Small Business Administration OIG (SBA OIG Spring 2024 - Semiannual Report to Congress)
Summary
The SBA Office of Inspector General's Spring 2024 Semiannual Report to Congress covers October 1, 2023 through March 31, 2024. Inspector General Hannibal "Mike" Ware writes that OIG estimated SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDL, Targeted Advance and PPP funds, and warns that once supplemental funding runs out at the close of FY 2024 the office will lack the resources to keep investigating it. In the period OIG issued 10 reports with 88 recommendations, questioned $7.9 billion in costs, and its investigations resulted in 130 indictments and 124 convictions. Highlights include over $1.4 billion in questioned costs in Report 24-06 on PPP loans to borrowers with Do Not Pay data matches and over $6.5 billion in Restaurant Revitalization Fund costs in Report 24-09.
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Semiannual Report to Congress
October 1, 2023 – March 31, 2024
U.S. Small Business Administration | Office of Inspector General
Message from the Inspector General
April 30, 2024
I am pleased to present the U.S. Small Business Administration (SBA)
Office of Inspector General’s (OIG) Spring 2024 Semiannual Report to
Congress. This report summarizes OIG’s activities from October 1,
2023 through March 31, 2024, as required by law.
OIG has prioritized its oversight work to align with top management
and performance challenges facing the agency’s programs and
operations.
Even though we have the monumental mission of investigating fraud
Hannibal “Mike” Ware in the Coronavirus Disease 2019 (COVID-19) pandemic response
programs, Congress did not provide a fiscal year (FY) 2024
appropriation that met the President’s request for our office. As we fight fraud, OIG is also
tasked with the oversight necessary to mitigate the top management and performance
challenges facing SBA. We have repeatedly achieved multi-billion dollar returns on investment
(ROI) for taxpayers. Our recommended corrective actions promote a more efficient and effective
SBA, allowing the nation’s economic engine — small businesses — to flourish. With the
exhaustion of supplemental funding at the close of FY 2024, OIG will not have sufficient
resources to meet SBA’s oversight needs, in particular the capacity to continue to investigate the
more than $200 billion COVID-19 fraud landscape.
We have implemented measures to address this budget shortfall by utilizing attrition, refraining
from backfilling critical positions, reducing training opportunities, and postponing the filling of
essential vacancies. These steps are intended to extend the availability of the remaining
supplemental funds into 2025. Already, our oversight capacity is 13 percent less than the 240
positions that would have been authorized by the President’s FY 2024 budget for this office, and
we expect this number to decrease significantly without congressional intervention.
We have estimated that SBA disbursed over $200 billion in potentially fraudulent COVID-19
Economic Injury Disaster Loans (EIDL), EIDL Targeted Advances, Supplemental Targeted
Advances, and Paycheck Protection Program (PPP) loans. This illustrates that we need the
resources to continue bringing fraudsters to justice and help return taxpayer funds, not reward
criminals who exploited a system meant to assist struggling small business owners and
entrepreneurs during an economic crisis.
Spring 2024 Semiannual Report to Congress | i
U.S. Small Business Administration | Office of Inspector General
Our Work this Period
During this reporting period, OIG continued to
bring fraudsters to justice and provide an
exponential ROI to American taxpayers. During
the 6-month period from October 1, 2023
through March 2024, OIG issued 10 reports
with 88 recommendations to improve SBA
operations and reduce fraud and unnecessary
losses in agency programs. We questioned
$7.9 billion in costs from our oversight
reviews. In addition, OIG investigations
resulted in 130 indictments and 124 convictions.
The following highlights a few significant reviews and investigation findings covered in this
report:
• The successful prosecution of a $20 million COVID-19 relief fraud ring. The leader was
sentenced to 15 years and co-conspirators were collectively sentenced to over 17 years
in federal prison for fraudulently obtaining PPP funds.
• The successful prosecution of a Georgia man who was sentenced to pay over $18 million
in restitution and serve 70 months in prison for leading a ring that fraudulently applied
for and obtained PPP funds.
• Over $1.4 billion in questioned costs in our SBA’s Eligibility and Forgiveness Reviews of
Paycheck Protection Program Loans Made to Borrowers with Treasury’s Do Not Pay Data
Matches evaluation (Report 24-06), which provided seven recommendations to
strengthen SBA’s internal controls and ensure procedures exist to ensure borrowers met
eligibility requirements.
• Over $6.5 billion in questioned costs disbursed from the Restaurant Revitalization Fund
(Report 24-09), which recommended SBA improve the use of data to reduce risk risks of
making improper payments and recover awards that did not meet eligibility requirements
or exceeded statutory limits.
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U.S. Small Business Administration | Office of Inspector General
OIG Staff Dedication and Success
The nation can depend on OIG to provide independent, objective, and timely oversight of SBA.
OIG’s engaged workforce will continue to give taxpayers a significant ROI, rooting out fraud,
waste, and abuse in SBA programs. Our resources will focus on systems and processes that
present serious management and performance challenges within SBA programs to improve the
integrity, accountability, and performance of those programs for the benefit of the American
people.
Hannibal “Mike” Ware
SBA Inspector General
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U.S. Small Business Administration | Office of Inspector General
Contents
SBA’s Top Management and Performance Challenges..................................................................................................................... 1
Summary of OIG Oversight Work ...................................................................................................................................................... 2
Pandemic Response Oversight .......................................................................................................................................................... 2
Audit, Inspections, and Evaluation .............................................................................................................................................. 2
Notable Investigations ................................................................................................................................................................. 6
Small Business Access to Capital ..................................................................................................................................................... 10
Investigation .............................................................................................................................................................................. 10
Disaster Assistance Program ........................................................................................................................................................... 12
Notable Investigations ............................................................................................................................................................... 12
Contracting and Counseling Programs............................................................................................................................................ 14
Notable Investigation ................................................................................................................................................................ 15
Agency Management ...................................................................................................................................................................... 16
Audits and Evaluations .............................................................................................................................................................. 16
Investigation .............................................................................................................................................................................. 19
Other Significant OIG Activities ....................................................................................................................................................... 20
Background Investigations Ensure Integrity.............................................................................................................................. 20
Debarment and Other Administrative Enforcement Actions ................................................................................................... 20
Stakeholder Presentations on PPP and EIDL Fraud................................................................................................................... 20
Reviews of Proposed Agency Regulations, Operating Procedures, and Other Initiatives Lead to Improved Program Controls
................................................................................................................................................................................................... 21
Approval of Small Business Development Center Surveys ....................................................................................................... 21
OIG Hotline ...................................................................................................................................................................................... 22
Significant Increases .................................................................................................................................................................. 22
Organizational Overview ................................................................................................................................................................. 23
U.S. Small Business Administration ........................................................................................................................................... 23
Office of Inspector General ....................................................................................................................................................... 24
Appendices ...................................................................................................................................................................................... 27
Appendix A: Reporting Period Statistical Highlights ................................................................................................................. 27
Appendix B: Reports Issued ....................................................................................................................................................... 29
Appendix C: Reports, Recommendations, and Management Decisions .................................................................................. 31
Appendix D: Investigations Reporting Statistics ........................................................................................................................ 61
Appendix E: Legal Actions Summary ......................................................................................................................................... 63
Appendix F: Cosponsored and Other Activities......................................................................................................................... 74
Appendix G: External Peer Reviews .......................................................................................................................................... 78
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U.S. Small Business Administration | Office of Inspector General
Appendix H: Office of Inspector General Reporting Requirements.......................................................................................... 79
Make a Difference ........................................................................................................................................................................... 81
Spring 2024 Semiannual Report to Congress | v
U.S. Small Business Administration | Office of Inspector General
SBA’s Top Management and Performance
Challenges
Each year, SBA’s Office of Inspector General Management &
(OIG) is required to report on the most
serious management challenges facing the
Performance Challenges
agency. In accordance with the Reports FY 2024
Consolidation Act of 2000 and Office of
Management and Budget (OMB) Circular A- Challenge 1
136, SBA includes this information in the SBA’s Economic Relief Programs Are Susceptible to
Significant Fraud Risks and Vulnerabilities
agency’s financial report.
Challenge 2
The management challenges represent
Eligibility Concerns in Small Business Contracting
areas OIG considers particularly vulnerable
Programs Undermine the Reliability of Contracting
to fraud, waste, abuse, or mismanagement, Goal Achievements
or which otherwise pose significant risk to
the agency, its operations, or its credibility. Challenge 3
SBA Faces Significant Challenges in IT Investments,
Each management challenge generally has
System Development, and Security Controls
originated from one or more reports issued
by OIG or the Government Accountability Challenge 4
Office (GAO). SBA Risk Management and Oversight Practices Need
Improvement to Ensure the Integrity of Loan
We do not usually rank the top challenges Programs
in order of importance or magnitude,
except for the Coronavirus Disease 2019 Challenge 5
SBA’s Management and Monitoring of the 8(a)
(COVID-19) pandemic challenge. We view
Business Development Program Needs Improvement
all eight challenges as critically important to
SBA operations in the upcoming year. Challenge 6
However, we placed COVID-19 economic Identification of Improper Payments in SBA’s 7(a)
relief programs at the top of the list for the Loan Program Remains a Challenge
2024 report in recognition that it is the Challenge 7
agency’s most acute challenge. You can SBA’s Disaster Assistance Program Must Balance
find the Top Management and Performance Competing Priorities to Deliver Prompt Assistance but
Challenges Facing the Small Business Prevent Fraud
Administration in Fiscal Year 2024 in the
Challenge 8
Reports section of the SBA OIG website. SBA Needs Robust Grants Management Oversight
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U.S. Small Business Administration | Office of Inspector General
Summary of OIG Oversight Work
Pandemic Response Oversight
As a result of the COVID-19 pandemic’s widespread economic effects on the U.S. economy,
Congress approved legislation to create SBA’s Paycheck Protection Program (PPP), which was
gradually increased to $813.7 billion. Congress also increased funding to SBA’s disaster assistance
program with a $50 billion appropriation that made $367 billion available through the Economic
Injury Disaster Loan (EIDL) program and $20 billion available for emergency grants for eligible
entities, which was then increased to $55 billion total in 2021.
Congress enacted the Shuttered Venue Operators Grant (SVOG) with $15 billion for SBA to
administer in grants to shuttered venues, which was increased to $16.25 billion in total in 2021.
Also in 2021, Congress established the Restaurant Revitalization Fund (RRF) program with
$28.6 billion to help small businesses in the food service industry adversely affected by the
pandemic.
Executive and legislative actions intended to expedite aid during the crisis led SBA to reduce or
eliminate key internal controls that could have helped mitigate fraud and misuse of taxpayer
funds. In the EIDL program, the agency relied on a mandated self-certification of eligibility to
expedite aid. The unprecedented demand and stress on SBA systems were considerable challenges
for the agency, and fraudsters took advantage.
The following summarizes our pandemic oversight work this period.
Audit, Inspections, and Evaluation
SBA's Internal Controls to Prevent Shuttered Venue
Operators Grants to Ineligible Applicants
(Report 24-02)
We assessed SBA’s SVOG controls to prevent disbursements to ineligible entities. Our review
focused on general eligibility requirements applicable to all SVOG applicants and venue-specific
requirements applicable to live venue operators. We found SBA delayed launching the SVOG
application portal for over 2 weeks in April 2021 due to technical issues. In June 2021, SBA officials
made program changes, which SBA called a “program refresh,” to accelerate application
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processing and expedite the release of program funds. SBA stopped using the application portal to
track applicant compliance with each eligibility requirement, switching instead to a manual
checklist. SBA staff were instructed to presume applicant assertions to be true unless a clear
indication of fraud was present. SBA also established a strict 4-hour review time limit per
application and limited or eliminated certain verification procedures.
We recommended SBA management 1) reevaluate eligibility for the 47 SVOG applicants we
reviewed and recover funds from applicants determined to be ineligible and 2) implement
additional controls for the monitoring, auditing, and compliance phases to prevent ineligible
entities from receiving grants.
SBA management disagreed with the audit’s finding because they did not believe our samples
sufficiently tested for eligibility and internal controls documented. Management agreed in
principle with recommendations 1 and 2.
Access this inspection report on the SBA OIG Reports site.
SBA's Handling of Identity Theft in the COVID-19
Economic Injury Disaster Loan Program
(Report 24-04)
We conducted a verification inspection of SBA’s corrective actions for the five recommendations in
OIG’s SBA’s Handling of Identity Theft in the COVID-19 Economic Injury Disaster Loan Program
evaluation report (Report 21-15). We initiated this verification inspection to determine whether
SBA had fully implemented the closed recommendations or if further corrective actions were
needed. Accordingly, our objective was to determine the effectiveness of the corrective actions
SBA implemented to 1) resolve credit-related issues for COVID-19 EIDL identity theft victims, 2)
charge-off fraudulent loans and remove Uniform Commercial Code filing fees for loans associated
with identity theft, and 3) review over 150,000 returned billing statements and resolve any
involving identity theft.
We determined recommendations 1, 2, 3, and 4 in Report 21-15 to be fully implemented.
Specifically, SBA:
• Implemented processes using two software systems to maintain and track identity theft
complaints.
• Implemented an effective process to review identity theft complaints and send
complainants letters notifying them of the outcome.
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• Developed an effective process to suspend automated notices, disassociate the victims’ tax
identification numbers from the fraudulent loans, and mail victims a UCC-3 Termination
Form for validated cases of identity theft.
• Developed an effective process requiring two reviewers to charge off loans and UCC filing
fees connected to validated identity theft complaints.
However, we found that SBA management had not fully implemented recommendation 5. SBA
successfully addressed the first part of the recommendation by implementing a phone calling
campaign to obtain updated mailing addresses for over 150,000 returned billing statements.
Nonetheless, SBA did not implement a formal process to resolve billing statements involving
identity theft. We will track management’s implementation by reopening the recommendation.
Access this verification inspection on the SBA OIG Reports site.
SBA’s Restaurant Revitalization Fund Program
Award Practices (Report 24-09)
We reviewed SBA’s RRF application review and approval process. The American Rescue Plan Act of
2021 established the RRF to help small businesses in the food service industry adversely affected
by the COVID-19 pandemic. Beginning in May 2021, SBA received 278,300 RRF applications
requesting $72.2 billion in relief payments. SBA approved approximately 101,000 applications and
disbursed all $28.6 billion authorized for the program. SBA developed an implementation plan
including a risk framework intended to reduce the risk of making improper payments and awarding
RRF funds to ineligible recipients. However, the plan did not include all program requirements and
SBA did not always adhere to the plan or have sufficient controls to ensure RRF applicants met
program and statutory requirements. As a result, we determined SBA:
• Awarded $552 million of improper payments to applicants with a history of “likely fraud”
by not effectively leveraging fraud indicators available in PPP loan data as planned.
• Awarded $6 billion to applicants without verifying historical data as planned.
• Awarded $377 million to applicants who claimed to operate as an inn or brewery, through
automated approval and without program eligibility review.
• Awarded $55 million to affiliate groups that collectively received amounts in excess of the
statutory limit.
We made five recommendations for SBA to improve the use of data to reduce risks of making
improper payments and review and recover funds awarded to applicants who did not meet
eligibility requirements or received funds that exceeded statutory limits. Management agreed or
partially agreed with all five recommendations. Management plans to develop a fraud risk
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framework to reduce improper payment risks in SBA programs and recover funds paid to affiliated
business groups that exceed statutory limits.
Access this audit report on the SBA OIG Reports site.
SBA’s Eligibility and Forgiveness Reviews of PPP
Loans Made to Borrowers with Treasury’s Do Not
Pay Data Matches (Report 24-06)
This report follows up an earlier SBA OIG report (Report Number 21-06) that found SBA did not use
Department of Treasury Do Not Pay data to screen borrowers for eligibility prior to approving PPP
loans originated before August 8, 2020. Our prior report found 57,473 potentially ineligible Do Not
Pay matched loans totaling about $3.6 billion for PPP round one (April 4 through August 8, 2020).
In this report, we assessed SBA actions to address potentially ineligible loans identified in the
earlier report and its implementation of controls to review Do Not Pay data for PPP loans
originated after August 8, 2020 (PPP round two).
We found that SBA’s review plan was not adequate to ensure loans with known Do Not Pay data
matches were cleared before disbursement and its loan review procedures were not always
adequate to ensure borrowers met eligibility requirements or sufficient to assess eligibility. As a
result, we recommended SBA implement or enhance policies and procedures to ensure
compliance with program requirements and federal standards for identifying and preventing
improper payments and seek remedy or repayment of ineligible loans. We made seven
recommendations to SBA including, but not limited to, reviewing the 1,799 PPP loans totaling over
$89 million, that matched a Do Not Pay data source to ensure eligibility requirements were met
and seek remedy or repayment of loans deemed ineligible and reviewing the 49 PPP loans totaling
approximately $35 million and the 43 loans totaling approximately $72 million to ensure
borrowers met eligibility requirements and seek remedy or repayment of loans deemed ineligible,
and reviewing the additional 47, 940 PPP loans totaling over $1.7 billion, identified through the Do
Not Pay data match, to ensure borrowers met the eligibility requirements and seek remedy or
repayment of loans deemed ineligible.
