL FBI, TIGTA Individual created Subject was sentenced
fraudulent documents, to 60 months
businesses, and false incarceration, 3 years
identities and of supervised release,
attempted to receive and ordered to pay
over $1.3 million in $1.3 million in
loan proceeds. restitution.
OR BL TIGTA, FBI Subject submitted Subject was sentenced
false information to 18 months of
about his employment probation and was
as an independent ordered to pay
contractor and $18,750 in restitution.
revenue.
AL DL USSS Subject made multiple Subject was sentenced
false statements and to 48 months
attempted to obtain an incarceration, 5 years
EIDL over $20,000. of supervised release,
and ordered to pay
$23,333 in restitution.
OR DL FBI, TIGTA As part of the scheme, Subject was sentenced
subject submitted to 70 months
fraudulent EIDL incarceration, 3 years
applications and of supervised release,
obtained over $1.3 and order to pay $1.3
million in CARES Act million in restitution.
funds.
Table Notes:
Legal Actions Summary Program Codes
BL………..Business Loans
DL……….Disaster Loans
GC………Government Contracting and Section 8(a) Business Development
IA………..Internal Affairs
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OT………Other
Joint-investigation Agency Acronyms
Defense Criminal Investigative Service (DCIS)
Department of Commerce Office of Inspector General (DOC/OIG)
Department of Energy Office of Inspector General (DOE/OIG)
Department of Health and Human Services Office of Inspector General (HHS/OIG)
Department of Homeland Security Homeland Security Investigations (DHS/HSI)
Department of Homeland Security Immigration and Customs Enforcement (DHS/ICE)
Department of Homeland Security Office of Inspector General (DHS/OIG)
Department of Justice Office of Inspector General (DOJ/OIG)
Department of Justice Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
Department of State Office of Inspector General (DOS/OIG)
Department of Transportation Office of Inspector General (DOT/OIG)
Department of Treasury Inspector General for Tax Administration (TIGTA)
Department of Treasury Special Inspector General for the Troubled Asset Relief Program (SIGTARP)
Department of Veterans Affairs Office of Inspector General (VA/OIG)
Federal Bureau of Investigation (FBI)
Federal Deposit Insurance Corporation Office of Inspector General (FDIC/OIG)
Federal Housing Finance Agency Office of Inspector General (FHFA/OIG)
Federal Reserve Board Office of Inspector General (FRB/OIG)
General Services Administration Office of Inspector General (GSA/OIG)
Internal Revenue Service – Criminal Investigation (IRS/CI)
National Aeronautics and Space Administration Office of Inspector General (NASA/OIG)
State of California Employment Development Department (State of CA/EDD)
United States Airforce Office of Special Investigations (AFOSI)
United States Army/Criminal Investigation Division (Army/CID)
United States Department of Agriculture Office of Inspector General (USDA/OIG)
United States Naval Criminal Investigative Service (NCIS)
United States Postal Inspection Service (USPIS)
United States Secret Service (USSS)
Semiannual Report to Congress, Fall 2023 | 63
U.S. Small Business Administration | Office of Inspector General
Appendix F: Cosponsored and Other Activities
SBA’s authorization to cosponsor events requires OIG to report to Congress on the Administrator’s
use of that authority semiannually. The following list of activities was provided by the Office of
Strategic Alliances.
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
Supporting Pandemic
Massachusetts District Office
Affected Community
— City of Boston Mayor's
Enterprises (SPACE) Grant Boston, MA September 27, 2023
Office of Economic
Info Session and SBA Meet &
Opportunity & Inclusion
Greet
HQ/Office of International
Trade — America’s Small
Outreach and Education Business Development
Virtual September 19, 2023
Series Centers, National Customs
Brokers & Forwarders
Association of America
HQ Office of Communications
and Public Liaison —
American Express Travel
Small Business Saturday 2023 Nationwide September 13, 2023
Related Services Company
Inc., Women Impacting Public
Policy Inc.
