Hot Topic Tuesday — House Committee Looks to Improve SBA’s IT Systems

July 28, 2020

By Caity Witucki
Contributing Editor, Hot Topic Tuesday

Hot Topic Tuesday — House Committee Looks to Improve SBA’s IT Systems

On July 22, 2020, the House Small Business Committee held a hearing to learn more about the SBA’s information technology (IT) systems, IT modernization efforts, and cybersecurity strategies.

“Ineffective IT systems have been a persistent problem at SBA,” says Hon. Judy Chu. “While significant progress has been made to upgrade the systems in recent years, the magnitude of the pandemic has demonstrated the need for more modern systems that are faster, safer, and more efficient at delivering services to America’s small businesses.”

Several technical issues have arisen during the pandemic, making it frustrating and difficult for both participating SBA lenders and small businesses. 

According to the Committee on Oversight and Government Reform’s IT scorecard, SBA has made improvements to its IT infrastructure overall but is still scoring a “D” on cybersecurity. This is particularly concerning given the cybersecurity breach that recently occurred with the EIDL program.

“In late March, SBA detected a vulnerability in the EIDL application, which allowed applicants’ personally identifiable information to be viewed by other applicants. Even more troubling, the individuals that were potentially affected were not notified until mid-April – nearly 20 days after the data breach,” explains Chu. “Affected businesses lost their place in the queue, were forced to reapply, and then were shut out of the program when SBA inexplicably limited applications to only agricultural businesses.”

Other problems that arose during the pandemic were related to SBA’s loan processing system, E-Tran. Issues concerning E-Tran are not new; in 2014 the GAO reported that “SBA may be unprepared for a large volume of applications to be submitted quickly following future disasters, which could result in delays in loan funds for disaster victims.” This projection came to fruition after the PPP portal was launched in March and then again when the portal opened for the second round of PPP funding in April. 

The Committee plans to continue to explore what steps must be taken to improve SBA’s IT systems moving forward in order to prevent these issues from reoccurring should Congress authorize further small business assistance as we continue to fight the virus.

Statement of the Hon. Judy Chu