SBA relief was vital to small business during the pandemic, but misuses pose a continuing threat to the small-business community.
This week, the U.S. Small Business Administration (SBA) released a report on anti-fraud control measures for the Paycheck Protection Program (PPP), as well as the COVID-19 Economic Injury Disaster Loan Program (COVID-EIDL)
According to the report titled, “Protecting the Integrity1 of the Pandemic Relief Emergency Programs: SBA’s Actions to Prevent, Detect and Address Fraud,” 86 percent of fraud in these small-business pandemic relief programs occurred in the first nine months of the pandemic.
The report highlights the actions the agency deployed to restore fraud measures in pre-existing relief programs, enhance fraud controls in new programs, as well as support cross-agency efforts to bring fraudsters to justice. It also provides an analysis estimating the total impact of fraud, including 13 million jobs eliminated by the theft and illegal misuse of these critical funds.
By the SBA's estimation, the effectiveness of the fraud control measures blocked more than 21 million applications representing an estimated $511 million in illegitimate fund requests and reconciled approximately $30 billion of stolen funds by recovery efforts.
Anti-fraud measures deployed in 2021 for the PPP and COVID-EIDL impeded further fraud attempts and helped identify fraud that had already occurred, including reinstatement of checking applications against Do Not Pay databases, the checking of tax transcripts to validate application information in the COVID-EIDL programs, and the establishment of a new Fraud Risk Management Board.
Read the full report, including the full overview and statistics detailing the effectiveness of the SBA’s anti-fraud measures, here.