Full text
Semiannual Report to Congress
April 1, 2020 – September 30, 2020
U.S. Small Business Administration
U.S. Small Business Administration
Office of Inspector General
Office of Inspector General
U.S. Small Business Administration
Office of Inspector General
Washington, D.C. 20416
MESSAGE FROM THE INSPECTOR GENERAL
October 30, 2020
I am honored to submit our Semiannual Report to Congress for the second half of fiscal year 2020.
Every 6 months, we report to Congress on our independent oversight of the U.S. Small Business
Administration (SBA), as required by law.
This semiannual period has been like no other in the history of SBA or the
Office of Inspector General (OIG). The focus of our work has been to
oversee the agency’s management of the enormous resources Congress
provided to help keep small businesses alive during the pandemic since
mid-March when the nation’s economy came to a virtual halt because of
the public health crisis caused by the spread of Coronavirus Disease 2019
(COVID-19).
OIG continues to focus on the most critical risks facing SBA, directing our
resources at the most serious management and performance challenges.
There is no doubt that pandemic oversight is at the top of the list.
Hannibal “Mike” Ware
Inspector General
Our Work this Period
In response to the COVID-19 pandemic, Congress authorized SBA to lend more than $1 trillion to
small business entities through the Paycheck Protection and Economic Injury Disaster Loan programs.
Sadly, the enormous sums authorized by Congress to support small businesses through the
pandemic were also viewed as opportunities by fraudsters.
Pandemic By the end of this reporting period, OIG had received more than
100,000 complaints of fraud via the Hotline. We have launched
Response hundreds of investigations in response.
During this reporting period, OIG issued 10 reports with 24
Oversight recommendations to improve SBA operations and reduce fraud and
unnecessary losses in agency programs. The 10 reports include 3 White
Papers, a Flash Report, and a Management Alert on pandemic-related
issues and fraud.
In addition, OIG investigations resulted in 47 indictments and 8 convictions. Overall, OIG’s
investigations and audits achieved monetary recoveries and savings of $124,513,846. OIG also sent
three present responsibility referrals to SBA. (Present responsibility means the business ethics,
integrity, honesty, and competence of vendors.)
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OIG Staff Dedication and Success
I would be remiss if I did not take this opportunity to
compliment and sincerely thank OIG’s outstanding
employees for their tireless efforts to maintain momentum
on all our projects while exclusively teleworking.
Despite difficult conditions and the need to quickly (and
frequently) adapt to rapid change over the past months, our
auditors, investigators, and support staff have redoubled
their efforts to meet OIG’s mandated mission of promoting
economy, efficiency, effectiveness, and integrity in SBA
programs and operations.
Every member of OIG is committed to protecting the
precious resources of American taxpayers. I look forward to
the impactful work OIG employees will produce in the
coming semiannual period. I am confident that I may speak
for them when I say we all look forward to continuing work
with SBA’s management to address the issues and
challenges facing the agency.
Hannibal “Mike” Ware
SBA Inspector General
U.S. Small Business Administration | Office of Inspector General
Organizational Overview
U.S. Small Business Administration
The mission of the U.S. Small Business Administration (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 fiscal years (FYs) 2018–22 has four key goals:
1. Support small business revenue and job growth.
2. Build healthy entrepreneurial ecosystems and create business friendly
environments.
3. Restore small businesses and communities after disasters.
4. Strengthen SBA’s ability to serve small businesses.
SBA is organized around the functional assistance areas of financial, contracting,
entrepreneurial development, and disaster assistance. The agency also represents small
businesses through an independent advocate and an ombudsman.
SBA’s 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. There also are 6
government contracting area offices. SBA also maintains a vast network of resource partners in
all 50 states, the District of Columbia, Puerto Rico, American Samoa, the U.S. Virgin Islands,
and Guam.
Office of Inspector General
OIG has three divisions and several supporting program offices:
1. The Audits Division audits and reviews SBA programs and operations to ensure they
are economical, efficient, and effective. Our key areas of emphasis are SBA’s loan
programs, disaster assistance, business and entrepreneurial development and
government contracting programs, as well as mandatory and other statutory audit
requirements involving information security and financial reporting. Other work
focuses on high-risk activities and management issues facing SBA.
2. The Investigations Division investigates allegations of illegal and improper activities
involving SBA’s programs, operations, and personnel. OIG criminal investigators carry
out a full range of traditional law enforcement functions. The OIG Hotline receives
allegations of waste, fraud, abuse, or serious mismanagement in SBA or its programs.
Hotline staff members review complaints and may coordinate reviews of allegations
within OIG, SBA program offices, or other government agencies.
The security operations staff conducts required OIG employee background
investigations and screens OIG employees and contractors according to Homeland
Security Presidential Directive-12 background investigations requirements.
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U.S. Small Business Administration | Office of Inspector General
3. The Management and Operations Division provides business support (e.g., budget
and financial management, human resources, information technology, administrative,
and communication) for OIG functions and activities.
The Office of Counsel provides legal and ethics advice to all OIG components; represents
OIG in litigation arising out of or affecting OIG operations; presents training; assists with
prosecuting criminal, civil, and administrative enforcement matters; processes subpoenas;
responds to Freedom of Information and Privacy Act requests; and reviews and comments on
proposed policies, regulations, legislation, and procedures.
OIG’s headquarters is in Washington, D.C. Our field staff, primarily investigative agents, are
located in12 offices in the four regions around the country.
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Table of Contents
Message from the Inspector General .............................................................................................................................. i
Our Work this Period ......................................................................................................................................................... i
OIG Staff Dedication and Success................................................................................................................................... ii
Organizational Overview .................................................................................................................................................iii
U.S. Small Business Administration............................................................................................................................iii
Pandemic Response Oversight ....................................................................................................................................... 1
Audits, Inspections, and Evaluations............................................................................................................................... 1
Investigations .................................................................................................................................................................... 4
Small Business Access to Capital .................................................................................................................................... 7
Audits, Inspections, and Evaluations............................................................................................................................... 7
Investigations .................................................................................................................................................................... 8
Disaster Assistance Program ......................................................................................................................................... 10
Audits, Inspections, and Evaluations............................................................................................................................. 10
Investigations .................................................................................................................................................................. 11
Procurement Assistance ................................................................................................................................................. 12
Audits, Inspections, and Evaluations............................................................................................................................. 12
Investigations .................................................................................................................................................................. 13
Agency Management ..................................................................................................................................................... 16
Other Significant OIG Activities ..................................................................................................................................... 18
OIG Hotline................................................................................................................................................................. 19
Appendix A. Reporting Period Statistical Highlights ................................................................................................... 20
Appendix B. Full Year Statistical Highlights, FY 2020 ................................................................................................. 22
Appendix C. Reports, Recommendations, and Management Decisions .................................................................. 24
Appendix D. Investigations Reporting Statistics .......................................................................................................... 36
Appendix E. Legal Actions Summary ............................................................................................................................ 37
Appendix F. Cosponsored and Other Activities .......................................................................................................... 43
Appendix G. External Peer Reviews .............................................................................................................................. 44
Appendix H. Office of Inspector General Reporting Requirements .......................................................................... 45
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U.S. Small Business Administration | Office of Inspector General
Summary of OIG Oversight Work
Pandemic Response Oversight
SBA’s Disaster Assistance Program is the federal government’s primary program for helping
small businesses, small agricultural cooperatives, and most private, nonprofit organizations after
disasters. SBA offers up to $2 million in economic injury disaster loans to help those eligible to
meet financial obligations and operating expenses.
To support businesses affected by the Coronavirus
Disease 2019 (COVID-19) pandemic, Congress
tasked SBA with lending more than $373 billion in
COVID-19 economic injury disaster funds (EIDLs)
and $20 billion in COVID-19 emergency advance
grants.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act also provided $349 billion for
the creation the Paycheck Protection Program (PPP) under Section 7(a) of the Small Business
Act. Congress added an additional $310 billion to the PPP in April 24, 2020, through the
Paycheck Protection Program and Health Care Enhancement Act .
SBA’s role in the nation’s pandemic response has resulted in the greatest oversight challenge
any OIG in history has ever faced. Our office published a robust oversight plan and immediately
initiated the first reviews focusing on implementation and eligibility of the lending and
entrepreneurial development programs.
SBA’s need to speedily provide relief to small business entities led to reduced controls on
pandemic-related loans and substantially increased risk. It was immediately clear that pandemic
relief efforts had drawn the attention of unscrupulous business owners and greedy criminals.
Within weeks, complaints from lenders and allegations of widespread fraudulent activity
overwhelmed OIG’s Hotline, and we launched hundreds of investigations and initiated audits to
root out the fraud and abuse endangering these critical resources. The following sections
summarize our pandemic oversight work this period.
Audits, Inspections, and Evaluations
During the semiannual period, OIG completed the following work to oversee the resources
allocated for pandemic response:
White Paper: Risk Awareness and Lessons Learned from Prior Audits of Economic Stimulus
Loans
In this White Paper, we listed a roundup of lessons learned and risks identified in
previous audits and reviews that SBA should consider to ensure program integrity
and reduce the risk of financial loss for COVID-19-related loans, which fall under the
7(a) program.
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U.S. Small Business Administration | Office of Inspector General
SBA has improved controls related to existing loan programs, but we noted several risk areas
that could present challenges in issuing and administering requirements under the COVID-19
loan programs. We detailed key considerations for SBA to ensure
program integrity and the timeliness of loans to eligible small
businesses and to reduce the risk of financial loss.
Our review of previous audits and reviews of economic stimulus loan
programs identified areas of risk in SBA’s 7(a) loan program. We
found SBA did not require program participants to submit
documentation, which resulted in inappropriate or unsupported loan
approvals. We determined that SBA should establish proper controls, such as clear and
consistent guidance and training for new stimulus programs before disbursing funds. The
controls should also ensure that program requirements are updated. (Report 20-11) Access the
White Paper here: https://www.sba.gov/sites/default/files/2020-04/SBA_OIG_WhitePaper_20-
11_508.pdf.
Second White Paper: Risk Awareness and Lessons Learned from Audits and Inspections of
Economic Injury Disaster Loans
In this White Paper, we listed a roundup of lessons learned and risks identified in
previous audits and inspections the agency should consider in managing and
mitigating the risk of loss for COVID-19-related disaster loans. The expected
increase in loan volumes and amounts and expedited processing timeframes will
place additional stress on existing controls.
OIG regularly conducts audits and inspections to evaluate management controls and to assess
program integrity, efficiency, and effectiveness of the Disaster Assistance Loan Program. We
compiled findings from those audits and evaluations that identified significant issues and
relevant risks. Previous audits and inspections identified that SBA:
• Issued economic injury disaster loans and noneconomic injury disaster loans without fully
vetting the borrowers’ credit or their ability to repay the loans.
• Issued economic injury disaster loans and noneconomic injury disaster loans to
businesses that did not suffer an economic loss or to businesses outside the timeframe
of the disaster.
• Encountered challenges with having experienced or well-trained staff to provide
accurate and appropriate assistance to borrowers during large-scale disasters.
To ensure program integrity and reduce the risk of financial loss, SBA should ensure that loans
are provided to eligible applicants timely, that borrowers meet all eligibility requirements, and
that it has experienced or well-trained personnel to provide appropriate assistance and handle
the increased loan volume and expedited processing timeframes. (Report 20-12) Access the
White Paper here: https://www.sba.gov/sites/default/files/2020-04/SBA_OIG_WhitePaper_20-
12_508_0.pdf.
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White Paper: Risk Awareness and Lessons Learned from Prior Audits of Entrepreneurial
Development Programs
This White Paper identified risks from previous audits and other reviews that SBA
should consider as it implements mandates to administer federal funds to Small
Business Development Centers, Women’s Business Centers, and resource partner
associations related to the COVID-19 pandemic. The increase in federal funds to
these centers and resource partner associations and expedited timeframes places
additional stress on existing controls.
OIG audits and reviews management controls to assess program integrity, efficiency, and
effectiveness of Small Business Development and Women’s Business Center programs, as well
as previous awards to resource partners for disaster technical assistance. We compiled findings
from those audits and reviews that identified significant issues and relevant risks. (Report 20-13)
Access the White Paper here: https://www.sba.gov/sites/default/files/2020-
04/SBA_OIG_Report_20-13_508.pdf.
Flash Report Small Business Administration's Implementation of the Paycheck
Protection Program Requirements
On April 24, we began our first review of SBA’s implementation of the Paycheck
Protection Program. However, when we received requests for information from a
group of Senators, we produced a Flash Report to detail our preliminary findings.
We analyzed key provisions of Section 1102 of CARES Act, SBA’s Interim Final
Rules, and public guidance intended to further inform stakeholders of SBA’s implementation of
the PPP. We found that SBA’s Interim Final Rules for implementing the PPP and SBA’s
Frequently Asked Questions mostly aligned with the Act.
We identified the following areas, however, that did not fully align with the Act’s provisions:
• Prioritizing underserved and rural markets
• Loan proceeds eligible for forgiveness
• Guidance on loan deferments
• Registration of loans
We offered some suggestions for SBA to consider to better align PPP requirements with the
provisions of the CARES Act. (Report 20-14) Access the Flash Report here:
https://www.sba.gov/sites/default/files/2020-05/SBA_OIG_Report_20-14_508.pdf.
Serious Concerns of Potential Fraud in the Economic Injury Disaster Loan Program
Pertaining to the Response to COVID-19
On July 28, 2020, Inspector General Ware issued a Management Alert to inform
widespread potential fraud in the Economic Injury Disaster Loan and advance grant
programs that required immediate attention and action.
OIG had been inundated with contacts to investigative field offices and the
complaint Hotline reporting more than 5,000 instances of suspected fraud from financial
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U.S. Small Business Administration | Office of Inspector General
institutions. Nearly 3,800 of those reported instances of
suspected fraud came from only six financial institutions. Management
Nine financial institutions reported a combined total of
$187.3 million in suspected fraudulent transactions. Alert
OIG suggested swift management action to engage
financial institutions immediately to identify disbursements that may have been obtained
fraudulently, recover disbursed funds, and prevent additional taxpayer losses. (Report 20-14)
Access the report here: https://www.sba.gov/sites/default/files/2020-07/SBA_OIG_Report_20-
16_508.1.pdf.
Investigations
Houston Entrepreneur Charged with Spending COVID-19 Relief Funds on Improper
Expenses Including Lamborghini and Strip Club
A Houston man was taken into custody on allegations he fraudulently obtained
more than $1.6 million in PPP loans. The complaint alleged the individual was
involved in a scheme to submit fraudulent PPP loan applications to federally insured
banks and other lenders.
The man allegedly used the loan proceeds not for payroll expenses, but for lavish personal
purchases, such as loan money on a Lamborghini Urus, a Rolex watch, and real estate
transactions. He also allegedly spent thousands at strip clubs and other Houston night clubs.
The complaint further alleged he also used a portion of the loan money to buy a 2020 Ford F-
350 pickup truck.
Find more information here: https://www.justice.gov/usao-sdtx/pr/houston-entrepreneur-
charged-spending-covid-relief-funds-improper-expenses-including.
Nine Charged with $24 Million in Fraudulent Small Business Administration Paycheck
Protection Program Loans
The owner of a Florida talent management company and four others were charged
in complaints for their alleged participation in a scheme to file fraudulent loan
applications seeking more than $24 million in PPP loans. Many of those loan
applications were approved and funded by financial institutions, paying out at least
$17.4 million.
“The defendants allegedly participated in an extensive nationwide scheme to file at least 90
fraudulent applications for millions of dollars in PPP loans in exchange for illegal kickbacks of
portions of the loan proceeds,” said an Acting Assistant Attorney General of the Justice
Department’s Criminal Division. Find more information here:
https://www.justice.gov/opa/pr/nine-charged-24-million-covid-relief-fraud-scheme.
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NFL Player Charged in South Florida Federal Court for Alleged Role in $24 Million
COVID-19 Fraud Scheme
Federal prosecutors charged an NFL player for his alleged participation in a
scheme to file fraudulent loan applications seeking more than $24 million in
forgivable PPP loans.
The complaint alleged the NFL player conspired with others to fraudulently secure
millions of dollars loans. Early in the scheme, an individual allegedly got a
fraudulent PPP loan for his talent management company using falsified documents.
After submitting that application, the individual then began to work with other co-conspirators,
including the NFL player, on a scheme to submit numerous fraudulent PPP loan applications for
loan applicants and take kickbacks in return for getting the forgivable loans for them.
The scheme involved the preparation of at least 90 fraudulent applications worth more than $24
million dollars. Many of those loan applications were approved and funded by financial
institutions, paying out at least $17.4 million. Access more information here:
https://www.justice.gov/usao-sdfl/pr/nfl-player-charged-south-florida-federal-court-alleged-role-
24-million-covid-relief.
Two Men Charged in Miami Federal Court for Exploiting Exploit Covid-19 Relief
Programs
Federal prosecutors charged two Florida residents with bank fraud conspiracy for
allegedly using synthetic identities to commit crimes, including defrauding banks
and stealing more than $3 million from Covid-19 relief programs.
Synthetic identities combine stolen real identity information, such as social security
numbers, with fraudulent identity information, such as fake names and dates of
birth. Criminals create synthetic identities and use them to open fraudulent bank and credit card
accounts and make fraudulent purchases.
From about April through July of 2020, members of the conspiracy allegedly used the already-
established synthetic identities and associated shell companies to fraudulently apply for PPP
help. According to the complaint, the defendants fraudulently sought and received more than
$3 million dollars in PPP relief. This money was paid to companies registered to the synthetic
identities. Access more information here: https://www.justice.gov/usao-sdfl/pr/two-men-who-
allegedly-used-synthetic-identities-existing-shell-companies-and-prior-0.
Florida Man and Two Massachusetts Men Charged in Scheme to Defraud PPP and EIDL
Programs
A Florida man and two Massachusetts men were charged and arrested in the
Southern District of Florida for their alleged participation in a fraud and money
laundering-ring established in 2019 to carry out fraudulent email schemes. The men
later used the scheme to fraudulently secure about $2 million from Covid-19 relief
programs.
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U.S. Small Business Administration | Office of Inspector General
The criminal complaint charges one of the Massachusetts men and the Florida man with counts
of bank fraud, and money laundering. Both were arrested. The other Massachusetts man was
also charged with false statements and aggravated identity theft and is still at large.
The investigation disclosed that in June and July 2020, these men used inactive, as well as newly
created shell companies to submit false and fraudulent loan applications under two government
relief programs to receive almost $2 million in government funding.
OIG conducted the investigation jointly with the Federal Bureau of Investigation, Miami Division;
Treasury Inspector General for Tax Administration; Cyber Crimes Division, Washington, D.C.;
the United States Secret Service, Miami; and the Federal Deposit Insurance Corp. Office of
Inspector General, Miami, in conjunction with the U.S. Attorney’s Office.
Virginia Man Indicted for Defrauding COVID-19 EIDL Program.
A Virginia man was indicted in the Eastern District of Virginia on multiple counts of
wire fraud, false statements to a financial institution, engaging in monetary
transactions in property derived from specified unlawful activity, and theft of
government property.
The indictment was based on evidence that he fraudulently obtained a Covid-19
EIDL. The application contained false statements about his business, income, and criminal
history, qualifying the man for a $197,000 EIDL loan.
The Virginia man also applied for a second EIDL using false information about a second
business. This loan was not funded. Additionally, he applied for a PPP that was not funded.
OIG conducted the investigation jointly with the U.S. Postal Inspection Service, the Federal
Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation, under the
direction of the U.S. Attorney’s Office, Eastern District of Virginia, Newport News Division.
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Small Business Access to Capital
SBA provides small businesses with capital and financial assistance through several key
programs. SBA has a financial assistance portfolio of guaranteed and direct loans that totaled
about $623 billion as of June 30, 2020.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.
For example, the agency’s largest lending program, 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 many 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 and loan agent 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.
Audits, Inspections, and Evaluations
Office of Inspector General High Risk 7(a) Loan Review Program
This Management Advisory presented the evaluation results of one 7(a) loan as part
of our High-Risk 7(a) Loan Review Program. We set out to determine if the high‐
dollar/early‐defaulted 7(a) loans were originated and closed in accordance with
SBA rules, regulations, policies, and procedures and whether material deficiencies
existed that warranted recovery of guaranteed payments to lenders.
Our review of one high-dollar/early defaulted 7(a) loan showed the lender did not provide
sufficient evidence to support that it had closed the loan in accordance with SBA’s
requirements. The lender did not have adequate documentation to substantiate reasonable
assurance that it met requirements for equity injection.
As a result, the lenders’ material noncompliance with SBA requirements while closing the loan
resulted in a potential loss to SBA of approximately $2.1 million. We recommended that SBA
require the lender to bring the loan into compliance or seek recovery of approximately $2.1
million. SBA management agreed with the recommendation and said if the problems were not
corrected, SBA would recover the funds from the lender. Access Report (20-18) here:
https://www.sba.gov/sites/default/files/2020-08/SBA%20OIG%20Report%2020-18.pdf.
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U.S. Small Business Administration | Office of Inspector General
Investigations
Former Maryland Bank President Pled Guilty in Bank Fraud Scheme
A Maryland woman, who was a former President of Maryland Bank, pled guilty in
federal court on multiple counts of conspiracy, bribery, and false statements. The
woman had been previously indicted on similar charges.
The investigation disclosed that from 2012 to 2013, the woman conspired with an
agent of a real estate development company to defraud the Maryland bank and
another bank by purchasing a home through false pretenses, representations, and promises.
The woman agreed to help the agent secure a $650,000 line of credit from the Maryland Bank in
exchange for the agent agreeing to serve as the straw purchaser of a property sought by the
woman.
OIG jointly conducted the investigation with the Federal Housing Finance Agency, Office of
Inspector General; the Federal Deposit Insurance Corporation, Office of Inspector General; and
the Special Inspector General for the Troubled Asset Relief Program, under the direction of the
U.S. Attorney’s Office, U.S. District of Maryland.
North Carolina Man Indicted in SBA Bank Fraud Scheme
A North Carolina man was indicted on multiple counts of aggravated identity theft,
bank fraud, wire fraud, concealment of money laundering, and false statements to a
bank in connection with his application for two SBA 7(a) loans totaling $845,200.
The indictment was based on evidence that man fraudulently obtained two SBA-
guaranteed 7(a) loans totaling $845,200 by making various false statements and
submitting fraudulent documents, including fraudulent applications and fake supporting
documentation. As part of his fraudulent schemes, he also stole the identity of at least one
individual and used various falsified documents in the victim’s name, including a falsified United
States passport.
