October 30, 2020
Fraud Friday — OIG Finds Over 21% of COVID-19 EIDLs May Have Been Improperly Obtained
According to a recent SBA OIG report, the SBA approved $14.3 billion in COVID-19 EIDLs to accounts that differed from the original bank accounts listed on the loan applications; $62.7 billion in multiple COVID-19 EIDLs to applicants using the same IP addresses, email addresses, bank accounts, or businesses listed at the same addresses; and approximately $1.1 billion in COVID-19 EIDLs and emergency advance grants to potentially ineligible businesses.
In response to these findings, the SBA OIG made 10 recommendations for SBA to strengthen its controls and lower fraud risks. However, SBA management only partially agreed with most of the OIG recommendations and disagreed completely with their 9th recommendation.
SBA Administrator Carranza received a draft of the OIG report prior to its publication. “The Draft Report does not fully and accurately portray SBA’s highly successful delivery of an unprecedented volume of disaster assistance,” comments Carranza. “Rather, the Draft Report grossly overstates the risk of fraud, waste, and abuse in the COVID-19 EIDL program.” Specifically, the Administrator says that the report failed to acknowledge the effective system controls that the SBA used to process COVID-19 EIDLs and that the findings rest on incomplete conclusions.