June 27, 2023

SBA: Report Released on Anti-Fraud Control Measures in Pandemic Relief Programs including PPP and EIDL Loans

Eighty-six percent of fraud in small business pandemic relief programs occurred in first nine months of pandemic according to findings in new agency report

The U.S. Small Business Administration (SBA) today released a report detailing analysis of anti-fraud protocols put in place by the Biden-Harris Administration in SBA’s four largest pandemic programs. The report “Protecting the Integrity of the Pandemic Relief Emergency Programs: SBA’s Actions to Prevent, Detect and Address Fraud” highlights the actions the agency deployed to restore fraud measures in pre-existing relief programs, enhance fraud controls in new programs, as well as support cross-agency efforts to bring fraudsters to justice. The report also details the most comprehensive analysis yet estimating the total impact of fraud, across SBA’s four largest pandemic relief programs, including the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan Program (COVID-EIDL). The report is the most thorough analysis available of the initial fraud prevention measures, new controls put in place by the Biden-Harris Administration to prevent and detect fraud, and the overall impact of fraud on the pandemic relief programs.

“Pandemic relief programs, including those supported by President Biden’s American Rescue Plan, have driven a historic economic recovery, including saving millions of businesses and creating over 13 million jobs since 2021,” said SBA Administrator Isabella Casillas Guzman. “SBA’s COVID relief programs were large-scale and significant undertakings; and the agency has analyzed, evaluated and taken action to incorporate the latest methods and technologies along the way. With this report, SBA is detailing the effective measures added to fight fraud and hold bad actors responsible, as well as recommendations of best practices to ensure future emergency small business programs are optimized from the start.”

“The findings in this report, coupled with the SBA Office of Inspector General and other law enforcement’s commitment to fighting fraud, is a major step forward,” said Special Counsel for Enterprise Risk Peggy Delinois Hamilton. “Releasing the results of this report is necessary to fully inform past, present and future efforts for addressing fraud.”

The new anti-fraud measures deployed in 2021 in PPP and COVID-EIDL, which are explained in detail in the report, impeded further fraud attempts significantly and helped identify fraud that had already occurred. They include the reinstatement of checking applications against Do Not Pay databases, the checking of tax transcripts to validate application information in the COVID-EIDL programs, and the establishment of a new Fraud Risk Management Board.

 As a result, in large part, of these measures, the SBA:

Anti-Fraud Recommendations

To follow through on the SBA’s work to identify awards, grants, and loans suspected of fraud, the report points to the importance of Congress meeting President Biden’s sweeping anti-fraud proposal published in March, which includes a request to provide at least $100 million in mandatory funding to SBA’s Office of Inspector General (OIG) to fulfill the mission laid out by recent legislation extending the statute of limitations for PPP and COVID-EIDL fraud.

Looking ahead to potential future national emergencies, the report also outlines recommendations to mitigate fraud through the design of relief programs. They include:

For more information, please visit https://www.sba.gov/document/report-protecting-integrity-pandemic-relief-programs to read the full report.


About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.

This post was originally published here.