Small Business Administration OIG 24-13 (Hurricanes Fiona and Ian – Initial Disaster Assistance and Recovery Response)
Summary
SBA OIG inspection Report 24-13, dated April 9, 2024, reviews SBA's initial disaster assistance response to Hurricanes Fiona and Ian, which made landfall in September 2022 and caused catastrophic damage in Puerto Rico, Florida and South Carolina. Hurricane Fiona caused $2.5 billion in damages in Puerto Rico alone, and Hurricane Ian caused over $112 billion in cumulative damages within both states. OIG found the response timely and effective: SBA set up a field presence in 3 business days and opened the first BRCs 5 to 6 days after each declaration. Four months after the disasters SBA had approved 88 and 97 percent of loan applications for Fiona and Ian, over $1.6 billion in loans, and approved disaster loans within 15 and 14 days on average against its 31-day goal.
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“Small Business Administration OIG 24-13 (Hurricanes Fiona and Ian – Initial Disaster Assistance and Recovery Response).”
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U.S. SMALL BUSINESS ADMINISTRATION OFFICE OF INSPECTOR GENERAL
Hurricanes Fiona and Ian –
Initial Disaster Assistance and
Recovery Response
Inspection Report
Report 24-13
April 9, 2024
Make a Difference
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Office of Inspector General Hotline at https://www.sba.gov/oig/hotline. You can also write to the
U.S. Small Business Administration, Office of Inspector General, 409 Third Street, SW (5th Floor),
Washington, DC 20416. In accordance with the Inspector General Act of 1978, codified as
amended at 5 U.S.C. §§ 407(b) and 420(b)(2)(B), confidentiality of a complainant’s personally
identifying information is mandatory, absent express consent by the complainant authorizing
the release of such information.
NOTICE:
Pursuant to the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023,
Public Law 117-263, Section 5274, any nongovernmental organizations and business entities
identified in this report have the opportunity to submit a written response for the purpose of
clarifying or providing additional context as it relates to any specific reference contained herein.
Comments must be submitted to AIGA@sba.gov within 30 days of the final report issuance date.
We request that any comments be no longer than two pages, Section 508 compliant, and free
from any proprietary or otherwise sensitive information. The comments may be appended to
this report and posted on our public website.
U.S. Small Business Administration
Office of Inspector General
EXECUTIVE SUMMARY
Hurricanes Fiona and Ian – Initial Disaster Assistance and
Recovery Response (Report 24-13)
What OIG Reviewed strategic goals. SBA also approved loan
This report presents the results of our inspection applications in a timely manner, faster than
of the U.S. Small Business Administration’s (SBA) its goal of 31 days.
disaster assistance response to Hurricanes Fiona Lastly, SBA adequately staffed its recovery
and Ian. In September 2022, both hurricanes centers throughout both hurricane responses.
made landfall, causing catastrophic damage to The agency reacted to anticipated resource
Puerto Rico, Florida, and South Carolina. needs by implementing a hiring initiative and
providing advanced specialty training. These
The President declared Hurricane Fiona a
disaster in Puerto Rico on September 21, 2022. actions addressed a projected staffing shortfall,
Hurricane Ian was declared a disaster in Florida including the need for bilingual staff who were
on September 29, 2022, and in South Carolina brought in to assist from other SBA offices.
on November 21, 2022. Subsequently, SBA
mobilized to provide disaster-related home,
personal property, and business loans to
qualified recipients within areas impacted by
the hurricanes.
Our objective was to determine SBA’s initial
disaster response to Hurricanes Fiona and Ian,
including staffing adequacy, loan application
volume, and timeliness of disaster loan
approvals.
To answer our objective, we interviewed
program officials and reviewed public laws,
regulations, and SBA policies and procedures.
We also reviewed disaster loan application
processing data and recovery center staffing
data.
