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Watchdog calls for cracking down on fraud in small business loan schemes



GAO stated that SBA was unable to provide information critical to its review, including a detailed description of the loan data, and it took several weeks to discuss the investigator’s issues.

The regulator pointed out that SBA was chosen due to lack of cooperation.

It said: “Most agencies are usually able to provide GAO with the information in this report in a timely manner when performing their duties in this unprecedented national crisis.”

SBA said in a reply to the report that it produced more than 420 pages of documents to GAO in May and gave senior officials an interview for three and a half hours.

SBA said, “Never refuse to provide data to GAO”

;, but was initially puzzled by GAO’s requirements. SBA said that GAO did not express its desire to obtain personal loan data similar to SBA’s flagship 7(a) loan plan released until June 1.

“SBA cannot simply access the spreadsheet used by the public [Freedom of Information Act] SBA said: “The website provides information on traditional loan programs and adds PPP loan information to it.” “PPP loans imply concerns about the borrower’s personal privacy and confidential, proprietary or commercially sensitive business information. “

SBA spokesman Jim Billimoria said in a follow-up statement that the report “minimized the historic work SBA has done to implement the CARES Act and distorted SBA’s interaction with GAO.”

He said: “SBA is providing GAO with loan-level data on the 4.7 million payroll protection scheme loans that have been issued to date,” he added, “SBA is working with GAO to ensure the borrower’s personally identifiable information and non-public Business information is protected. By GAO.”

Based on the information available, GAO recommends that SBA “develop and implement a plan to identify and respond to risks in PPP to ensure the integrity of the plan, achieve the effectiveness of the plan, and address potential fraud.”

SBA announced that it will conduct an additional review of loans over $2 million, but this is not enough for investigators.

GAO said: “As of June 15, 2020, SBA has not provided us with other methods (including timetables and specific review procedures) to detail how to review all loans exceeding $2 million.” “In addition, SBA We have not yet notified us of any specific monitoring plan for more than 4 million loans of less than 2 million US dollars, including how to determine the loans to be reviewed and the number of reviews of the plan.”

In addition, the GAO recommended that the Department of Labor help state unemployment agencies to address concerns about unemployed people receiving wages through loans under the Wage Protection Program while receiving unemployment benefits.

The regulator said: “Challenges caused by the integrity of such procedures may result in millions of dollars in losses, which may be difficult to recover.”


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