This independent auditors’ report on the U.S. Small Business Administration’s (SBA) improper payment reporting is required by the Payment Integrity Information Act of 2019. We contracted with the independent certified public accounting firm KPMG LLP to conduct a performance audit of SBA’s Fiscal Year (FY) 2022 compliance with the Act. The auditor was engaged to review the payment integrity section of SBA’s Agency Financial Report Fiscal Year 2022 (AFR) and accompanying materials to determine whether the agency complied with the reporting requirements under the Act. In the report, KPMG auditors found SBA was not compliant with 9 of the 10 reporting requirements under the Act and Office of Management and Budget (OMB) guidance. • The agency’s risk assessment methodology did not consider certain identified risk factors to adequately conclude whether the Restaurant Revitalization Fund, Shuttered Venue Operators Grant, and the payments for covered loans in the 7(a) and 504 Certified Development Company loan guaranty programs under the debt relief assistance program were likely to include improper and unknown payments above or below the statutory threshold. • The sampling and estimation methodology plans were not appropriate for the SBA disaster assistance loans, COVID-19 Economic Injury Disaster Loans (COVID-19 EIDL), and Economic Injury Disaster Loan Targeted Advance programs and activities. • SBA did not demonstrate improvements to payment integrity for 7(a) loan guaranty purchases because the improper payment estimate increased between fiscal years 2021 and 2022, and • SBA did not publish improper and unknown payment estimates, corrective action plans, and reduction targets within the AFR and accompanying materials for PPP loan guaranty purchases and forgiveness activities. SBA indicates that it is committed to reducing the dollar amount of improper payments, ensuring program integrity, and continuing to implement effective risk management procedures in accordance with improper payment legislation.
Monday, May 15, 2023
Agency Reviewed / Investigated:
Submitting OIG-Specific Report Number:
Type of Report:
Funds for Better Use:
Number of Recommendations: