This report presents the results of our inspection of the Small Business Administration’s (SBA’s) initial disaster assistance response to Hurricane Florence, the first major hurricane of the 2018 Atlantic hurricane season. This category 1 hurricane made landfall over Wrightsville Beach, North Carolina, on September 14, 2018, dumping massive amounts of rain throughout the Carolinas and causing catastrophic flooding. SBA responded effectively during its initial disaster assistance response for Hurricane Florence. Specifically, SBA provided adequate staffing and surpassed its goals for establishing a field presence, opening Business Recovery Centers, and processing loan applications timely. In order to establish a presence and assist Hurricane Florence survivors, SBA used staff already onboard to assist Hurricane Maria survivors and rehired previously trained personnel used for Hurricanes Harvey and Irma. As of the end of August 2018, SBA had approximately 1,877 staff onboard. To respond to Hurricane Florence and other disasters, SBA continued to increase its disaster assistance staffing up to 2,808 by the end of November 2018. In response to Hurricane Florence, SBA surpassed its staffing goals for establishing field presence in both North Carolina and South Carolina. SBA provided staff for the Joint Field Office in North Carolina on September 17, just 3 days after the disaster declaration, and in South Carolina on September 21, 2018, the same day as the disaster declaration. Additionally, SBA opened its first Business Recovery Center in North Carolina on September 18, 2018, and South Carolina on September 25, 2018, which was within 4 days of each state’s disaster declaration. By the end of November 2018, SBA received 21,183 loan applications for Hurricane Florence. Of those, 17,791, or about 84 percent, were processed to a final decision; 2,743, or about 13 percent, were withdrawn; and 649, or about 3 percent, remained to be processed. SBA approved 9,206 of 17,791, or about 52 percent, totaling approximately $368 million. Of those, 5,202 loans, or about 57 percent, were disbursed totaling approximately $93.8 million. Lastly, we computed SBA’s processing times for Hurricane Florence disaster loan applications with a loan approval, denial, or withdrawal as of the end of October 2018 and found that SBA also exceeded their goals. The average processing time was approximately 7 days when computer-generated declines were not included. However, when these computer-generated declines were included, the overall average processing time was approximately 5 days.
Wednesday, April 17, 2019
Agency Reviewed / Investigated:
Submitting OIG-Specific Report Number:
Type of Report:
Disaster Recovery Report