The North Carolina man used the fraudulently obtained funds for personal expenses such as
trips to casinos, rent and car payments, and purchases at restaurants and bars throughout North
Carolina, Florida, and Las Vegas.
OIG conducted the joint investigation with the FBI, under the direction of the U.S. Attorney’s
Office, Western District of North Carolina, Charlotte Division.
Georgia Reality Television Personality Indicted for Ponzi Scheme
A Georgia reality television personality was indicted on multiple counts of wire
fraud, bank fraud, false statements, and money laundering in the Northern District
of Georgia in an elaborate Ponzi scheme. The indictment alleged that from
approximately August 2014 through May 2020, the TV personality posed as the
owner of a profitable trucking business.
The trucking business never generated enough revenue to cover its expenses. However, the
personality persuaded approximately 20 individuals to invest more than $5 million in his
trucking business.
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The man promised he would use the investors’ money to purchase and operate trucks. Instead,
he used the investors’ money to pay his personal debts and expenses and fund an extravagant
lifestyle for himself. During the wire fraud scheme, he transferred more than $5 million to a
casino to cover his personal gambling and entertainment expenses.
The TV personality also signed and applied for an SBA-guaranteed PPP loan in the name of his
trucking business, stating that the business had 107 employees and an average monthly payroll
of $1,490,200. Seeking a loan in the amount of $3,725,500, he certified the loan proceeds
would be used to “retain workers and maintain payroll or make mortgage interest payments,
lease payments, and utility payments, as specified under the Paycheck Protection Program
Rule.”
Instead, he used the money for unauthorized personal expenses such as paying past-due child
support, paying restitution in a previous fraud case, cash withdrawals, custom jewelry, the
purchase of a Rolls-Royce car, payments to associates assisting in the Ponzi scheme, and
payments to help an associate start a new business.
The personality allegedly structured these financial transactions to conceal and disguise the
nature, location, source, ownership, and control of the proceeds. When the PPP lender became
suspicious of information provided in support of the SBA PPP loan application, the personality
submitted false bank statements for the trucking business although the account had been
closed.
OIG conducted the joint investigation with the Federal Bureau of Investigation and U.S.
Attorney’s Office, Northern District of Georgia.
California Man Charged for Making False Statements to Secure SBA Loans
In 2019, a California man made several material omissions and false statements to
secure two loans to his business for a total of approximately $5 million from an SBA
preferred lender. SBA guaranteed 75 percent of the loans from the lender to the
business under the SBA’s Section 7(a) program.
In 2020, the man applied for and received approximately $1.7 million through the
PPP from another lender. In the application, he falsely certified he paid employee salaries and
payroll taxes. In fact, he had not been paying payroll taxes for employees as required since mid-
2019. In May 2020, a criminal complaint was issued and in June the man was arrested for
making false statements and omissions to obtain SBA loans.
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U.S. Small Business Administration | Office of Inspector General
Disaster Assistance Program
Disaster assistance has been part of the agency since its inception in 1953. Through its Office of
Disaster Assistance, SBA provides long-term, low-interest financial assistance to businesses of all
sizes, private nonprofit organizations, homeowners, and renters following a disaster. Each year,
SBA approves hundreds of millions of dollars in disaster assistance loans.
The Disaster Loan Program is the only form of SBA assistance not limited to small businesses.
The program’s disaster loans are the primary form of federal assistance for repairing and
rebuilding nonfarm, private sector disaster losses.
The program includes four categories of loans for disaster-related losses:
• Home disaster loans
• Business disaster loans
• Economic injury disaster loans
• Military reservist economic injury loans
Audits, Inspections, and Evaluations
Audit of SBA’s Compliance with the Debt Collection Improvement Act, as Amended
This report presented the results of our audit to determine if SBA was in compliance
with the Debt Collection Improvement Act of 1996, as amended, for delinquent
disaster loans as of April 30, 2019. Under the law as amended in 2014, if a disaster
loan is delinquent for 120 days, the SBA is required to refer the debtors to the U.S.
Department of the Treasury Offset Program for administrative offset. The Act also
requires SBA to transfer all disaster loans that are 180-days delinquent to Treasury for collection
action unless they are exempt.
We found SBA was not fully in compliance with the Debt Collection Improvement Act, because
the agency had not sent more than 250 past-due loans totaling more than $30.5 million and 180
days or more delinquent to Treasury Cross-Servicing for collection. None of the 250 loans that
SBA was maintaining without sending to Treasury Cross-Servicing were exempt from collection
action.
In addition, several delinquent loans were incorrectly classified as exempt from transfer to
Treasury for collection. In our sample of 20 loans, eight (40 percent) totaling $1.2 million, were
incorrectly classified as exempt.
We recommended and SBA agreed to 10 actions to strengthen its controls and improve
compliance with the Debt Collection Improvement Act. Management’s implemented and
planned actions will resolve all our recommendations, including conducting loan reviews,
revising, and establishing policies and procedures, and conducting training to ensure
compliance with the Debt Collection Improvement Act. (Report 20-20) Access the report here:
https://www.sba.gov/sites/default/files/2020-09/SBA%20OIG%20Report%2020-20.1.pdf.
10 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Investigations
Customs and Border Protection Agent Sentenced for Hurricane Harvey Fraud Disaster
Fraud
An employee of the US Department of Homeland Security, Customs and Border
Protection, pled guilty in federal court to engaging in monetary transactions in
property derived from specified unlawful activity. The Texas man was sentenced to
3 years of probation, and his federal employment terminated.
He had received $53,000 for alleged damage caused by Hurricane Harvey to a
residential rental property in Houston. The man failed to send in receipts and refused an onsite
inspection of the damaged property. The investigation revealed that the property received no
hurricane damage and that he had used the funds to pay off credit cards and send an
international wire to a friend in Kenya.
We conducted this investigation jointly with the Department of Homeland Security OIG.
Semiannual Report to Congress, Fall 2020 | 11
U.S. Small Business Administration | Office of Inspector General
Procurement Assistance
Each year, the federal government spends hundreds of billions of dollars in federal contracts to
purchase goods and services. SBA has worked to maximize opportunities for small business
firms to receive these contract awards. In FY 20, the federal government aimed for 23 percent of
these award dollars to go to small businesses, as mandated in the Small Business Act.
SBA has specific programs that focus on strengthening particular types of small businesses,
including firms owned and controlled by service-disabled veteran-owned small businesses and
women-owned small businesses, as well as small businesses that are disadvantaged or located
in historically underused business zones (HUBZones).
The HUBZone Program helps small businesses stimulate their economically challenged local
economies. Similarly, to help small, disadvantaged businesses gain access to federal and private
procurement markets, SBA’s Section 8(a) Business Development Program offers a broad range
of business development support, such as mentoring, procurement assistance, business
counseling, training, financial assistance, surety bonding, and other management and technical
assistance.
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 Association, and women’s business centers.
SBA also designed the Boots to Business Program to provide transitioning service members
interested in exploring business ownership or other self-employment opportunities with
technical assistance and access to information on available resources and on start-up capital.
These programs require effective and efficient management, outreach, and service delivery.
Audits, Inspections, and Evaluations
SBA's Corrective Actions to Reduce 8(a) Firms Eligibility Risks
This report presented the results of our inspection of SBA’s corrective actions for
two recommendations made in previous Office of Inspector General audit reports
on the 8(a) Business Development Program. Our most recent audits of SBA’s 8(a)
program have identified internal control weaknesses that allowed ineligible firms to
be certified and participate in the program.
This follow-up inspection focused on two significant weaknesses OIG identified during previous
reviews of SBA’s 8(a) program eligibility and continuing eligibility processes.
In SBA OIG Audit Report 16-13, SBA’s 8(a) Business Development Program Eligibility, we
reported that SBA did not properly document that 8(a) firms admitted in the program met all
eligibility criteria because managers overturned lower-level reviewers’ recommendations for
denial without fully documenting how the identified eligibility concerns had been resolved.
In addition, in SBA OIG Audit Report 18-22, Improvements Needed in SBA’s Oversight of 8(a)
Continuing Eligibility Processes, we reported that SBA did not perform required continuing
eligibility reviews when it received specific and credible complaints about firm eligibility and did
not log all complaints referred by the OIG Hotline.
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We inspected SBA’s corrective actions for two recommendations made to address these
weaknesses and verified the corrective actions SBA implemented effectively ensured that
program officials justified their recommendations to admit firms applying to the 8(a) program
and program officials tracked complaints received about firms’ participating in the 8(a) program.
(Report 20-19) Access the report at: https://www.sba.gov/sites/default/files/2020-
09/Final%20Report%20-%208%28a%29%20BD%20Program%20follow%20up-508.pdf
Investigations
Oklahoma Man to Pay More than $1.3 Million in Restitution
An Oklahoma man was sentenced in federal court to 48 months in prison and
ordered to pay $1,355,068 in restitution for his role in a conspiracy to commit
bribery and theft by an agent of an Indian tribal government receiving federal
funds. This investigation was based on allegations received from the Federal
Bureau of Investigations about an Oklahoma tribally owned Section 8(a) company.
The company was formed by a former tribal town chief. Even though the tribal town was a 51
percent owner of the 8(a) company, the town had no oversight and was not even sure what
services the 8(a) company performed.
Although the tribal town had requested financial documents from the 8(a) company for several
years, the 8(a) company declined to provide documents, claiming they were classified because
of the nature of the contracts the 8(a) company serviced. In addition, other tribal town elected
officials alleged that the former chief had formed the 8(a) company for his personal gain.
The investigation determined that the Oklahoma man helped establish the 8(a) company and
other business entities established under the tribal town. He and a woman serving as the
controller and chief financial officer for these tribal town-owned businesses diverted funds to the
man for personal expenses unrelated to tribal town business. Between 2012 and 2019, the
unauthorized withdrawals from the business entities were more than $1.2 million.
Finally, a second man, the chairman of the Economic Development Authority of the tribal town,
engaged in wrongdoing. The authority identified, planned, initiated, and developed economic
strategies and activities on behalf of the town. The chairman pled guilty to accepting $61,900 in
payments from the Oklahoma man who intended to influence or reward the chairman in
deciding ongoing or future business transactions for the town. The chairman was sentenced to
12 months in prison and ordered to pay a $10,000 fine.
Five Ohio Individuals Sentenced in Bribery Scheme
Five people in Ohio were sentenced in schemes to defraud SBA, the U.S. Navy, Air
Force, Department of Defense, and the Department of Veterans Affairs by paying
bribes and fraudulently obtaining at least $15 million in government set-aside
contracts.
One individual owned several businesses that had been part of the SBA’s 8(a)
Business Development Program. One business had graduated from the program in late 2009
and was no longer eligible for the 8(a) set-aside contracts.
Semiannual Report to Congress, Fall 2020 | 13
U.S. Small Business Administration | Office of Inspector General
The primary subject recruited 8(a) and veteran-owned small businesses to bid on contracts and
pass them through to other ineligible businesses in exchange for a fee. On at least two
occasions, the primary subject also purchased 49 percent of the 8(a) or the veteran-owned small
business.
In addition, a civilian engineering technician for the United States Navy accepted a series of
bribes and kickbacks, including cash, meals, a hunting trip, a fence, and a vehicle, in return for
using his official position with the Navy to the defendants their businesses. These benefits
included assistance in finding and securing government contracts and approval of invoices for
payments to pass-through companies used by the defendants.
