June 16, 2021

Caity Roach
Contributing Editor

C-Suite Wednesday— GAO Tells SBA How to Calculate PPP Lender Guaranty Denials

On June 2, 2021, the U.S. Government Accountability Office (GAO) published an update on the overall status of the SBA’s implementation of GAO recommendations. According to the report, the SBA has 54 open recommendations, 15 of which are considered high-priority.

Here are the 15 open high-priority recommendations that need to be addressed by the SBA:

COVID-19 Pandemic Response

  • Develop and implement plans to identify and respond to risks in the PPP.
  • Estimate improper PPP payments and report on the estimated error rate.
  • Develop and implement portfolio-level data analytics for the EIDL program.
  • Conduct and document a fraud risk assessment for the EIDL program.
  • Develop a strategy that outlines specific actions to address assessed fraud risks in the EIDL program on a continuous basis.
  • Implement a comprehensive oversight plan to identify and respond to risks in the EIDL program.
  • Conduct and document a fraud risk assessment for PPP.
  • Develop a strategy that outlines specific actions to monitor and manage fraud risks in PPP on a continuous basis.

Disaster Response

  • Identify and document risks associated with SBA disaster response and plans to mitigate these risks.
  • Identify the key elements of a disaster action plan and provide additional guidance to staff on how to incorporate these elements into future action plans.

Credit Elsewhere

  • Use on-site and off-site reviews to routinely collect information on lenders’ use of credit elsewhere criteria.
  • Analyze lender use of credit elsewhere criteria to identify lenders that may be at greater risk of noncompliance.

Export Promotion

  • Update SBA’s plan for additional Office of International Trade staff.
  • Establish a process that ensures documentation of states’ compliance with the total match requirement before grant closeout.
  • Develop a process to determine states’ compliance with the cash match requirement.

The SBA fully or generally agreed with all 15 high-priority recommendations and has already taken some steps toward implementing them. 

Click here to read the full GAO Report.