What OIG Found
We found SBA’s response to Hurricanes Fiona
and Ian was timely and effective. SBA
established a field presence within 3 business
days and opened a Business Recovery Center
within 10 business days of the disaster
declaration for both hurricanes, meeting its
OFFICE OF INSPECTOR GENERAL
U.S. SMALL BUSINESS ADMINISTRATION
MEMORANDUM
Date: April 9, 2024
To: Isabel Casillas Guzman
Administrator
From: Hannibal “Mike” Ware
Inspector General
Subject: Hurricanes Fiona and Ian – Initial Disaster Assistance and Recovery Response
(Report 24-13)
This report presents the results of our inspection of Hurricanes Fiona and Ian – Initial Disaster
Assistance and Recovery Response.
We appreciate the cooperation and courtesies provided by your staff. If you have any questions
or need additional information, please contact me or Andrea Deadwyler, Assistant Inspector
General for Audits, at (202) 205-6586.
cc: Francisco Sanchez Jr., Associate Administrator, Office of Disaster Recovery and Resilience
Katie Frost, Associate Administrator, Office of Capital Access
Kate Aaby, Associate Administrator & Chief Financial Officer, Office of Performance,
Planning, and the Chief Financial Officer
Walter B. Hill Jr., Chief Risk Officer, Office of Performance, Planning, and the Chief Financial
Officer
Therese Meers, General Counsel, Office of General Counsel
John Miller, Deputy Associate Administrator, Office of Capital Access
Deborah Chen, Deputy Chief Financial Officer, Office of Performance, Planning, and the
Chief Financial Officer
Tonia Butler, Director, Office of Internal Controls
Anna M. Calcagno, Director, Office of Program Performance, Analysis, and Evaluation
Michael Simmons, Attorney Advisor, Office of General Counsel
Peter Meyers, Senior Advisor, Office of Capital Access
Rachel Wilson, Program Analyst, Office of Capital Access
Sheena McShan, Program Analyst, Office of Disaster Recovery and Resilience
Chiante Thomas, Internal Controls Director, Office of Disaster Recovery and Resilience
409 Third St. SW, Washington, DC 20416 • (202) 205-6586 • Fax (202) 205-7382
Contents
Introduction .................................................................................................................................... 1
Hurricanes Fiona and Ian ........................................................................................................... 1
Objective ................................................................................................................................... 2
Results ............................................................................................................................................. 2
Field Operations Response ........................................................................................................ 2
Disaster Loan Volume and Timeliness ....................................................................................... 3
Recovery Center Staffing ........................................................................................................... 4
Tables
1 Hurricanes Fiona and Ian Recovery Centers .................................................................. 3
2 Hurricane Fiona – Applications Processed and Approved ............................................. 3
3 Hurricane Ian – Applications Processed and Approved................................................. 4
Appendices
1 Scope and Methodology ............................................................................................ 1-1
i
Introduction
The U.S. Small Business Administration (SBA) plays a major role in disaster relief efforts in
the wake of hurricanes, floods, earthquakes, and other physical disasters. SBA’s disaster
assistance program provides low-interest disaster loans to businesses of all sizes, private
nonprofit organizations, homeowners, and renters to repair or replace real estate, personal
property, machinery and equipment, inventory, and business assets that have been damaged or
destroyed in a declared disaster. SBA also provides Economic Injury Disaster Loans to eligible
small businesses and most private nonprofit organizations, providing working capital to help
overcome economic injury.
SBA’s disaster assistance operations are organized into two offices: the Office of Capital Access
and the Office of Disaster Recovery and Resilience. The Office of Capital Access manages the
lending component of disaster recovery, while the Office of Disaster Recovery and Resilience
oversees the field operation centers for recovery operations. To maximize SBA services to
affected areas, the agency established the following types of recovery centers:
• Business Recovery Center (BRC) – A facility established by SBA and staffed with SBA
personnel to assist survivors with loan applications, answer questions about SBA
programs, and close loans.
• Disaster Recovery Center (DRC) – A joint federal/state public facility where
representatives of all participating federal, state, and local disaster relief agencies and
organizations issue program applications, related information, and other services
to disaster survivors. Depending on the size and scope, the Federal Emergency
Management Agency may set up more than one DRC. SBA is represented at each DRC.