One man was sentenced to 36 months’ probation and a $15,900 fine, two individuals were
sentenced to 24 months’ probation and ordered to pay $10,200 and $5,300. Two additional
individuals were sentenced to 12-month probation and ordered to pay $5,000 fines.
OIG conducted this investigation jointly with the NASA Office of Inspector General, Department
of Defense Criminal Investigative Service, Department of Veterans Affairs Office of Inspector
General, and the Naval Criminal Investigative Service.
Georgia Man Pled Guilty for Participation in 8(a) Program Kickback and Bribery Scheme
A Georgia man who owned a defense contracting company entered a guilty plea in
the Southern District of Georgia on a charge of conspiracy. By entering the plea, he
admitted to participating in a kickback and bribery scheme involving government
contracts at Fort Gordon, Georgia, to build and modernize its communications
network. The scheme involved active duty and retired military personnel. The man
agreed to forfeit $1,131,861.66.
OIG conducted the investigation jointly with U.S. Army Criminal Investigation Division
Command and the Defense Criminal Investigative Service. Prosecution is being handled by the
U.S. Attorney's Office, Southern District of Georgia, Augusta Division, Augusta, Georgia.
Virginia Business and a Group of Seven Individuals Indicted for Defrauding SBA Service-
Disabled Veteran-Owned Small Business Program
A Virginia-based business and seven participating individuals were indicted in the
Eastern District of Virginia and charged with multiple counts of conspiracy to
defraud and commit offenses against the United States, wire fraud, mail fraud, entry
of goods falsely classified, entry of goods by false statements, smuggling goods,
and criminal forfeiture.
The indictment alleged that from at least 2011 through 2018, the group repeatedly and
fraudulently violated federal contracting requirements by engaging in fraud related to the
Service-Disabled Veteran-Owned Small Business set-aside program and sourcing merchandise
from China and concealing such supplying of merchandise to the United States and its
agencies.
The company received three set-aside contracts by using an unindicted figurehead owner to
appear to comply with the contracting requirements governing such contracts. The company
14 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
was awarded various federal government contracts that required it to comply with the Buy
American Act, the Berry Amendment, and the Trade Agreements Act.
Even though the group was subject to such requirements, they repeatedly tried to bring in
merchandise manufactured in China and falsely represented to various government contracting
agencies that the merchandise was made in the United States.
OIG conducted the case jointly with the Defense Criminal Investigative Service, the Naval
Criminal Investigative Service, U.S. Immigration and Customs Enforcement, and the U.S.
Department of State, Office of Inspector General. The U.S. Attorney’s Office for the Eastern
District of Virginia, Newport News Division, is handling the prosecution.
Washington Man Created Alias to Fraudulently Obtain Government Contracts
The investigation revealed the man used various aliases to procure government
contracts. The individual was debarred from government contracting from 2014 to
2017. During that time, he formed various small businesses with associates to bid
on and be awarded set-aside contracts.
Companies he financially controlled during the period of debarment were awarded
69 federal contracts valued at more than $1 million. Many of the contracts were set-aside for
small businesses. Once awarded contracts, he devised a scheme to defraud other government
contractors by subcontracting the work and not making payment to those subcontractors.
In another scheme to defraud government contractors, he presented himself as a federal
contracting official, created fictitious contracting documents, and passed said documents to
victim businesses to perform work under the false understanding they had been awarded a
prime contract with the U.S. government. Once the contracts were complete, those victim
businesses were unable to obtain payment.
OIG conducted the investigation in conjunction with the Defense Criminal Investigative Service;
U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit; General Service
Administration, Office of Inspector General; U.S. Department of Health and Human Services,
Office of Inspector General; U.S. Department of Justice, Office of Inspector General; Internal
Revenue Service Criminal Investigation Division; U.S. Department of State, Office of Inspector
General; Department of Homeland Security, Office of Inspector General; Department of
Commerce, Office of Inspector General.
Semiannual Report to Congress, Fall 2020 | 15
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 these
efforts, OIG works 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.
Audits, Inspections, and Evaluations
Independent Auditors’ Report on SBA’s Compliance with Improper Payments Act
We contracted with independent certified public accounting firm KPMG LLP for a
performance audit as required by the Improper Payments Elimination and Recovery
Act of 2010 (IPERA). The objectives of the engagement were to review the payment
integrity section of SBA’s FY 2019 Agency Financial Report to determine whether
the agency is in compliance with the Improper Payments Information Act of 2002,
as amended. KPMG also evaluated the agency’s accuracy and completeness of reporting and
performance in reducing and recapturing improper payments.
KPMG conducted the engagement in accordance with consulting services standards
established by the American Institute of Certified Public Accountants, the standards applicable
to performance audits contained in the U.S. Government Accountability Office’s Government
Auditing Standards issued by the Comptroller General of the United States, and guidance as
defined by the Council of the Inspectors General on Integrity and Efficiency’s “Guidance for
Improper Payments Elimination and Recovery Act Compliance Reviews.”
The attached independent auditors’ report presents KPMG’s findings on the agency’s improper
payment reporting required under IPERA. KPMG reported:
• SBA complied with the six IPERA reporting requirements.
• Improvement was needed over the completeness and accuracy of improper payment
reporting.
• SBA reduced the improper payment rates for most programs.
The report contains four recommendations to improve the effectiveness of improper payment
controls. These recommendations will remain open until OIG receives documentation
demonstrating that these recommendations have been addressed. (Report 20-15) Access the
report here: https://www.sba.gov/sites/default/files/2020-05/SBA_OIG_Report_20-15_508.pdf
Evaluation of Certify.SBA.gov
This report presents the results of our evaluation of SBA’s most recent information
technology (IT) initiative intended to improve SBA’s small business contracting
programs, Certify.SBA.Gov. Our scope included Certify’s development,
implementation, and oversight from FYs 2015-19. SBA’s Business Technology
Investment Committee ratified Certify’s objectives and approved an 11-year project
lifecycle cost estimate of $45 million on May 20, 2015.
16 | Semiannual Report to Congress, Fall 2020
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Certify was envisioned to be the single gateway to all of SBA’s contracting programs and a
vehicle to improve small business participation in federal contracts. The primary goal of Certify
was to streamline the certification process and improve productivity by providing management
views of in-progress applications, automate repetitive tasks, make document review
straightforward, and provide tools for identifying fraud, waste, and abuse.
We found that Certify has not accomplished its objectives to
significantly improve SBA’s certification processes or facilitate
small business participation in federal contracts. Although SBA
has spent 5 years and more than $30 million on the development
of Certify and it offers some improved functionality, it does not
have many of the essential search, analytical, and reporting tools
it was supposed to have.
To compensate for Certify’s shortcomings, program analysts must use labor intensive methods
external to the Certify platform, reducing Certify’s expected benefits for both SBA contracting
program analysts and program participants.
We identified a need for improved planning and performance oversight throughout this project.
As a result, Certify did not meet its original goal of improving SBA’s small business certification
process, and the $30 million investment has not yielded its intended results. Moving forward,
SBA plans to migrate to another platform to address Certify’s limitations. However, until SBA
addresses these oversight weaknesses, there is a continued risk of repeating past project
shortcomings.
We made nine recommendations to improve SBA’s system development and contracting
program management in the following areas: requirements, baseline management, risk
management, investment monitoring, and reporting. Although SBA management agreed or
partially agreed with all recommendations, its planned actions only resolved three
recommendations. We will work with SBA management to resolve the remaining six
recommendations through the audit follow-up process. (Report 20-17) Access the report here:
https://www.sba.gov/sites/default/files/2020-07/SBA_OIG_Report_20-17_508.pdf
Semiannual Report to Congress, Fall 2020 | 17
U.S. Small Business Administration | Office of Inspector General
Other Significant OIG Activities
OIG Background Investigations Ensure Integrity
During this reporting period, OIG initiated 53 background investigations and issued 5 security
clearances for OIG employees and contractors. OIG adjudicated 10 background investigative
reports.
OIG Promotes 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 vendors. These present responsibility referrals often result in suspensions, debarments, and
similar administrative enforcement actions.
These actions protect taxpayer funds from contract vendors who are not a good risk for the
government. During this reporting period, OIG sent three present responsibility referrals to
SBA.
A typical OIG referral contains a summary of allegations, evidence supporting the case, and a
draft notice of suspension or proposed debarment in certain instances. 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.
OIG Trains Multiple Agencies on Small Business Procurement Integrity and
Other Oversight Concerns
On May 6, 2020, we presented the sixth annual Small Business Procurement Integrity Seminar
virtually. The event was a continuation of our partnership with the Council of the Inspectors
General on Integrity and Efficiency Training Institute. We trained almost 100 members of the
federal oversight community to identify, develop, and pursue small business contracting fraud.
OIG 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 67 proposed revisions of these program directives and submitted comments
designed to improve 27 of these initiatives.
2004 Legislation Requires SBA Regulations and OIG Approval of SBDC
Surveys
In December 2004, Congress amended Section 21(a)(7) of the Small Business Act (15 U.S.C.
648(a)(7)) to restrict disclosing information regarding individuals or small businesses that have
18 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
received assistance from a Small Business Development Center and limit the agency’s use of
such information. The provision also required SBA to issue regulations about disclosures of the
information for use in conducting financial audits or SBDC client surveys. In 2009, SBA officials
told OIG the agency would issue regulations as required by the statute. In April 2014, SBA sent
the proposed regulations for publication in the Federal Register for public comment.
In addition, Section 21(a)(7) of the Small Business Act states that until these 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, and must also
include this approval in OIG’s Semiannual Report to Congress. SBA did not submit any surveys
OIG review during the reporting period.
OIG Hotline
OIG’s Hotline reviews allegations of waste, fraud, abuse, or serious mismanagement within SBA
or its programs from employees, contractors, and the public. During this reporting period, the
Hotline received 104,913 complaints, 100 times more than the total of 742 complaints received
in 2019.
Complaints come to OIG via online submission on the SBA OIG
website, telephone, e-mail, and posted mail. Hotline staff
conducts a preliminary review of each allegation and may consult
with OIG’s Investigations Division, Audits Division, and Office of
Counsel to determine the appropriate course of action.
Referrals within OIG may result in corrective actions, audits, or
administrative, civil, or criminal investigations. Matters referred to
SBA program offices for further action are monitored by Hotline staff for prompt response,
adequate resolution of the allegations, and documentation of any corrective action taken.
In 2020, OIG was recertified under the Office of Special Counsel 2302(c) Certification Program.
The program requires federal agencies to inform their workforces about the rights and
remedies available to them under the Whistleblower Protection Act, the Whistleblower
Protection and Enhancement Act, and related civil service laws. In accordance with the
certification requirements, the whistleblower coordinator trained all OIG and agency employees
on protections against whistleblower retaliation and other prohibited personnel practices. OIG
was initially certified in 2015.
Comprehensive information on whistleblower protection may be found here:
https://www.sba.gov/oig/whistleblower-rights-and-protection.
