Washington D.C.— Today, the House Small Business Committee held a hearing examining the Small Business Administration’s (SBA) actions to combat fraud in agency programs and how Congress can support these efforts. During the hearing, Ranking Member Nydia M. Velázquez (D-NY) discussed the importance of providing the SBA Office of the Inspector General (OIG) with the resources needed to fight fraud and the disastrous impact a government shutdown would have on the office’s mission.
“The single most important action we can take to combat fraud is to fully fund the Inspector General’s budget request,” said Ranking Member Velázquez. “Unfortunately, their budget for Fiscal Year 2024 was slashed from $47.7 million to $32 million in the House Financial Services and General Government Appropriations bill. We are just days away from a government shutdown, which will limit the OIG’s and law enforcement’s efforts to recover fraudulent funds."
SBA works with the OIG and Department of Justice to flag potentially fraudulent loans. The agency has enlisted the help of investigators and lawyers from multiple federal agencies to investigate and pursue COVID-EIDL loan fraud cases. SBA’s fraud review team provides support to the OIG, Department of Justice, U.S. Secret Service, and other law enforcement officers. To date, a total of $30 billion has been recovered from the pandemic relief emergency programs.
The OIG, in collaboration with its law enforcement partners and financial institutions, played a key role in the return of billions of dollars in fraudulent loans to the Treasury. To date, the OIG has received 90,000 actionable leads. The OIG has warned that without additional resources the office will not be able to fully investigate these leads and prosecute the bad actors before the statute of limitations on these crimes expires.
During the hearing, witnesses testified on the need for increased resources for SBA OIG to ensure they can properly combat fraud and abuse.
“SBA’s COVID-19 programs were three times the size of the 2009 Troubled Asset Relief Program and significantly more complex, but SBA OIG’s funding has been significantly less than the funding Congress provided for TARP,” said Linda Miller, Former Deputy Executive Director, PRAC and current CEO of Audient Group, LLC. “In the FY 2023 Omnibus passed in December 2022, Congress provided $32 million to SBA OIG. However, more resources for law enforcement are needed. Continued increases in annual appropriations for OIG will enable the office to enhance its data analytics unit and hire more permanent investigative personnel.”
