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Washington, D.C.— Today, House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) called in the Small Business Administration’s (SBA) Inspector General (IG) for a hearing focused on management and operational concerns at the SBA. The hearing follows the release of an annual report from the IG outlining significant challenges that exist at the agency. 

“Without a confirmed Administrator and even Deputy Administrator in place to take the reigns of the agency, it is now more critical than ever to ensure the SBA is operating effectively and performing its core goal of reaching and assisting entrepreneurs across this country,” said Chairwoman Velázquez. “I am hopeful we can work together using the IG’s expertise and unique insight into the agency to improve the SBA.”

The Office of the Inspector General (OIG) is a nonpartisan watchdog responsible for oversight across SBA programs. Every year, the OIG assembles a report identifying risks within the agency related to fraud, waste, error, mismanagement, or inefficiencies. The report describes these challenges in-depth and proposes recommendations to ameliorate them. 

This year's report found numerous concerns related to some of the SBA's key programs. The IG identified several issues within the agency’s small business contracting initiatives. According to the report, unqualified 8(a) businesses continue to compete for and win federal contracts reserved for certified disadvantaged small firms. The report also found that the SBA has yet to initiate a certification process for its Women-Owned Small Business procurement program, even though Congress mandated it in 2015. Some of the other issues listed in the report include problems with SBA's online 8(a) certification platform, grant management practices, management of loan agent activities in the 7(a) program, and the operation of the agency’s Disaster Assistance program.

The hearing allowed members to engage with the IG and examine the issues highlighted in the report. 

 “SBA’s programs are essential to strengthening America's economy; however, the Agency faces a number of challenges in carrying out its mission,” said Mike Ware, Inspector General at the SBA. “Challenges include fraudulent schemes affecting all SBA programs, significant losses from defaulted loans, procurement flaws that allow large firms to obtain small business awards, excessive improper payments, and outdated legacy information systems.”  

 “While I am pleased to see progress being made in certain areas, the SBA needs to do more,” said Chairwoman Velazquez. “This Committee remains committed to working with SBA in a bipartisan fashion to ensure that these challenges are appropriately addressed.”

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