Semiannual Report to Congress, Fall 2020 | 19
U.S. Small Business Administration | Office of Inspector General
Appendixes
Appendix A. Reporting Period Statistical Highlights
Summary of OIG Dollar Accomplishments in dollars ($)
Dollar Accomplishments as a Result of Investigations and Related
Activities
Potential Investigative Recoveries and Fines 46,747,462
Asset Forfeitures Attributed to OIG Investigations 0
Loans/Contracts Not Approved or Canceled as a Result of 26,293,440
Investigations
Investigations Subtotal 73,040,902
Dollar Accomplishments as a Result of Audit Activities
Disallowed Costs Agreed to by Management 51,472,944
Recommendations that Funds Be Put to Better Use Agreed to by
Management
Audit Subtotal 51,472,944
Total OIG Dollar Accomplishments $124,513,846
Efficiency and Effectiveness Activities Related to Audit, Other Reports, and Follow-up
Activities
Reports Issued 10
Recommendations Issued 24
Dollar Value of Costs Questioned $0
Dollar Value of Recommendations that Funds Be Put to Better Use $0
Recommendations with Management Decisions 33
Recommendations without a Management Decision 13
Collections as a Result of Questioned Costs $347,673
Indictments, Convictions, and Case Actions
Indictments from OIG Cases 47
Convictions from OIG Cases 8
Cases Opened 257
Cases Closed 62
SBA Personnel Actions Taken as a Result of Investigation
Dismissals 1
Resignations and Retirements 0
Suspensions 0
Reprimands 1
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Program Actions Taken During the Reporting Period as a Result of OIG Action
Present Responsibility Referrals to the Agency 3
Pending at the Agency as of September 30, 2020 39
Suspensions Issued by the Agency 50
Proposed Debarments Issued by the Agency 0
Final Debarments Issued by the Agency 5
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 67
Comments Provided by OIG to Improve Legislation, Regulations, Standard Operating
Procedures, and Other Issuances 27
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U.S. Small Business Administration | Office of Inspector General
Appendix B. Full-Year Statistical Highlights, FY 2020
Summary of OIG Dollar Accomplishments
Dollar Accomplishments as a Result of Investigations and
Related Activities
Potential Investigative Recoveries and Fines $51,389,743
Asset Forfeitures Attributed to OIG Investigations $69,000
Loans and Contracts Not Approved or Canceled as a Result
of Investigations $26,293,440
Investigations Subtotal $77,752,183
Dollar Accomplishments as a Result of Audit Activities
Disallowed Costs Agreed to by Management $64,796,672
Recommendations that Funds Be Put to Better Use Agreed
to by Management $0
Audit Subtotal $64,796,672
Total OIG Dollar Accomplishments $142,548,855
Efficiency and Effectiveness Activities Related to Audit, Other Reports,
and Follow-up Activities
Reports Issued 20
Recommendations Issued 91
Dollar Value of Costs Questioned $64,804,274
Dollar Value of Recommendations that Funds Be Put to Better Use $0
Recommendations with Management Decisions 88
Recommendations without Management Decisions 13
Collections as a Result of Questioned Costs $393,172
Indictments, Convictions, and Case Actions
Indictments from OIG Cases 63
Convictions from OIG Cases 32
Cases Opened 295
Cases Closed 118
SBA Personnel Actions Taken as a Result of Investigations
Dismissals 1
Resignations and Retirements 1
Suspensions 0
Reprimands 1
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Program Actions Taken During the Fiscal Year as a Result of OIG Action
Present Responsibility Referrals to the Agency 47
Pending at the Agency as of September 30, 2020 36
Suspensions Issued by the Agency 24
Proposed Debarments Issued by the Agency 24
Final Debarments Issued by the Agency 27
Present Responsibility Matters Declined by the Agency 4
Administrative Agreements Entered by the Agency in Lieu of Debarment 1
Present Responsibility Actions by Other Agencies 15
*OIG does not count matters where SBA has ceded lead agency as declinations
Agency Legislative and Regulatory Proposals Reviewed
Legislation, Regulations, Standard Operating Procedures, and
Other Issuances Reviewed 140
Comment Memoranda Provided by OIG to Improve Legislation,
Regulations, Standard Operating Procedures, and Other Issuances 28
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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
Independent Auditors’ Report on SBA’s Compliance with 20-15 5/12/2020 $0 $0
Improper Payments Elimination and Recovery Act of 2010
Evaluation of Certify.SBA.Gov 20-17 7/30/2020 $0 $0
Program Subtotal 2 — $0 $0
Credit/Capital Programs
Title Report Issue Date Questioned Funds for
Number Costs Better Use
White Paper: Risk Awareness and Lessons Learned from 20-11 4/3/2020 $0 $0
Prior Audits of Economic Stimulus Loans
Flash Report: Small Business Administration’s 20-14 5/8/2020 $0 $0
Implementation of the Paycheck Protection Program
Requirements
Office of Inspector General High Risk 7(a) Loan Review 20-18 8/25/2020 $0 $0
Program
Audit of SBA’s Compliance with the Debt Collection 20-20 9/30/2020 $0 $0
Improvement Act, as Amended
Program Subtotal 4 — $0 $0
Disaster Assistance
Title Report Issue Date Questioned Funds for
Number Costs Better Use
White Paper: Risk Awareness and Lessons Learned from 20-12 4/3/2020 $0
Audits and Inspections of Economic Injury Disaster Loans
Serious Problems and Deficiencies in Internal Controls 20-16 7/28/2020 $0 $0
Over Economic Injury Disaster Loan Program Pertaining
to the Response to COVID-19
Program Subtotal 2 — $0 $0
Contracting and Counseling Programs
Title Report Issue Date Questioned Funds for
Number Costs Better Use
White Paper: Risk Awareness and Lessons Learned from 20-13 4/23/2020 $0 $0
Prior Audits Entrepreneurial Development Programs
SBA’s Corrective Actions to Reduce 8(a) Firm Eligibility 20-19 9/15/2020 $0 $0
Risks
Program Subtotal 2 — $0 $0
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Reports with Questioned Costs
Reports Recommendations* Questioned Unsupported
Costs** Costs***
A. No management decision made by 1 2 $51,472,944 $51,472,944
March 31, 2020
B. Issued during this reporting period 0 0 $0 $0
Subtotal (Universe from which 1 2 $51,472,944 $51,472,944
management decisions could be made in
this reporting period)
C. Management decisions made during 1 2 $51,472,944 $51,472,944
this reporting period
(i) Disallowed costs 1 2 $51,472,944 $51,472,944
(ii) Costs not disallowed 0 0 $0 $0
D. No management decision made by 0 0 $0 $0
September 30, 2020
* 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
Reports Recommendations Recommended
Funds for
Better Use
A. No Management Decision Made by March 31, 2020 — — —
B. Issued During this Reporting Period — — —
Subtotal (Universe from which Management — — —
Decisions Could Be Made in this Reporting Period)
C. Management Decisions Made During this Reporting — — —
Period
(I) Recommendations Agreed to by SBA Management — — —
(Ii) Recommendations Not Agreed to by SBA — — —
Management
D. No Management Decision Made by — — —
September 30,2020
Reports from Prior Periods with Overdue Management Decisions
Report Report Title Issue Date Recommendation Reason for Delay Timetable for
Number Resolution
None this period
Reports from Prior Periods with Open Recommendations as of September 30, 2020
Report Title Date Issued Number of Open Aggregate
Number Recommendations Potential Cost
Savings
15-16 SBA Needs to Improve Its Oversight of 9/25/2015 1 —
Loan Agents
17-19 Audit of SBA’s Microloan Program 9/28/2017 2 $137,199,806
18-03 Independent Auditor’s Report on the 11/14/2017 1 —
SBA’s FY 2017 Financial Statements
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U.S. Small Business Administration | Office of Inspector General
Report Title Date Issued Number of Open Aggregate
Number Recommendations Potential Cost
Savings
18-07 Accuracy of the FY 2015 7(a) Loan 12/11/2017 1 $ 1,903,213
Guaranty Purchase Improper Payments
Rate
18-13 Evaluation of SBA 7(a) Loans Made to 3/6/2018 1 —
Poultry Farmers
18-18 Audit of SBA’s Women-Owned Small 6/20/2018 1 —
Business Federal Contracting Program
18-21 OIG High-Risk 7a Loan Review Program 8/15/2018 2 $1,351,565
2018
18-22 Improvements Needed in SBA’s Oversight 9/7/2018 5 —
of 8(a) Continuing Eligibility Processes
18-23 OIG High-Risk 7(a) Loan Review Program 9/13/2018 2 $1,303,403
19-06 SBA’s District Offices’ Customer Service 12/19/2018 1 —
19-08 SBA’s HUBZone Certification Process 3/28/2019 1 $589,000
19-14 SBA’s 2018 and 2019 Cash Contributions 6/19/2019 2 —
and Gifts
19-15 OIG High-Risk 7(a) Loan Review Program 7/10/20191 $3,000,297
19-16 Office of Inspector General High-Risk 7(a) 2 $2,059,132
8/14/2019
Loan Review Program
19-17 Evaluation of SBA’s All Small Mentor- 4 —
9/17/2019
Protégé Program
19-18 Audit of SBA's Suspension and 1 $2,900,000
9/18/2019
Debarment Process
19-19 Office of Inspector General High-Risk 7(a) 1 $1,267,223
9/19/2019
Loan Review Program
19-20 Review of Women's Business Center, Inc. 1 —
Compliance with Cooperative Agreement 9/19/2019
Requirement
19-23 Audit of SBA’s Desktop Loss Verification 1 $2,524,400
9/26/2019
Process
20-03 Audit of SBA's Oversight of High-Risk 6 $13,3135,60
11/12/2019
Lenders
20-05 KPMG Management Letter 2 —
Communicating Matters Relatives to SBA's 12/10/2019
FY 2019 Financial Statement Audit
20-06 SBA’S FY 2019 Cash Contributions and 1 —
2/11/2020
Gifts
20-07 Audit of the Office of Disaster Assistance 1 —
2/20/2020
Improper Payment Appeal Process
20-08 Audit of the SBA's Community Advantage 6 $5,1472,944
3/18/2020
Pilot Program
20-09 Audit of SBA’s Cooperative Agreement 3 —
With Arsenal Business and Technology
3/24/2020
Partnership’s Veterans Business
Outreach Center
Total 48 $153,519,682
26 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Significant Recommendations from Prior Reporting Periods without Final Action as of
September 30, 2020
Report Date Issued Recommendation Date of Final Action Target
Number Management Date
Decision
15-16 9/25/2015 Develop benchmarks for contractor 9/20/2018 1/31/2021
performance and require the Fiscal
Transfer Agent to implement
appropriate application controls and
follow-up procedures with lenders to
ensure the integrity of the Form 159
database.
17-19 9/28/2017 Continue efforts to improve the 1/4/2018 12/31/2020
information system to include outcome-
based performance measurements and
ensure the data captured can be used
to effectively monitor the microloan
program compliance, performance, and
integrity.
17-19 9/28/2017 Update the microloan reporting system 1/4/2018 12/31/2020
manual to reflect current technology
capabilities.
18-03 11/14/2017 Monitor and perform procedures over 1/10/2018 3/31/2021
the service organization’s attestation
report regarding user control
considerations. This assessment should
be performed annually.
18-13 3/6/2018 Review the arrangements between 3/1/2018 12/31/2020
integrators and growers under the
revised regulations, and establish and
implement controls, such as
supplemental guidance, to ensure SBA
loan specialists and lenders make
appropriate affiliation determinations.
18-18 6/20/2018 Implement a Women-Owned Small 9/28/2018 10/30/2020
Business Federal Contracting Program
certification process as required by the
National Defense Authorization Act for
FY 2015.
18-21 8/15/2018 Require the lender to bring the loan into 8/7/2018 10/30/2020
compliance or, if not possible, seek
recovery of $799,159 on the guaranty
paid by SBA.