SBA partially agreed with six of the recommendations and disagreed with one.
Access this evaluation report on the SBA OIG Reports site.
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Notable Investigations
CEO of Company Providing Homes for Parolees and
Probationers Sentenced to 17 Years for Bank Fraud,
Wire Fraud, Witness Tampering
A California man was sentenced to 17 years in prison after being convicted of 44 felonies, including
conspiracy, bank fraud, wire fraud, aggravated identity theft, false statements to a bank,
destruction of property to prevent a search, possession of a firearm as a felon, making a false tax
return, obstruction, and witness tampering. His company provided a residential reentry home for
probationers, parolees, homeless persons, and persons with mild mental illness. He carried out
multiple schemes to defraud, including defrauding organizations that placed residents at his
company’s transitional housing facilities and defrauding several lenders that were participating in
the PPP. The evidence at trial showed that he submitted a total of 16 fraudulent loan applications
seeking approximately $34.6 million in PPP loans. The jury also found that he attempted to destroy
evidence, obstructed the grand jury’s investigations into his crimes, and tampered with a witness
by attempting to conceal the witness while law enforcement was taking steps to execute a
material witness order.
Former Florida State Representative Sentenced for
Wire Fraud, Money Laundering, Making False
Statements
A Florida man was sentenced to 4 months in federal prison for wire fraud, money laundering, and
making false statements in connection with COVID-19 relief fraud. The former Florida state
representative devised a scheme to defraud SBA and obtain small business loans by means of
materially false and fraudulent pretenses, representations, and promises and, while executing the
scheme, transmitted wire communications in interstate commerce. He also submitted to SBA a
false and fraudulent EIDL application in the name of one of his dormant business entities. Through
this conduct, he fraudulently obtained $150,000 in COVID-19 relief funds from SBA.
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U.S. Small Business Administration | Office of Inspector General
Leader of $20 Million COVID-19 Relief Fraud Ring
Sentenced to 15 Years
A Texas man, who is the head of a multi-million dollar COVID-19 relief fraud ring and
six of his co-conspirators were sentenced for fraudulently obtaining more than
$20 million in forgivable PPP loans that the SBA guaranteed under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act. According to court documents, he was sentenced to 15 years in
prison and ordered to forfeit $5.5 million for leading the conspiracy and for conspiring to submit
75 fraudulent PPP loan applications in 2020. In the applications, the defendants falsified the
number of employees and the average monthly payroll expenses of the applicant businesses and
submitted fraudulent bank records and fake federal tax forms in support of the PPP loan
applications. He paid some of the defendant's large kickbacks in exchange for their assistance with
the false and fraudulent PPP loan applications. In addition, the co-conspirators were sentenced for
their roles in the loan fraud scheme.
Man Charged for $10 Million COVID-19 Relief Fraud
Scheme
A California man was charged in a scheme to fraudulently obtain more than
$10 million in CARES Act loans. According to court documents, he allegedly submitted fake tax
documents and business records to three banks to obtain two PPP loans and one Main Street
Lending Program loan totaling $10.6 million. He is charged with four counts of wire fraud and, if
convicted, faces a maximum penalty of 20 years in prison on each count.
COVID-19 Fraudster Sentenced, Ordered to Repay
Stolen Funds
A Georgia man was sentenced to 64 months in federal prison and ordered to pay
$1.9 million in restitution after being convicted at trial for conspiracy to commit wire fraud, wire
fraud, and money laundering conspiracy. He stole nearly $2 million in COVID-19 small business
relief funding by devising a complex and far-reaching scheme to steal federal funding intended to
provide relief to small businesses struggling from the COVID-19 pandemic. Court documents state
that he used information for non-existent companies to file at least 46 fraudulent applications for
EIDL and PPP loans for himself and others from April 2020 through May of 2021, seeking more
than $4.2 million in COVID-19 relief funds. He received nearly $2 million in funding directly or was
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paid by other recipients for his work in submitting the EIDL applications on their behalf. He then
conspired to launder the fraudulent proceeds to hide the source of the funds.
Two Former Miami Police Department Employees
Pled Guilty to COVID-19 Relief Fraud
Two Florida women pled guilty to one count of wire fraud in the Southern District
of Florida in connection with their fraudulent applications for a PPP loan and an
EIDL program loan. At the time they were both full-time employees of the Miami Police
Department and submitted fraudulent PPP and EIDL program loan applications on behalf of several
companies that they purportedly owned. They falsified information in the loan applications and
supporting documents, including claims that some of the businesses had a gross income over
$1 million. They also submitted falsified federal tax returns. In addition, they misused loan
proceeds by transferring the funds to personal bank accounts. They are scheduled for sentencing
in May 2024 in Miami, Florida, where they each face a maximum sentence of 20 years in prison.
Atlanta-Based Financial Adviser Sentenced for COVID-
19 Relief Fraud Scheme
A Georgia man pled guilty and was sentenced to over 3 three years in federal
prison, followed by 3 years of supervised release, and ordered to pay restitution in
the amount of $1.1 million for a multi-million dollar fraud scheme related to a COVID-19 relief
program. He conspired with others to submit millions of dollars of fraudulent EIDL loan
applications in the names of shell companies that had no employees and conducted no business
activities. He filed fraudulent EIDL loan applications and recruited and taught others to file
fraudulent applications, totaling over $2 million. He posted related videos on his YouTube channel,
where he provided financial and investment advice before the pandemic. In a May 2020 video
titled “EIDL, disaster assistance you don’t have to pay back,” he explained, in Korean, that
applicants could receive tens of thousands of dollars in assistance without collateral or a co-signor,
using only the applicant’s electronic signature.
Seven Chicago-Area Residents Charged with $16
Million in COVID Relief Fraud
Seven Chicago area residents have been indicted on federal charges for allegedly
fraudulently obtaining at least $16 million in small business loans and grants under
the CARES Act. The defendants engaged in fraud related to the EIDL program. According to the
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indictment, the defendants submitted fraudulent applications to SBA, claiming to own and operate
various businesses in Illinois and Florida. The applications and supporting documents contained
materially false representations about the defendants’ companies, including the purported
number of employees, revenue amounts, and other expenses, the indictment states.
The indictment alleges that the defendants caused SBA to disburse at least $16 million in EIDL
loans and grants into bank accounts controlled by the defendants and others. The defendants
allegedly used the money to make cash withdrawals and transfers for their personal benefit.
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Small Business Access to Capital
SBA provides small businesses with capital and financial assistance through several key programs.
The agency has a financial assistance portfolio of guaranteed and direct loans that totaled about
$170 billion as of September 2023, after the forgiveness of over $750 billion in PPP loans. Over the
years, OIG has worked closely with the agency to identify potential points of risk and improve
SBA’s oversight and controls to ensure eligible participants most in need of assistance benefit from
these programs.
The Section 7(a) loan program is SBA’s principal vehicle for providing small businesses with access
to credit that cannot be obtained elsewhere. Recipients may use proceeds from a 7(a) loan to
establish a new business or assist in acquiring, operating, or expanding an existing business. This
program relies on numerous outside parties (such as borrowers, loan agents, and lenders) to
complete loan transactions.
SBA has centralized several loan approval and servicing functions and reduced the number of staff
performing these functions, placing more responsibility on, and giving greater independence to,
lenders. Past OIG reviews have reported on these trends and OIG continues to identify weaknesses
in SBA’s lender oversight processes.
Criminals use a wide array of techniques to fraudulently get — or induce others to obtain — SBA-
guaranteed loans. The techniques include submitting fraudulent documents, making fictitious
asset claims, manipulating listed property values, using loan proceeds contrary to the terms of the
loans, and failing to disclose debts or previous criminal records. Consequently, there is a greater
chance of financial loss to the agency and its lenders. OIG dedicates a significant portion of its
resources to identifying wrongdoers and, whenever possible, recovering taxpayer funds.
The following summarizes our audit and investigation work this period.
Investigation
Loan Brokers and Bank Loan Officer Sentenced for
Bank Fraud Scheme
Two operators of a loan brokerage business and a loan officer at a Massachusetts-
based bank were sentenced for conspiring to defraud a bank and SBA. According to court
documents, each was sentenced to 1 year and 2 years of supervised release, and collectively
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U.S. Small Business Administration | Office of Inspector General
ordered to pay restitution of over $2.6 million. The defendants previously pled guilty to one count
each of conspiracy to commit bank fraud.
Between 2015 and 2018, they agreed to defraud a bank and SBA by submitting fraudulent loan
applications to the bank, which administered the SBA Express loan program, to secure SBA-
guaranteed bank loans. Specifically, they submitted dozens of fraudulent loan applications on
behalf of borrowers who were ineligible for traditional business loans. These loan applications
misrepresented the identity of the real loan recipients and the businesses for which the loans were
sought.
They falsified applicant signatures and falsely indicated that no broker had assisted in preparing or
referring the loan applications when, in fact, they charged borrowers excessive fees for obtaining
these fraudulent loans. Many of the loans the bank issued as a result of the fraudulent applications
ultimately defaulted, resulting in substantial losses to the bank.
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Disaster Assistance Program
Disaster assistance has been part of the agency since its inception in 1953. SBA provides long-
term, low-interest financial assistance to businesses of all sizes, private nonprofits, homeowners,
and renters following a declared disaster. Each year, SBA approves hundreds of millions of dollars
in disaster assistance loans.
The disaster assistance loan program is the only form of SBA assistance not limited to small
businesses. The program’s disaster assistance loans are the primary form of federal assistance for
repairing and rebuilding nonfarm, private sector losses following a declared disaster.
The program includes four categories of loans for disaster-related losses: home disaster loans,
business disaster loans, economic injury disaster loans (includes pandemic relief loans), and
military reservist economic injury loans.
During this semiannual period, our audit and investigations work in this program area focused on
pandemic response programs.
Notable Investigations
Jefferson City Man Pled Guilty to $12 Million Bank
Fraud Scheme
A Missouri man pled guilty in federal court to a $12.4 million bank fraud scheme that
included fraudulent PPP loans for four businesses. He pled guilty to one count of bank fraud, one
count of money laundering, and one count of aggravated identity theft. He received a total of
$12.4 million in PPP loans for his four businesses. In each of those loan applications, he admitted
that he failed to disclose his ownership in the other three businesses and made materially false
and fraudulent claims in the loan applications and supporting documentation. He falsely stated the
businesses were in operation on February 15, 2020 and eligible for PPP loans. He also inflated the
income of those businesses and claimed payroll for employees who did not exist or no longer
worked for him.
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U.S. Small Business Administration | Office of Inspector General
Leader of $6.8 million Pandemic Fraud Scheme
Sentenced to 5 Years in Prison
A Washington woman was sentenced to 5 years in prison and ordered to pay over
$5 million in restitution for her role in a scheme to defraud the government of more than
$3.3 million in pandemic assistance programs. She received more than $2 million in fraudulent
proceeds and spent the money on luxury cars, lavish trips, cosmetic surgery, jewelry, and designer
goods. Overall, the fraud ring sought to steal more than $6.8 million in pandemic benefits from
nearly every major pandemic assistance program. According to case records, from June 2020 to
February 2022, she personally submitted over 125 fraudulent applications for the U.S. Department
of Treasury’s Emergency Rental Assistance Program funds administered by King County, the PPP,
the EIDL program, and CARES Act unemployment benefits. She enlisted over 50 associates,
including her 5 co-defendants, to obtain more than $3.3 million by posing as fake tenants,
landlords, and small business owners in need of assistance. In submitting these applications, she
created falsified bank statements, tenant ledgers, and landlord attestations.
Tax Preparation Business Owner Sentenced for
Defrauding Pandemic Relief Programs
A Georgia woman was sentenced to 5 years in prison and ordered to repay more
than $500,000 she fraudulently obtained from COVID-19 small business relief programs. She was a
franchisee of a tax preparation service with multiple locations in Georgia. She admitted to lying to
investigators from SBA OIG about applications she filed for herself and on behalf of others,
including her customers, to obtain more than $550,000 from a California lender through the PPP
and EIDL programs.
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U.S. Small Business Administration | Office of Inspector General
Contracting and Counseling Programs
The U.S. government is the largest single purchaser of goods and services in the world, recently
awarding over $760 billion in prime contracts annually. SBA works to maximize opportunities for
small businesses to receive these contract awards. As mandated by the Small Business Act, the
government-wide goal is to award at least 23 percent of contract dollars to small businesses.
SBA has specific programs that focus on strengthening particular types of small businesses, like
those owned by service-disabled veterans and women, as well as small businesses that are
disadvantaged or located in historically underutilized business zones (HUBZones).
The HUBZone program is intended to help small businesses stimulate their economically
challenged local economies. Similarly, to help small, disadvantaged businesses gain access to
federal and private procurement markets, SBA’s 8(a) Business Development Program helps socially
and economically disadvantaged entrepreneurs who own small businesses gain business skills and
access to federal contracting opportunities so they can better compete in the open marketplace.
The program offers free business development education, training workshops, and matchmaking
opportunities with federal buyers.
SBA also aids existing and prospective small businesses through a variety of counseling and training
services offered by partner organizations. Among these partners are Small Business Development
Centers, the SCORE mentoring network, Women’s Business Centers, and Veterans Business
Outreach Centers. SBA designed the Boots to Business program to provide transitioning military
service members with entrepreneurial skills and technical assistance to start their own businesses.
SBA is wrapping up the Community Navigator Pilot Program, an American Rescue Plan initiative,
that provided funding to organizations working with local community groups to improve access to
government resources. These programs all require effective and efficient management, outreach,
and service delivery.
During this semiannual period, our audit work in this program area was focused on the pandemic
response programs.
Spring 2024 Semiannual Report to Congress | 14
U.S. Small Business Administration | Office of Inspector General
Notable Investigation
Former Navy Civilian Employee and Executive Indicted
in $100 Million Contracting Bribery Scheme
A Las Vegas, Nevada man who was a former civilian employee of the San Diego-
based Naval Information Warfare Center and a former executive with a South Carolina defense
contractor were charged with participating in a bribery scheme to trade expensive meals, jobs, and
a ticket to a premiere sporting event for help obtaining more than $100 million in government
contracts.
From 2006 to 2019, the civilian defendant was an engineer, project leader, and certified
contracting officer representative helping to manage Department of Defense contracts. He was
supposed to act as liaison between the government and the contractor, including keeping
contractor bid, proposal, and selection information confidential and protecting the integrity of the
acquisition process by maintaining fairness in the government’s treatment of all bidders.
According to the indictment, he instead used his considerable influence to steer lucrative contracts
to the South Carolina man who was an executive vice president of a company vying for defense
contracts.
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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 further agency goals. As part of this work, OIG
coordinates with the offices of the Chief Financial Officer, the Chief Information Officer, and the
Chief Operating Officer to review financial reporting and performance management, human
resources, procurements and grants, space and facilities, and maintenance of SBA’s information
systems and related security controls.
Audits and Evaluations
Independent Auditors’ Report on SBA’s Fiscal Year
2023 Financial Statements (Report 24-03)
We contracted with the independent certified public accounting firm KPMG LLP to conduct an
audit of SBA’s consolidated balance sheets as of September 30, 2023 and 2022 and the notes
related to these statements. KPMG reported significant matters for which it was unable to obtain
sufficient and appropriate audit evidence to provide a basis for an audit opinion on SBA’s balance
sheet as of September 30, 2023. KPMG issued a disclaimer of opinion on the consolidated balance
sheets as of September 30, 2023 and 2022.
SBA was unable to provide adequate evidential matter supporting a significant number of
transactions and account balances related to the PPP, EIDL program, the RRF, and the SVOG
program. As a result, KPMG was unable to determine whether any adjustments to the following
might have been necessary: Credit Program Receivables and Related Foreclosed Property, Net;
Other than Intragovernmental Accounts Receivable, Net; Downward Reestimate Payable to
Treasury; and Loan Guarantee Liabilities. KPMG identified six material weaknesses and three
significant deficiencies in internal control over financial reporting. SBA’s Chief Financial Officer
generally concurred with its findings and recommendations and agreed to implement the
recommendations.
Access this audit report on the SBA OIG Reports site.
Spring 2024 Semiannual Report to Congress | 16
U.S. Small Business Administration | Office of Inspector General
SBA’s Controls Over Cash Contributions and Gifts,
Fiscal Year 2023 (Report 24-05)
We found SBA complied with the Consolidated Appropriations Act and SBA regulations and policies
regarding soliciting and accepting cash contributions from six new entities that cosponsored
National Small Business Week 2023. However, we noted SBA did not ensure the timely and
accurate closeout of the 2023 event in accordance with standard operating procedures.
We made one recommendation for SBA to fully implement a 90-day closeout process for the event
mall as outlined in a Standard Operating Procedure. SBA management agreed with the
recommendation.
Access this audit report on the SBA OIG Reports site.
Fiscal Year 2023 Federal Information Security
Modernization Act (Report 24-07)
We found SBA responded to previously identified vulnerabilities in its information security systems
policies, procedures, and practices. It also made progress in three of the nine Federal Information
Security Modernization Act (FISMA) required review areas; however, we rated SBA’s overall
information security program as “not effective” because controls were found to be ineffective in
eight of the nine areas. In this report, we made 11 recommendations for improvements in the
following 6 domains: risk management, supply chain risk management, identity and access
management, data protection and privacy, security training, and contingency planning. We did not
repeat recommendations from previous years in the areas of risk management, supply chain risk
management, and contingency planning. SBA management agreed with our recommendations and
is implementing corrective measures, including inventory software, personal identity verification
card compliance, and updating applicable policies and procedures.
SBA OIG contracted with the independent certified public accounting firm KPMG LLP for this
evaluation report, which you can find on the SBA OIG audit reports site.
Fiscal Year 2022 Risk Assessment over SBA’s Charge
Card Programs (Report 24-08)
We assessed SBA’s internal controls over purchase and travel card expenditures for FY 2022 and
found the agency is at low risk of illegal, improper, or erroneous purchases and payments. We
found SBA implemented effective internal controls to limit risk. SBA established the use of bank
17 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
card management analytical and audit tools to manage card program expenses, review
cardholders spending patterns, and analyze transaction detail reports to monitor delinquency,
potential fraud and misuse, performance metrics, and other noncompliance issues. SBA’s internal
controls helped safeguard taxpayer funds against fraud, waste, or abuse. We made no
recommendations, and the agency did not provide any comments on the advisory.
Access this management advisory on the SBA OIG Reports site.
SBA’s IT Investment Governance Framework
(Report 24-10)
OIG has reported on significant Information Technology (IT) investment internal control issues over
the last 6 years, which the agency has also identified without taking meaningful action to resolve.
These issues include:
• The governance board did not meet as required to oversee IT investments.
• Performance against established baselines was not reported.
• Critical system capabilities were missing.
• Corrective actions were not taken for underperforming investments.
These issues require immediate attention as a strong IT governance framework enables the agency
to achieve mission goals and objectives while safeguarding taxpayer funds. An efficient IT
framework will help the agency better deliver SBA programs and services, particularly in times of
crisis. Our evaluation determined that SBA hasn’t had an effective governance framework for
several years, and the new IT investment governance framework isn’t scheduled to be
implemented until the second quarter of 2024. We made six recommendations and SBA
management agreed with five and partially agreed with one. To address these recommendations,
the agency is planning to implement corrective measures, including updating applicable policies,
procedures, and evidentiary documentation.
Access this management advisory on the SBA OIG Reports site.
Spring 2024 Semiannual Report to Congress | 18
U.S. Small Business Administration | Office of Inspector General
Investigation
Former IT Contractor Sentenced to Trafficking Stolen
Property from SBA
A Maryland woman pled guilty and was sentenced in U.S. Superior Court for the
District of Columbia to 12 months of incarceration, 36 months of supervised release, 60 months
probation, and ordered to serve 40 hours of community service. She was also ordered to pay
$50,000 in restitution to SBA.
She was employed as a contractor working at SBA’s IT service desk at the agency’s headquarters in
Washington, D.C. According to the government’s evidence, between November 20, 2017 and
August 22, 2018, she stole and resold at least 57 laptops paid for with taxpayer money in an online
customer-to-customer marketplace used to buy and sell products and services.
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U.S. Small Business Administration | Office of Inspector General
Other Significant OIG Activities
Background Investigations Ensure Integrity
During this reporting period, OIG initiated 69 background investigations, issued 4 security
clearances for OIG employees and contractors, and adjudicated 24 background investigative
reports.
Debarment and Other Administrative Enforcement
Actions
OIG promotes program integrity by making present responsibility referrals to SBA and other
agencies. Present responsibility means the business ethics, integrity, honesty, and competence of
persons who participate in SBA programs or otherwise do business with the government. During
this reporting period, OIG prepared 11 present responsibility referrals.
Present responsibility referrals can result in suspensions, debarments, and similar administrative
enforcement actions. These actions protect taxpayer funds from program participants who are not
a good risk for the government.
A typical OIG referral contains a summary of allegations and criminal, civil, administrative, or other
evidence supporting the recommendation. Most OIG administrative referrals involve SBA’s loan
and contract programs. OIG ensures that a suspension and debarment official reviews all
appropriate allegations arising in other contexts, such as the investigation of False Claims Act
cases.
Stakeholder Presentations on PPP and EIDL Fraud
During this reporting period, SBA OIG held 99 presentations for internal and external stakeholders
to raise awareness of fraud, waste, and abuse related to SBA programs. More than 2,476
participants attended these events.
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U.S. Small Business Administration | Office of Inspector General
Reviews of Proposed Agency Regulations, Operating
Procedures, and Other Initiatives Lead to Improved
Program Controls
OIG reviews changes SBA proposes to make to its program directives, such as regulations, internal
operating procedures, agency policy notices, and SBA forms completed by the public. OIG often
identifies material weaknesses in the proposals and works with the agency to promote more
effective controls to deter waste, fraud, and abuse. During the reporting period, OIG reviewed 136
proposed revisions of these program directives and submitted comments designed to improve 15
of these initiatives.
Approval of Small Business Development Center Surveys
According to 15 USC 648(a)(7) of the Small Business Act, until 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 include this approval in the
semiannual report. SBA issued final regulations on November 7, 2023. There were no surveys
submitted for review prior to November 7, 2023.
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U.S. Small Business Administration | Office of Inspector General
OIG Hotline
Offices of Inspector General have a hotline
function that takes complaints from anyone
who suspects waste, fraud, abuse, or serious
mismanagement within an agency or its
programs by employees, contractors, and
the public. Hotline complaints may result in
corrective actions, audits, or administrative,
civil, or criminal investigations.
Our OIG Hotline staff examines complaints
and monitors the progress of matters
referred to SBA program offices for action to
ensure the agency has promptly followed up,
adequately resolved allegations, and documented any corrective actions.
Significant Increases
Hotline work has changed dramatically because of the COVID-19 pandemic. OIG’s Hotline team has
been diligently working through a large backlog of complaints. The staff is addressing each
complaint received online submissions to the SBA OIG website, telephone, e-mail, and posted mail,
as well as referrals from banks and other agencies.
The number of complaints has increased by orders of magnitude since the COVID-19 pandemic
relief programs were established by Congress, which has overwhelmed the system and our staff.
During this semiannual period, the OIG Hotline received more than 18,000 complaints of loan
fraud and abuse, identity theft, and problems with SBA’s customer service.
In total, since the pandemic began in March 2020, OIG has received more than 286,000
complaints. By contrast, the OIG Hotline received 742 complaints in calendar year 2019.
Spring 2024 Semiannual Report to Congress | 22
U.S. Small Business Administration | Office of Inspector General
Organizational Overview
U.S. Small Business Administration
SBA’s mission under the Small Business Act, as amended, is to maintain and strengthen the
nation’s economy by enabling the establishment and vitality of small businesses and assisting in
the economic recovery of communities after disasters. The agency’s strategic plan for FYs 2022–
2026 has three key goals:
1. Ensure equitable and customer-centric design and delivery of programs to support small
businesses and innovative startups.
2. Build resilient businesses and a sustainable economy.
3. Implement strong stewardship of resources for greater impact.
SBA is organized around the areas of financial, contracting, entrepreneurial development, and
disaster assistance. The agency also represents small businesses through an independent advocate
and an ombudsman.
SBA headquarters is in Washington, D.C. The agency has staff in 10 regional offices, 68 district
offices and corresponding branch offices, and 2 disaster field operation centers. SBA also has 6
government contracting area offices and maintains a network of resource partners in all 50 states,
the District of Columbia, Puerto Rico, American Samoa, the U.S. Virgin Islands, and Guam.
23 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Office of Inspector General
OIG’s mission is to provide
independent, objective, and
timely oversight to improve
the integrity, accountability,
and performance of SBA and
its programs for the benefit
of all Americans.
Our strategic plan for FYs
2022–2027 has four goals. In
addition to the Office of
Counsel to the Inspector
General, four divisions assist
in carrying out the statutory
responsibilities of OIG: the
Audits Division, Investigations Division, Technology Solutions Division, and the Management and
Operations Division.
Our vision is to be valued and engaged change agents who set the standard for oversight
excellence in support of America’s small businesses. We seek to demonstrate our values of
integrity, commitment, and excellence as we deliver products and services of the highest quality
defined by accuracy, timeliness, fairness, and usefulness.
The Office of Counsel provides legal and ethics advice to all OIG components; protects the OIG’s
interests in litigation arising out of or affecting OIG operations; assists in prosecuting criminal, civil,
and administrative enforcement matters; processes subpoenas; responds to Freedom of
Information Act and Privacy Act requests, and reviews and comments on proposed policies,
regulations, legislation, and procedures.
The Audits Division performs and oversees audits and reviews to promote the economical,
efficient, and effective administration of SBA programs and operations. Key areas of emphasis are
SBA loan, disaster assistance, business development, and government contracting programs, as
well as mandatory and other statutory audit requirements involving information technology
security, financial reporting, and other SBA program areas.
The Investigations Division manages programs to detect and deter illegal and improper activities
involving SBA’s programs, operations, and personnel. The criminal investigations staff carries out a
Spring 2024 Semiannual Report to Congress | 24
U.S. Small Business Administration | Office of Inspector General
full range of traditional law enforcement functions. Within the division, Hotline staff reviews
allegations of waste, fraud, abuse, and severe mismanagement within SBA or its programs made
by employees, contractors, and the public.
A preliminary review of all complaints is conducted to determine the appropriate course of action.
As part of the review process, Hotline staff may coordinate reviews of allegations within OIG, SBA
program offices, or other government agencies.
The Technology Solutions Division provides data analytics and IT support across OIG, such as
artificial intelligence and machine learning solutions, and expands the impact of OIG’s oversight
activities.
The Management and Operations Division provides business support (e. g., budget and financial
management, human resources, and procurement) for various OIG functions and activities. The
Security Operations Staff within the division conducts required employee and contractor
background investigations to achieve a high level of integrity in the agency's workforce. It makes
adjudications on OIG employees and contractors for issuance of PIV cards pursuant to HSPD-12
background investigations requirements.
OIG’s headquarters is in Washington, D.C. Our field offices are in Atlanta, Georgia; Boston,
Massachusetts; Chicago, Illinois; Columbus, Ohio; Dallas-Fort Worth, Texas; Detroit, Michigan;
Denver, Colorado; Seattle, Washington; Herndon, Virginia; Houston, Texas; Los Angeles, California;
Miami, Florida; New York, New York; Philadelphia, Pennsylvania; Sacramento, California; San
Francisco, California; Tampa, Florida; and Washington, D.C.
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U.S. Small Business Administration | Office of Inspector General
Spring 2024 Semiannual Report to Congress | 26
U.S. Small Business Administration | Office of Inspector General
Appendices
Appendix A: Reporting Period Statistical Highlights
Summary of OIG Dollar Accomplishments
Dollar Accomplishments as a Result of Investigations and Related Activities
Potential Investigative Recoveries and Fines $154,293,127
Other Recoveries (e.g., administrative seizures with partner law enforcement agencies) $8,097,632
Asset Forfeitures Attributed to OIG Investigations $6,589,755
Loans/Contracts Not Approved or Canceled as a Result of Investigations $128,970
Investigations Subtotal $169,109,484
Dollar Accomplishments as a Result of Audit Activities
Disallowed Costs Agreed to by Management $55,067,326
Recommendations that Funds Be Put to Better Use Agreed to by Management —
Audit Subtotal $55,067,326
Total OIG Dollar Accomplishments $224,176,810
Efficiency and Effectiveness Activities Related to Audit, Other
Reports, and Follow-up Activities
Reports Issued 10
Recommendations Issued 88
Dollar Value of Costs Questioned $7,917,110,270
Dollar Value of Recommendations that Funds Be Put to Better Use —
Recommendations with Management Decisions 87
Recommendations without a Management Decision 0
Collections as a Result of Questioned Costs —
Indictments, Convictions, and Case Actions
Indictments from OIG Cases 130
Convictions from OIG Cases 124
Cases Opened 131
Cases Closed 122
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U.S. Small Business Administration | Office of Inspector General
SBA Personnel Actions Taken as a Result of Investigation
Dismissals 0
Resignations and Retirements 0
Suspensions 0
Reprimands 0
Program Actions Taken During the Reporting Period as a Result
of OIG Action
Present Responsibility Referrals to the Agency 23
Pending at the Agency as of March 31, 2024 22
Suspensions Issued by the Agency 12
Proposed Debarments Issued by the Agency 12
Final Debarments Issued by the Agency 7
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 71
Comments Provided by OIG to Improve Legislation, Regulations, Standard Operating Procedures, and
Other Issuances 4
Spring 2024 Semiannual Report to Congress | 28
U.S. Small Business Administration | Office of Inspector General
Appendix B: Reports Issued
Agency Management
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
Independent 24-03 11/15/2023 — — —
Auditors’ Report
on SBA’s FY 2023
Financial
Statements
SBA's Controls 24-05 2/20/2024 — — —
Over Cash
Contributions and
Gifts, FY 2023
FY 2023 FISMA 24-07 3/7/2024 — — —
FY 2022 Risk 24-08 3/13/2024
Assessment over
SBA’s Charge Card
Programs
SBA’s IT 24-10 3/29/2024 — — —
Investment
Governance
Framework
Program Subtotal — — — — —
Credit/Capital Programs
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
SBA's Eligibility 24-06 2/22/2024 $1,428,399,071 $1,428,399,071 —
and Forgiveness
Review of PPP
Loans Made to
Borrowers with
Treasury’s Do Not
Pay Data Matches
Program Subtotal — — $1,428,399,071 $1,428,399,071 —
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U.S. Small Business Administration | Office of Inspector General
Top Management Challenges
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
Top Management 24-01 10/16/2023 — — —
and Performance
Challenges Facing
the SBA in FY 2024
Program Subtotal — — — — —
Disaster Assistance
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
SBA’s Internal 24-02 10/25/2023 $22,878,968 $22,878,968 —
Controls to
Prevent Shuttered
Venue Operators
Grants to Ineligible
Applicants
SBA’s Handling of 24-04 12/19/2023 — — —
Identity Theft in
the COVID-19 EIDL
Program
Program Subtotal — — $22,878,968 $22,878,968 —
Contracting and Counseling Programs
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
SBA’s Restaurant 24-09 3/26/2024 $6,465,832,231 $6,410,764,905 —
Revitalization
Fund Program
Award Practices
Program Subtotal — — $6,465,832,231 $6,410,764,905 —
Spring 2024 Semiannual Report to Congress | 30
U.S. Small Business Administration | Office of Inspector General
Appendix C: Reports, Recommendations, and
Management Decisions
Reports with Questioned Costs
IG Act Reporting Requirement Reports Recommendations* Questioned Costs** Unsupported
Costs***
No management decision made by — — — —
September 30
Issued during this reporting period 3 5 $7,917,110,270 $7,862,042,944
Management decisions made during 3 5 $7,917,110,270 $7,862,042,944
this reporting period
(i) Disallowed costs 1 1 $55,067,326 —
(ii) Costs not disallowed 3 4 $7,806,975,618 $7,862,042,944
No management decision made by — — — —
March 31
* Reports may have more than one recommendation.
** Questioned costs are costs found to be improper.
*** Unsupported costs may be proper but lack documentation. Unsupported costs are a subset of questioned costs.
Reports with Recommendations that Funds Be Put to Better Use
IG Act Reporting Requirement Reports Recommendations Recommended Funds for Better Use
No management decision made by — — —
September 30
Issued during this reporting period — — —
Subtotal — — —
Management decisions made — — —
during this reporting period
(i) Recommendations agreed to by — — —
SBA management
(ii) Recommendations not agreed — — —
to by SBA management
No management decision made by — — —
March 31
Reports from Prior Periods with Overdue Management Decisions
There are no reports from prior periods with overdue management decisions.
