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Report File
Date Issued
Submitting OIG
Small Business Administration OIG
Other Participating OIGs
Small Business Administration OIG
Agencies Reviewed/Investigated
Small Business Administration
Report Number
24-21
Report Description

The Office of Inspector General (OIG) is issuing this management advisory to bring attention to concerns regarding the U.S. Small Business Administration’s (SBA) post-award review process to monitor Shuttered Venue Operators Grant (SVOG) award recipients’ eligibility, award calculation, and use of funds. The Shuttered Venue Operators Grant (SVOG) program was established on December 27, 2020, as part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act). The program was amended by the American Rescue Plan Act on March 11, 2021, which increased program funding and reduced SVOG assistance for some recipients who also received loans under the Paycheck Protection Program. Collectively these laws provided the SVOG program with $16.25 billion to provide grants to eligible businesses that engage in venue operations.Since the agency is currently conducting post-award reviews of SVOG awards, we believe management should take immediate action to apply a more robust risk-based approach in selecting awards to review for eligibility. Specifically, the agency has selected 155 awards for eligibility reviews; however, OIG has identified an additional 1,818 high-risk awards totaling $1.6 billion that warrant review. We also believe the agency should assess the post-award review process to ensure reviews are conducted timely. Program officials assigned 30 staff members to review 2,162 of the 13,011 SVOG awards in total. As of February 5, 2024, SBA completed 165 reviews since it began conducting post-award reviews in July 2022. At this pace, we estimate it will take 19 years, or until February 2043, to complete the remaining reviews. Therefore, program officials must prioritize the reviews to increase the opportunity to save taxpayer funds and improve the integrity of this vital pandemic relief program. SBA management partially agreed with two recommendations and disagreed with one recommendation.

Report Type
Audit
Special Projects
Pandemic
Agency Wide
Yes
Number of Recommendations
3
Questioned Costs
$0
Funds for Better Use
$0

Open Recommendations

This report has 3 open recommendations.
Recommendation Number Significant Recommendation Recommended Questioned Costs Recommended Funds for Better Use Additional Details
1 Yes $0 $0

Take immediate action to review 1,818 SVOG awards that we identified as high-risk of potential ineligibility and recover any funds from recipients who did not meet the requirements.

2 Yes $0 $0

Finalize and implement updated guidance dated April 18, 2024, to terminate the award for unresponsive recipients and initiate actions to recover funds within the stated timeline.

3 Yes $0 $0

Assess staffing and procedures 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 in time to accommodate relevant statute of limitations.

Small Business Administration OIG

United States