18-21 8/15/2018 Require the lender to bring the loan into 8/7/2018 10/30/2020
compliance or, if not possible, seek
recovery of $552,406 on the guaranty
paid by SBA.
18-22 9/7/2018 Revise its current process to ensure it 12/19/2019 11/30/2020
accurately identifies all high-risk firms to
receive continuing eligibility reviews
from the Office of Certification and
Eligibility.
Semiannual Report to Congress, Fall 2020 | 27
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Recommendation Date of Final Action Target
Number Management Date
Decision
18-22 9/7/2018 Establish and implement clear policies 12/19/2019 11/30/2020
and procedures for evaluating 8(a)
continuing eligibility, including ensuring
that district offices use standardized
analysis tools that conform with 8(a)
continuing eligibility requirements
found in 13 CFR 124, and train
employees on these procedures.
18-22 9/7/2018 Develop and implement a 12/19/2019 11/30/2020
comprehensive oversight plan to ensure
completion of continuing eligibility
reviews of all 8(a) firms, monitor the
quality of continuing eligibility reviews,
and eliminate duplication between the
Office of Certification and Eligibility and
the district offices.
18-22 9/7/2018 Establish and implement clear policies 12/19/2020 11/30/2020
and procedures that include timelines
for sending Notices of Intent to
Terminate and to Graduate Early firms
after eligibility issues are first identified.
18-22 9/7/2018 Establish and implement clear policies 12/19/2020 11/30/2020
and detailed procedures, consistent
with 13 CFR 124.112(c), to promptly and
effectively review and address
complaints about 8(a) continuing
eligibility, including communicating the
content of the complaint to the district
office, and train employees
implementing the 8(a) program on the
updated procedures.
18-23 9/13/2018 Require the lender to bring the loan into 9/20/2018 10/30/2020
compliance or, if not possible, seek
recovery of $448,287 plus interest on
the guaranty paid by SBA.
18-23 9/13/2018 Require the lender to bring the loan into 9/20/2018 10/30/2020
compliance or, if not possible, seek
recovery of $855,116 plus interest on
the guaranty paid by SBA.
19-06 12/19/2018 Revise SOP 90 75 4, Outreach Activities, 12/19/2018 1/31/2020
to clarify the expectation for using SBA
Form 20, Outreach Event Survey, and
establish a process to collect and
analyze customer feedback.
19-08 3/28/2019 Implement a plan to reduce IT issues 3/29/2019 9/15/2020
affecting the HUBZone certification
process.
28 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Recommendation Date of Final Action Target
Number Management Date
Decision
19-14 6/19/2019 Develop and implement prescriptive 6/26/2020 1/31/2020
and rigorous controls to oversee and
monitor excess cash held by the fiscal
agent for recurring activities such as
NSBW on behalf of SBA and in
accordance with the requirements of
OMB Circular No. A-123. These controls
should be incorporated into SOP 90 75
4 and include the receipt and recurring
review of bank statements for cash held
on account.
19-14 6/19/2019 Implement a process to ensure that 6/26/2020 1/31/2020
responsibilities stipulated in the NSBW
co-sponsorship agreement are aligned
with requirements in SOP 90 75 4.
19-15 7/10/2019 Require the lender to bring the loan into 7/11/2019 10/30/2020
compliance or, if not possible, seek
recovery of $3,000,297 plus interest on
the guaranty paid by SBA.
19-16 8/14/2019 Require the lender to bring the loan into 8/15/2019 10/30/2020
compliance or, if not possible, seek
recovery of $1,367,417 plus interest on
the guaranty paid by SBA.
19-16 8/14/2019 Require the lender to bring the loan into 8/15/2019 10/30/2020
compliance or, if not possible, seek
recovery of $691,715 plus interest on
the guaranty paid by SBA.
19-17 9/17/2019 Develop and implement application 9/17/2019 11/30/2020
review and annual evaluation
procedures to ensure mentors are
qualified, including implementing
mandatory use of the mentor
certification form.
19-17 9/17/2019 Develop and implement procedures to 9/17/2019 11/30/2020
ensure quality and consistency in
application reviews and annual
evaluations, including maintaining
adequate documentation to support
completion of each step in the
application review and annual
evaluation processes.
19-17 9/17/2019 Prioritize staff resources to ensure 2/4/2020 3/31/2021
application reviews and annual
evaluations are conducted in
accordance with regulatory and
program requirements.
19-17 9/17/2019 Ensure that certify.SBA.gov has the 9/17/2019 3/31/2021
functionality needed for program
officials to conduct application reviews
and annual evaluations.
19-18 9/18/2019 Rescind the SBA loan guaranty for the 11/13/2019 12/31/2020
$2.9 million loan and assess the lender’s
eligibility for continued participation in
the SBA lending program.
Semiannual Report to Congress, Fall 2020 | 29
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Recommendation Date of Final Action Target
Number Management Date
Decision
19-20 9/19/2019 Refer the Women's Business Center, 9/19/2019 9/30/2019
Inc., and its personnel to the Suspension
and Debarment Official for a present
responsibility determination.
19-23 9/26/2019 Implement controls to require loss 9/25/2019 10/2/2020
verifiers to provide sufficient
documentation to support their post
desktop review conclusions regarding
the validity of the initial desktop
verification and their assessment of the
extent of damages and losses and the
cost to restore the property to its
predisaster condition.
20-03 11/12/2019 Develop and implement policies and 11/15/2019 12/31/2020
procedures to document OCRM's
justification for not conducting planned
reviews and identifying and prioritizing
additional lenders for review.
20-03 11/12/2019 Develop and implement a 11/15/2019 12/31/2020
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 Develop and implement policies and 11/15/2019 12/31/2020
procedures to provide clear and specific
guidance to analysts regarding the
appropriate corrective and enforcement
actions for identified lenders and loan
deficiencies to ensure analysts
recommend appropriate and consistent
corrective and enforcement actions.
20-03 11/12/2019 Conduct periodic overall assessments of 11/15/2019 12/31/2020
the high-risk lender review results and
recommended risk mitigation actions to
ensure analysts recommend appropriate
and consistent corrective and
enforcement actions.
20-03 11/12/2019 Develop and implement policies and 11/15/2019 12/31/2020
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.
30 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Recommendation Date of Final Action Target
Number Management Date
Decision
20-03 11/12/2019 Determine whether the lenders 11/15/2019 12/31/2020
corrected the deficiencies on the 21
loans purchased for a total of $13.3
million. If not, require the lenders to
bring the loans into compliance or, if not
possible, seek recovery of the guaranty
paid by SBA from lenders.
20-05 12/10/2019 KPMG recommends Associate 1/9/2020 1/31/2021
Administrator for Capital Access update
appropriate Center Desk Manuals to
specify relevant staff involved in the
charge-off and referral processes to
ensure the Next Due Date field in the
loan repository system is timely updated
when a loan's liable parties change. Any
change to policy should be
communicated to relevant staff.
20-05 12/10/2019 KPMG recommends the Associate 1/9/2020 1/31/2021
Administrator for Capital Access
perform a regular review of liable parties
with outstanding receivable balances to
ensure they are referred in a timely
manner.
20-06 2/11/2020 Continue to train program office grant 2/25/2020 9/30/2020
personnel responsible for monitoring
grant recipient performance to enforce
compliance with SBA’s established
policies and procedures for grants
management and best practices for
administering grant awards and
monitoring performance.
20-07 2/20/2020 Update improper payment standard 8/4/2020 10/2/2020
operating procedures, training guides,
and checklists to provide clear and
comprehensive guidance and
instructions to assist Quality Control
Specialists to accurately identify
improper payments and help mitigate
the risk associated with using
inexperienced staff.
20-08 3/18/2020 Evaluate options that facilitate the 6/30/2020 2/7/2021
Community Advantage pilot program’s
ability to effectively expand access to
capital in underserved markets.
20-08 3/18/2020 Evaluate whether it is feasible to align 6/30/2020 3/31/2020
the maximum interest rates charged
under the CA pilot program with
comparable 7(a) program rates,
excluding SBA Express.
20-08 3/18/2020 Provide criteria to lenders to assist them 8/5/2020 3/31/2020
with assessing the borrowers’ M&TA
needs.
Semiannual Report to Congress, Fall 2020 | 31
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Recommendation Date of Final Action Target
Number Management Date
Decision
20-08 3/18/2020 Establish methods to assess whether 6/30/2020 3/31/2020
lenders have the expertise needed to
provide M&TA to underserved
borrowers and to address any lender
deficiencies regarding M&TA.
20-08 3/18/2020 Require lenders to complete the data 6/30/2020 3/31/2020
fields related to the M&TA provided and
enhance the annual CA performance
analysis by including the evaluation of
the performance associated with the
various types of M&TA.
20-08 3/18/2020 Establish a process to periodically 6/30/2020 3/31/2020
assess the performance of CA loans
approved with SBSS scores under 140,
to determine whether the recently
implemented SBA approval
requirement is adequately mitigating
the risk of loss.
20-09 3/24/2020 Implement procedures to ensure 3/25/2020 11/30/2020
program officials enforce financial
examination results.
Significant Recommendations from this Reporting Period
Report Title Date Recommendation
Number Issued
20-15 Independent 5/12/2020 Update SBA Standard Operating Procedure (SOP) 20 32 1,
Auditors’ Report Estimating and Reporting Improper Payments, using the
on SBA’s framework in the Government Accountability Office Standards for
Compliance with Internal Control in the Federal Government (Green Book) to
Improper design and implement robust internal and quality control
Payments processes to ensure complete and accurate reporting of annual
Elimination and improper payment results, including the sampling methodology
Recovery Act of documentation is consistent with the population, sample, and
2010 (IPERA) payment integrity information in the AFR.
20-15 Independent 5/12/2020 Provide training to responsible staff in the Offices of Internal
Auditors’ Report Control, Capital Access, and Disaster Assistance regarding
on SBA’s updates to SBA SOP 20 32 1.
Compliance with
IPERA
20-15 Independent 5/12/2020 Ensure that staff in the Office of Internal Control oversee and
Auditors’ Report provide adequate quality control reviews over improper payment
on SBA’s disclosures submitted by SBA program offices.
Compliance with
IPERA
20-15 Independent 5/12/2020 Provide training to program office staff, as needed, on the timely
Auditors’ Report reconciliation of the population of transactions used for
on SBA’s estimating improper payments to the general ledger.
Compliance with
IPERA
32 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Report Title Date Recommendation
Number Issued
20-17 Evaluation of 7/30/2020 Include the Certify investment in the Agency’s Enterprise Risk List
Certify.SBA.Gov as a high-risk endeavor and require continuous risk monitoring,
as specified in the SBA Enterprise Risk Management Framework
Guide.
20-17 Evaluation of 7/30/2020 Establish traceable functional requirements for the Certify
Certify.SBA.Gov investment in accordance with the Capital Programming Guide,
supplement to OMB Circular A-11, specifically, in terms of the
Office of Government Contracting and Business Development’s
mission, purpose, capability, schedule and cost objectives.
2017 Evaluation of 7/30/2020 Develop a documented requirements traceability matrix and
Certify.SBA.Gov ensure that the Office of Government Contracting and Business
Development has adequate resources to trace requirements
throughout all stages of design, development, and user-
acceptance.