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U.S. Small Business Administration | Office of Inspector General
Reports from Prior Periods with Open Recommendations as of
March 31, 2024
Report Title Date Issued Number of Open Aggregate
Number Recommendations Potential Cost
Savings
20-03 Audit of SBA's Oversight of High-Risk Lenders 11/12/2019 3 —
20-20 Audit of SBA’s Compliance with the Debt 9/30/2020 9 —
Collection Improvement Act, as Amended
21-02 Inspection of SBA’s Initial Disaster Assistance 10/28/2020 1 —
Response to the Coronavirus Pandemic
21-07 Inspection of SBA's Implementation of the 1/14/2021 1* —
Paycheck Protection Program
21-08 SBA’s Use of Vendors Without a Contract 2/3/2021 2 $10,800,476
21-09 Duplicate Loans Made Under the Paycheck 3/15/2021 1 —
Protection Program
21-14 Audit of SBA’s Oversight of Women’s Business 5/4/2021 8 $785,961
Centers’ Compliance with Cooperative
Agreement Financial Requirements
22-01 SBA's Emergency EIDL Grants to Sole 10/7/2021 1 $4,500,000,000
Proprietors and Independent Contractors
22-04 Independent Auditors’ Report on SBA’s 11/8/2021 1 —
Compliance with DATA Act Reporting
22-06 COVID-19 EIDL Program Recipients on the 11/30/2021 2 —
Department of Treasury's Do Not Pay List
22-07 SBA’s Oversight of the Grant Recipient’s 1/18/2022 3* —
Implementation of the CARES Act Resource
Partners Training Portal
22-08 SBA’s Business Development Assistance to 8(a) 2/14/2022 5* $24,317,629
Program Participants
22-11 FY 2021 FISMA Review 4/28/2022 1 —
22-13 SBA’s Handling of Potentially Fraudulent PPP 5/26/2022 2* —
Loans
22-15 Inspection of SBA's Award and Payment 7/5/2022 1* —
Practices in the Shuttered Venue Operators
Grant Program
22-17 Evaluation of COVID-19 EIDL Applications 9/12/2022 2 —
Submitted from Foreign IP Addresses
22-19 COVID-19 and Disaster Assistance Information 9/27/2022 8 —
Systems Security Controls
22-21 Paycheck Protection Program Eligibility for 9/26/2022 1 —
Nonprofit Organizations
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U.S. Small Business Administration | Office of Inspector General
Report Title Date Issued Number of Open Aggregate
Number Recommendations Potential Cost
Savings
22-22 Follow-up Inspection of SBA’s Internal Controls 9/29/2022 2 $1,969,200
to Prevent COVID-19 EIDLs to Ineligible
Applicants
22-23 SBA’s Corrective Actions to Improve Monitoring 9/30/2022 1 —
District Offices’ Customer Service Activities
22-25 SBA's Guaranty Purchases for PPP Loans 9/30/2022 2 —
23-03 FY 2022 FISMA Review 12/13/2022 3 —
23-07 Independent Auditors’ Report on SBA’s FY 2022 5/15/2023 4 —
Compliance with the PII Act of 2019
23-10 SBA's Administrative Process To Address 7/5/2023 1 $278,570,834
Potentially Fraudulent RRF Awards
23-11 SBA’s Awards for Staffing Support for COVID-19 7/26/2023 3 $5,010,382
Economic Relief Loan Programs
23-12 SBA's Corrective Actions to Improve Oversight 9/21/2023 1 —
of the SCORE Association
23-15 SBA’s Oversight of Restaurant Revitalization 9/29/2023 6 $3,528,709,751
Fund (RRF) Recipients
23-16 Ending Active Collections on Delinquent COVID- 9/29/2023 2* —
19 Economic Injury Disaster Loans
— Total — 77 $8,350,164,233
*Recommendations submitted for closure by agency and undergoing OIG review.
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Significant Recommendations from Prior Reporting Periods
Without Final Action as of March 31, 2024
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
20-03 11/12/2019 1 Develop and implement policies and procedures to 11/15/2019 06/28/2024
document OCRM's justification for not conducting
planned reviews and identifying and prioritizing
additional lenders for review.
20-03 11/12/2019 2 Develop and implement a comprehensive database to 11/15/2019 08/30/2024
manage its oversight of high-risk lenders to ensure
performance of all planned reviews, implementation of
risk mitigation actions, and identification of
noncompliant lender and systemic material loan
deficiencies.
20-03 11/12/2019 5 Develop and implement policies and procedures that 11/15/2019 06/28/2024
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.
20-20 09/30/2020 1 Review all loans assigned to the resolution center that 04/29/2022 09/6/2024
are 180 days or more delinquent and classified with code
66 (Lien or Mortgage/Refer to Treasury Offset Program
Only) and 00 (Clear Existing Status Code) and transfer the
loans to Treasury Cross-Servicing, unless verified as
exempt when the temporary suspension of debt
collection activities because of the pandemic is lifted.
20-20 09/30/2020 2 Revise SOP 50 52 to clearly communicate that all loans 04/29/2022 09/06/2024
with collateral must be evaluated for foreclosure and
placed in foreclosure status before they are 180 days
delinquent.
20-20 09/30/2020 3 Revise SOP 50 52 2 to clearly communicate that all debts 04/29/2022 09/06/2024
180 days delinquent must be transferred to Treasury
Cross-Servicing unless the debt meets a valid transfer
exemption.
20-20 09/30/2020 5 Ensure that information used to monitor compliance 09/16/2020 09/06/2024
with the Debt Collection Improvement Act includes all
loans assigned to the resolution center as identified in
the Capital Access Financial System.
Spring 2024 Semiannual Report to Congress | 34
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
20-20 09/30/2020 6 Review all loans currently assigned to the Center and 04/29/2022 09/06/2024
designated exempt from Treasury Offset Program and
verify that each of the obligors is exempt from referral to
Treasury Offset Program, and if not, refer the obligors to
Treasury Offset Program, as required.
20-20 09/30/2020 7 Review all loans currently assigned to the Center and 04/29/2022 09/06/2024
designated as exempt from Treasury Cross-Servicing that
are 180 days or more delinquent and verify that each of
the obligors is exempt from transfer to Treasury Cross-
Servicing, and if not, transfer the debt to Treasury Cross-
Servicing, as required when the temporary suspension of
debt collection activities due to COVID-19 is lifted.
20-20 09/30/2020 8 Establish policies and procedures to require routine 09/16/2020 09/06/2024
follow-up on delinquent loans to ensure full compliance
with the Debt Collection Improvement Act.
20-20 09/30/2020 9 Reiterate the requirements for workout agreements to 04/29/2022 09/06/2024
responsible personnel to ensure compliance with the
Debt Collection Improvement Act.
20-20 09/30/2020 10 Perform a cost benefit analysis to determine if SBA 04/29/2022 09/06/2024
should begin assessing fees to offset the cost of
processing and handling delinquent disaster loans.
21-02 10/28/2020 6 Strengthen data integrity to make it possible to 09/30/2021 05/31/2024
determine if the inaccurate information allowed loans to
be made to ineligible entities and to strengthen SBA’s
ability to service loans appropriately.
21-07 01/14/2021 1 Review the loans identified as potentially ineligible to 01/14/2021 10/31/2023*
determine if the businesses met eligibility requirements.
If not, take appropriate action related to loan guaranty
and forgiveness.
21-08 02/03/2021 1 Require responsible personnel to execute a contract for 02/01/2021 04/16/2024
foreclosure and real estate services to ensure the
procurement of services are obtained and authorized in
accordance with the Federal Acquisition Regulation
requirements.
21-08 02/03/2021 3 Ratify the over $10.8 million in payments in accordance 02/02/2023 08/01/2024
with the FAR and 48C.F.R. § 1.602-3.
21-09 03/15/2021 1 Review the OIG identified potential duplicate 03/31/2021 11/29/2024
disbursements for eligibility and take action to recover
any improper payments as applicable.
35 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
21-14 05/04/2021 1 Implement financial oversight procedures for the 05/04/2021 06/03/2024
Women’s Business Center (WBC) program that ensure
the program office enforces WBC cooperative agreement
requirements. Program officials should ensure WBCs use
federal funds only for allowable, allocable, and
reasonable expenses, adhere to contract award
procedures, and separate project costs by funding
source.
21-14 05/04/2021 2 Remedy $523,790 in unsupported matching funds, 05/04/2021 09/29/2024
unsupported program income, and the resulting portion
of the federal funds reimbursed for the unmet match,
and $186,537 in unsupported expenses.
21-14 05/04/2021 3 Recover $31,215 for improperly awarded contracts and 05/04/2021 09/29/2024
$31,424 in unallowable or unallocable expenses.
21-14 05/04/2021 4 Implement policies and procedures for conducting 05/04/2021 06/03/2024
thorough financial compliance reviews and coordinate
with the Office of Field Operations to train field office
personnel responsible for semiannual site visits
21-14 05/04/2021 5 Establish policies holding program officials accountable 05/04/2021 06/03/2024
for promptly following up on financial examination
results and enforcing cooperative agreement
requirements.
21-14 05/04/2021 6 Require higher-level reviewers to clearly justify and 05/04/2021 06/03/2024
document approving or denying disbursement of funds if
the decisions differ from the recommendations of lower-
level reviewers; justification documentation should be
kept in the official cooperative agreement file.
21-14 05/04/2021 7 Review expenses for the $28,089 reallocation of budget 05/04/2021 09/29/2024
expenses we detailed in this report to ensure these costs
are allowable and document the rationale for the
reallocation or recover costs that are unallowable.
21-14 05/04/2021 8 Require program officials to enforce the cooperative 05/04/2021 06/03/2024
agreement terms and conditions and deobligate or
withhold payments if WBCs do not submit accurate
financial reports on time.
22-01 10/07/2021 1 Review the applications of sole proprietors and 08/22/2022 04/30/2024
independent contractors that included numbers of
employees but no Employer Identification Number; and
remedy the $3.5 billion disbursed to sole proprietors and
$1 billion disbursed to independent contractors that
exceeded the amount allowed by SBA’s policy.
Spring 2024 Semiannual Report to Congress | 36
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
22-04 11/8/2021 2 KPMG recommends the Administrator coordinate with 09/01/2022 04/30/2024
the Associate Administrator for Disaster Assistance to
enforce that documentation is maintained to evidence
changes to a loan and ensure that awarding actions are
entered into the source systems in a timely manner.
22-06 11/30/2021 2 Use Treasury’s DNP analysis to systemically flag COVID- 01/18/2023 04/30/2024
19 EIDL and Emergency EIDL grant recipients who were
found in Treasury’s DNP system and not previously
reported by OIG. Review the applications and determine
whether they are deemed ineligible. If the applicant is
deemed ineligible, recover any disbursed funds, and flag
the application as ineligible.
22-06 11/30/2021 3 For all COVID-19 EIDLs and Emergency EIDL grants 02/02/2023 04/30/2024
identified and flagged as potentially ineligible above,
include those transactions in SBA’s 2021 improper
payments estimation process.
22-08 02/14/2022 1 Implement a standard process to approve initial business 11/10/2022 08/01/2024
plans and monitor to ensure that business plans are
reviewed annually, to include appropriate updates for
specific targets, objectives, and goals for the business
development of program participants, in accordance with
13 CFR 124.403(a) and section 7(j)(10)(D) of the Small
Business Act.
22-08 02/14/2022 3 Establish outcome-based performance goals and 2/14/2022 12/29/2023*
measurements to assess whether the program achieved
business development objectives, including the number
of graduated 8(a) firms in accordance with the measure
of success in section 101(b)(2) of the Business
Opportunity Development Reform Act of 1988.
22-08 02/14/2022 5 Implement a process to ensure the systematic collection 11/10/2022 08/01/2024
of accurate and complete data on program results and
operations to make sure all program reporting
requirements are met, in accordance with section
7(j)(16)(A) of the Small Business Act and Standards for
Internal Control in the Federal Government Principles for
Information and Communication.
22-08 02/14/2022 6 Implement requirements for management to monitor 11/10/2022 08/01/2024
that Business Opportunity Specialists consistently assess
program participant’s development needs, counsel
participants, conduct annual field visits, and maintain
required documentation, as required by standard
operating procedures.
37 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
22-11 04/28/2022 2 Ensure the continuity of operations plan is tested 04/29/2022 08/30/2024
annually, as required by Federal Continuity Directive 1.
22-13 05/26/2022 1 Establish clearly defined and detailed roles, 06/03/2022 12/29/2023*
responsibilities, and processes for all SBA offices and
officials responsible for managing and handling
potentially fraudulent PPP loans to reduce the risk of
ineligible applicants receiving PPP forgiveness and the
risk of fraud and financial loss in the PPP and when
implementing similar future programs.
22-13 05/26/2022 2 Provide lenders formal guidance to effectively and 06/03/2022 12/29/2023*
consistently handle potentially fraudulent PPP loans and
ensure lenders have sufficient guidance when
implementing similar future programs.
22-17 09/12/2022 1 Thoroughly review each COVID-19 EIDL, grant, and 10/06/2022 05/03/2024
advance application submitted from foreign IP addresses
that were approved and funded and verify eligibility. If
ineligibility or evidence of potential fraud is found, SBA
should stop any further or future disbursements, recover
any disbursed funds, and refer fraudulent loans to OIG
for investigation.
22-17 09/12/2022 2 Examine controls related to foreign IP addresses and 10/06/2022 05/03/2024
ensure these controls are more effective in future
disaster processing systems.
22-19 09/27/2022 1 Ensure the existing SBA System Development 11/08/2022 06/03/2024
Methodology is updated to include supply chain risk-
management practices as required by OMB Circular A-
130 and high-value asset system designation guidance.
Also, ensure high-value asset system risks are
incorporated into the enterprise risk management
framework, as recommended by OMB M-19-03 and SBA
SOP 90 47 6.
22-19 09/27/2022 2 Communicate and enforce the SBA System Development 11/08/2022 08/29/2024
Methodology in which a traceability matrix is used to
ensure that system requirements can be tested and
demonstrated in the operational system. Ensure all
requirements are aligned with the contractual
acceptance criteria.
Spring 2024 Semiannual Report to Congress | 38
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
22-19 09/27/2022 3 Implement in updated agency guidance, the 11/23/2022 06/03/2024
requirements of OMB Circular No. A-123 that stipulate a
SOC 1 Type 2 report is needed for all new and existing
financial systems. This guidance should also require
confirmation at least annually that the controls are
functioning as designed.
22-19 09/27/2022 5 In conjunction with the Enterprise Risk Management 11/08/2022 06/17/2024
Board, implement enterprise-wide privacy risk mitigation
practices that can be assimilated into new and existing
system program designs.
22-19 09/27/2022 6 Complete an initial assessment and authorization for 11/08/2022 07/31/2024
each information system and all agency-designated
common controls before operation.
22-19 09/27/2022 7 Transition information systems and common controls to 11/10/2022 07/31/2024
an ongoing authorization process (when eligible for such
a process) with the formal approval of the respective
authorizing officials or reauthorize information systems
and common controls as needed, on a time or event-
driven basis in accordance with agency risk tolerance, as
required by OMB Circular No. A-130 and SOP 90 47 6.
22-19 09/27/2022 8 Review and update POA&Ms at least quarterly as 11/09/2022 07/31/2024
required by SOP 90 47 6.
22-19 09/27/2022 10 Implement an automated process to document and 11/09/2022 07/31/2024
monitor system changes as recommended by NIST SP
800-53 Rev. 5.
22-21 09/26/2022 1 Review the 179 PPP loans, totaling approximately $684 — —
million, for compliance with affiliation and size standards
to ensure eligibility requirements were met and seek
remedy or repayment for all loans deemed ineligible.
22-22 09/29/2022 1 Review the 20 loans identified in this report as ineligible 11/09/2022 04/30/2024
for the COVID-19 EIDL that the applicants received and
recover approximately $2 million improperly disbursed to
the applicants.
22-22 09/29/2022 2 Review the COVID-19 EIDL disbursements with suspect 11/09/2022 04/30/2024
Taxpayer Identification Numbers made after December
27, 2020 to determine if the loan file contains conclusive
evidence that the applicant business existed on January
31, 2020 and therefore, met the CARES Act eligibility
requirements. If not, flag the borrower as ineligible and
recover the funds.
39 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
22-25 09/30/2022 2 Explore alternative means of collections for PPP loans — —
with an outstanding balance of $100,000 or less.
22-25 09/30/2022 3 Conduct an initial and periodic cost benefit analysis on 12/07/2022 05/31/2024
PPP purchase guarantees with comprehensive estimates
to sufficiently assess whether the cost of collecting loans
of $100,000 or less is more than the recovery amount
and pursue collections based on results of the analysis.
