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Federal Market Intelligence for Small Business |
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COVID19 fraud to be top priority at SBA ‘for many years,’ IG says$89B in suspected frauds in EIDL and $4.6B suspected frauds in PPP with more than 1.4M complaints pendingSuspected fraud in the massive COVID-19 relief programs for small businesses is at “alarming” levels that likely will be a top priority for the Small Business Administration for the next few years, according to a recent report from the SBA’s Inspector General Hannibal “Mike” Ware. The magnitude of SBA’s duties regarding those suspected frauds potentially may impede SBA’s capacity to address problematic issues in its other programs, Ware said. The affected programs may include those for small business federal contractors and entrepreneurs. The SBA’s Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL) program initiated in March 2020 delivered nearly $1 trillion in aid to struggling small firms as of May 2021. There was $800 billion distributed under PPP and $197 billion under EIDL in the periods reviewed. So far, more than $89 billion in suspected frauds has been identified--$85 billion for EIDL and $4.6 billion for PPP, the IG report states. Another 1.4 million fraud complaints have yet to be investigated. “I believe managing COVID-19 stimulus lending is the greatest overall challenge facing SBA, and it may likely continue to be for many years as the agency grapples with fraud in the programs,” especially with EIDL and with PPP loan forgiveness, Ware wrote. Going forward, SBA expects to investigate about 215,000 suspected fraud complaints pending for PPP, and 1.2 million complaints for EIDL. This activity may reduce attention on SBA’s other responsibilities, Ware added. “Pandemic response has, in many instances, magnified the challenging systemic issues in SBA’s mission-related work,” Ware added. These include management of government contracting and entrepreneur development. The OIG report did not include SBA’s response, and SBA officials were not available for comment by press time. More information: IG report: https://bit.ly/3CscAPP
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