20-17 Evaluation of 7/30/2020 Develop and maintain a performance-measurement baseline
Certify.SBA.Gov with budgets and schedules assigned to product-oriented work
breakdown structure elements and established cost and
schedule variance thresholds in accordance with the Capital
Programming Guide, supplement to OMB Circular A-11.
20-17 Evaluation of 7/30/2020 Evaluate work breakdown structure elements for cost, schedule,
Certify.SBA.Gov and technical risk. Use the results of such risk analysis to maintain
a risk-adjusted budget and schedule in accordance with the
Capital Programming Guide, supplement to OMB Circular A-11.
20-17 Evaluation of 7/30/2020 Incorporate earned value management and integrated baseline
Certify.SBA.Gov reviews into the Certify investment as required by FAR 34. 2 and
conduct documented integrated baseline reviews in accordance
with the 32 criteria identified in National Defense Industrial
Association’s Earned Value Management Systems EIA-748 Intent
Guide, as required by SOP 90 52.
20-17 Evaluation of 7/30/2020 Ensure that all Certify investment cost, schedule, and
Certify.SBA.Gov performance baseline data submitted for BTIC review clearly
show the amount of work accomplished and actual costs against
the original investment baseline to provide critical management
visibility on the achievement of, or deviation from, goals.
20-17 Evaluation of 7/30/2020 Update system development methodology to link agile summary
Certify.SBA.Gov components with establishing traceable requirements,
monitoring progress through a requirements traceability matrix
and reporting progress using a performance management
system, including an earned value management system for the
development of major IT investments.
20-17 Evaluation of 7/30/2020 Determine whether any customization and enhancement costs
Certify.SBA.Gov for internal use software related to Certify investment should be
capitalized in accordance with the financial reporting
requirements in OMB Circular A-136.
Semiannual Report to Congress, Fall 2020 | 33
U.S. Small Business Administration | Office of Inspector General
Report Title Date Recommendation
Number Issued
20-18 Office of 4/25/2020 Require the lender to bring the loan into compliance or, if not
Inspector General possible, seek recovery of $2,094,574 on the guaranty paid by
High Risk 7(a) SBA.
Loan Review
Program
20-20 Audit of SBA’s 9/30/2020 Review all loans assigned to the resolution center that are 180
Compliance with days or more delinquent and classified with code 66 (Lien or
the Debt Mortgage/Refer to Treasury Offset Program Only) and 00 (Clear
Collection Existing Status Code) and transfer the loans to Treasury Cross-
Improvement Act, Servicing, unless verified as exempt when the temporary
as Amended suspension of debt collection activities because of the pandemic
is lifted.
20-20 Audit of SBA’s 9/30/2020 Revise SOP 50 52 to clearly communicate that all loans with
Compliance with collateral must be evaluated for foreclosure and placed in
the Debt foreclosure status before they are 180 days delinquent.
Collection
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Revise SOP 50 52 2 to clearly communicate that all debts 180
Compliance with days delinquent must be transferred to Treasury Cross-Servicing
the Debt unless the debt meets a valid transfer exemption.
Collection
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Establish requirements to provide annual training on Debt
Compliance with Collection Improvement Act requirements to all staff of the
the Debt resolution center.
Collection
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Ensure that information used to monitor compliance with the
Compliance with Debt Collection Improvement Act includes all loans assigned to
the Debt the resolution center as identified in the Capital Access Financial
Collection System.
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Review all loans currently assigned to the Center and designated
Compliance with 0 exempt from Treasury Offset Program and verify that each of the
the Debt obligors is exempt from referral to Treasury Offset Program, and
Collection if not, refer the obligors to Treasury Offset Program, as required.
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Review all loans currently assigned to the Center and designated
Compliance with as exempt from Treasury Cross-Servicing that are 180 days or
the Debt more delinquent and verify that each of the obligors is exempt
Collection from transfer to Treasury Cross-Servicing, and if not, transfer the
Improvement Act, debt to Treasury Cross-Servicing, as required when the
as Amended temporary suspension of debt collection activities due to COVID-
19 is lifted.
34 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Report Title Date Recommendation
Number Issued
20-20 Audit of SBA’s 9/30/2020 Establish policies and procedures to require routine follow-up on
Compliance with delinquent loans to ensure full compliance with the Debt
the Debt Collection Improvement Act.
Collection
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Reiterate the requirements for workout agreements to
Compliance with responsible personnel to ensure compliance with the Debt
the Debt Collection Improvement Act.
Collection
Improvement Act,
as Amended
20-20 Audit of SBA’s 9/30/2020 Perform a cost benefit analysis to determine if SBA should begin
Compliance with assessing fees to offset the cost of processing and handling
the Debt delinquent disaster loans.
Collection
Improvement Act,
as Amended
Significant Management Decisions – OIG Disagreement
There were no significant management decisions OIG disagreed with during this reporting
period.
Significant Revised Management Decisions
There were no significant revised management decisions during this reporting period.
Federal Financial Management Improvement Act
OIG’s Independent Public Accountant, KPMG, found in the FY 2020 financial statement audit
that there were no instances in which SBA’s financial management systems did not substantially
comply with the Federal Financial Management Improvement Act of 1996.
Instances of Interference
There were no attempts by SBA officials to interfere with OIG independence during the
reporting period.
Semiannual Report to Congress, Fall 2020 | 35
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 29
Preliminary Case Closing Reports of Investigation 8
Total 37
Persons Referred for Prosecution
Referred To Number of Persons
Department of Justice 200
State Attorney 0
Local Attorney 0
Total 200*
*Number includes persons and entities referred for prosecution.
Pandemic-Related Investigative Statistics
SBA OIG Investigations Indict/Complaint Arrests Convictions
PPP/EIDL* 41 74 62 4
Investment Fraud 1 1 1 1
Total 42 75 63 5
*PPP stands for Paycheck Protection Program. EIDL stands for economic injury disaster loan.
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 involving a senior government employee where misconduct
was substantiated during the reporting period.
Investigations Involving a Senior Government Employee That Is 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.
36 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
Appendix E. Legal Actions Summary
April 1, 2020 – September 30, 2020
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
with
AL DL DHS/HSI, Individual conspired to submit a fraudulent Federal seizure warrant
TIGTA Economic Injury Disaster Loan (EIDL). issued resulting in
$300,974 recovery.
AR BL FBI, TIGTA Individual fraudulently obtained two SBA Individual arrested.
guaranteed loans intended for COVID-19
relief through the Paycheck Protection
Program (PPP).
CA BL FBI, FDIC/OIG Individual fraudulently obtained three SBA Individual arrested.
guaranteed loans intended for COVID-19
relief through the PPP.
CA DL FBI Individual fraudulently obtained two SBA Individual arrested.
guaranteed loans intended for COVID-19
relief through the PPP.
CA BL FHFA/OIG, Individual obtained more than $8 million in Individual indicted.
FDIC/ PPP loans from various lenders.
OIG,
TIGTA, IRS/CI,
FBI
CA BL DHS/HSI, Individual fraudulently obtained two SBA Individual charged by
TIGTA, USPIS, guaranteed loans intended for COVID-19 criminal complaint.
State of relief through the PPP.
CA/EDD
CO DL USSS Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $14,500. administrative recovery of
$14,500
CO DL USSS Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $147,436.66. administrative recovery of
$147,436.66.
DC BL FBI, IRS/CI Individual fraudulently obtained seven SBA Individual charged by
guaranteed loans intended for COVID-19 criminal complaint. In
relief through the PPP and EIDL programs. addition, SBA realized an
administrative recovery of
approximately $450,000.
FL DL FBI, TIGTA, Three individuals conspired to fraudulently Individuals charged by
FDIC/OIG, obtain SBA guaranteed loans intended for criminal complaint.
COVID-19 relief through the PPP and EIDL
programs.
FL BL USSS Individual assisted persons in obtaining SBA realized an
PPP loans for which they were not qualified. administrative recovery of
SBA OIG recovered funds from five $1,998,368.
individuals who participated in the scheme.
FL DL Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $46,100. administrative recovery of
$46,100.
Semiannual Report to Congress, Fall 2020 | 37
U.S. Small Business Administration | Office of Inspector General
FL BL TIGTA, USPIS Individual fraudulently obtained two SBA Individual charged by
guaranteed loans intended for COVID-19 criminal complaint.
relief through the PPP.
GA DL Individual fraudulently obtained SBA SBA realized an
guaranteed loans intended for COVID-19 administrative recovery of
relief through the EIDL program. $172,100.
GA BL FBI Two individuals falsified applications for Two individuals indicted.
and SBA PPP loan by providing false
supporting documentation.
GA DL Multiple individuals used stolen identities SBA realized an
to obtain EIDL loans. administrative recovery of
$1,021,225.
GA DL USSS Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $59,295. administrative recovery of
$59,295.
GA GC DCIS, Individual disclosed sensitive federal Individual sentenced to
Army/CID procurement information to a company 20 months confinement,
competing for government contracts. three years supervised
release and ordered to
pay $15,000 fine.
GA OT Individual falsified receipts to remain SBA realized an
eligible for SBA grants to which they were administrative recovery of
not entitled. $420,000.
ID GC DCIS, Individuals made false statements to qualify Individuals entered into a
Army/CID, to receive Historically Underutilized settlement agreement in
AFOSI, Business Zone (HUBZone) contracts. the amount of $500,000
DHS/OIG,
GSA/OIG
LA DL Individual misused SBA disaster loan funds Individual pled guilty.
received for a property damaged by
flooding.
MA BL Individual obtained two SBA guaranteed Individual sentenced to
loans by providing false information on the 30 months
loan application. imprisonment,5 years
supervised release and
ordered to pay a $300
assessment.
MA BL FBI, IRS/CI, Individual submitted falsified Individual indicted.
FRB/OIG, documentation in support of multiple
FDIC-OIG applications for PPP loans.
MD BL FHFA/OIG, Individuals conspired to defraud two banks Individual pled guilty.
FDIC/OIG, to purchase a home through false
SIGTARP representations.
ME DL Individual fraudulently obtained SBA SBA realized an
guaranteed loans intended for COVID-19 administrative recovery of
relief through the EIDL program. $126,200.
MI BL Individual misused proceeds of SBA PPP Individual charged by
loan. The individual received the funds criminal complaint.
then withdrew the funds to purchase four
vehicles.
38 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
MO BL FBI, FDIC/OIG, Individual falsified information on his SBA Individual indicted and
IRS/CI loan application. arrested.
NC BL FBI Individual fraudulently obtained two SBA Individual indicted.
7(a) loans by submitting fraudulent
applications and fake supporting
documentation.
NJ BL Individual charging fees to assist applicants Cease and desist notice
obtain SBA PPP loans, in violation of SBA issued.
policy.
NY BL FBI Individual made misrepresentations to SBA realized an
obtain a PPP loan. administrative recovery of
$211,325.
NY GC Army/CID, Individuals created a sham company to bid Company entered into
DCIS, on and receive government contracts. settlement agreement in
DOT/OIG, the amount of $4,350,000.
GSA/OIG
NY BL FBI, IRS/CI Individual made misrepresentations to SBA realized an
obtain EIDL and PPP loans. administrative recovery of
$813,250 and an
individual was charged by
complaint.
NY BL FBI Individual fraudulently obtained two SBA Individual indicted.
guaranteed loans intended for COVID-19
relief through the PPP.
OH BL IRS/CI Individual fraudulently obtained two SBA Individual charged by
guaranteed loan sand one EIDL loan criminal complaint.
intended for COVID-19 relief.