Business Health Information Baltimore District Office —
Conference: Keep Your Small Maryland Health Benefit Virtual September 12, 2023
Business Healthy & Strong! Exchange
Massachusetts District Office
Meet Lenders – Mass Bankers
— Massachusetts Bankers Virtual August 22, 2023
& SBA
Association
Georgia District Office —
South Dekalb Pop Up Decide Dekalb Development
Decatur, GA August 14, 2023
Business Incubator Authority, New Life
Community Alliance
Wyoming District Office —
Doing Business with the
Wyoming APEX Accelerator
Federal Government Training Virtual, Wyoming Statewide July 28, 2023
(formerly known as Wyoming
Series
PTAC)
Spirit of Small Business Los Angeles District Office —
Santa Barbara, CA July 24, 2023
Awards Pacific Coast Business Times
Hawaii District Office — City
Small Business Connection and County of Honolulu
Oahu, HI July 13, 2023
Counseling and Training Office of Economic
Revitalization
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U.S. Small Business Administration | Office of Inspector General
12th Annual Building
HQ/Office of Disaster
Resilience Through Private-
Assistance — U.S. Chamber Washington, DC July 11, 2023
Public Partnerships
of Commerce Foundation
Conference
Rhode Island District Office —
City of Providence,
Department of Economic
Small Business Workshops Development, Rhode Island Providence, RI July 7, 2023
Small Business Development
Center, University of Rhode
Island
HQ/Office of International
International Trade Education
Trade — International Trade Virtual July 6, 2023
Series
& Forfaiting Association
HQ/Office of the
Administrator, Public
Building a Better America 12 Virtual 4 In person June 15, 2023
Engagement — Public Private
Strategies Institute
Illinois District Office —
Chicagoland Chamber of
United States SBA 70th
Commerce Foundation,
Anniversary Small Business Chicago, IL May 25, 2023
SCORE Chicago, Illinois SBDC
Awards Luncheon and Expo
Department of Commerce
and Economic Opportunity
HQ/Office of Veterans
Business Development —
SBA Military Spouse
U.S. Chamber of Commerce Virtual May 22, 2023
Entrepreneur Summit
Foundation's Hiring Our
Heroes
HQ/Office of the
SBA and NPHC National Atlanta, GA with additional
Administrator — National May 22, 2023
Engagement locations to be determined
Pan-Hellenic Council
HQ/Office of Field Operations
AANHPI Economic Summits Nationwide May 16, 2023
— U.S. Department of Energy
Massachusetts District Office
AA & NHPI Connectivity
— Asian Community Fund at Boston, MA May 11, 2023
Summit
The Boston Foundation
HQ/Office of International
Export Education for Craft
Trade — Brewers Association, Virtual May 9, 2023
Brewers Webinar Series
Virginia SBDC
Vermont District Office —
2023 Vermont Small Business
VermontBiz (Formerly Waterbury, VT May 1, 2023
Awards Ceremony
Vermont Business Magazine)
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U.S. Small Business Administration | Office of Inspector General
Massachusetts District Office
— Asian Business
AA & NHPI Connectivity Empowerment Council at The
Boston, MA April 27, 2023
Summit Boston Foundation,
Massachusetts Asian
Restaurant Association
West Virginia District Office
— iBusiness Funding,
SBA Construction Lending
Strategic Banking Partners Virtual April 21, 2023
Webinar
Inc., Partner Engineering and
Science Inc.
HQ/Office of International
Trade Finance Education Trade — Financial &
Miami, FL April 21, 2023
Series International Business
Association
T.H.R.I.V.E Emerging Leaders Kentucky District Office —
Louisville KY April 14, 2023
Program Bellarmine University
Small Business Week Puerto Rico & Virgin Islands
Breakfast and Awards District Office — Puerto Rico Carolina, PR April 14, 2023
Ceremony Bankers Association
New Hampshire District
Small Business Week Awards
Office — New Hampshire Bedford, NH April 7, 2023
Program
Bankers Association
HQ/Office of
National Small Business Week
Communications and Public Virtual/Nationwide April 4, 2023
2023
Liaison — Meta/Facebook
PR & VI District Office &
Government Contracting,
Area I — Camera de
Mercadeo, Industria y
Distribución de Alimentos,
Centro Unido Detallistas de
Puerto Rico, PRiMEX-Puerto
Rico Manufacturing Extension
Federal Contract Inc., PTAC/Apex Accelerator,
San Germán, PR April 4, 2023
Opportunities for Food Department of Economic
Development and
Commerce, Puerto Rico
Manufacturers Association,
Puerto Rico Minority Business
Development Agency
Business Center, Small
Business Technology
Development Center
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U.S. Small Business Administration | Office of Inspector General
HQ/Office of
National Small Business Week
Communications and Public Virtual/Nationwide April 3, 2023
2023
Liaison — Chase
Hawaii District Office —
National Small Business Week Better Business Bureau,
Honolulu, HI April 2, 2023
Awards Event Great West and Pacific, Maui
Chamber of Commerce
National Small Business Week
Rhode Island District Office —
Congressional Breakfast and Pawtucket, RI, North
Rhode Island Society of April 1, 2023
Salute to Small Business Kingstown, RI
Certified Public Accountants
Awards Luncheon
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U.S. Small Business Administration | Office of Inspector General
Appendix G: External Peer Reviews
Section 5(a) of the IG Act requires OIGs to report peer review results in the Semiannual Reports to
Congress. The following information is provided in accordance with these requirements.
Audits Division
The Government Auditing Standards, or Yellow Book, issued by the Comptroller General of the
United States requires that audit organizations performing audits and attestation engagements in
accordance with the Yellow Book must have an external peer review performed by reviewers
independent of the audit organization being reviewed at least once every 3 years. OIG’s Audits
Division was reviewed by the National Science Foundation OIG for the period ending March 31,
2021. SBA OIG received a peer review rating of pass.
Similarly, the Council of the Inspectors General on Integrity and Efficiency requires that
organizations that conduct inspections and evaluations under the Quality Standards for Inspection
and Evaluation, or Blue Book, must have an external peer review at least once every 3 years.