23-03 12/13/2022 2 Implement a process to ensure SBA reviews its external 12/16/2022 04/01/2024
service providers for supply chain risks and ensure all
assessments of supply chain risks are documented as
outlined in NIST 800-53.
23-03 12/13/2022 3 Communicate and reinforce to program offices the 12/16/2022 07/31/2024
requirement to review and remove system and user
accounts in accordance with SOP 90 47 6.
23-03 12/13/2022 5 Develop, document, and implement a process that 12/16/2022 07/31/2024
requires management review of information security
data and report information security threats.
23-07 05/15/2023 5 Collaborate with the responsible staff involved in the 06/15/2023 05/15/2024
payment integrity reporting process to ensure timely and
complete reconciliations are performed on the
populations subject to sampling for improper payment
reviews.
23-07 05/15/2023 6 Formally document and implement appropriate 06/15/2023 05/15/2024
preventative and monitoring controls prior to approval of
7(a) loan guaranty purchases.
23-07 05/15/2023 7 Exercise effective management review controls over the 06/15/2023 05/15/2024
statistician’s work by verifying that the documentation of
the sampling and estimation methodology plans
comprehensively outlines the details of the implemented
sampling and extrapolation methodology, while
maintaining statistical validity.
23-07 05/15/2023 8 Design and document adequate review procedures to 06/15/2023 05/15/2024
ensure that the results of the sample meet the PIIA
objectives.
23-10 07/05/2023 1 Prioritize and complete the review of the 2,172 awards 08/15/2023 07/12/2024
that were flagged by the point-of-sale partner as having
unsupported gross sales and take appropriate
administrative actions to recover improper payments,
which includes 110 awards that were suspected of fraud.
Spring 2024 Semiannual Report to Congress | 40
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
23-11 07/26/2023 1 Establish and implement policies and procedures on how — —
to use appropriate analysis techniques when determining
prices are fair and reasonable when GSA scheduled list
prices and rates are adjusted, in accordance with FAR
Part 8.
23-11 07/26/2023 3 Determine the total additional amount paid to Highlight — —
Technologies, LLC due to using Washington, D.C. labor
rates and pursue any applicable remedies to recover
costs.
23-11 07/26/2023 4 Evaluate all call orders issued under the Highlight blanket — —
purchase agreement for compliance with the Limitation
on Subcontracting Rule per 13 CFR § 125.6 and pursue
any applicable remedies.
23-15 09/29/2023 1 Follow-up with recipients who did not submit their final 10/05/2023 08/30/2024
annual report as required by April 30, 2023, and take
action to recover funds.
23-15 09/29/2023 2 Review the 210 RRF award recipients currently marked in 10/05/2023 08/30/2024
the PPP loan data as potentially fraudulent or ineligible
that were not selected for post award review.
23-15 09/29/2023 3 Extend the record retention period and notify all RRF — —
award recipients in writing in accordance with 2 CFR
200.334.
23-15 09/29/2023 4 Assess the post-award review process and manpower 10/05/2023 08/30/2024
requirements to ensure post award reviews are
conducted in a prompt manner. Use the results of the
assessment to improve processing times to ensure
reviews are completed before the statute of limitations
expire.
23-15 09/29/2023 5 Take immediate administrative actions to recover 10/05/2023 08/30/2024
improper payments from the 5 hotels and 18 recipients
found to be ineligible, for a total of 23 ineligible award
recipients identified totaling $39 million.
23-15 09/29/2023 6 Establish and implement procedures to recover unused 10/05/2023 08/30/2024
funds or recover funds paid to ineligible recipients and
prioritize this effort.
23-16 09/29/2023 3 Ensure SBA does not end active collections pursuant to 02/20/2024 12/31/2024
the April 27, 2022 decision on any COVID-19 EIDL of
$100,000 or less made to borrowers who received
multiple COVID-19 EIDLs that, when combined, exceed
$100,000.
41 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
23-16 09/29/2023 5 Evaluate the COVID-19 EIDL portfolio, in collaboration — —
with Treasury, to determine if selling the portfolio,
including delinquent loans of $100,000 or less, is in the
best interest of the government.
*Recommendations submitted for closure by agency and undergoing OIG review.
Spring 2024 Semiannual Report to Congress | 42
U.S. Small Business Administration | Office of Inspector General
Significant Recommendations from this Reporting Period
Report Date Issued Title Recommendation Recommendation
Number Number
24-02 10/25/2023 SBA’s Internal Controls to Prevent 1 Reevaluate eligibility for the 47 applicants
Shuttered Venue Operators Grants we questioned and recover grant funds
to Ineligible Applicants from the ineligible applicants.
24-02 10/25/2023 SBA’s Internal Controls to Prevent 2 Implement additional controls to ensure
Shuttered Venue Operators Grants that during the monitoring, auditing, and
to Ineligible Applicants compliance phases, awards are carefully
screened to verify eligibility and to recover
grant funds from ineligible entities.
24-03 11/15/2023 Independent Auditors’ Report on 1 Design and implement controls to ensure
SBA’s Fiscal Year 2023 Financial the population used in the review and
Statements follow-up of nonreporting loan status
reports or loan status reports with errors
is complete and accurate.
24-03 11/15/2023 Independent Auditors’ Report on 2 Determine enforceable actions and
SBA’s Fiscal Year 2023 Financial controls to hold lenders accountable for
Statements submitting loan status reports timely and
correctly.
24-03 11/15/2023 Independent Auditors’ Report on 3 Assess the sufficiency of implemented
SBA’s Fiscal Year 2023 Financial controls to monitor incomplete or
Statements inaccurate PPP lender loan status reports
on an ongoing basis, including the
identification and resolution of the root
causes of reporting noncompliance.
24-03 11/15/2023 Independent Auditors’ Report on 4 Design and implement an automated
SBA’s Fiscal Year 2023 Financial system control to accurately reduce the
Statements outstanding principal balance after the
processing of all forgiveness payments.
24-03 11/15/2023 Independent Auditors’ Report on 5 Perform a thorough review of the
SBA’s Fiscal Year 2023 Financial outstanding PPP loan guarantees and
Statements determine the impact on the outstanding
guarantee and eligibility for forgiveness of
loans determined to not be in
conformance with the related legislation
and program’s terms.
24-03 11/15/2023 Independent Auditors’ Report on 6 Design, implement, and document an
SBA’s Fiscal Year 2023 Financial effective PPP forgiveness review process
Statements for loan guarantees that were forgiven
that addresses both the eligibility and the
accuracy of the loan approval and
forgiveness amounts.
43 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 7 Design and implement an effective funds
SBA’s Fiscal Year 2023 Financial recovery plan to ensure PPP funds
Statements disbursed on behalf of ineligible recipients
are recovered and reported accurately in
a timely manner. The plan should include
an effective process to provide the
information necessary to the Office of
Performance, Planning, and the Chief
Financial Officer to record any required
accounting adjustments.
24-03 11/15/2023 Independent Auditors’ Report on 8 Perform a thorough and complete analysis
SBA’s Fiscal Year 2023 Financial of all requirements communicated to
Statements lenders for the PPP program and
determine how to evaluate whether
lenders met the requirements prior to
disbursing a PPP loan. The analysis should
include evidence to support the adequacy
of SBA’s review process when determining
which purchase requests will require
additional review.
24-03 11/15/2023 Independent Auditors’ Report on 9 Develop and implement an effective
SBA’s Fiscal Year 2023 Financial process to review purchase requests for
Statements outstanding PPP loan guarantees and for
loans that have already been purchased
that addresses whether the lender met
their requirements in accordance with the
program requirements.
24-03 11/15/2023 Independent Auditors’ Report on 10 Develop and implement an effective funds
SBA’s Fiscal Year 2023 Financial recovery plan to ensure funds related to
Statements PPP purchases disbursed to ineligible
recipients are recovered and reported
accurately in a timely manner. The plan
should include an effective process to
provide the information necessary to the
Office of Performance, Planning, and the
Chief Financial Officer to record any
required accounting adjustments.
24-03 11/15/2023 Independent Auditors’ Report on 11 Perform and update the program’s
SBA’s Fiscal Year 2023 Financial internal control risk assessment to identify
Statements changes to risks that may require the
design and implementation of effective
monitoring controls over the review of the
COVID-19 EIDLs portfolio.
Spring 2024 Semiannual Report to Congress | 44
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 12 Design and implement an effective funds
SBA’s Fiscal Year 2023 Financial recovery plan to ensure COVID-19 EIDLs
Statements funds disbursed to ineligible recipients are
recovered and reported accurately and in
a timely manner. The plan should include
an effective process to provide the
information necessary to the Office of
Planning, Performance, and the Chief
Financial Officer to record any required
accounting adjustments.
24-03 11/15/2023 Independent Auditors’ Report on 13 Reevaluate the appropriateness and
SBA’s Fiscal Year 2023 Financial update SBA’s existing policies and
Statements procedures to ensure they are supported
by quality information stemming from
effective control activities. This includes
assessing the recoverability of COVID-19
EIDLs prior to charge-off. Perform a
regular review of implemented policies to
ensure they are responding to relevant
risks.
24-03 11/15/2023 Independent Auditors’ Report on 14 Perform and update the program’s
SBA’s Fiscal Year 2023 Financial internal control assessment to identify
Statements changes to risks that may require the
design and implementation of effective
monitoring controls and review processes
of RRF awards to identify recipients that
may not have been eligible to receive
awards or that may have spent awards on
ineligible expenses in accordance with the
program’s terms.
24-03 11/15/2023 Independent Auditors’ Report on 15 Design and implement effective follow-up
SBA’s Fiscal Year 2023 Financial procedures for RRF award recipients that
Statements are not complying with the program’s
terms and to ensure complete, accurate,
and timely reporting for the use of the
award.
45 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 16 Design and implement an effective funds
SBA’s Fiscal Year 2023 Financial recovery plan and controls to ensure RRF
Statements awards disbursed to ineligible recipients
or spent on ineligible expenses are
recovered and reported accurately and in
a timely manner. In conjunction with the
Office of Planning, Performance, and the
Chief Financial Officer, design and
implement an effective process to provide
the information necessary to record any
required accounting adjustments.
24-03 11/15/2023 Independent Auditors’ Report on 17 Perform and update the program’s
SBA’s Fiscal Year 2023 Financial internal control assessment to identify
Statements changes to risks that may require the
design and implementation of effective
monitoring controls and review processes
of SVOG awards to identify recipients that
may not have been eligible to receive
awards or that may have spent awards on
ineligible expenses in accordance with the
program’s terms.
24-03 11/15/2023 Independent Auditors’ Report on 18 Design and implement effective follow-up
SBA’s Fiscal Year 2023 Financial procedures for SVOG award recipients
Statements that are not complying with the program’s
terms and to ensure complete, accurate,
and timely reporting for the use of the
award.
24-03 11/15/2023 Independent Auditors’ Report on 19 Design and implement an effective funds
SBA’s Fiscal Year 2023 Financial recovery plan and controls to ensure
Statements SVOG awards disbursed to ineligible
recipients or spent on ineligible expenses
are recovered and reported accurately
and in a timely manner. In conjunction
with the Office of Planning, Performance,
and the Chief Financial Officer, design and
implement an effective process to provide
the information necessary to record any
required accounting adjustments.
24-03 11/15/2023 Independent Auditors’ Report on 20 Develop and document the policies and
SBA’s Fiscal Year 2023 Financial procedures for the recovery of funds, the
Statements accounts receivable, and the allowance for
estimated uncollectible amounts related
to the programs created or expanded by
the CARES Act and related legislation.
Spring 2024 Semiannual Report to Congress | 46
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 21 Document the current state of accounting
SBA’s Fiscal Year 2023 Financial policies and procedures for the recovery
Statements of funds, including the respective
accounting entries for all applicable
scenarios (e.g., fraud related, ineligibility)
for COVID-19 EIDLs and PPP loans that
have been charged-off or forgiven.
24-03 11/15/2023 Independent Auditors’ Report on 22 Inquire with standard setting bodies to
SBA’s Fiscal Year 2023 Financial confirm the appropriate accounting
Statements treatment throughout each step of the
recovery lifecycle for COVID-19 EIDLs and
the PPP loans that have been charged-off
or forgiven. Memorialize the response by
updating management’s documented
policies and procedures including the
respective accounting entries under
generally accepted accounting principles
for all applicable scenarios.
24-03 11/15/2023 Independent Auditors’ Report on 23 Design and implement effective controls
SBA’s Fiscal Year 2023 Financial and communication processes to timely
Statements obtain the information necessary from
program offices to record any required
accounting adjustments for programs
created or expanded by the CARES Act
and related legislation.
24-03 11/15/2023 Independent Auditors’ Report on 24 Continue implementing controls in
SBA’s Fiscal Year 2023 Financial collaboration with relevant program
Statements offices for the PPP and COVID-19 EIDLs
portfolios to accumulate relevant,
complete, and accurate data on which to
base the subsidy reestimate.
24-03 11/15/2023 Independent Auditors’ Report on 25 Design and implement adequate review
SBA’s Fiscal Year 2023 Financial and approval controls over the reestimate
Statements for the PPP and COVID-19 EIDLs portfolios
by appropriate levels of management, and
to coordinate with relevantprogram
offices to assess the integrity of relevant
data inputs used in the development of
assumptions, and reasonableness for the
selected assumptions used and the
resulting estimates.
24-03 11/15/2023 Independent Auditors’ Report on 26 Refine existing review and approval
SBA’s Fiscal Year 2023 Financial controls to ensure the reestimate output
Statements is in accordance with accounting
standards for charged-off loans.
47 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 27 Continually evaluate the established policy
SBA’s Fiscal Year 2023 Financial for SOC 1 reports that requires service
Statements organizations to provide a SOC 1 report
over the control environment that is
relevant and significant to the processing
and recording of SBA’s transactions as it
relates to loan guarantee programs. If a
SOC 1 report cannot be obtained,
management should design, implement,
and operate controls within SBA’s control
environment.
Spring 2024 Semiannual Report to Congress | 48
U.S. Small Business Administration | Office of Inspector General
24-03 11/15/2023 Independent Auditors’ Report on 28 Assess the risk posed by the service
SBA’s Fiscal Year 2023 Financial organizations’ control environments and
Statements obtain sufficient assurance over the
operating effectiveness of relevant and
significant controls to determine the
integrity of loan guarantee programs
transactions processed on behalf of and
recorded by SBA. To achieve this, consider
obtaining a SOC 1 report for the relevant
control environments at the service
organizations, and perform and document
the following:
• SOC 1 report is sufficiently scoped to
cover transaction processing and related
control activities performed by the service
organizations on behalf of SBA.
• All exceptions noted in the SOC 1 report
– not just those described in the
independent service auditor’s report – are
evaluated to determine applicability to
SBA’s internal controls over financial
reporting, the potential impact to SBA’s
financial statements, and mitigating
controls considerations made during their
risk assessment.
• All complementary user entity controls
described in the SOC 1 reports are
evaluated using current information and
with consideration to their applicability to
SBA’s internal controls over financial
reporting.
• Evaluation procedures performed to
assess whether complementary user
entity controls and other SBA-performed
controls were tested on a frequency
determined by SBA and found operating
effectively and, if they are not, assess the
impact of such deficiencies on SBA’s
internal controls over financial reporting.
• All complementary subservice
organization controls described in SOC 1
reports are evaluated to determine
whether they provided services and
performed controls considered relevant to
SBA’s internal controls over financial
reporting and, if relevant subservice
organizations were identified, an
evaluation is performed to obtain an
49 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
understanding of the subservice
organization(s) and their controls.
• SOC 1 reports cover the appropriate
period or corresponding gap letters
provide sufficient coverage to assess
impacts on SBA’s internal controls over
financial reporting.
24-03 11/15/2023 Independent Auditors’ Report on 29 Continually evaluate the established policy
SBA’s Fiscal Year 2023 Financial for SOC 1 reports that requires service
Statements organizations to provide a SOC 1 report
over the control environment that is
relevant and significant to the processing
and recording of SBA’s transactions as it
relates to the SVOG program. If a SOC 1
report cannot be obtained, management
should design, implement, and operate
controls within SBA’s control
environment.
Spring 2024 Semiannual Report to Congress | 50
U.S. Small Business Administration | Office of Inspector General
24-03 11/15/2023 Independent Auditors’ Report on 30 Assess the risk posed by the service
SBA’s Fiscal Year 2023 Financial organizations’ control environments and
Statements obtain sufficient assurance over the
operating effectiveness of relevant and
significant controls to determine the
integrity of SVOG program transactions
processed on behalf of and recorded by
SBA. To achieve this, consider obtaining a
SOC 1 report for the relevant control
environments at the service organizations,
and perform and document the following:
• SOC 1 report is sufficiently scoped to
cover transaction processing and related
control activities performed by the service
organizations on behalf of SBA.