OH BL Two individuals devised and participated in Two individuals charged
a money laundering scheme to obtain 18 by criminal complaint.
PPP loans totaling millions of dollars.
OH GC DCIS, Individuals engaged in a conspiracy to Individual sentenced to
NASA/OIG, defraud the government by paying bribes three years’ probation, a
NCIS, VA/OIG and obtaining set-aside contracts to which fine of $15,000 and a
they were not entitled. special assessment of
$900.
OK DL Individuals fraudulently obtained six SBA Two individuals charged
guaranteed loans intended for COVID-19 by criminal complaint.
relief through the PPP.
OK DL Individual made misrepresentations to Individual indicted.
obtain an EIDL loan.
OR DL Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $74,100. administrative recovery of
$74,100.
RI BL FBI, FDIC/OIG, Individuals fraudulently obtained two SBA SBA realized an
IRS/CI guaranteed loans intended for COVID-19 administrative recovery of
relief through the PPP. $279,710.
RI BL FDIC/OIG, Individual charged borrowers’ SBA realized an
FRB/OIG impermissible fees that were not disclosed administrative recovery of
to SBA. In addition, submitted altered $467,497.
documents with SBA loan applications.
Semiannual Report to Congress, Fall 2020 | 39
U.S. Small Business Administration | Office of Inspector General
RI BL FBI, FDIC/OIG, Individuals fraudulently obtained four SBA SBA realized an
IRS/CI guaranteed loans intended for COVID-19 administrative recovery of
relief through the PPP. $442,881. In addition, two
individuals were charged
by criminal complaint.
SC CC AFOSI, Individuals conspired to make false Individual entered into
Army/CID, applications for SBA 8(a) contracts. civil settlement in the
DOE/OIG, amount of $850,000.
USDA/OIG,
VA/OIG
TX BL USPIS Individuals fraudulently obtained two SBA SBA realized an
guaranteed loans intended for COVID-19 administrative recovery of
relief through the PPP. $1,158,143. Individual was
arrested pursuant to a
criminal complaint.
TX BL Individuals fraudulently obtained two SBA SBA realized an
guaranteed loans intended for COVID-19 administrative recovery of
relief through the PPP. $3,006,200. Individual
charged by criminal
complaint.
TX BL ATF, DHS/HSI, Individuals fraudulently obtained SBA SBA realized an
TIGTA guaranteed loan intended for COVID-19 administrative recovery of
relief through the PPP. $504,715. Individual
arrested.
TX BL FDIC/OIG, Individual fraudulently obtained SBA Individual indicted.
FHFA/OIG, guaranteed loans intended for COVID-19
IRS/CI, TIGTA relief through the PPP. Individual used
funds to purchase luxury automobile, home
mortgage payments and other personal
expenses.
TX BL Individual submitted nine applications for Individual arrested
PPP loans. The applications contained false pursuant to criminal
documents and/or misrepresentations. complaint. In addition,
Three loans were funded for a total of $4 SBA realized an
million. administrative recovery of
$3,111,698.
TX DL USSS Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $406,000. administrative recovery of
$406,000.
TX DL USSS Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $145,653. administrative recovery of
$145,653.
TX DL DHS/OIG Individual obtained SBA disaster loan for Individual sentenced to 3
damage caused by Hurricane Harvey. years’ probation and
Investigation determined the property ordered to pay a $100
received no damage and proceeds were special assessment.
used to pay off personal credit cards.
TX DL Individual refused to schedule onsite loss SBA realized an
verification inspection pursuant to SBA administrative recovery of
disaster loan terms and conditions. $22,221.
TX DL DHS/HSI, Individual fraudulently obtained SBA SBA realized an
FDIC/OIG guaranteed loan intended for COVID-19 administrative recovery of
relief through the PPP. $50,000.
40 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
TX DL SBA employee applied for three EIDL SBA realized an
loans, two were reviewed and obligated by administrative recovery of
the employee. $130,900. SBA employee
terminated.
UT BL FBI Individual failed to disclose criminal history Individual arrested and
on PPP application. $28,889 seized and
returned to SBA.
UT GC AFOSI, Individuals devised a scheme to obtain Two individuals charged
Army/CI, DCIS, HUBZone set-aside contracts. Individuals by information.
FBI submitted false documentation related to
the location of their primary offices.
VA BL FBI Individuals fraudulently obtained SBA Individuals pled guilty.
guaranteed loan intended for COVID-19
relief through the PPP.
VA GC DCIS, NCIS, Individuals conspired to obtain SDVOSB Seven individuals
INS, DOS/OIG set-aside contracts to which the companies indicted.
would not otherwise be entitled.
VA DL FBI, IRS/CI, Individual made misrepresentations to Individual indicted.
USPIS obtain an EIDL loan.
WA GC Army/CI, DCIS, Individuals conspired to create fictious Individual indicted.
DOC/OIG, small businesses to obtain small business
DOJ/OIG, set-aside contracts to which the companies
GSA/OIG, would otherwise be entitled.
HHS/OIG,
IRS/CI
WA DL Individual used stolen identity to obtain SBA realized an
EIDL loan in the amount of $159,900. administrative recovery of
$159,900.
WA DL IRS/CI Individual obtained a PPP loan by making SBA realized an
false statements on his application. administrative recovery of
$102,711.
WA DL FBI, FDIC/OIG, Individual fraudulently submitted 26 SBA Individual charged by
HHS/OIG, guaranteed loan applications intended for criminal complaint. SBA
IRS/CI, TIGTA COVID-19 relief through the PPP and EIDL realized an administrative
programs. recovery of $1,183,499.
WA DL DHS/OIG Individual obtained a EIDL loan by making SBA realized an
false statements on his application. administrative recovery of
$149,900. Individual
arrested.
WA DL FBI, TIGTA Individual fraudulently obtained five SBA SBA realized an
guaranteed loans intended for COVID-19 administrative recovery of
relief through the PPP and EIDL programs. $10,000. Individual
charged by criminal
complaint.
WI BL FBI Individual made false statements during a Individual pled guilty and
bankruptcy proceeding related to an SBA was sentenced to 12
guaranteed loan. months and 1 day in
prison, 3 years supervised
release, and ordered to
pay $2,466,550 in
restitution.
Semiannual Report to Congress, Fall 2020 | 41
U.S. Small Business Administration | Office of Inspector General
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
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)
42 | Semiannual Report to Congress, Fall 2020
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 Date Fully
Location Executed
Utah DO - South Valley Chamber of
Commerce, Salt Lake Chamber Women’s
2020 National Small Business World Wide
Business Center, Utah Small Business 9/21/2020
Week Awards Event Web Virtual
Development Center Network, SCORE Utah
Chapter
Virtual,
Casper,
Laramie,
Selling to the Government Wyoming DO - Wyoming Procurement
Cheyenne, 9/14/2020
Training Series Technical Assistance Center
Riverton,
Jackson, Fort
Washakie, WY
Nebraska DO - Better Business Bureau,
Business Ethics Alliance, Catholic Charities
Entrepreneur’s Education Archdiocese of Omaha, Greater Omaha
Virtual 8/24/2020
Collaborative Chamber of Commerce, Nebraska Business
Development Center, Nebraska Enterprise
Fund, SCORE Greater Omaha Chapter 40
Spirit of Small Business Los Angeles DO - Pacific Coast Business
Virtual 8/19/2020
Awards Program Times
Wichita DO - FranNet of Missouri, Kansas,
Small Business Webinars Virtual 8/14/2020
Southern Illinois, and Eastern Iowa
HQ/Office of Government Contracting &
SBA Military Spouse World Wide
Business Development - US Chamber of 7/23/2020
Entrepreneur Summit Web
Commerce Foundation's Hiring Our Heroes
Small Business Basics
New York DO - The City of Newburgh Newburgh, NY 3/18/2020
Workshops
HQ/Office of Communications and Public
National Small Business World Wide
Liaison - SCORE Association, Various 2/28/2020
Week 2020 Web Virtual
Cosponsors
Semiannual Report to Congress, Fall 2020 | 43
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
Generally accepted government auditing standards (Yellow Book) issued by GAO require 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 U.S. Department of State OIG for the period ended March 31, 2018. In
September 2018, 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 20, our Audits Division underwent a first for OIG, a Blue Book peer review
conducted by the Department of Justice OIG. OIG generally met Blue Book standards.
In addition, in FY 20, our Audits Division reviewed the U.S. Department of Housing and Urban
Development OIG against the Blue Book standards. We determined HUD 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 2017, the U.S. Federal Deposit Insurance Corporation OIG reviewed our Investigations
Division. The reviewers found the system of internal safeguards and management procedures
for the investigative function of OIG was compliant with the quality standards established by the
Council of the Inspectors General on Integrity and Efficiency and the applicable Attorney
General Guidelines. (OIGs can be assessed as either compliant or noncompliant.) No
recommendations were offered.
44 | Semiannual Report to Congress, Fall 2020
U.S. Small Business Administration | Office of Inspector General
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 here: https://www.sba.gov/sites/default/files/2020-
10/SBA%20OIG%20Report%2021-01.508.pdf.
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 https://www.sba.gov/office-of-inspector-general.
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
Recommendations with respect to significant Significant Recommendations from This
5(a)(2) problems, abuses, and deficiencies Reporting Period
Significant Recommendations from Prior
Prior significant recommendations on which Reporting Periods Without Final Action as of
5(a)(3) corrective action has not been completed September 30, 2019
5(a)(4) Matters referred to prosecutive authorities Legal Actions Summary
Instances in which requested information was
5(a)(5) refused N/A
5(a)(6) List of audit, inspection, and evaluation reports Reports Issued; Reports with Questioned Costs
5(a)(7) Significant reports Throughout
Audit, inspection, and evaluation statistical
5(a)(8) tables Statistical Highlights
Audit, inspection, and evaluation reports with
recommendations that funds be put to better Reports with Recommendations That Funds Be
5(a)(9) use Put to Better Use
Audit, inspection, and evaluation reports Reports from Prior Periods with Overdue
without management decision, without Management Decisions; Reports from Prior
comment within 60 days, or with Periods with Open Recommendations as of
5(a)(10) unimplemented recommendations September 30, 2019
5(a)(11) Revised management decisions Significant Revised Management Decisions
Management decisions with which the Significant Management Decisions with Which
5(a)(12) Inspector General disagrees OIG Disagrees
Semiannual Report to Congress, Fall 2019 | 45
U.S. Small Business Administration | Office of Inspector General
Section Reporting Requirement Location
Information described under section 05(b) of
the Federal Financial Management Federal Financial Management Improvement
5(a)(13) Improvement Act of 1996 Act
5(a)(14)–(16) Peer review results External Peer Reviews
Investigative statistical tables and supporting
5(a)(17),(18) metrics Investigations Reporting Statistics
Investigations involving a senior government Investigations Involving a Senior Government
employee where allegations of misconduct Employee Where Misconduct Was
5(a)(19) were substantiated Substantiated
5(a)(20) Whistleblower retaliation Whistleblower Retaliation Cases
Attempts to interfere with the independence of
5(a)(21) OIG Instances of Interference
Each closed inspection, evaluation, and audit
not disclosed to the public; each closed Investigations Involving a Senior Government
investigation involving a senior government Employee That Is Closed and Not Disclosed to
5(a)(22) employee not disclosed to the public the Public
46 | Semiannual Report to Congress, Fall 2020