he speed in which the SBA was expected to deliver the large amount of aid in a short period of time after the economy began to shut down in March.
Between the two programs, the SBA has provided about $729 billion to help businesses hurt by the pandemic, according to the GAO.
More than 57 people have been charged with PPP fraud, SBA Inspector General Hannibal “Mike” Ware said Thursday, and his office has initiated hundreds of investigations. Federal law enforcement officials have identified nearly 500 individuals suspected of committing coronavirus-related loan fraud and have opened “several hundred” investigations, the Justice Department said earlier this month.
With regard to the EIDL program, Ware said the agency had taken steps to shore up fraud controls, including measures to re-verify bank account information when it changed and to automatically decline loan applications by identifying suspicious online activity.
But GAO Financial Markets and Community Investment Director William Shear told lawmakers that SBA officials had not provided enough information to show how they were implementing safeguards to protect against fraud and abuse “and yet they accuse us of not giving them credit for what oversight they have in place.”
Shear said the SBA took weeks to provide loan-level PPP data and make officials available to discuss the program. GAO is also trying to obtain loan data for the EIDL program and information on the SBA’s outside contractors, which he said the agency was relying on heavily.
“As auditors, we ask the question, What is the agency trying to hide?” Shear said. “There’s just too many questions that go unanswered.”
The GAO has experienced “extreme data reliability issues” that have affected its evaluation of whom the programs are serving, Shear said. The two agencies are scheduled to discuss it next week, he said.
Velázquez said the head of the GAO, Comptroller General Gene Dodaro, had called her about the agency’s access to information. Velázquez said she asked SBA Administrator Jovita Carranza to expedite the release of data.
The SBA didn’t immediately comment for this story.
“We do not deny that the agency must do everything they can to put money into the hands of deserving businesses,” Velázquez said. “But not at the expense of compromising the fact that they have to take every control or put in place every mechanism to make sure that we avoid mismanagement, fraud and abuse. And it is not happening.”
