GAO Finds Gaps in SBA Improper Payment Estimates and Overpayment Recovery

The Small Business Administration recovered less than 1 percent of the $616.2 million in overpayments it identified across its programs in fiscal year 2025, compared with 62 percent government-wide, according to a report from the U.S. Government Accountability Office.

GAO said it reviewed SBA's methods for estimating improper payments for fiscal years 2020 through 2024 in the Paycheck Protection Program, the COVID-19 Economic Injury Disaster Loan program, the 7(a) loan guaranty program and the standard EIDL program. According to GAO, the estimates met the Office of Management and Budget's basic statistical requirements, but SBA did not document the basis for key decisions, including its assumption that small and large loans are equally likely to be improper. GAO said SBA also did not consider whether its pandemic program estimates reflected known fraud risks.

GAO said SBA does not conduct recovery audits for 7(a) and standard EIDL and had not reevaluated those decisions in 10 and 15 years, respectively. SBA said it recovers overpayments through other methods, GAO reported.

GAO noted that SBA estimated about $2 billion in improper payments for the reviewed programs in 2025. GAO made four recommendations. SBA disagreed with the first two and agreed or partially agreed with the others, according to GAO, which said it maintains the recommendations are valid.

Source: U.S. Government Accountability Office.

Originally published by True News: https://truenews.bagleyenterprises.net/stories/903