SBA Hot Topic Tuesday — SBA OIG Receives Record-Setting Number of Hotline Complaints

June 1, 2021

Caity Roach

SBA Hot Topic Tuesday — SBA OIG Receives Record-Setting Number of Hotline Complaints

“Since March 2020, our focus has been on providing oversight of SBA’s pandemic response efforts to combat program fraud, ensuring these programs are being efficiently and effectively managed.” says SBA Inspector General, Hannibal ‘Mike’ Ware in his Spring 2021 Semiannual Report to Congress. “SBA’s tremendous role in the nation’s pandemic response is without precedent. SBA has expended more than a trillion dollars in lending authority and entrepreneurial assistance in the wake of the pandemic. The speed and reduced controls surrounding this lending authority brought with it substantially increased risk.”

To combat the increased risk within SBA pandemic relief programs, the SBA OIG has implemented an aggressive oversight plan for the calendar year 2021. Pursuant to that plan, the SBA OIG has issued 12 reports with 81 recommendations. In addition, OIG investigations resulted in 119 indictments and 32 convictions resulting in monetary recoveries and savings of $85.4 million.

Nevertheless, the SBA OIG’s Hotline for suspected fraud continues to see a record number of reports. From March 2020 to April 2021, the Hotline has received more than 150,000 complaints related to loan fraud. Contrast that figure against the 742 complaints received in all of 2019 and the picture that emerges is one of an overwhelming surge. The semiannual report states that hotline staff are diligently working through a backlog of more than 11,000 complaints. 

Although the SBA OIG listed fraud risks and vulnerabilities as the top management challenge currently facing the agency, they also listed 7 other challenges that they will continue to focus their efforts on in the coming period. Those challenges include:

  1. Inaccurate procurement data and eligibility concerns in the small business contracting programs;

  2. Oversight of IT investments;

  3. Loan program integrity;

  4. The Section 8(a) Business Development Program;

  5. Improper Payments in SBA’s Loan Programs;

  6. Fraud in SBA’s disaster assistance program; and

  7. Grant management oversight.

Click here to read the full Spring 2021 Semiannual Report to Congress.