• All exceptions noted in the SOC 1 report
– not just those described in the
independent service auditor’s report – are
evaluated to determine applicability to
SBA’s internal controls over financial
reporting, the potential impact to SBA’s
financial statements, and mitigating
controls considerations made during their
risk assessment.
• All complementary user entity controls
described in the SOC 1 reports are
evaluated using current information and
with consideration to their applicability to
SBA’s internal controls over financial
reporting.
• Evaluation procedures performed to
assess whether complementary user
entity controls and other SBA-performed
controls were tested on a frequency
determined by SBA and found operating
effectively and, if they are not, assess the
impact of such deficiencies on SBA’s
internal controls over financial reporting.
• All complementary subservice
organization controls described in SOC 1
reports are evaluated to determine
whether they provided services and
performed controls considered relevant to
SBA’s internal controls over financial
reporting and, if relevant subservice
organizations were identified, an
evaluation is performed to obtain an
understanding of the subservice
51 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
organization(s) and their controls.
• SOC 1 reports cover the appropriate
period or corresponding gap letters
provide sufficient coverage to assess
impacts on SBA’s internal controls over
financial reporting.
24-03 11/15/2023 Independent Auditors’ Report on 31 In conjunction with the Office of the Chief
SBA’s Fiscal Year 2023 Financial Financial Officer, complete the internal
Statements control risk assessments for programs that
have a material impact on the financial
statements at a process level in a timely
manner including the consideration of
whether controls are designed,
implemented, and are operating at a
sufficient precision level in accordance
with management’s materiality threshold
and will be sufficient for financial
reporting purposes.
24-03 11/15/2023 Independent Auditors’ Report on 32 Design, implement, and monitor the
SBA’s Fiscal Year 2023 Financial operating effectiveness of key controls
Statements that respond to significant risks of
material misstatements and compliance
with relevant laws and regulations.
24-03 11/15/2023 Independent Auditors’ Report on 33 Perform and document a thorough risk
SBA’s Fiscal Year 2023 Financial assessment at the financial statement
Statements assertion level to identify process level
risks and communicate the results to
relevant program offices. Also, assess the
effectiveness of the key process level
controls to respond to the identified risks
in conjunction with relevant program
offices.
24-03 11/15/2023 Independent Auditors’ Report on 34 Design and implement controls that
SBA’s Fiscal Year 2023 Financial demonstrate oversight over the
Statements contractor, including documentation that
provides evidence over the adequate
review and validation of the contractor’s
work product.
Spring 2024 Semiannual Report to Congress | 52
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 35 Perform and document a thorough risk
SBA’s Fiscal Year 2023 Financial assessment of the payments for covered
Statements loans under the Debt Relief Program,
including the impact of payments not
considered, determined to be of lower
risk, for which a variance threshold was
applied, and the appropriateness and
sufficiency of the applied methodology
given the results of the review.
24-03 11/15/2023 Independent Auditors’ Report on 36 Based on the results of the risk
SBA’s Fiscal Year 2023 Financial assessment performed, design and
Statements implement appropriate controls to ensure
an effective post payment review of
payments for covered loans under the
Debt Relief Program.
24-03 11/15/2023 Independent Auditors’ Report on 37 Review and update current processes and
SBA’s Fiscal Year 2023 Financial procedures for defining a time period by
Statements which system access must be disabled or
removed for separated individuals.
24-03 11/15/2023 Independent Auditors’ Report on 38 Develop procedures to validate that
SBA’s Fiscal Year 2023 Financial access for separated employees is
Statements removed in accordance with required
timeframes.
24-03 11/15/2023 Independent Auditors’ Report on 39 Develop procedures to validate that
SBA’s Fiscal Year 2023 Financial access for separated contractors is
Statements removed in accordance with required
timeframes.
24-03 11/15/2023 Independent Auditors’ Report on 40 Design, implement, and document
SBA’s Fiscal Year 2023 Financial controls for monitoring job failures to
Statements ensure complete and accurate reports are
generated.
24-03 11/15/2023 Independent Auditors’ Report on 41 Design and implement multi-factor
SBA’s Fiscal Year 2023 Financial authentication controls for non-privileged
Statements users.
24-03 11/15/2023 Independent Auditors’ Report on 42 Implement monitoring controls to track
SBA’s Fiscal Year 2023 Financial compliance with the multi-factor
Statements authentication controls.
24-03 11/15/2023 Independent Auditors’ Report on 43 Design and implement controls to validate
SBA’s Fiscal Year 2023 Financial that access for separated employees is
Statements removed in accordance with required
timeframes.
24-03 11/15/2023 Independent Auditors’ Report on 44 Develop, design, and implement controls
SBA’s Fiscal Year 2023 Financial for access recertification for accounts with
Statements administrative or privileged roles annually.
53 | Spring 2024 Semiannual Report to Congress
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Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 45 Perform a risk assessment and obtain an
SBA’s Fiscal Year 2023 Financial approved waiver in accordance with
Statements established policy of not updating
authentication controls due to system
limitations. Design and implement
relevant compensatory controls if
necessary.
24-03 11/15/2023 Independent Auditors’ Report on 46 We recommend the Administrator
SBA’s Fiscal Year 2023 Financial coordinate with the Chief Financial Officer
Statements to make the necessary adjustments to
system configurations to ensure a
complete record of the journal entry
process is maintained, including the actual
user identification of the preparer, for all
journal entry transactions.
24-03 11/15/2023 Independent Auditors’ Report on 47 Design and implement effective
SBA’s Fiscal Year 2023 Financial communication processes with other
Statements relevant offices, including the Office of
General Counsel, to ensure subsequent
events are timely identified and reported
completely and accurately.
24-03 11/15/2023 Independent Auditors’ Report on 48 Improve training plans to ensure
SBA’s Fiscal Year 2023 Financial individuals responsible for financial
Statements reporting functions are adequately
prepared to respond to the occurrence of
events or transactions that may require
financial reporting considerations,
including subsequent events, under
generally accepted accounting principles.
24-03 11/15/2023 Independent Auditors’ Report on 49 Reassess existing policies to ensure they
SBA’s Fiscal Year 2023 Financial are supported by quality information
Statements stemming from an effective control
environment that reviews the root causes
of borrower delinquency prior to charge-
off and referral to Treasury. Perform a
regular review of the implemented
policies to ensure they are responding to
relevant risks of noncompliance for the
current fiscal year.
24-03 11/15/2023 Independent Auditors’ Report on 50 Design, implement, and document
SBA’s Fiscal Year 2023 Financial appropriate monitoring controls to
Statements address compliance with DCIA.
Spring 2024 Semiannual Report to Congress | 54
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-03 11/15/2023 Independent Auditors’ Report on 51 Reevaluate the operational infrastructure
SBA’s Fiscal Year 2023 Financial to address relevant risks of
Statements noncompliance and ensure that
borrowers are notified timely of
delinquency, and if applicable,
subsequently referred to Treasury timely.
24-03 11/15/2023 Independent Auditors’ Report on 52 Update the risk assessment regarding the
SBA’s Fiscal Year 2023 Financial evaluation of internal controls to ensure it
Statements includes all significant programs, key
processes, and other material line items
on the consolidated financial statements.
24-03 11/15/2023 Independent Auditors’ Report on 53 In conjunction with relevant program
SBA’s Fiscal Year 2023 Financial offices, perform and document the
Statements internal control evaluation for significant
programs or processes affecting the
financial statements. This should include
entity level controls, manual controls,
general information technology controls,
and system application controls covering
key financial statement line items and
risks.
24-03 11/15/2023 Independent Auditors’ Report on 54 Update the existing policy and implement
SBA’s Fiscal Year 2023 Financial adequate controls to ensure that the
Statements statement of assurances provided by the
program offices are adequately
documented and reviewed for
completeness and accuracy to provide a
sufficient basis to support the
Administrator’s statement of assurance.
24-03 11/15/2023 Independent Auditors’ Report on 55 Address the control deficiencies over
SBA’s Fiscal Year 2023 Financial transactions arising from the
Statements implementation of the CARES Act and
related legislation by working with the
Office of Capital Access and the Office of
Disaster Recovery and Resilience to
implement the recommendations in
Appendix I – Material Weaknesses.
24-05 02/20/2024 SBA's Controls Over Cash 1 Fully implement the 90-day closeout
Contributions and Gifts, Fiscal Year process for National Small Business Week
2023 as outlined in SOP 90 75 5, as amended,
and resolve the identified closeout
discrepancy between the fiscal agent and
the Office of Strategic Affairs for business
week 2023.
55 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-06 02/22/2024 SBA's Eligibility and Forgiveness 1 Review the 1,799 PPP loans totaling over
Review of PPP Loans Made to $89 million, that matched a DNP data
Borrowers with Treasury’s Do Not source, to ensure eligibility requirements
Pay Data Matches were met and seek remedy or repayment
of all loans deemed ineligible.
24-06 02/22/2024 SBA's Eligibility and Forgiveness 2 Review the 49 PPP loans totaling
Review of PPP Loans Made to approximately $3.5 million and the 43
Borrowers with Treasury’s Do Not loans totaling approximately $7.2 million
Pay Data Matches to ensure borrowers met eligibility
requirements and seek remedy or
repayment of loans deemed ineligible.
24-06 02/22/2024 SBA's Eligibility and Forgiveness 3 Conduct a review of PPP loans, in which
Review of PPP Loans Made to the DNP hold codes were cleared to 1)
Borrowers with Treasury’s Do Not identify those cleared using pre-decisional
Pay Data Matches memos and 2) those cleared without
sufficient evidence to support the
reviewer’s loan decision and seek remedy
or repayment of loans deemed ineligible.
24-06 02/22/2024 SBA's Eligibility and Forgiveness 4 Develop and implement controls, such as
Review of PPP Loans Made to supervisory reviews, to ensure PPP loans
Borrowers with Treasury’s Do Not and loans for future stimulus programs
Pay Data Matches with DNP matches receive manual
reviews, as required. The reviews should
ensure that pre-decisional memos are not
used to clear DNP hold codes and that the
loan files contain relevant and appropriate
documentary evidence to support the
loan review decisions.
24-06 02/22/2024 SBA's Eligibility and Forgiveness 5 Develop and implement clear guidance
Review of PPP Loans Made to requiring responsible officials to maintain
Borrowers with Treasury’s Do Not documentary evidence used to support
Pay Data Matches loan decisions in the loan files.
24-06 02/22/2024 SBA's Eligibility and Forgiveness 6 Review the 59,893 PPP applications that
Review of PPP Loans Made to matched a DNP data source to ensure
Borrowers with Treasury’s Do Not borrowers met eligibility requirements
Pay Data Matches and seek remedy or repayment of loans
deemed ineligible.
24-06 2/22/2024 SBA's Eligibility and Forgiveness 7 Review the additional 47,940 PPP loans
Review of PPP Loans Made to totaling over $1.7 billion, identified
Borrowers with Treasury’s Do Not through the DNP data match, to ensure
Pay Data Matches borrowers met the eligibility requirements
and seek remedy or repayment of loans
deemed ineligible.
Spring 2024 Semiannual Report to Congress | 56
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-07 03/07/2024 Fiscal Year 2023 Federal 1 Complete the implementation of an
Information Security automated solution to help ensure a
Modernization Act complete and accurate inventory of
software assets.
24-07 03/07/2024 Fiscal Year 2023 Federal 2 Define a required frequency for updating
Information Security the system inventory and implement a
Modernization Act quality control process to validate that
system inventories are updated in a timely
manner.
24-07 03/07/2024 Fiscal Year 2023 Federal 3 Update existing policy and procedures to
Information Security ensure plans of action and milestones are
Modernization Act closed only after the planned corrective
actions and milestones have been
implemented.
24-07 03/07/2024 Fiscal Year 2023 Federal 4 Review the Enterprise Risk Management
Information Security Framework Guide annually and update if
Modernization Act needed.
24-07 03/07/2024 Fiscal Year 2023 Federal 5 Develop a strategy to ensure that
Information Security products, system components, systems,
Modernization Act and services of external providers are
consistent with the organization’s
cybersecurity and supply chain
requirements.
24-07 03/07/2024 Fiscal Year 2023 Federal 6 Define timeframe and remediation
Information Security requirements for baseline and
Modernization Act configuration weaknesses.
24-07 03/07/2024 Fiscal Year 2023 Federal 7 Properly update and remediate
Information Security vulnerabilities and configuration
Modernization Act weaknesses throughout the SBA
environment.
24-07 03/07/2024 Fiscal Year 2023 Federal 8 Implement a process to track and enforce
Information Security compliance with PIV implementation and
Modernization Act multi-factor requirements.
24-07 03/07/2024 Fiscal Year 2023 Federal 9 Ensure implementation procedures for
Information Security data loss prevention are updated at least
Modernization Act on a biannual basis to reflect new
processes and new requirements.
24-07 03/07/2024 Fiscal Year 2023 Federal 10 Update existing procedures that identify
Information Security the roles of individuals with significant IT
Modernization Act responsibilities who require role-based
training and ensure such training is
provided and tracked.
24-07 03/07/2024 Fiscal Year 2023 Federal 11 Provide training to individuals with
Information Security contingency planning roles and
Modernization Act responsibilities.
57 | Spring 2024 Semiannual Report to Congress
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Report Date Issued Title Recommendation Recommendation
Number Number
24-09 03/26/2024 SBA’s Restaurant Revitalization 1 Develop a plan for future similar programs
Fund Program Award Practices to leverage applicable existing SBA data
sources when determining eligibility and
monitoring awards. The plan should
include requirements to evaluate
effectiveness of the use of the data as
controls to reduce risk of improper
payments.
24-09 03/26/2024 SBA’s Restaurant Revitalization 2 Validate historical sales for 47,565 awards
Fund Program Award Practices designated or treated as Tier 2 that failed
or did not receive IRS validation. Recover
any excess funds paid that are attributable
to unverified historical sales data.
24-09 03/26/2024 SBA’s Restaurant Revitalization 3 Review the 3,443 applicants awarded
Fund Program Award Practices funds totaling $376,583,100 that self-
certified as a brewery or inn, to determine
if they met the 33 percent onsite sales
eligibility requirement and recover any
funds from applicants that did not meet
the requirement.
24-09 03/26/2024 SBA’s Restaurant Revitalization 4 In accordance with Public Law 117-2, §
Fund Program Award Practices 5003(a)(4)(A)(i) take immediate action to
review and recover improper payments
from the 14 affiliated business groups
disclosed by RRF applicants for a total of
$55,067,326 in excess funds paid, beyond
the $10 million limit per affiliated group.
24-09 03/26/2024 SBA’s Restaurant Revitalization 5 Review the 16,345 applicants that
Fund Program Award Practices disclosed having an affiliated business to
determine if the amounts collectively
awarded to the applicant and affiliates
exceeded the $10 million maximum and
recover any excess awards.
24-10 03/29/2024 SBA’s IT Investment Governance 1 Update its business case for the MySBA
Framework investment in accordance with SOP 90 44.
24-10 03/29/2024 SBA’s IT Investment Governance 2 Ensure the architecture review board
Framework reviews new investments to confirm
compatibility with agency systems and
ensure the Business Technology
Investment Council approves new
investments prior to purchase, as required
by SOPs 90 52 1 and 90 44.
Spring 2024 Semiannual Report to Congress | 58
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
24-10 03/29/2024 SBA’s IT Investment Governance 3 Ensure program offices create business
Framework cases prior to approval of the investment
to ensure project scope, risks, and costs
are fully vetted as required by SOP 90 44.
24-10 03/29/2024 SBA’s IT Investment Governance 4 Update procedures to provide specific
Framework guidance to agency investment managers
on how to utilize earned value principles
to measure investment progress against
both the current approved baseline and
the original baseline for all major
investments as required by SOP 90 52 1
and OMB Circular A-130.
24-10 03/29/2024 SBA’s IT Investment Governance 5 Establish and implement controls to
Framework ensure all investments in the control
phase are rated by the CIO monthly using
baseline factors such as contractor cost
oversight and schedule performance; and
apply corrective measures as necessary as
required by SOP 90 44.
24-10 03/29/2024 SBA’s IT Investment Governance 6 Perform oversight procedures as required
Framework in OMB Circular A-11 and SOP 90 44.
Specifically, ensure that post-
implementation reviews, business case
closeouts, TechStat sessions, operational
analyses, and lessons learned are
completed.
Significant Management Decisions with which OIG Disagrees
There were no significant management decisions with which 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
Our independent auditors, KPMG, reported in the 2023 financial statement audit that
management did not establish and maintain financial management systems that substantially
comply with FFMIA requirements. These areas related to control deficiencies over transactions
arising from the implementation of the CARES Act and related legislation. They found financial
59 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
reporting controls do not ensure compliance objectives are met, and do not ensure budgetary
resources are safeguarded against waste, loss, and misuse.
