23% of Restaurant Revitalization Fund Authorizations were Potentially Ineligible

March 28, 2024

Delaney Sexton
Contributing Editor

23% of Restaurant Revitalization Fund Authorizations were Potentially Ineligible

The Restaurant Revitalization Fund approved 101,000 applications and disbursed $28.6 billion to small business owners, but the Inspector general found that $6.7 billion may have been disbursed to ineligible applicants.

SBA developed a plan that included a risk framework that was intended to reduce the risk of making improper payments and awarding RRF funds to ineligible recipients. The plan did not include all program requirements, and SBA did not always adhere to the plan or have sufficient controls to ensure program and statutory requirements were met by RRF applicants.

The Inspector General found that:

• More than $550 million of improper payments to applicants with a history of “likely fraud” by not effectively leveraging fraud indicators available in PPP loan data as planned.
• $6 billion was made to applicants without verifying historical data as planned.
• Through automated approval and without program eligibility review, there was $377 million that went to applicants who claimed to operate an inn or brewery.
• $55 million went to affiliate groups that collectively received amounts in excess of the statutory limit.

Once the Inspector general accounted for award amounts that were questioned for more than one eligibility requirement, nearly $6.7 billion was disbursed to applicants without sufficiently verifying they were eligible for the award.

Source:
OIG Report