Federal Reports

The Office of Inspector General is issuing this audit report to determine the U.S. Small Business Administration’s (SBA) efforts to collect on delinquent Coronavirus Disease 2019 (COVID-19) Economic Injury Disaster Loans (EIDL) with collateral and personal guarantors.

We found that SBA did not perfect its security interest on borrower deposit accounts, conduct post-default site visits, report all delinquent obligors to credit bureaus, or refer debts to the U.S. Department of Justice for litigation.

We recommended SBA conduct a study to determine the minimum loan dollar thresholds for performing site visits, implement policies and procedures based the results of that study, and ensure post-default site visits are conducted and available collateral is liquidated on delinquent COVID-19 EIDLs; verify that all delinquent COVID-19 EIDL obligors are reported to credit bureaus in a timely manner; and confer with the U.S. Department of Justice to establish a reasonable standard for referring delinquent COVID-19 EIDLs for litigation.

SBA management agreed with one recommendation and disagreed with two. Management’s planned action resolved Recommendation 2; however, management’s response did not resolve Recommendations 1 and 3.

In 2020, the Department of Energy implemented Department Order 486.1A, Foreign Government Sponsored or Affiliated Activities (Order), which prohibits Department and Laboratory employees from participating in foreign Government-sponsored talent recruitment programs and restricts other foreign Government-sponsored activities or affiliated activities with a foreign country of risk.

We initiated this inspection to determine if the Department and its National Laboratories are complying with the Order.

We determined that the Department and its National Laboratories did not consistently comply with Department Order 486.1A requirements. Specifically, we found issues surrounding reporting disclosures, and the submission and review of quarterly disclosure reports. Additionally, we found that the Federal Oversight Advisory Body did not adhere to the Order.

If the Department and its National Laboratories are not consistently complying with the Order, then U.S. competitive and national security interests and Department program objectives may not be protected; potential conflicts of interest may arise; and the unauthorized transfers of scientific and technical information may occur.

We have made five recommendations that, if fully implemented, should help ensure that the issues identified in this report are corrected.