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Report File
Title Full
The Office of Inspector General is issuing this management advisory to present the results of our review of the U.S. Small Business Administration’s (SBA) incomplete reviews of Coronavirus Disease 2019 (COVID-19) Economic Injury Disaster Loans (EIDL) and grants disbursed to borrowers who self-disclosed their business establishment dates after January 31, 2020.
Date Issued
Submitting OIG
Small Business Administration OIG
Agencies Reviewed/Investigated
Small Business Administration
Report Number
25-18
Report Description

The Office of Inspector General is issuing this management advisory to present the results of our review of the U.S. Small Business Administration’s (SBA) incomplete reviews of Coronavirus Disease 2019 (COVID-19) Economic Injury Disaster Loans (EIDL) and grants disbursed to borrowers who self-disclosed their business establishment dates after January 31, 2020.

SBA asserted that the Coronavirus Aid, Relief, and Economic Security (CARES) Act requirement for a business to be in operation on or before January 31, 2020, applied only to COVID-19 EIDLs, not Emergency EIDL Advances. The Office of Inspector General disagreed and reiterated the CARES Act requirement that there be no waiver of eligibility for a business that was not in operation on or before January 31, 2020, which included Emergency EIDL Advances.

We made two recommendations for SBA to recover funds disbursed to ineligible applicants and to ensure automated controls are aligned with clearly defined disaster assistance criteria. Management’s planned action to resolve Recommendation 1 does not fully satisfy the intent of the recommendation; therefore, it will remain unresolved. Management’s planned action to resolve Recommendation 2 satisfies the intent of the recommendation; therefore, it will be closed upon issuance of this report.

Report Type
Other
Special Projects
Pandemic
Agency Wide
Yes
Number of Recommendations
2
Questioned Costs
$0
Funds for Better Use
$0
Report updated under NDAA 5274
No

Open Recommendations

This report has 2 open recommendations.
Recommendation Number Significant Recommendation Recommended Questioned Costs Recommended Funds for Better Use Additional Details
1 Yes $0 $0

Review the 17,568 COVID-19 EIDLs and Emergency EIDL Advances identified with business establishment dates after January 31, 2020, to determine eligibility and to seek recovery of funds from ineligible recipients.

2 Yes $0 $0

Assess the automated controls within the agency’s new lending platform, the Unified Lending Platform (ULP), to ensure they align with clearly defined disaster assistance criteria.

Small Business Administration OIG

United States