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Federal Market Intelligence for Small Business |
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Velazquez calls out SBA for obstruction of PPP auditsThe Small Business Administration has not been forthcoming with information needed to investigate potential fraud in the $729 billion spent on CARES Act federal loans to small businesses, Rep. Nydia Velazquez, D-NY, declared at a House hearing on Oct. 1. Velazquez, who chairs the House Small Business Committee, made the allegations in a subcommittee hearing examining fraud in the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL). "What we are seeing is not only cases of fraud and abuse committed in the EIDL and PPP, but mismanagement. Probably the obstruction coming from the SBA is because they knew they didn’t take or implement the kind of controls needed to prevent fraud and abuse," Velazquez said at the hearing. She spoke following testimony from William Shear, a director at the Government Accountability Office, who is auditing the PPP and EIDL. "There was obstruction (from SBA) when we were trying to obtain loan-level PPP data that went on for weeks. Getting access to people to talk about how they were implementing PPP-- that went on for weeks," Shear said. "We are still not getting a lot of cooperation from SBA and yet they accuse us of not giving them credit for what oversight they have in place, when they provide very little information and don’t respond to what we’re asking." With EIDL, it is "more extreme," Shear added. "We have asked a very long time ago for application-level EIDL data." The GAO in June advised SBA to implement plans to identify and respond to fraud risks in the PPP. SBA neither agreed nor disagreed with the GAO's recommendations. SBA officials did not respond to a request for comment by press time.
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