Specifically, management was unable to provide evidence that the accounting treatment and
financial reporting of the recovery of funds related to the RRF, SVOG, COVID-19 EIDLs, and PPP
programs were in accordance with U.S. generally accepted accounting principles.
Instances of Interference
There were no attempts by SBA officials to interfere with OIG independence during this reporting
period.
Spring 2024 Semiannual Report to Congress | 60
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 120
Preliminary Case Closing Reports of Investigation 2
Total 122
Persons Referred for Prosecution
Referred to Number of Persons*
Department of Justice (or other) 80
State Attorney —
Local Attorney —
Total 80
* Number includes persons and entities referred for prosecution.
Pandemic-Related Investigative Statistics
SBA OIG Investigations Indictments/Complaints Arrests Convictions
(opened)
PPP/EIDL/RFF/SV* 124 128 97 117
Investment Fraud 5 2 6 7
Total 129 130 103 124
* PPP stands for Paycheck Protection Program; EIDL stands for Economic Injury Disaster Loan; RFF stands for Restaurant Revitalization Fund; SV
stands for Shuttered Venue Operators Grant.
Whistleblower Retaliation Cases
There were no OIG investigations involving whistleblower retaliation cases during this semiannual
period.
Executive Order 14074 Section 10(c) No-Knock Entries
There were no OIG investigations involving no-knock entries that occurred pursuant to judicial
authorization during this semiannual period.
61 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Investigations Involving a Senior Government Employee in
which Misconduct was Substantiated
There were no OIG investigations involving a senior government employee where misconduct was
substantiated during this semiannual period.
Investigations Involving a Senior Government Employee that are
Closed and Not Disclosed to the Public
There were no nonpublic, closed investigations of senior government employees during this
semiannual period.
Spring 2024 Semiannual Report to Congress | 62
U.S. Small Business Administration | Office of Inspector General
Appendix E: Legal Actions Summary
Legal Actions, October 1, 2023–March 31, 2024
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
AL DL DHS HSI, Individuals defrauded SBA and financial Individual 1 was sentenced to 60
TIGTA institutions for over $37,000 in fraudulent funds months of supervised release.
through the EIDL program. Individuals utilized Individual 2 was sentenced to 60
stolen identities to create false EIDL months of supervised release.
applications. Individuals were ordered to pay
$37,727 in restitution.
AL BL FRB, FDIC As part of the scheme, subject submitted Subject was sentenced to 45
OIG multiple fraudulent PPP and EIDL loan months incarceration, 3 years of
applications. Subject successfully obtained over supervised release. Individuals were
$1.6 million in fraudulent funds. ordered to pay $609,687 restitution.
MS BL FBI, TIGTA Individual made material misrepresentations to Individual 1 was sentenced to 14
a financial institution to gain approval for PPP months of incarceration and 3 years
loans and obtained over $500,000 by using false of supervised release. Individual 2
business operations and providing materially was sentenced to 12 months of
false information on loan applications. incarceration and 5 years of
supervised release. Individual 3 was
sentenced to 6 years of
incarceration and 5 years of
supervised release Individuals were
ordered to pay $1.1 million in
restitution.
AR BL IRS CI Individual defrauded and conspired to Individual was sentenced to 36
submitted PPP and EIDL loans securing over months of supervised release and
$40,000 by using false business operations and ordered to pay $127,500 in
providing materially false information on loan restitution.
applications.
AR BL TIGTA Individual made false statement in the attempt Individual was sentenced to 5 years
to obtain over $200,000. Subject made several of supervised release and ordered
false statements and manipulated bank to pay $200,000 in restitution.
statements within the application.
AR BL FRB, TIGTA Subject made false statement in the attempt to Subject was sentenced to 3 years of
obtain over $20,000. Subject made several false supervised release and ordered to
statements and manipulated bank statements pay $20,000 in restitution.
within the application.
MT DL IRS CI Individual made multiple false statements and Individual entered a non-
obtained over $109,000 in EIDLs. prosecution agreement and ordered
to pay $109,000 in restitution.
IL BL DL FBI, TIGTA Individual defrauded SBA and financial Individual 1 was sentenced to 60
institutions for over $400,000 in loans through hours of community service ordered
the PPP. to pay $410,508 in restitution.
63 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
VA BL FDIC, IRS CI Individual devised a scheme and applied for Individual was sentenced to 24
over $2.5 million in PPP loans. Subject months of incarceration, 5 years of
fraudulent submitted payroll documentation in supervised release, and ordered to
order to receive the funds. pay $2.5 million in restitution.
GA BL FBI, FDIC Subject devised a scheme and applied for Subject was sentenced to 70
fraudulent PPP applications which resulted in months of incarceration and 3 years
obtaining over $24 million in PPP funds. of supervised release and ordered
to pay $18 million in restitution.
NE BL DL FBI, TIGTA Individuals submitted a PPP and EIDL Individual 1 was sentenced to 16
application seeking over $680,000 in COVID-19 months of incarceration and 5 years
relief funds by overstating the amount of gross of supervised release. Individual 2
revenues and average monthly payroll for the was sentenced to 5 years of
business and by submitting fake IRS Forms 941 probation. Individual 3 was
to support the numbers provided. sentenced to 5 years of probation.
Individuals were ordered to pay
$680,632 in restitution.
NV BL FBI, TIGTA Subject devised a scheme and submitted over Subject was sentenced to 19
50 applications for PPP loans on behalf of months of incarceration, 3 years of
himself and others. Subject provided false supervised release, and ordered to
information and statements on the loan pay $1.2 million in restitution.
applications to obtain funds to which he and
others would otherwise not be entitled.
NY DL BL FBI, IRS CI, Individuals submitted multiple fraudulent EIDL Individual 1 was sentenced to 90
FRB and PPP loan applications, including falsified months of incarceration and 3 years
supporting documentation, for companies they of supervised release. Individual 2
owned or controlled which resulted in the was sentenced to 40 months of
disbursement of over $1.7 million in fraudulent incarceration and 3 years of
loans and attempted to obtain $30 million in supervised release. Individual 3 was
PPP funds. sentenced to 90 months of
incarceration and 3 years of
supervised release. Individual 4 was
sentenced to 18 months of
incarceration and 3 years of
supervised release. Individual 5 was
sentenced to 42 months of
incarceration and 3 years of
supervised release. Individuals were
ordered to pay $12.4 million in
restitution.
MI BL DL USSS Individual made material misrepresentations to Individual was sentenced to 255
a financial institution and submitted false IRS months of incarceration, 3 years of
tax form supporting the inflated payroll and supervised release, and ordered to
number of employees listed on the application. pay $3.8 million in restitution.
Individual used some of the PPP funds on a
down payment to lease a $239,000 Lamborghini
and obtained more than $3.8 million dollars.
Spring 2024 Semiannual Report to Congress | 64
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
AZ BL USSS, DHS As part of the scheme, subjects submitted Subject 1 was sentenced to 36
HSI, TIGTA multiple fraudulent loan applications. Subjects months of supervised release.
successfully obtained over $450,000 in Subject 2 was sentenced to 36
fraudulent funds months of supervised release and
ordered to pay $475,000 in
restitution.
IL DL DHS HSI, Individuals made multiple false statements and Individual 1 was sentenced to 35
TIGTA, IRS submitted over 300 EIDL applications for months of incarceration and 2 years
CI advances and loans. The applications contained of supervised release. Individual 2
materially false statements and was sentenced to 50 months
misrepresentations concerning the applicant’s incarceration and 2 years of
citizenship status, and the purported entities’ supervised release. Individuals were
number of employees, revenues, expenses, ordered to pay $7.5 million in
type of business, and owners. They obtained restitution.
over $16 million in EIDL loans/advances.
FL DL FBI, FDIC Individual submitted false and fraudulent EIDL Individual 1 was sentenced to 4
OIG, IRS CI applications and received over $150,000. months of incarceration and 2 years
Individuals made lavish personal purchases such of supervised release and ordered
as property and vacation rentals. to pay $250,000 in restitution.
MI DL SSA Individuals submitted false and fraudulent EIDL Individual 1 was sentenced to 6
applications and received over $400,000. months of incarceration and 3 years
of supervised release. Individual 2
was sentenced to 5 years of
supervised release. Individual 3 was
sentenced to 3 years of supervised
release. Individuals were ordered to
pay $443,900 in restitution.
sFL BL FBI Individual made false assertions and Individual was sentenced to 5
certifications concerning EIDL benefits and months of incarceration, 1 year of
obtained over $150,000. supervised release, and ordered to
pay $600,000 in restitution.
CO GC FBI Subject illegally obtained $2.3 million in loan Subject was sentenced to 48
guarantee by concealing their extensive months of incarceration, 3 years of
criminal history and falsifying debts. supervised release, and ordered to
pay $1.3 million in restitution.
FL BL DL FBI Individuals conspired with others and submitted Individual 1 was sentenced to 18
false statement and fraudulently applied for months of incarceration and 3 years
PPP loans which resulted in over $700,000 in of supervised release. Individual 2
disbursements. was sentenced to 4 months of
incarceration and 3 years of
supervised release. Individuals were
ordered to pay $717,530 in
restitution.
65 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
CO BL DL IRS CI Subject devised a scheme to defraud and obtain Subject was sentenced to 37
money by means of materially false months of incarceration, 3 years of
representations on PPP and EDIL applications supervised release, and ordered to
seeking over $150,000. pay $151,000 in restitution.
WA DL FBI, TIGTA, Individuals devised a scheme and submitted Individual 1 was sentenced to 60
DOL OIG over 125 applications for PPP and EIDL loans. months of incarceration and 5 years
Individuals provided false information and of supervised release. Individual 2
statements on the loan applications seeking was sentenced to 36 months of
$6.8 million but obtain $3.3 million in funds. incarceration and 3 years of
supervised release. Individual 3 was
sentenced to 18 months
incarceration and 3 years of
supervised release. Individual 4 was
sentenced to 15 months of
incarceration and 3 years of
supervise release. Individual 5 was
sentenced to 3 years of supervised
release. Individuals were ordered to
pay $4.8 million in restitution.
CO DL/BL TIGTA As part of the scheme, subject submitted Subject was sentenced to 15
multiple fraudulent EIDL loan applications. months of incarceration, 3 years of
Subject successfully obtained over $4.5 million supervised release, and ordered to
in fraudulent funds. pay $4.9 million in restitution.
FL BL FBI, USSS Individual made false statement and Individual was sentenced to 70
fraudulently applied for PPP loans for more months of incarceration, 3 years of
than $1.2 million dollars. supervised release, and ordered to
$1.2 million in restitution.
GA BL FBI As part of the scheme, subject submitted Subject was sentenced to 40
multiple fraudulent EIDL applications. Subject months of incarceration, 3 years of
successfully obtained over $1.1 million in supervised release, and ordered to
fraudulent funds. pay $1.1 million in restitution.
OK DL/BL USSS Subject made multiple false statements and Subject was sentenced 48 months
attempted to obtain multiple PPP and EIDL of supervised release and ordered
loans over $56,000. to pay $56,900 in restitution.
AK DL AUSA Individual made false assertions and Individual was sentenced to 48
certifications concerning EIDL loans benefits months of incarceration, 3 years of
and obtained over $108,000. supervised release, and ordered to
pay treble damages of $351,381 in
restitution.
Spring 2024 Semiannual Report to Congress | 66
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
FL DL BL FBI Individuals submitted false and fraudulent PPP Individual 1 was sentenced to 18
applications and received over $1.3 million in months of incarceration and 3 years
loan proceeds. of supervised release. Individual 2
was sentenced to 6 months of
incarceration and 3 years of
supervised release. Individuals were
ordered to pay $1.3 million in
restitution.
FL BL FBI, TIGTA Individuals attempted to defraud the Individual 1 was sentenced to 70
government of over $3 million. Individuals months of incarceration and 3 years
misused proceeds for personal use on several of supervised release. Individual 2
luxury vehicles. was sentenced to 33 months of
incarceration and 3 years of
supervised release. Individuals were
ordered to pay $2.5 million in
restitution.
OK DL FBI Individual created fraudulent documents, Individual was sentenced to 20
businesses and false identities and received months of incarceration, 3 years of
over $400,000 in loan proceeds. Individual supervised release, and ordered to
misused proceeds for personal use. pay $252,143 in restitution.
MD BL DHS HSI Subject submitted false statement and Subject was sentenced to 17
fraudulently applied for multiple PPP loans and months of incarceration, 3 years of
resulting in over $700,000 in disbursements. supervised release, and ordered to
pay $734,609 in restitution.
TN BL FBI Subject made multiple false statements and Subject was sentenced to 15
attempted to obtain multiple PPP and EIDL months of incarceration, 1 year of
loans over $150,000 dollars. supervised release, and ordered to
pay $151,094 in restitution.
OK DL FBI, IRS CI Subject made multiple false statements and Subject was sentenced to 18
attempted to obtain an EIDLs over $170,000. months of incarceration, 5 years of
Subject used the proceeds to purchase jewelry, supervised release, and ordered to
watches, precious metals, and precious stones. pay $170,832 in restitution.
ND DL FBI As part of the scheme, subject submitted Subject was sentenced 5 years of
fraudulent EIDL applications and obtained over supervised release and ordered to
$330,000 in CARES Act funds. pay $333,390 in restitution.
IL BL FBI, IRS CI As part of the scheme, subject submitted Subject was sentenced to 102 months
fraudulent EIDL applications and obtained over of incarceration, 3 years of supervised
$2.9 million dollars in CARES Act funds. release, and ordered to pay $2.9
million in restitution.
67 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
MD DL/BL FBI Individual attempted to defraud the Individual 1 was sentenced to 24
government with multiple PPP loans and EIDLs months of incarceration and 3 years
over $1.2 million. of supervised release. Individual 2 was
sentenced to 24 months of
incarceration and 3 years of
supervised release. Individuals were
ordered to pay $1.2 million in
restitution.
GA BL/DL FBI Individual applied for 41 EIDLs and 5 PPP loans Individual was sentenced to 64
totaling $4.2 million in attempted loss and $1.9 months of incarceration, 3 years of
million in actual loss. supervised release, and ordered to
pay $1.9 million in restitution.
GA BL FBI Individual submitted false and fraudulent PPP Individual was sentenced to 60
applications and received over $500,000 in loan months of incarceration, 36 months
proceeds. of supervised release, and ordered to
pay $547,095 in restitution.
OR DL TIGTA, FBI Subject submitted a PPP application seeking Subject was sentenced to 24 months
over $100,000 in COVID-19 relief funds. of incarceration, 3 years of supervised
release, and ordered to pay $99,549
in restitution.
OR DL FBI, TIGTA Individual created fraudulent documents for Individual was sentenced to 21
businesses and false identities and attempted months of incarceration, 5 years of
to receive over $1.3 million dollars in loan supervised release, and ordered to
proceeds. pay $1.3 million in restitution.
FL BL USSS, FBI Subject submitted false information about his Subject was sentenced to 14 months
revenue and employment as an independent of incarceration, 36 years of
contractor. supervised release, and ordered to
pay $1.5 million in restitution.
MS DL FBI, TIGTA As part of a scheme, individuals conspired to Individuals 1-3 were each sentenced
forge IRS documents and falsify SBA forms to to 12 months of incarceration and 3
obtain EIDLs over $12.1 million. years of supervised release.
Individuals 4-6 were sentenced to 6
months of incarceration and 5 years
of supervised release each. Individual
7 was sentenced to 22 months of
incarceration and 3 years of
supervised release. Individual 8 was
sentenced to 62 months of
incarceration and 3 years of
supervised release. Individuals 9-10
were each sentenced to 1 month of
incarceration and 3 years of
supervised release. Individuals were
ordered to pay $12.4 million in
restitution.
Spring 2024 Semiannual Report to Congress | 68
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
NV DL FBI, TIGTA As part of the scheme, Subject submitted Subject was sentenced to 30 months
fraudulent EIDL applications and obtained over of incarceration, 3 years of supervised
$50,000 in CARES Act funds. release, and ordered to pay $42,082
in restitution.
WA BL FBI, USPIS, Subject used stolen identities to submit 2,300 Subject was sentenced to 42 months
DOL OIG, fraudulent tax returns to the IRS, as well as of incarceration, 5 years of supervised
IRS CI 1,700 fraudulent claims for COVID-19 pandemic release, and ordered to pay $1 million
related unemployment benefits to over 25 state in restitution.
work force agencies. Attempted to obtain $25
million in government funds, and successfully
obtained $2.4 million
ID BL DL USSS Subject submitted false and fraudulent PPP and Subject was sentenced to 70 months
EIDL applications, totaling over $919,000 in of incarceration, 5 years of supervised
attempted loss and over $660,000 in actual release, and ordered to pay $886,879
loss. in restitution.