Hurricanes Fiona and Ian
On September 18, 2022, Hurricane Fiona made landfall along Puerto Rico’s southwestern coast
as a Category 1 hurricane, causing $2.5 billion in damages in Puerto Rico alone. Ten days later,
Hurricane Ian made landfall in Florida as a Category 4 hurricane and then continued on, making
another landfall in South Carolina as a Category 1 hurricane on September 30, 2022. There was
over $112 billion in cumulative damages within both states from Hurricane Ian.
1
The President issued an emergency declaration for the affected regions of Puerto Rico on
September 21, 2022, Florida on September 29, 2022, and South Carolina on November 21, 2022.
Subsequently, SBA mobilized its staff to establish recovery centers in the areas affected by both
hurricanes.
This report presents the results of our inspection of SBA’s initial response to the Hurricane Fiona
and Hurricane Ian disasters.
Objective
Our objective was to assess SBA’s initial response to the Hurricane Fiona and Hurricane Ian
disasters, including staffing adequacy, loan application volume, and timeliness of disaster loan
approvals.
Results
We found SBA’s response to Hurricanes Fiona and Ian was timely and effective. SBA established
a field presence within 3 business days and opened a BRC within 10 business days of the disaster
declaration for both hurricanes, meeting its strategic goals. SBA also approved loan applications
in a timely manner, faster than its goal of 31 days. Additionally, SBA successfully addressed initial
staffing concerns and maintained adequate staffing levels throughout its response to both
hurricanes.
Field Operations Response
We reviewed SBA’s disaster response by assessing its field presence, the timeliness of opening
its BRCs, and the number of recovery centers established to aid in disaster recovery efforts.
According to its strategic goals, the agency aimed to establish a field presence within 3 business
days of the disaster declaration and open a BRC within 10 business days of the declaration.
We found that SBA successfully reached its strategic goals by establishing a field presence in
Puerto Rico, Florida, and South Carolina in 3 business days after each disaster declaration and
opening the first BRCs 5 to 6 days after each declaration. Overall, there were 97 recovery centers
established throughout Puerto Rico, Florida, and South Carolina to respond to both hurricanes
(see table 1 for a breakdown of the recovery centers in each location).
2
Table 1: Hurricanes Fiona and Ian Recovery Centers
Number of Number of Total Number of
Disaster BRCs DRCs Recovery Centers
Fiona – Puerto Rico 7 43 50
Ian – Florida 6 37 43
Ian – South Carolina 1 3 4
Total 14 83 97
Source: OIG analysis based on data provided by SBA
Disaster Loan Volume and Timeliness
We evaluated the volume of loans submitted and the time it took for SBA to begin approving
those loans. We found that SBA processed and approved loan applications timely. Specifically,
4 months after the disasters, we found the agency had approved 88 and 97 percent of the loan
applications for Hurricanes Fiona and Ian, respectively. This equates to over $1.6 billion in loans
completed in this timeframe (tables 2 and 3).
Table 2: Hurricane Fiona – Applications Processed and Approved
Number of Number of Number of Dollar Value of
Applications Applications Applications Loans Approved Percentage
As of Date Received Processed Approved (in millions) Completed
10/15/2022 710 384 106 $3,682 54
10/31/2022 1,373 798 208 $8,028 58
11/30/2022 4,289 2,903 983 $28,523 68
12/31/2022 7,686 5,056 1,722 $52,868 66
01/31/2023 9,179 8,054 2,957 $88,236 88
Source: OIG analysis based on loan application data
3
Table 3: Hurricane Ian – Applications Processed and Approved*
Number of Number of Number of Dollar Value of
Applications Applications Applications Loans Approved Percentage
As of Date Received Processed Approved (in millions) Completed
10/15/2022 19,979 8,010 1,168 $65,454 40
10/31/2022 35,990 22,772 6,476 $429,601 63
11/30/2022 51,030 46,215 15,404 $1,087,664 91
12/31/2022 58,619 57,161 19,537 $1,377,407 98
01/31/2023 64,231 62,489 22,507 $1,592,313 97
* The numbers in table 3 represent loan data from Florida only. This table excludes data from
South Carolina because SBA stated that, given the minimal size of the disaster (under 500 applications
were received as of January 15, 2023), a report including the South Carolina data was not generated
prior to November 7, 2023.
