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Thank you, Chairman Williams. We are here today to discuss the SBA’s efforts in recovering fraudulent loans and preventing future fraud.

Over the past three years, this Committee has played an integral role in examining the pandemic relief programs, which helped millions of small businesses stay afloat in unprecedented times.

Approximately $1.2 trillion of economic aid was disbursed through SBA’s pandemic relief programs over the course of the pandemic – with much of that originating in the first 9 months of the pandemic under the Trump Administration.

While there may be disagreement on the actual estimates of fraud, it is clear we need to work together to protect the integrity of SBA programs from bad actors.

The SBA, under the leadership of Administrator Guzman, has taken strong steps to root out fraud in the pandemic relief programs and put strong controls in place to prevent future fraud.

Earlier this year, we heard testimony from Administrator Guzman that SBA is doing just that.

In 2022, SBA established a Fraud Risk Management Board, aligning its practices with GAO’s oversight policies.

A new role was also created – the SBA Special Counsel for Enterprise Risk – to advise the Administrator on fraud and risk management activities. And the agency continues to work collaboratively with the SBA Inspector General, the Interagency COVID-19 Fraud Enforcement Task Force, and the Department of Justice to recover stolen funds.

With that said, we must be clear – the SBA is not an investigative agency, and it does not have a team of auditors, investigators and attorneys, and state of the art data analytics technology to root out and prosecute fraud. That is the role of the Inspector General.

And, it is important that we understand the difference between the missions of the SBA and the Office of the Inspector General if we are going to effectively develop policies to prevent and recover fraud.
To that end, the single most important action we can take to combat fraud is to fully fund the Inspector General’s budget request.

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 bring the OIG’s and law enforcement’s efforts to recover fraudulent funds to a screeching halt.

Put simply, this is unacceptable. We must take our responsibilities seriously.

In the last Congress, I joined with Rep. Luetkemeyer, to sponsor legislation to extend the statute of limitations for fraud in PPP and EIDL to ten years. These two bills, which became law, sent a strong message that unscrupulous behavior will not be tolerated and that those who commit fraud will be held accountable in the years to come.

But it is all for naught if we don’t give the Inspector General the resources it needs.

I look forward to hearing from our witnesses today, and I am certainly open to new creative ideas, provided we are committed to fully funding the Office of the Inspector General and the law enforcement community.