NC BL DL FBI, TIGTA Subject submitted false and fraudulent PPP Subject was sentenced to 24 months
applications and received over $700,000 in loan of incarceration, 2 years of supervised
proceeds. release, and ordered to pay $720,079
in restitution.
69 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
TX BL FBI, FDIC CPAs created false documents and entered Individual 1 was sentenced to 180
OIG, TIGTA misleading information on PPP loan months of incarceration and 3 years
applications, which were then submitted to of supervised release. Individual 2 was
lenders, receiving over $41 million in loan sentenced to 41 months of
proceeds. incarceration and 3 years of
supervised release. Individual 3 was
sentenced to 30 months of
incarceration and 3 years of
supervised release. Individual 4 was
sentenced to 18 months of
incarceration and 3 years of
supervised release. Individuals 5-6
were sentenced to 36 months of
incarceration and 3 years of
supervised release. Individual 7 was
sentenced to 30 months of
incarceration and 3 years of
supervised release. Individual 8 was
sentenced to 13 months of
incarceration and 3 years of
supervised release. Individual 9 was
sentenced to 13 months of
incarceration and 3 years of
supervised release. Individuals 10-14
were sentenced to 24 months of
incarceration and 3 years of
supervised release. Individual 15 was
sentenced to 44 months of
incarceration and 3 years of
supervised release. Individual 16 was
sentenced to 12 months of
incarceration and 3 years of
supervised release. Individuals 17-18
were sentenced to 18 months of
incarceration and 3 years of
supervised release. Individual 19 was
sentenced to 97 months of
incarceration and 5 years of
supervised release. Individuals were
ordered to pay $41.6 million in
restitution.
Spring 2024 Semiannual Report to Congress | 70
U.S. Small Business Administration | Office of Inspector General
State Program Jointly Alleged Violation(s) Prosecuted Legal Action
OK BL FRB, TIGTA Individual submitted falsified statements to Individual 1 was sentenced to 36
apply for approximately $2.7 million in PPP months of incarceration and 5 years
loans, receiving $742,961 in fraudulent of supervised release. Individual 2 was
disbursements. sentenced to 24 months incarceration
and 5 years supervised release.
Individuals were ordered to pay
$743,776 in restitution.
MA BL FBI, FDIC Individuals submitted false and fraudulent PPP Individual 1 was sentenced to 12
OIG applications and received over $4 million in loan months of incarceration and 2 years
proceeds. of supervised release. Individual 2 was
sentenced to 12 months of
incarceration and 2 years of
supervised release. Individual 3 was
sentenced to 12 months of
incarceration and 2 years of
supervised release. Individuals were
ordered to pay $4 million in
restitution.
DC OT FBI Individual obtained and sold 57 Microsoft Individual was ordered to pay $50,000
Surface Pro computers belonging to SBA with in restitution.
an approximate value of $110,233.
VA GC DCIS, GSA Individual provided gratuities and bribes to Company was sentenced to dissolve
OIG, DHS government officials in exchange for and ceasing operations within 30 days
HSI government contracts. of judgment. Case resulted in 4
convictions, 7 civil settlements
totaling $38.9 million, and 6
suspensions.
NY GC Army CID Individual sought and received sports tickets, Individual pled guilty and entered the
meals, and more from local general contractor Providing Alternatives That Help
in exchange for providing the company with (PATH) Pretrial Diversion Program for
government contracts. 12-24 months. After successful
completion, the guilty plea will be
withdrawn.
CA BL FBI, FRB, Individual submitted 16 fraudulent loan Individual was sentenced to 204
IRS CI, applications to the PPP lending plan seeking months of incarceration and 3 years
TIGTA approximately $34.6 million. of supervised release. Individual was
ordered to pay $1.1 million in
restitution.
71 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
The following lists define the program codes for legal actions and the abbreviations in the table.
Legal Actions Summary Program Codes
BL = Business Loans
DL = Disaster Loans
GC = Government Contracting and Section 8(a) Business Development
RRF = Restaurant Revitalization Fund
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 Justice Money Laundering & Asset Recovery Section (MLARS)
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)
Spring 2024 Semiannual Report to Congress | 72
U.S. Small Business Administration | Office of Inspector General
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)
73 | Spring 2024 Semiannual Report to Congress
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 SBA Office of
Strategic Alliances.
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
National Small Business Week 2024 SBA headquarters (HQ) Office of Virtual March 22, 2024
Communications and Public Liaison -
JPMorgan Chase Bank, National
Association
2024 National Small Business Week Massachusetts SBA District Office (DO) - Andover, MA March 22, 2024
Massachusetts Awards Ceremony Merrimack Valley Chamber of
Breakfast Commerce
Woostapreneurs Forum Massachusetts DO - Worcester Area Worcester, MA March 14, 2024
Chamber of Commerce
Small Business Week Breakfast and Puerto Rico & Virgin Island DO - Puerto Carolina, PR March 14, 2024
Awards Ceremony Rico Bankers Association
Federal Contract Readiness for Women Georgia DO - Women’s Entrepreneurial Atlanta, GA March 12, 2024
Workshops Opportunity Project, Inc.
Flint Hills Veteran Owned Small Wichita DO - Flint Hills Vetrepreneur Manhattan, KS March 12, 2024
Business Summit Foundation
2024 Women’s Business Summit HQ Office of Women's Business Nationwide March 5, 2024
Ownership - Association of Women’s
Business Centers, Wells Fargo Bank,
Nasdaq Entrepreneurial Center
2024 SBA West Virginia Small Business West Virginia DO - Bank of Charles Fairmont, WV March 5, 2024
Week Awards Luncheon Town, aka The Community’s Bank,
Citizens Bank of West Virginia,
Community Trust Bank, The Huntington
National Bank, WesBanco Bank Inc.
National Small Business Week 2024 HQ Office of Communications and Virtual March 4, 2024
Public Liaison – NerdWallet Inc.
2024 Black History Month Access to Massachusetts DO - Roxbury Boston, MA February 20, 2024
Capital Matchmaker Community College, Black Economic
Council of Massachusetts, Greater New
England Minority Supplier Development
Council, Urban League of Eastern
Massachusetts, Urban League of
Springfield Inc., Berkshire Black
Economic Council, Dorchester Bay
Economic Development Corp.
National Small Business Week – Rhode Island DO - Skills for Rhode Warwick, RI February 20, 2024
Congressional Breakfast and Salute to Island’s Future
Small Business Awards Luncheon
Spring 2024 Semiannual Report to Congress | 74
U.S. Small Business Administration | Office of Inspector General
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
The E.D.G.E Workshop Series: Denver RO Region VIII - Small Business Virtual February 20, 2024
Entrepreneurs, Decisions, Growth and Majority
Education!
Consumer Credit and Commercial Georgia DO - Decide Dekalb Decatur, GA February 16, 2024
Credit Seminars Development Authority, New Life
Community Alliance, Equifax Inc.,
Morningstar Urban Development Inc.,
On the Rise Community Development
Center
National Small Business Week Awards Utah DO - Mountain Federal Credit Midvale, UT February 13, 2024
Event 2024 Union, Zions Bancorporation, Utah
Small Business Development Center
National Small Business Week 2024 HQ Office of Communications and Virtual February 13, 2024
Public Liaison - Amazon.com Services
LLC
Utah Reboot Trainings 2024 Utah DO - Big Sky Veterans Business Statewide/Virtual February 6, 2024
Outreach Center, Utah Veteran
Business Source Center
ASCENT: Contract Ready Utah DO - Utah Apex Virtual February 2, 2024
National Small Business Week 2024 HQ Office of Communications and Virtual January 31, 2024
Public Liaison - Constant Contact Inc.
National Small Business Week 2024 HQ Office of Communications and Virtual January 30, 2024
Public Liaison - Google LLC
ChallengeHer Campaign HQ Office of Government Contracting - Virtual/In person January 18, 2024
Women Impacting Public Policy Inc.,
American Express Travel Related
Services Company Inc.
National Small Business Week Awards New Mexico DO - Albuquerque Hispano Albuquerque, NM January 9, 2024
Breakfast Chamber of Commerce
National Small Business Week 2024 HQ Office of Communications and Virtual January 9, 2024
Public Liaison - Lockheed Martin Corp.
Maine SBA Lender Awards & 2023 Maine DO - Manufacturers and Traders Freeport, ME December 21, 2023
THRIVE Graduation Trust Co.
National Small Business Week 2024 HQ Office of Communications and Virtual December 21, 2023
Public Liaison - TriNet
National Small Business Week 2024 HQ Office of Communications and Virtual December 19, 2023
Public Liaison - Worldpay from FIS
Government Procurement Training North Dakota DO - North Dakota Small Virtual December 14, 2023
Series for FY 2024 Business Development Center,
University of North Dakota
Conferences and Training Events for Utah DO - Mountain West Foundation, Utah December 13, 2023
Underserved Communities Utah Small Business Alliance Statewide/Virtual
National Small Business Week 2024 HQ Office of Communications and Virtual December 12, 2023
Public Liaison - T-Mobile
75 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
Marketing and Outreach Activities HQ Office of Disaster Assistance - Virtual/Nationwide December 6, 2023
Disaster Preparedness Insurance Institute for Business &
Home Safety, Triple-I
National Small Business Week 2024 HQ Office of Communications and Virtual December 2, 2023
Public Liaison - Square
Contracting, Business Matchmaking, Hawaii DO - State of Hawaii Statewide November 29, 2023
Financing and Small Business Outreach Transportation, Office of Civil Rights
Events Disadvantaged Business
National Small Business Week 2024 HQ Office of Communications and Virtual November 22, 2023
Public Liaison – ADP Inc.
2023 SBA Annual Meeting & Lender Massachusetts DO - Massachusetts Newton, MA November 21, 2023
Awards Bankers Association
National Small Business Week 2024 HQ Office of Communications and Virtual November 17, 2023
Public Liaison - VISA USA Inc.
SBA MA Salute to Veterans – Massachusetts DO - City of Burlington Burlington, MA November 17, 2023
Matchmaker Economic Development Office
Flint Hills Veteran Owned Small Wichita DO - The Spark Inc., Junction Manhattan, KS October 30, 2023
Business Summit City Main Street, Junction City Area
Chamber of Commerce, Military Affairs
Council, Manhattan Area Chamber of
Commerce, Military Relations
Committee, Kansas Small Business
Development Center, SCORE Wichita
Chapter 0143, St. Louis Veterans
Business Resource Center
National Small Business Week 2024 HQ Office of Communications and Virtual October 19, 2023
Public Liaison - SCORE Association
Washington Small Business Fair Seattle DO - SCORE Greater Seattle, Puyallup, Spokane, October 17, 2023
(Washington Biz Fair) Washington Center for Women in WA
Business, Washington Small Business
Development Center, Washington State
University, Washington State
Department of Commerce, Washington
State Governor’s Office for Regulatory
Innovation and Assistance, Washington
Women’s Business Center, Business
Impact NW, Women’s Business Center,
Spokane Neighborhood Action Partner,
Pierce College Puyallup
Nevada 2024 National Small Business Nevada DO - Asian American and Pacific Las Vegas, NV October 16, 2023
Week Awards Islander Chamber of Commerce of
Southern Nevada Inc.
Spring 2024 Semiannual Report to Congress | 76
U.S. Small Business Administration | Office of Inspector General
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
Unite Conference - National Veteran Utah DO - Big Sky Veteran Business Hurricane, UT October 3, 2023
Small Business Week 2023 Outreach Center, Utah Veteran
Business Resource Center, Utah
Department of Veteran and Military
Affairs
77 | Spring 2024 Semiannual Report to Congress
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 their semiannual reports to
Congress. The following information is provided in accordance with these requirements.
Audits Division
The Government Auditing Standards, or Yellow Book, issued by the Comptroller General of the
United States requires that audit organizations performing audits and attestation engagements in
accordance with the Yellow Book must have an external peer review performed by reviewers
independent of the audit organization being reviewed at least once every 3 years. OIG’s Audits
Division was reviewed by the National Science Foundation OIG for the period ending March 31,
2021. SBA OIG received a peer review rating of pass.
Similarly, the Council of the Inspectors General on Integrity and Efficiency (CIGIE) requires that
organizations that conduct inspections and evaluations under the Quality Standards for Inspection
and Evaluation, or Blue Book, must have an external peer review at least once every 3 years.
During FY 2023, our Audits Division underwent a Blue Book peer review conducted by the Board of
Governors of the Federal Reserve System OIG. SBA OIG generally met Blue Book standards.
Investigations Division
Section 6(e)(7) of the IG Act, Attorney General Guidelines for Offices of Inspector General with
Statutory Law Enforcement Authority, and the CIGIE Quality Standards for Investigations require
external peer reviews of OIG investigative functions be conducted every 3 years.
In May 2023, Treasury OIG reviewed our Investigations Division and issued a final report on June 6,
2023. Treasury OIG found that the system of internal safeguards and management procedures for
the investigative function of OIG complied with the quality standards established by CIGIE and the
applicable Attorney General’s guidelines. No recommendations were offered.
Spring 2024 Semiannual Report to Congress | 78
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 on our OIG Reports web page.
OIG plays a critical role in addressing these and other challenges by conducting audits to identify
wasteful expenditures and program mismanagement; investigating fraud and other wrongdoing;
and taking other actions to deter and detect waste, fraud, abuse, and inefficiencies in SBA
programs and operations.
OIG’s activities also help to ensure that SBA employees possess a high level of integrity. This is
critical to the proper administration of SBA’s programs because it helps ensure SBA resources are
used by those who need them the most. Copies of OIG reports and other products are available at
our OIG Reports web page.
Reporting Requirements in the Inspector General Act of 1978, As
Amended
Section Reporting Requirement Location
4(a)(2) Review of legislation and regulations Other Significant OIG Activities
5(a)(1) Significant problems, abuses, and deficiencies Throughout
5(a)(2) Recommendations with respect to significant Significant Recommendations from this Reporting
problems, abuses, and deficiencies Period
5(a)(3) Prior significant recommendations on which Significant Recommendations from Prior Reporting
corrective action has not been completed Periods Without Final Action as of September 30,
2019
5(a)(4) Matters referred to prosecutive authorities Legal Actions Summary
5(a)(5) Instances in which requested information was N/A
refused
5(a)(6) List of audit, inspection, and evaluation reports Reports Issued; Reports with Questioned Costs
5(a)(7) Significant reports Throughout
5(a)(8) Audit, inspection, and evaluation statistical tables Statistical Highlights
5(a)(9) Audit, inspection, and evaluation reports with Reports with Recommendations that Funds Be Put to
recommendations that funds be put to better use Better Use
79 | Spring 2024 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
5(a)(10) Audit, inspection, and evaluation reports without Reports from Prior Periods with Overdue
management decision, without comment within 60 Management Decisions; Reports from Prior Periods
days, or with unimplemented recommendations with Open Recommendations as of September 30,
2019
5(a)(11) Revised management decisions Significant Revised Management Decisions
5(a)(12) Management decisions with which the Inspector Significant Management Decisions with Which OIG
General disagrees Disagrees
5(a)(13) Information described under section 05(b) of the Federal Financial Management Improvement Act
Federal Financial Management Improvement Act of
1996
5(a)(14)–(16) Peer review results External Peer Reviews
5(a)(17),(18) Investigative statistical tables and supporting metrics Investigations Reporting Statistics
5(a)(19) Investigations involving a senior government Investigations Involving a Senior Government
employee where allegations of misconduct were Employee Where Misconduct Was Substantiated
substantiated
5(a)(20) Whistleblower retaliation Whistleblower Retaliation Cases
5(a)(21) Attempts to interfere with the independence of OIG Instances of Interference
5(a)(22) Each closed inspection, evaluation, and audit not Investigations Involving a Senior Government
disclosed to the public; each closed investigation Employee that Is Closed and Not Disclosed to the
involving a senior government employee not Public
disclosed to the public
Spring 2024 Semiannual Report to Congress | 80
U.S. Small Business Administration | Office of Inspector General
Make a Difference
To promote integrity, economy, and efficiency, we encourage you to report instances of fraud,
waste, or mismanagement to the OIG Hotline.*
Visit our OIG Hotline website.
Write or visit:
U.S. Small Business Administration
Office of Inspector General
Investigations Division
409 Third Street SW (5th Floor)
Washington, D.C. 20416
* In accordance with Sections 7 and 8L(b)(2)(B) of the Inspector General’s Act, confidentiality of a complainant’s personally identifying information is
mandatory, absent express consent by the complainant authorizing the release of such information.
81 | Spring 2024 Semiannual Report to Congress
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