During FY 2023, our Audits Division underwent a Blue Book peer review conducted by the Board of
Governors of the Federal Reserve System OIG. SBA OIG generally met Blue Book standards.
Investigations Division
Section 6(e)(7) of the IG Act, Attorney General Guidelines for Offices of Inspector General with
Statutory Law Enforcement Authority, and the CIGIE Quality Standards for Investigations require
external peer reviews of OIG investigative functions be conducted every 3 years.
In May 2023, Treasury OIG reviewed our Investigations Division and issued a final report on June 6,
2023. Treasury OIG found that the system of internal safeguards and management procedures for
the investigative function of OIG complied with the quality standards established by CIGIE and the
applicable Attorney General’s guidelines. No recommendations were offered.
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Appendix H: Office of Inspector General Reporting
Requirements
Under the Inspector General Act of 1978, as amended, OIG provides independent, objective
oversight to improve the integrity, accountability, and performance of SBA and its programs for
the benefit of the American people.
Although SBA’s programs are essential to strengthening America’s economy, the agency faces
several challenges in carrying out its mission. Access our annual report of the agency’s top
management and performance challenges on our OIG Reports web page.
OIG plays a critical role in addressing these and other challenges by conducting audits to identify
wasteful expenditures and program mismanagement; investigating fraud and other wrongdoing;
and taking other actions to deter and detect waste, fraud, abuse, and inefficiencies in SBA
programs and operations.
OIG’s activities also help to ensure that SBA employees possess a high level of integrity. This is
critical to the proper administration of SBA’s programs because it helps ensure SBA resources
are used by those who need them the most. Copies of OIG reports and other products are
available at our OIG Reports web page.
Reporting Requirements in the Inspector General Act of 1978, As
Amended
Section Reporting Requirement Location
4(a)(2) Review of legislation and regulations Other Significant OIG Activities
5(a)(1) Significant problems, abuses, and deficiencies Throughout
5(a)(2) Recommendations with respect to significant Significant Recommendations from This Reporting
problems, abuses, and deficiencies Period
5(a)(3) Prior significant recommendations on which Significant Recommendations from Prior Reporting
corrective action has not been completed Periods Without Final Action as of September 30,
2019
5(a)(4) Matters referred to prosecutive authorities Legal Actions Summary
5(a)(5) Instances in which requested information was N/A
refused
5(a)(6) List of audit, inspection, and evaluation reports Reports Issued; Reports with Questioned Costs
5(a)(7) Significant reports Throughout
5(a)(8) Audit, inspection, and evaluation statistical tables Statistical Highlights
5(a)(9) Audit, inspection, and evaluation reports with Reports with Recommendations That Funds Be Put to
recommendations that funds be put to better use Better Use
Semiannual Report to Congress, Fall 2023 | 69
U.S. Small Business Administration | Office of Inspector General
5(a)(10) Audit, inspection, and evaluation reports without Reports from Prior Periods with Overdue
management decision, without comment within 60 Management Decisions; Reports from Prior Periods
days, or with unimplemented recommendations with Open Recommendations as of September 30,
2019
5(a)(11) Revised management decisions Significant Revised Management Decisions
5(a)(12) Management decisions with which the Inspector Significant Management Decisions with Which OIG
General disagrees Disagrees
5(a)(13) Information described under section 05(b) of the Federal Financial Management Improvement Act
Federal Financial Management Improvement Act of
1996
5(a)(14)–(16) Peer review results External Peer Reviews
5(a)(17),(18) Investigative statistical tables and supporting metrics Investigations Reporting Statistics
5(a)(19) Investigations involving a senior government Investigations Involving a Senior Government
employee where allegations of misconduct were Employee Where Misconduct Was Substantiated
substantiated
5(a)(20) Whistleblower retaliation Whistleblower Retaliation Cases
5(a)(21) Attempts to interfere with the independence of OIG Instances of Interference
5(a)(22) Each closed inspection, evaluation, and audit not Investigations Involving a Senior Government
disclosed to the public; each closed investigation Employee That Is Closed and Not Disclosed to the
involving a senior government employee not Public
disclosed to the public
Make a Difference
To promote integrity, economy, and efficiency, we encourage you to report instances of fraud,
waste, or mismanagement to the OIG Hotline.*
Visit our OIG Hotline website.
Write or visit:
U.S. Small Business Administration
Office of Inspector General
Investigations Division
409 Third Street, SW (5th Floor)
Washington, DC 20416
*In accordance with Sections 7 and 8L(b)(2)(B) of the Inspector General’s Act, confidentiality of a complainant’s personally
identifying information is mandatory, absent express consent by the complainant authorizing the release of such information.
70 | Fall 2023 Semiannual Report to Congress
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