Source: OIG analysis based on loan application data
Further, we found SBA approved disaster loans within 15 and 14 days on average for
Hurricanes Fiona and Ian, respectively, in significantly less time than the agency’s 31-day
processing goal.
Recovery Center Staffing
We reviewed Field Operations Center-East’s (FOC-East) recovery center staffing levels to
determine whether SBA’s initial staffing goal was met and if adequate staffing levels were
maintained throughout Hurricanes Fiona and Ian. We found SBA successfully addressed initial
staffing concerns and maintained adequate staffing levels for both hurricanes. FOC-East’s policy
states that the staffing strategy is initially three Customer Service Representatives per center;
however, staffing levels are adjusted based on an assessment of impacted areas.
Through its FOC-East’s office, SBA determined its staffing needs by considering the projected
activities at the beginning of the disaster declaration. For both Hurricanes Fiona and Ian,
FOC-East created an initial action plan based on the projected volume of customer service
requests and loan applications. With these projections, FOC-East projected a staffing shortfall,
including the need for bilingual staff.
To address the shortfall, FOC-East hired 285 disaster personnel to support Hurricane Fiona and
Hurricane Ian operations. Additionally, FOC-East brought in bilingual staff from various SBA
offices and implemented advanced specialty training to address outreach needs. These actions
increased SBA’s ability to open and staff more centers, provide increased outreach to survivors,
and provide services to more borrowers; thereby closing more loans and getting funds to those
in need.
4
Appendix 1: Scope and Methodology
This report presents the results of our inspection of the U.S. Small Business Administration’s
(SBA) disaster assistance response to Hurricanes Fiona and Ian. Our objective was to determine
SBA’s initial response to the hurricanes, including staffing adequacy, loan application volume,
and timeliness of disaster loan approvals.
To answer our objective, we:
• Interviewed SBA officials from Field Operations Center-East, the Processing and
Disbursement Center, the Damage Verification Center, and the Customer Service
Center;
• Reviewed applicable laws, regulations, and implementing guidance governing the
disaster loans;
• Interviewed SBA officials from the Office of Capital Access and Office of Disaster
Recovery and Resilience to determine whether reorganization efforts impacted disaster
response efforts (prior to July 3, 2022, all disaster operations were organized under the
Office of Disaster Assistance);
• Reviewed SBA’s standard operating procedures (SOP), including SOP 50 30 9, Disaster
Assistance Program, and other Field Operations Center-East operational and training
guidance; and
• Analyzed disaster loan application processing and staffing data.
We performed this review in accordance with the Council of Inspectors General on Integrity and
Efficiency’s Quality Standards for Inspection and Evaluation. Those standards require that we
plan and perform a review to obtain sufficient and appropriate evidence to provide a reasonable
basis for our conclusions and observations based on our objective. We believe the evidence
obtained provides a reasonable basis for our conclusions and observations based on our
objectives.
Use of Computer-processed Data
We reviewed computer-generated disaster activity reports from Disaster Credit Management
System 2.0 and disaster field activity reports. We used these reports to analyze the loan
application volume, staff totals, and staff hours worked, including overtime hours. We conducted
1-1
limited testing on data extracts to verify reliability of the data by comparing the field activity
reports to the staffing reports to ensure the data was accurate and complete. Based on our
limited testing, we believe the computer-processed information was reliable for the purposes
of this inspection.
Prior Audit Coverage
The following lists the Office of Inspector General’s previous audit coverage related to the
objective of this report:
Report Number Report Title Report Date
24-12 Inspection of SBA’s Initial Response to Hurricane Idalia April 3, 2024
24-11 Maui Wildfires – Initial Disaster Assistance and Recovery April 2, 2024
Response
21-05 Consolidated Results of SBA’s Initial Disaster Assistance December 22, 2020
Response to Hurricanes Harvey, Irma, and Maria
18-19 Inspection of SBA’s Initial Disaster Assistance Response to July 19, 2018
Hurricane Maria
18-16 Inspection of SBA’s Initial Disaster Assistance Response to April 26, 2018
Hurricane Irma
18-10 Inspection of SBA’s Initial Disaster Assistance Response to January 19, 2018
Hurricane Harvey
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